-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HM25iXBXhX8mQq7has8Bno3ggCwPOls8kdwP+/qS/ecATw7WeTxidQAdWm/lvv++ AiXlG4tf2XCSkFH1Mkb2Yw== 0001023175-06-000256.txt : 20060814 0001023175-06-000256.hdr.sgml : 20060814 20060814153015 ACCESSION NUMBER: 0001023175-06-000256 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20060630 FILED AS OF DATE: 20060814 DATE AS OF CHANGE: 20060814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VIEW SYSTEMS INC CENTRAL INDEX KEY: 0001075857 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS BUSINESS SERVICES [7380] IRS NUMBER: 592928366 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-30178 FILM NUMBER: 061029845 BUSINESS ADDRESS: STREET 1: 1550 CATON CENTER DRIVE STREET 2: SUITE E CITY: BALTIMORE STATE: MD ZIP: 21227 BUSINESS PHONE: 410-242-8439 MAIL ADDRESS: STREET 1: 1550 CATON CENTER DRIVE STREET 2: SUITE E CITY: BALTIMORE STATE: MD ZIP: 21227 10QSB 1 view10qsb.txt QUARTERLY REPORT ON FORM 10-QSB FOR THE PERIOD ENDED JUNE 30, 2006 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2006 [ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-30178 VIEW SYSTEMS, INC. ______________________________________________________________ (Exact name of small business issuer as specified in its charter) Nevada 59-2928366 ________________________ __________________________________ (State of incorporation) (I.R.S. Employer Identification No.) 1550 Caton Center Drive, Suite E, Baltimore, Maryland 21227 ________________________________________________________________ (Address of principal executive offices) (410) 242-8439 ________________________________________________________________ (Issuer's telephone number) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] As of July 17, 2006, View Systems, Inc. had 90,702,422 shares of common stock outstanding. Transitional small business disclosure format: Yes [ ] No [X] TABLE OF CONTENTS PART I: FINANCIAL INFORMATION Item 1. Financial Statements................................................2 Item 2. Management's Discussion and Analysis or Plan of Operation...........9 Item 3. Controls and Procedures............................................15 PART II: OTHER INFORMATION Item 4. Other Information..................................................16 Item 6. Exhibits...........................................................16 Signatures..................................................................17 PART I: FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The financial information set forth below with respect to our statements of operations for the three and six month periods ended June 30, 2006 and 2005 is unaudited. This financial information, in the opinion of management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data. The results of operations for the six month period ended June 30, 2006 are not necessarily indicative of results to be expected for any subsequent period. 2 View Systems, Inc. and Subsidiaries Consolidated Balance Sheets ASSETS June 30, December 31, 2006 2005 ------------- ------------ Current Assets Cash $ 67,434 $ 8,708 Accounts Receivable (Net of Allowance of $9,369 and $64,486 as of June 30, 2006 and December 31, 2005) 84,302 280,001 Inventory 156,843 72,012 ------------- ------------ Total Current Assets 308,579 360,721 ------------- ------------ Property & Equipment (Net) 28,542 18,043 ------------- ------------ Other Assets Licenses 1,676,854 1,626,854 Due from Affiliates 116,875 95,575 Deposits 9,646 7,291 ------------- ------------ Total Other Assets 1,803,375 1,729,720 ------------- ------------ Total Assets $ 2,140,496 $ 2,108,484 ============= ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable $ 483,361 $ 343,430 Accrued Expenses 44,679 43,229 Accrued Interest 90,467 77,000 Accrued Royalties 37,500 75,000 Loans from Shareholder 64,000 64,000 Notes Payable 440,000 110,000 ------------- ------------ Total Current Liabilities 1,160,007 712,659 ------------- ------------ Stockholders' Equity Preferred Stock, Authorized 10,000,000 Shares, $.01 Par Value, Issued and outstanding 7,171,725 71,717 71,717 Common Stock, Authorized 100,000,000 Shares, $.001 Par Value, Issued and Outstanding 91,837,422 91,838 - Issued and Outstanding 90,775,752 - 90,776 Additional Paid in Capital 19,413,609 19,293,804 Retained Earnings (Deficit) (18,596,675) (18,060,472) ------------- ------------ Total Stockholders' Equity 980,489 1,395,825 ------------- ------------ Total Liabilities and Stockholders' Equity $ 2,140,496 $ 2,108,484 ============= ============ The accompanying notes are an integral part of these consolidated financial statements. 3
View Systems, Inc. and Subsidiaries Consolidated Statements of Operations For the For the Three Months Ended June 30, Six Months Ended June 30, ---------------------------- --------------------------- 2006 2005 2006 2005 -------------- ------------- ------------- ------------- Revenues, Net $ 222,403 $ 195,914 $ 624,978 $ 481,556 Cost of Sales 111,457 125,180 318,739 229,508 -------------- ------------- ------------- ------------- Gross Profit (Loss) 110,946 70,734 306,239 252,048 -------------- ------------- ------------- ------------- Operating Expenses Business Development 73,700 17,617 113,377 32,646 General & Administrative 81,835 25,238 194,747 94,020 Professional Fees 52,137 31,341 103,432 69,856 Salaries & Benefits 211,665 148,812 416,871 234,365 -------------- ------------- ------------- ------------- Total Operating Expenses 419,337 223,008 828,427 430,887 -------------- ------------- ------------- ------------- Net Operating Income (Loss) (308,391) (152,274) (522,188) (178,839) -------------- ------------- ------------- ------------- Other Income(Expense) Interest Expense (8,669) (5,538) (14,015) (5,538) -------------- ------------- ------------- ------------- Total Other Income(Expense) (8,669) (5,538) (14,015) (5,538) -------------- ------------- ------------- ------------- Net Income (Loss) $ (317,060) $ (157,812) $ (536,203) $ (184,377) ============== ============= ============= ============= Net Income (Loss) Per Share $ (0.00) $ (0.00) $ (0.01) $ (0.00) ============== ============= ============= ============= Weighted Average Shares Outstanding 91,106,170 76,866,047 91,106,170 76,866,047 ============== ============= ============= ============= The accompanying notes are an integral part of these consolidated financial statements 4
View Systems, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (Deficit) Additional Retained Preferred Common Paid-in Earnings Shares Amount Shares Amount Capital (Deficit) ------------- ----------- ------------- ---------- ------------- ------------- Balance, December 31, 2004 - $ - 76,533,922 $ 76,534 $ 17,119,596 $(15,691,496) January - March 2005 - shares issued for cash - - 155,000 155 15,345 - January - March 2005 - shares issued in payment of accounts payable - - 128,000 128 18,872 - January - March 2005 - shares issued for services - - 1,805,000 1,805 191,335 - April - June 2005 - shares issued for cash - - 2,287,500 2,288 114,713 - April - June 2005 - shares issued for services - - 1,242,000 1,242 77,004 - July - September 2005 - shares issued for cash - - 612,000 612 55,588 - July - September 2005 - shares issued for services - - 150,000 150 37,998 - July - September 2005 - shares issued 7,171,725 71,717 - - - - October - December 2005 - shares issued for cash - - 953,330 953 122,880 - October - December 2005 - shares issued for services - - 6,909,000 6,909 1,540,473 - Net loss for the year ended December 31, 2005 - - - - - (2,368,976) ------------- ----------- ------------- ---------- ------------- ------------- Balance, December 31, 2005 7,171,725 71,717 90,775,752 90,776 19,293,804 (18,060,472) January - March 2006 - shares issued for cash - - 100,000 100 9,900 - January - March 2006 - shares issued for services - - 160,000 160 15,840 - April - June 2006 - shares issued for cash - - 60,000 60 5,940 - April - June 2006 - shares issued for services - - 1,075,000 1,075 121,125 - Reclassification of a receipt of proceeds from a loan which was previously reflected as a payment for stock - - (333,330) (333) (33,000) - Net loss for the period ended June 20, 2006 - - - - - (536,203) ------------- ----------- ------------- ---------- ------------- ------------- Balance, June 30, 2006 7,171,725 $ 71,717 91,837,422 $ 91,838 $ 19,413,609 $(18,596,675) ============= =========== ============= ========== ============= ============= The accompanying notes are an integral part of these consolidated financial statements. 5
View Systems, Inc. and Subsidiaries Consolidated Statements of Cash Flows For the Six Months Ended June 30, -------------------------------- 2006 2005 ---------------- --------------- Cash Flows from Operating Activities: Net Income (Loss) $ (536,203) $ (184,377) Adjustments to Reconcile Net Loss to Net Cash Provided by Operations: Depreciation & Amortization 6,000 6,400 Adjustment to allowance for doubtful accounts (55,117) - Stock issued for services 138,200 71,150 Change in Operating Assets and Liabilities: (Increase) Decrease in: Accounts Receivable 250,816 94,370 Inventories (84,831) 35,000 Deposits (2,355) - Increase (Decrease) in: Accounts Payable 139,931 (164,898) Accrued Expenses 1,450 (64,346) Accrued Interest 13,467 - Accrued Royalties (37,500) - ---------------- --------------- Net Cash Provided (Used) by Operating Activities (166,142) (206,701) Cash Flows from Investing Activities: Purchases of equipment (16,499) (1,115) Purchase of licenses (50,000) - Funds advanced (to) from affiliated entities (21,300) (4,901) ---------------- --------------- Net Cash Used In Investing Activities (87,799) (6,016) Cash Flows from Financing Activities: Fund provided by issuance of notes payable 296,667 - Proceeds from stock issuance 16,000 132,500 ---------------- --------------- Net Cash Provided by Financing Activities 312,667 132,500 ---------------- --------------- Increase (Decrease) in Cash 58,726 (80,217) Cash and Cash Equivalents at Beginning of Period 8,708 173,486 ---------------- --------------- Cash and Cash Equivalents at End of Period $ 67,434 $ 93,269 ================ =============== The accompanying notes are an integral part of these consolidated financial statements 6
View Systems, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Continued) For the Six Months Ended June 30, -------------------------------- 2006 2005 ---------------- --------------- Cash Paid For: Interest $ - $ 138 Income Taxes $ - $ - Non-Cash Investing and Financing Activities: Stock issued in payment of accounts payable $ - $ 19,000 The accompanying notes are an integral part of these consolidated financial statements. 7
View Systems, Inc. Notes to the Consolidated Financial Statements June 30, 2006 GENERAL View Systems, Inc. (the Company) has elected to omit substantially all footnotes to the financial statements for the six months ended June 30, 2006 since there have been no material changes (other than indicated in other footnotes) to the information previously reported by the Company in their Annual Report filed on the Form 10-KSB for the twelve months ended December 31, 2005. UNAUDITED INFORMATION The information furnished herein was taken from the books and records of the Company without audit. However, such information reflects all adjustments which are, in the opinion of management, necessary to properly reflect the results of the interim period presented. The information presented is not necessarily indicative of the results from operations expected for the full fiscal year. 8 In this report references to "View Systems," "we," "us," and "our" refer to View Systems, Inc. and its subsidiaries. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS The Securities and Exchange Commission ("SEC") encourages companies to disclose forward-looking information so that investors can better understand future prospects and make informed investment decisions. This report contains these types of statements. Words such as "may," "will," "expect," "believe," "anticipate," "estimate," "project," or "continue" or comparable terminology used in connection with any discussion of future operating results or financial performance identify forward-looking statements. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION EXECUTIVE OVERVIEW Our product lines are related to visual surveillance, intrusion detection and physical security. Our principal products include: .. SecureScan Concealed Weapons Detection System - a walk-through concealed weapons detector which uses passive magnetic sensing technology and location algorithms to accurately pinpoint the location, size and number of threat objects. The control unit for this patented product combines the magnetic and video information in a manner that allows it to be stored and displayed for easy recognition and auditory warning. The software system's architecture allows for easy integration of biometrics and access control devices. .. Fingerprint biometric verification systems, magnetic door locks and central monitoring or video command centers which can be combined with our principal products. .. Passport and driver's license verification system for positive identification in correctional facilities, large government and commercial office buildings combined with our concealed weapons detection SecureScan. .. RADView - a patented integrated neutron and gamma-ray radiation sub-system which are being integrated into other detection systems. .. ViewMaxx Digitial Video products - a high-resolution, digital video recording and real-time monitoring system. .. Visual First Responder - a lightweight, wireless camera system housed in a tough, waterproof flashlight body. The camera systems sends real-time images back to a video monitor at a command post located outside the exclusion zone or containment area. The Visual First Responder is able to transmit high quality video in the most difficult environments. It uses a triple-diversity antenna system that minimizes signal distortion in urban environments. Management believes that heightened attention to personal threats, potential large scale destruction and theft of property in the United States along with spending by the United States government on Homeland Security will continue to drive growth in the market for security products. In June 2006 we previewed our Biometric SecureScan III which includes positive identification and biometric verification capabilities. The SecureScan III includes a fingerprint identification and verification system, state-issued identification scanning device for driver's licenses and passports, and a visitor badge printing system. We intend to integrate technology to sense enriched nuclear material into our SecureScan and our Visual First Responder products. This technology will allow our products to detect enriched nuclear material that may be used to build nuclear based explosive devices or for creating radiological disasters. In addition, this technology will be used in stand alone handheld portable detectors. This technology is based on existing patents owned by the United States government and is licensed exclusively to View Systems for the purpose of commercializing it. 9 For the next twelve months our primary challenge will be to develop our sales and distribution network into additional regions and markets in the United States and abroad. We intend to increase sales by offering demonstrations of our products in specific geographical areas to potential customers or at region specific trade shows, such as sheriff's conventions, court administrators' meetings, civil support team, state police shows and dealers shows. When a demonstration results in a sale of one of our products, then we attempt to expand that market by contacting other potential customers in the area, such as, correctional facilities, courthouses and other municipal buildings. After several sales in a particular geographic area management will decide whether it is appropriate to open a sales and service office. LIQUIDITY AND CAPITAL RESOURCES We have incurred losses for the past two fiscal years and had a net loss of $317,060 at June 30, 2006. Our revenues from product sales have been increasing but are not sufficient to cover our operating expenses. Our auditors have expressed substantial doubt that we can continue as a going concern unless we obtain financing. Historically, we have relied on revenues, debt financing and sales of our common stock to satisfy our cash requirements for working capital. For the six month period ended June 30, 2006 (the "2006 six month period") we received cash from revenues of $624,978, proceeds of $296,667 from debt financing and $16,000 from sales of our common stock. For the six month period ended June 30, 2005 (the "2005 six month period"), we received cash from revenues of $481,556 and received proceeds of $132,500 from the sale of our common stock. Management intends to finance our operations with revenue from product sales and any cash short falls will be addressed through equity or debt financing. In December 2005 we completed debt financing to fund operations in the short term. We entered into a subscription agreement, discussed below in "Commitments and Contingent Liabilities", that provides for the purchase of convertible promissory notes through $100,000 installments over a five month period. As of June 30, 2006, we have received funds of $296,667 from this subscription agreement and we expect to receive an additional approximate $170,000 under this agreement. We will use this cash for marketing, working capital, and to enhance our presence in other geographical regions. At our current revenue levels we will require an additional $500,000 during the next six months to cover our operating costs of approximately $100,000 per month. These operating costs include cost of sales, general and administrative expenses, salaries and benefits and professional fees related to contracting engineers. We may rely on equity financing to raise additional funds; however, as of the date of this filing we have approximately 9,000,000 authorized common shares of common stock remaining. Management is taking steps to increase our authorized common stock within the next 60 days to provide shares for additional financing. Management believes revenues will continue to increase but not to the point of profitability in the short term. We will need to continue to raise additional capital, both internally and externally, to cover cash shortfalls and to compete in our markets. We cannot assure you that we will be able to obtain financing on favorable terms and if we cannot obtain financing, then we may be required to reduce our expenses and scale back our operations. COMMITMENTS AND CONTINGENT LIABILITIES Our base rent for operating leases related to our principal office and manufacturing facility is approximately $2,870 per month, with an annual rent escalator of 3%. At December 31, 2005, future minimum payments for operating leases related to our office and manufacturing facility were $97,646 through December 31, 2008. We also lease two additional offices. We lease a 1,299 square foot sales, engineering and manufacturing office in the East Point Business Center in Jacksonville, Florida. This lease has a base rent of approximately $1,500 with a 4% annual escalator and expires on January 1, 2008. The second sales and engineering office is located in Office World Plaza in Lomita, California, near Los Angeles. We lease this office for $850 per month and this lease expires February 28, 2007. 10 Our total current liabilities increased to $1,160,007 at June 30, 2006 compared to $712,659 at December 31, 2005. The increase was primarily the result of notes payable related to the subscription agreement discussed below. At June 30, 2006, we are in default on a $110,000 note payable to a former stockholder of Xyros Technology which was due in 1999. We negotiated to repay the loan as cash flows permit and this debt remains outstanding. We are in doubt about the intentions, will or ability of the note holder to attempt collection of this debt. Subscription Agreement We entered into a Subscription Agreement, dated December 23, 2005, with three accredited investors; Starr Consulting, Inc., Active Stealth, LLC, and KCS Referral Service LLC (the "Subscribers"). We agreed to sale and the Subscribers agreed to purchase convertible promissory notes and warrants. However, on January 6, 2006, the Subscribers consented to the removal of the warrants from the subscription agreement, with the understanding that the warrants would be reinstated after we increased our authorized common stock and the shares underlying the warrants would be registered at a later date. The Subscribers did not receive any other additional consideration for the removal of the warrants. The Subscribers agreed to purchase up to an aggregate of $500,000 of 8% promissory notes convertible into shares of our common stock at a per share conversion price of $0.10. The notes are due and payable by December 31, 2006. The Subscribers agreed to purchase the promissory notes over a 5 month period in $100,000 per month installments; however, other than the contractual agreement there is no guarantee that the Subscribers will purchase the promissory notes. In March 2006 we terminated this agreement with KCS Referral Service LLC. Starr Consulting, Inc. agreed to purchase convertible promissory notes in the aggregate amount of $166,667, which may be converted into 1,666,667 shares of our common stock. Active Stealth, LLC and KCS Referral Service LLC each agreed to purchase convertible promissory notes in the aggregate amount of $166,666, convertible into 1,666,666 common shares. As of June 30, 2006 , Starr Consulting purchased promissory notes valued at $148,334, Active Stealth purchased promissory notes of $115,000, KCS Referral Service LLC purchased promissory notes valued at $33,333 and Elite Equity Marketing purchased promissory notes valued at $66,000 that were originally designated for KCS Referral Service LLC. The agreement provides for piggy back registration rights for the shares underlying the convertible promissory notes. The agreement provides that we must file a registration statement within 60 days of a request by any Subscriber and cause the registration statement to become effective within 120 days of that request. We are obligated to maintain the effectiveness of the registration statement until all the underlying shares have been sold by the Subscribers. If we fail to obtain or maintain effectiveness of the registration statement, then we are required to pay liquidated damages in an amount equal to 2% of the purchase price of the convertible promissory notes remaining unconverted and the purchase price of the shares issued upon conversion of the notes owned of record by the holder of the notes for each 30 day period that the registration statement is not effective. We filed a registration statement on Form SB-2 on February 2, 2006 to register the underlying shares, but as of the date of this filing, the registration statement has not been declared effective. If we fail to issue shares within 10 business days after a request by a Subscriber, then the Subscriber is entitled to a sum of money, whichever is greater of either (i) multiplying the outstanding principal amount of the note designated by the Subscriber by 130%, or (ii) multiplying the number of shares deliverable upon conversion of the amount of the note's principal and/or interest at the conversion price that would be in effect on the deemed conversion date by the highest closing price of the common stock on the principal market for the period commencing on the deemed conversion date until the day prior to the receipt of the payment. OFF-BALANCE SHEET ARRANGEMENTS None. 11 CRITICAL ACCOUNTING POLICIES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates of particular significance in our financial statements include annual tests for impairment of our licenses. These estimates could likely be materially different if events beyond our control, such as changes in government regulations that affect the usefulness of our licenses or the introduction of new technologies that compete directly with our licensed technologies affect the value of our licenses. We first determine the value of the license using a projected cash-flow analysis to determine the present value of cash flows. The test is done using assumptions as to various scenarios of increases and decreases in the revenue stream and applying a discount rate of 6%. If the value achieved under these various methods is less than the carrying value of the assets then it is considered that an impairment has occurred and the asset's carrying value is adjusted to reflect the impairment. Management also makes estimates on the useful life of our licenses based on the following criteria: .. Whether other assets or group of assets are related to the useful life of the licenses, .. Whether any legal, regulatory or contractual provisions will limit the use of the assets, .. We evaluate the cost of maintaining the license, .. We consider the possible effects of obsolescence, and .. Whether there is maintenance or any other costs associated with the license. RESULTS OF OPERATIONS The following discussions are based on the consolidated financial statements of View Systems and its subsidiaries. These charts and discussions summarize our financial statements for the three and six month periods ended June 30, 2006 and 2005 and should be read in conjunction with the financial statements, and notes thereto, included with this report at Part I, Item 1, above. Summary Comparison of 2006 and 2005 Period Operations ---------------------------------------------------- Three month period ended Six month period ended June 30, 2006 June 30, 2005 June 30, 2006 June 30, 2005 ------------- ------------- ------------- ------------- Revenues, net $ 222,403 $ 195,914 $ 624,978 $ 481,556 Cost of sales 111,457 125,180 318,739 229,508 Gross profit (loss) 110,946 70,734 306,239 252,048 Total operating expenses 419,337 223,008 828,427 430,887 Net operating loss (308,391) (152,274) (522,188) (178,839) Total other income (expense) (8,669) (5,538) (14,015) (5,538) Net income (loss) (317,060) (157,812) (536,203) (184,377) Net earnings (loss) per share $ (0.00) $ (0.00) $ (0.01) $ (0.00) Revenue is considered earned when the product is shipped to the customer. The concealed weapons system and the digital video system each require installation and training. Training is a revenue source separate and apart from the 12 sale of the product. In those cases revenue is recognized at the completion of the installation and training. The following chart provides a breakdown of our sales for the 2006 and 2005 six month periods. June 30, 2006 June 30, 2005 ------------- ------------- Secure Scan $ 291,721 $ 221,970 Digital Video 6,870 38,017 Visual First Responder 302,120 219,691 Service, installation and training $ 24,267 $ 1,878 Our marketing efforts have increased sales of our SecureScan and Visual First Responder, while sales of our ViewMaxx digital video decreased in the 2006 six month period when compared to the 2005 comparable period. We had strong sales of this product in the 2005 six month period, but that level of sales did not continue in 2006. Service, installation and training revenues increased due to the sales of our SecureScan and Visual First Responder sales. Management anticipates that increases in revenues will continue as we develop our sales and marketing channels and establish local sales and service offices in geographic areas where we have already completed sales. In addition, the introduction of our new products that have biometric identification capabilities and new products the have the capability to sense enriched nuclear material may also increase our sales. Our backlog at June 30, 2006, was approximately $382,000 compared to $160,000 at March 31, 2006. Our back log is carried in part by our third party manufacturers because purchase orders are placed with the manufacturers and they receive payment when we receive payment from the customer. However, the delay between the time of the purchase order and shipping of the product results in a delay of recognition of the revenue from the sale. This delay in recognition of revenues will continue as part of our results of operations. Cost of sales includes costs of products sold and shipping costs. Cost of sales was approximately 47% to 50% of net revenues for the 2006 six month period and the three month period ended June 30, 2006 (the "2006 second quarter) and the three month period ended June 30, 2005 (the "2005 second quarter"). However, cost of sales was 63.9% of net revenues for the 2005 second quarter due to lower economy of scale factors. Management anticipates that the relative margins for product sales for each product line, assuming similar quantities sold and similar sourcing of components, should remain relatively the same during the remainder of 2006. Total operating expense increased in the 2006 periods compared to the 2005 periods due to increases in all aspects of our operation expenses. Business development increased as a result of our active efforts to increase business. General and administrative expenses increased primarily due to increases in rent from the addition of office space in California and Florida. Professional fees increased in the 2006 six month period due to an increase in engineering fees and recognition of the issuance of shares for services in the 2006 periods. We rely on independent contractors to provide services rather than hiring employees and we issued shares of our common stock for services under these contracts rather than deplete our cash. Salaries and benefits expenses increased due to the addition of three employees to our Florida office. We anticipate total operating expense will continue to increase as we continue business development, expand our sales channels, and possibly open regional sales and engineering offices with employees. Total other expense for the 2006 six month period was related to interest on loans. Management anticipates interest expense to increase as a result of the subscription agreement with the Subscribers, described above, and our need to seek further private financing in the future to cover cash shortfalls. Management believes net losses will continue in the short term as we expand our sales channels. 13 FACTORS AFFECTING FUTURE PERFORMANCE Our independent auditors have expressed substantial doubt whether we can continue as a going concern. We have incurred ongoing operating losses and do not currently have financing commitments in place to meet expected cash requirements for the next twelve months. We recorded a net loss of $536,203 for the six month period ended June 30, 2006 and have negative working capital of $851,428. We are unable to fund our day-to-day operations through revenues alone and management believes we will incur operating losses for the near future while we expand our sales channels. While we have expanded our product line and expect to establish new sales channels, we may be unable to increase revenues to the point that we attain and are able to maintain profitability. As a result we rely on private financing to cover cash shortfalls. We need additional external capital and may be unable to raise it. Based on our current growth plan we believe we may require approximately $500,000 in additional financing within the next twelve months to develop our sales channels. Our success will depend upon our ability to access equity capital markets and borrow on terms that are financially advantageous to us. However, we may not be able to obtain additional funds on acceptable terms. If we fail to obtain funds on acceptable terms, then we might be forced to delay or abandon some or all of our business plans or may not have sufficient working capital to develop products, finance acquisitions, or pursue business opportunities. If we borrow funds, then we could be forced to use a large portion of our cash, if any, to repay principal and interest on those loans. If we issue our securities for capital, then the interests of investors and stockholders will be diluted. We are currently dependent on the efforts of resellers for our continued growth and must expand our sales channels to increase our revenues and further develop our business plans. We are in the process of developing and expanding our sales channels, but we expect overall sales to remain down as we develop these sales channels. We are actively recruiting additional resellers and dealers and have hired in-house sales personnel for regional and national sales. We must continue to find other methods of distribution to increase our sales. If we are unsuccessful in developing sales channels we may have to delay further development of our business plan. We may not be able to compete successfully in our market because we have a small market share and compete with large national and international companies. We estimate that we have less than a 1% market share of the surveillance and weapons detection market. We compete with many companies that have greater brand name recognition and significantly greater financial, technical, marketing, and managerial resources. The position of these competitors in the market may prevent us from capturing more market share. We intend to remain competitive by increasing our existing business through marketing efforts, selectively acquiring complementary technologies or businesses and services, increasing our efficiency, and reducing costs. Our revenues are dependent in part upon our relationships and alliances with government agencies and partners. While we own exclusive licenses for the SecureScan technology, we are dependent upon the continuation of the ongoing contract between the Department of Energy and National Institute of Justice for continuations and improvements to the concealed weapons detection technology. We are also reliant upon the Department of Energy and National Institute of Justice for continuations and improvements to the Visual First Responder. If either of these entities should discontinue its operations or research and development in these areas we may lose our competitive edge in our market. 14 We must successfully introduce new or enhanced products and manage the costs associated with producing several product lines to be successful. Our future success depends on our ability to continue to improve our existing products and to develop new products using the latest technology that can satisfy customer needs. For example, our short term success will depend on the continued acceptance of the SecureScan portal and Visual First Responder product lines. We cannot be certain that we will be successful at producing multiple product lines and we may find that the cost of production of multiple product lines inhibits our ability to maintain or improve our gross profit margins. In addition, the failure of our products to gain or maintain market acceptance or our failure to successfully manage our cost of production could adversely affect our financial condition. Our directors and officers are able to exercise significant influence over matters requiring stockholder approval. Currently, our directors and executive officers collectively hold approximately 58.1% of the voting power of our common and preferred stock entitled to vote on any matter brought to a vote of the stockholders. Specifically, Gunther Than, our CEO, holds approximately 56.5 % of the total voting power as of the date of this report. Pursuant to Nevada law and our bylaws, the holders of a majority of our voting stock may authorize or take corporate action with only a notice provided to our stockholders. A stockholder vote may not be made available to our minority stockholders, and in any event, a stockholder vote would be controlled by the majority stockholders. As a result, our minority stockholders may not have the opportunity to approve or consent to corporate actions or other transactions. This concentration of ownership may also have the effect of delaying or preventing a change in control. Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could lead to loss of investor confidence in our reported financial information. Pursuant to proposals related to Section 404 of the Sarbanes-Oxley Act of 2002, beginning with our Annual Report on Form 10-KSB for the fiscal year ending December 31, 2008, we will be required to furnish a report by our management on our internal control over financial reporting. If we cannot provide reliable financial reports or prevent fraud, then our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our stock could drop significantly. In order to achieve compliance with Section 404 of the Act within the prescribed period, we will need to engage in a process to document and evaluate our internal control over financial reporting, which will be both costly and challenging. In this regard, management will need to dedicate internal resources, engage outside consultants and adopt a detailed work plan. During the course of our testing we may identify deficiencies which we may not be able to remedy in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud. ITEM 3. CONTROLS AND PROCEDURES We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. This information is accumulated and communicated to our executive officers to allow timely decisions regarding required disclosure. Our Chief Executive Officer, who also acts in the capacity of principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, he concluded that our disclosure controls and procedures were effective. 15 Also, our Chief Executive Officer determined that there were no changes made in our internal controls over financial reporting during the second quarter of 2006 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting. PART II: OTHER INFORMATION ITEM 5. OTHER INFORMATION We filed a preliminary Schedule 14C information statement on May 2, 2006, related to increasing our authorized common stock to 250,000,000, ratifying prior corporate actions and seeking new acquisitions and business opportunities. Due to SEC regulatory review, we intend to revise the preliminary Schedule 14C and file a definitive Schedule 14C within the next 30 days. ITEM 6. EXHIBITS Part I Exhibits 31.1 Chief Executive Officer Certification 31.2 Principal Financial Officer Certification 32.1 Section 1350 Certification Part II Exhibits 3.1 Articles of Incorporation of View Systems, as amended (Incorporated by reference to exhibit 3.1 to Form 10-QSB, filed November 14, 2003) 3.2 By-Laws of View Systems (Incorporated by reference to exhibit 3.2 to Form 10-QSB, filed November 14, 2003) 4.1 View Systems, Inc. 2005(b) Professional/Consultant Compensation Plan, dated November 7, 2005 (Incorporated by reference to exhibit 4.1 to Form S-8 filed November 8, 2005) 4.2 Subscription Agreement between View Systems, Inc. and Starr Consulting, Inc., Active Stealth, LLC, and KCS Referral Service LLC, dated December 23, 2005 (Incorporated by reference to exhibit 4.1 of Form 8-K, filed January 6, 2006) 10.1 View Systems, Inc. 1999 Stock Option Plan (Incorporated by reference to exhibit 10.16 to Form SB-2 filed January 11, 2000) 10.2 Employment agreement between View Systems and Gunther Than, dated January 1, 2003 (Incorporated by reference to exhibit 10.3 for Form 10-KSB, filed April 14, 2004) 10.3 Lease agreement between View Systems and MIE Properties, Inc., dated August 3, 2005 (Incorporated by reference to exhibit 10.2 to Form 10-QSB, filed November 10, 2005) 10.4 Consulting Agreement between View Systems and Business Development Corporation, dated December 27, 2005 (Incorporated by reference to exhibit 10.4 to Form SB-2, as amended, filed February 2, 2006) 10.5 Engagement between View Systems and John F. Alexander, dated October 6, 2005 (Incorporated by reference to exhibit 10.5 to Form SB-2, as amended, filed February 2, 2006) 10.6 Consulting Agreement between View Systems and Elite Equity Marketing, dated February 6, 2006 (Incorporated by reference to exhibit 10.6 to Form 10-KSB filed April 17, 2006) 10.7 Lease Agreement between View Systems and Commercial Management Associates, Inc., dated February 3, 2006 10.8 Lease Agreement between View Systems and Office World, dated February 20, 2006 21.1 Subsidiaries (Incorporated by reference to exhibit 21.1 for Form 10-KSB, filed March 31, 2003) 16 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. VIEW SYSTEMS, INC. /s/ Gunther Than Date: August 14, 2006 By:____________________________________________ Gunther Than Chief Executive Officer, Treasurer, Director Principal Financial and Accounting Officer /s/ Michael L. Bagnoli Date: August 14, 2006 By: __________________________________________ Michael L. Bagnoli Secretary and Director 17 EX-10.7 2 viewexh107fllease.htm LEASE AGREEMENT: VIEW SYSTEMS AND COMMERCIAL MANAGEMENT ASSOCIATES INC, DATED FEB. 3, 2006 EAST POINTE BUSINESS CENTER                                    

Exhibit 10.7                                 EAST POINTE BUSINESS CENTER

LEASE AGREEMENT


THIS LEASE AGREEMENT, made (his this 3rd day of February, 2006, by and between COMMERCIAL MANAGEMENT ASSOCIATES INC not   individually, but   solely as management and Leasing Agent for EAST POINTE BUSINESS CENTER ( a registered fictitious name) herein referred to as "Landlord" and View Systems, Inc. with its principal offices located at 1550 Caton Center Dr., S-E, Baltimore, MD 21227 hereinafter referred to as   "Tenant."                      



WITNESSETH:

1.   LEASE PREMISES: Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the following described property: Space   designated as Suite 7 comprising approximately 1,299 square feet as shown of Exhibit "A" attached hereto and made   a part hereof, being located at 3740 St. Johns Bluff Road, City of Jacksonville, County of Duval,  State of Florida.


2. TERM:  Tenant to have and to hold the above-described premises for a term commencing on February  1 2006 , and terminating on January 31 2008 on the terms and conditions as set forth herein.


If Landlord cannot deliver possession of the premises by the commencement date noted above, this Lease shall not become void or voidable, but the commencement date shall be the date of occupancy or three (3) days after issuance of the certificate of substantial completion provided by Landlord and Landlord shall not be liable for any damage or loss, actual or consequential, resulting therefrom.


3. RENT: Tenant hereby covenants and agrees to pay without deduction, offset,   prior notice or demand, together with any and all sales and use taxes levied upon   the use and occupancy of the leased premises as set forth in Paragraph 8, during the   term hereof,   to the Landlord, in advance beginning on February 1, 2006   and on the first day of each and every month thereafter, a monthly Base rent of $1,461,38  1407.25, [initialed], plus sales tax (presently 7%) in the amount of $102.30  98.51, [initialed] for a total monthly rent of $1,563.68  $ 1505.76, [initialed].   Rent shall be paid to:                   


EAST POINT   BUSINESS CENTER  

c/o Commercial Management Associates Inc.

6220 South Orange Blossom Trail

Suite 163  

Orlando, FL 32809


Total monthly rent will be adjusted each year of this Lease in the manner set forth in Paragraph 4. If Tenant's possession commences on other than the first day of the month, Tenant   shall occupy the leased premises under the terms, conditions and provisions of this Lease and the rental for one full calendar month plus the pro rata portion of the monthly rent for said month shall be paid upon the execution of this lease and the term of the Lease shall commence on the first day of the month following that in which possession is given.


Tenant also covenants and agrees to pay a Late Payment Penalty of five percent (5%) of the amount due for any payment of monthly rent not received by Landlord on or before the 5th day of each month. For any other payment due Landlord pursuant to the terms and provisions hereof, all monies received after ten (10) days from the date of demand, may be assessed an additional five (5%) percent charge as a late payment penalty. Acceptance by Landlord of a rental payment in an amount less than that which is currently due, including any late charges due thereon, shall in no way affect Landlord’s rights under this lease and in no way be an accord and satisfaction. Time is of the essence in this Lease.


4. RENT ADJUSTMENT: The base rent for each 12-month period subsequent to the prior 12 month period occurring during the term of this Lease shall be increased by an amount computed by multiplying the prior year's Base Rent by the greater of the following: Four (4%) percent.  (b) The increase in the Consumer Price Index, United States City Average for the Urban Wage Earners and Clerical Workers ( 1982-84



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equals 100). the Consumer Price Index is abolished or discontinue then thereafter the computation of the applicable charge shall accomplished by the method of computing the purchasing value of the dollar which is established and published   as a substitute for said Consumer Price Index, or, if there is no substitute, then by the most compatible  available method of computing the purchasing value of the dollar. [initialed]  The Landlord shall notify the Tenant of the adjusted base rent in writing. The  Tenant agrees to pay the adjusted base rent monthly, together with any applicable taxes as set forth in Paragraph 3, on the first day of each month for the following 12 month period.


5. OPERATING EXPENSES AND REAL ESTATE TAX STOP:


(a) Effective with the calendar year 2006   and continuing for each calendar year thereafter , Tenant shall pay, as additional rent its proportionate share (proportional share shall be Tenant's leased area divided by the building's total area of square feet, which is 37,465 square feet) of operating expenses, real estate taxes and property insurance that exceed $ 2.90 per square foot.  Landlord shall notify Tenant in writing as soon as possible after the end of the calendar year of any increase and Tenant shall remit payment in a lump sum within fifteen (15)   days after receipt of the notice. The term ''operating expense'' is defined as all expenses and insurance premiums incurred by Landlord in connection with providing the services of the Landlord described in Paragraph 12   below.


(b) At Landlord option, Landlord may make a good faith estimate or the excess operating expenses for each upcoming calendar year and upon thirty (30) days written notice to Tenant may require the monthly payment of additional rental adjusted in accordance with such estimate. The amount of such estimated excess shall be payable in equal monthly installments over the remaining months of the calendar year after notice of such estimate is delivered to Tenant. Any amounts paid based on such an estimate shall be subject to adjustments pursuant to Paragraph (c) when actual operating expenses are available for each year.


(c) By April l of each year during Tenant's occupancy or as soon thereafter as practical Landlord shall furnish to Tenant a statement of Landlord's actual operating expenses for the previous calendar year. If for any calendar year additional rent collected for the prior year as a result of Landlord's estimate of operating expenses, is in excess of the additional rent actually due during such prior year, then Landlord shall refund to Tenant any overpayment (or at Landlord's option apply such amount against rentals due or to become due hereunder).

Likewise, Tenant shall pay to Landlords within ten (10)     days, any underpayment with respect to the prior year.


6. SECURITY: Tenant has deposited with Landlord the sum of $ 1,563.68 as security for the faithful performance and observance by Tenant of the terms provisions and conditions of this Lease; it is agreed that in the event Tenant defaults in respect of any of the terms, provisions and conditions of this Lease, including but not limited to the payment of rent and additional rent. Landlord may use, apply or retain the whole or any part of security so deposited to the extent required for the payment of any rent and additional rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant's default in respect of any of the terms covenants and conditions of this Lease, including but not limited to any damages or deficiency in the reletting of the leased premises, whether such damages or deficiency acceded before or after summary proceedings or other re-entry by Landlord. In the event that Tenant sha ll fully and faithfully comply with all of the terms, provisions covenants and conditions of this Lease. The security shall be returned to Tenant without interest. After the date fixed as the end of the Lease and after delivery of entire possession of the leased premises to Landlord. In the event of a sale of the land and building of which the leased premises form a part, hereinafter referred to as the buildings or leasing of the building. Landlord shall have the right to transfer the security to the vendee or tenant and Landlord shall thereupon be released by Tenant from all liability for the return of said security; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of the security to a new Landlord. Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the monies deposited herein as security and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or att empted encumbrance.




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In the event of any bankruptcy or other proceeding against or by Tenant under Paragraph 23 herein, it is agreed that all such security deposit held hereunder shall be deemed to be applied first to rent and other charges first due to Landlord for all periods prior to the filing of any such proceedings.


7. NOTICES: For purpose of notice or demand the respective parties shall be served by certified or registered mail, return receipt requested. Addressed to the Tenant or to the Landlord at their respective office addresses as follows:


Tenant:

 Landlord:

View Systems Inc.

EAST POINTE BUSINESS CENTER

3740 St. Johns Bluff Road

c/o Commercial Management Associates Inc.

Suite 7

6220 South Orange Blossom Trial, Suite 163

Jacksonville FL 32224

Orlando. FL 32809


8. SALES AND USE TAX: Tenant hereby covenants and agrees to pay monthly to the Landlord any sales, use or other tax, excluding State and/or Federal Income Tax now or hereafter imposed upon any and all rents or other sum due and payable hereunder by the United States of America the state or any political subdivisions thereof notwithstanding the fact that such statute ordinance or enactment imposing the same may endeavor to impose the tax on the Landlord.


9. USE AND POSSESSION: It is understood that the leased premises are to be used only for general office purposes and only for the following specific uses:


General Office


No other use whatsoever except as described above shall be permitted without the prior written consent of Landlord. In the event Tenant uses the leased premises for purposes not expressly permitted herein Landlord may terminate this lease or without notice to Tenant restrain said improper use by injunction. Tenant shall not use the leased premises for any unlawful purpose or so as to constitute a nuisance. The Landlord covenants and agrees to have the leased premises completed and ready for possession on or before the commencement date barring strikes insurrections. Acts of God and other casualties or unforeseen events beyond the control of the Landlord. Tenant agrees to accept possession of said lease premises upon notice by Landlord of completion and satisfactory inspection by Tenant which shall not be unreasonably withheld. However Tenant shall have no obligation to accept possession prior to commencement date of this Lease. The Tenants at the expiration of the term sha ll deliver up the leased premises in good repair and condition ordinary wear and tear excepted.


10. ORDINANCES AND REGULATIONS


(a) Tenant hereby covenants and agrees to comply with all the rules and regulations of the Board of Fire Underwriters Officers or Boards of the City, County and State having jurisdiction over the leased premises, and with all ordinances and regulations of governmental authorities wherein the leased premises are located at Tenant's sole cost and expense, but only in so far as any of such rules, ordinances and regulations pertain to the manner in which the Tenant shall use the leased premises; the obligation to comply in every other case and also all cases where such rules regulations and ordinances require repairs alterations   changes or additions to the building (including the leased premises, but not caused by Tenant's use thereof or building equipment, or any part of either being hereby expressly assumed by Landlord, and Landlord covenants and agrees to comply with all such rules, regulations and ordinances with which Tenant has not herein expressly agreed to comply. Tenant hereby agrees to cooperate with Landlord in all respects and to comply with the above.


(b) Tenant agrees to be bound by the rules and regulations set forth on the schedule attached hereto as Exhibit ''C'' initialed by the parties and made a part thereof.


Landlord shall have the right from time to time to issue additional or amended rules and regulations regarding the use of the lease premises; When so issued the same shall be considered a part of this Lease



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and Tenant covenants that said additional or amended rules and regulations shall likewise be faithfully observed by Tenant and the employees, agents, officers servants, patrons, licensees, visitors and invitees of Tenant provided that said additional or amended rules are made applicable to at least a majority on a square foot basis) of all tenants in the building.


Any failure of Tenant to abide by the aforesaid rules and regulations shall constitute a default under this Lease.


11. SIGNS: The Tenant will not place any signs. Advertising matter or material on the exterior or on the interior where possible to be seen from the exterior of the leased premises or of the building in which the leased premises are located. Any lettering or signs placed on the interior of said building shall be for directional proposes only, and such signs and lettering shall be of a type, kind character and description to be approved in writing by the Landlord.


12. SERVICES:


A. Landlord covenants and agrees to furnish the following services:


(a) sewer and water;

(b) landscape maintenance;

(c) removal of trash;

(d) maintenance of the exterior of the building (roof) exterior wails and walks and exterior building signs); (e) maintain and keep clean all common areas of the site outside the building, including grounds. landscaping drives parking and service court;

(f) area maintenance charge due from Landlord for Common Maintenance

Fees;

(g) property management.


B. Tenant shall, at its sole expense, be responsible for and furnish:


(a) janitorial service;

(b) electricity

(c) maintenance and repair of the leased premises heating and air conditioning equipment (including but not limited to replacement of parts compressions air handling units), plumbing and plumbing fixtures lights and lighting fixtures, doors (exterior and interior) and all other improvements located on the leased premises except those repairs expressly required to be made by the Landlord.


Landlord. however shall not be liable for failure to furnish any of the foregoing when such failure is caused by conditions beyond the control of Landlord or by accidents repairs or strikes or otherwise, nor shall landlord be liable tender any circumstances for loss of or injury to person or property, however occurring, through or in connection with or incidental to the furnishing of any of the foregoing services.


13. MAINTENANCE. ALTERATIONS. MECHANIC'S LIENS:


(a) The Landlord agrees to keep in good repair the roof foundations and exterior walls of the building on the premises and underground utility and sewer pipes outside of the exterior walls of said building; provided, however the Landlord shall not be responsible for the repair of any glass and exterior doors and any and all repairs rendered necessary by the negligence of Tenant its agents, employees, or invitees. Landlord gives to Tenant exclusive control of premises and shall be under no obligation to inspect said premises. Tenant shall promptly report in writing to Landlord any defective condition known to it which Landlord is required to repair and failure to so report such defects shall make Tenant responsible to Landlord for any liability incurred by Landlord by reason of such defects.


(b) Tenant accepts the leased premises in their present condition and as suited for the uses intended by Tenant. Tenant shall. throughout the initial term of this Lease and all renewals thereof at its expense. maintain in good order and repair the leased premises including the building. heating and air conditioning



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equipment (including but not limited to replacement of parts, compressors, air handling units and heating units and changing of filters) plumbing lines and fixtures the replacement of light bulbs and fixtures and other improvements located thereon except those repairs expressly required to be made by Landlord. Tenant shall furnish evidence to Landlord that Tenant has in effect at all times a service agreement with a reputable heating and air conditioning service company for periodic maintenance on the heating and air conditioning system including but not limited to changing of filters and preventive maintenance.


In the event Tenant fails to make said repairs, then Landlord may, but shall not be obligated to make such repairs in which event Tenant shall promptly reimburse Landlord for all expenses incurred thereby. Tenant agrees to return said premises to Landlord at the expiration or prior termination or this Lease in as good condition and repair as when first received natural wear and tear damage by storm fire lightning earthquake or other casualty alone excepted.


Aside from the aforesaid repairs Tenant shall not make any alterations additions or improvements to the premises without the prior written consent of Landlord.


(c) Tenant shall make no changes in or to the leased premises of any nature without Landlord's prior written consent. Subject to the prior written consent of Landlord and to the provisions of this paragraph, Tenant, at Tenant's expense and for Tenant's benefit may make alterations installations additions or improvements which are nonstructural and which do not affect utility services or plumbing and electrical lines in or to the interior of the leased premises by using contractors or mechanics first approved by Landlord. AIl fixtures and all paneling partitions railing and like installations, installed in the leased premises at any time, either by tenant or by Landlord in tenant's behalf shall become the property of landlord and shall remain upon and be surrendered with the leased premises. Nothing in this paragraph shall be construed to prevent Tenant's removal of trade fixtures but upon removal of any such trade fixtures from the leased premises or upon removal of other installations as may be required by Landlord Tenant shall immediately and at its expense. repair and restore the leased premises to the condition existing prior to installation and repair any damage to the leased premises or the building due to such removal. All property permitted or required to be removed by Tenant at the end of the term remaining in the leased premises after Tenant's removal shall be deemed abandoned and may, at the election of Landlord either be retained as Landlord's property or may be removed from the leased premises by Landlord at Tenant's expense. Tenant shall before making any alterations additions installations or improvements at its expense, obtain all permits approvals and certificates required by any governmental or quasi-governmental bodies and (upon completion) certificates of final approval thereof and shall deliver promptly duplicates of all such permits approvals and certificates to Landlord and Tenant agrees to carry Workmen's compensation general liability, Personal and Pr operty Damage Insurance as Landlord may require. Tenant agrees to obtain and deliver to Landlord written and unconditional waivers of mechanic's liens filed in contravention of this agreement upon the interest of Landlord for all work, labor and services to be performed and materials to be furnished in connection with such work, signed by all contractors sub-contractors, materialmen and laborers to become involved in

such work. Nothing herein shall be construed to give Tenant or any contractor, sub-contractor, materialmen or laborer any right to a mechanic's lien upon Landlord's interest in the real property. Notwithstanding the foregoing, if any mechanic's lien is filed against the leased premises or the building for work claimed to have been done for, or materials furnished to Tenant, whether or not done pursuant to this paragraph. The salve shall be discharged by Tenant within ten (10)   days thereafter at Tenant's expense. by transferring the lien to security pursuant to Florida Statute 71 3.24 or other applicable provisions of the Florida Mechanic's Lien Law.


14. OUIET ENJOYMENT: Subject to the provisions of Paragraph 20 hereof, the Landlord covenants and agrees that Tenant on paying said monthly rent and performing the covenants and conditions herein, shall and may peaceably and quietly hold and enjoy the leased premises for the term aforesaid.


15. LANDLORD'S RIGHT TO INSPECT AND DISPLAY: The Landlord shall have the right at reasonable times during the term of this Lease to enter the leased premises for the purpose of examining or inspecting same and of making such repairs or alterations therein as the Landlord shall deem necessary. The Landlord shall also have the right to enter the leased premises at all reasonable hours for the purpose of displaying said leased premises to prospective tenants within ninety (90) days prior to the termination of



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this Lease or at any reasonable time for the purpose of showing the leased trellises to a prospective buyer of the building. If during the last month of the term Tenant shall have removed all or substantially all of Tenant's property, Landlord may immediately enter the leased premises and prepare them for any future Tenant. Furthermore, the Landlord may allow such future Tenant to occupy the leased premises. These ants shall have no effect upon the Tenant's obligation under this Lease and Tenant shall be entitled to no abatement or diminution of rent as a result thereof except that in the event such future Tenant makes any payment for the period up until the expiration of this Lease. Tenant shall be entitled to a credit to the extent of such payment.


16. DAMAGE OR DESTRUCTION:

(a) If by fire or other casualty the leased premises are totally destroyed or the building is partially damaged or destroyed to the extent of seventy-five percent (75%) or more of the replacement cost thereof even though the leased premises may not be damaged Landlord shall have the option of terminating this Lease or any renewal thereof by serving written notice upon the Tenant within thirty (30) days from the date of the casualty and any prepaid rent shall be prorated as of time of destruction and unearned rent refunded without interest.


(b) If by fire or other casualty the leased trellises are damaged or partially destroyed to the extent of twenty-live percent (25%) or more of the replacement cost thereof and the provisions of (a) above are not applicable then (1 ) if the unexpired term of the Lease is less than one year, excluding any unexercised renewal option , Landlord may either terminate this Lease by serving written notice upon Tenant within ten ( l 0) days of the date of destruction or Landlord shall restore the leased premises or (2) if the unexpired term of the Lease is snore than one year, including any exercised renewal option. Landlord shall restore the leased premises.


(c) lf by fire or other casualty the leased premises are damaged or partially destroyed to the extent of twenty-five percent (25%), or the replacement cost thereof and the provisions of (a) above are not applicable Landlord shall restore the leased premises.


(d) In the event of' restoration by Landlord all rents paid in advance shall be proportioned as of the date of damage or destruction and all rent thereafter accruing shall be equitable and proportionately adjusted according to the nature and extent of the destruction or damage, pending completion of rebuilding restoration or repair. In the event the destruction or damage is so extensive as to make it infeasible for the Tenant to conduct Tenant's business on the leased premises, the rent shall be completely abated until the leased premises are restored by the Landlord or until the Tenant resumes use and occupancy of the leased premises whichever shall first occur. The Landlord shall not be liable for any damage to or any inconvenience or interruption of business of the Tenant or any of its employees. Agents or invitees occasioned by fire or other casualty.


(e) Said restoration rebuilding or repairing shall be at Landlord's sole cost and expense.


(f) Landlord shall not be required to carry fire, casualty or extended coverage insurance on the person or property of the Tenant or any person occupying the leased premises or property which may now or hereafter be placed in the leased premises. Landlord and Tenant each waive all rights and liabilities which each may have against the other party, their agents, employees and invitees for damage or destruction to the real or personal property owned by said party, except for intentional or malicious destruction or gross negligence, Landlord and Tenant shall provide in any insurance policy a clause providing for and recognizing such waiver of the right of subrogation.


17. EMINENT DOMAIN: If the whole or any part of the leased premises shall be acquired or condemned by Eminent Domain for any public or quasi-public use or purpose then and in that event the term of this Lease shall cease and terminate from the date of title vesting in such proceeding and Tenant shall have no claim against Landlord or against the total award for the value of any unexpired portion of the Lease term or otherwise, and Tenant shall not be entitled to any part of any award that may be made for such taking nor to any damages therefore except that the rent shall be adjusted as of the date of such termination of this Lease.



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18. ASSIGNMENT OR SUBLETTING: The Tenant shall not: (a) assign, encumber dispose of or convey this Lease or any interest under it; (b) allow any assignment, subletting or transfer hereof or any lien upon the Tenant's interest by operation of law or by voluntary or involuntary bankruptcy proceedings or otherwise and in no event shall this Lease or any right or privileges hereunder be an asset of Tenant under any bankruptcy, insolvency or reorganization proceedings; (c) sublet the leased premises or any part thereof  or (d) permit the use or occupancy of the leased premises or any part thereof by anyone other than the Tenant.


If the Landlord shall consent to any assignment or subletting, Assignee shall assume all obligations of Tenant hereunder and neither Tenant nor any assignee shall be relieved of any liability hereunder and in the event of default by assignee in the performance of any of the terms hereof no notice of such default or demand of any kind need to be served on Tenant or assignee to hold him or them liable to Landlord. Notwithstanding any assignment of sublease, Tenant shall remain fully liable and shall not be released from performing any of the terms of this Lease.


Without otherwise limiting Landlord's right to approve or disapprove any assignment or subletting, Landlord intends to withhold its consent to any subletting, of the premises or any part thereof, if (i) such proposed subletting be to any person, firm association or corporation which shall then be a tenant or sub-tenant of Landlord or an occupant of any part of the building or (ii) such proposed subletting is at a rental rate less then the rental rates then being charged under leases being entered into by Landlord for comparable space in the building, or (iii) such subletting is to an agency of any federal state or local government or is an employment or personnel agency or school. Any assignment or subletting of the premises by Tenant without the written consent of Landlord shall be, at the option of Landlord null and void.


19.   HOLDOVER: It is further covenanted and agreed that if the Tenant or any approved assignee or sublessee shall continue to occupy the leased premises alter the termination of the Lease without prior written consent of the Landlord such tenancy shall be Tenancy at Sufferance. The base monthly rent for any month during which Tenant is a Tenant at Sufferance under the terms of this Lease shall be one hundred fifty percent (150% ) of the base rent during the last month prior to Tenant becoming a Tenant at Sufferance under the terms of this Lease.


Acceptance by the Landlord of rent after such termination shall not constitute a renewal of this Lease or a consent to such occupancy nor shall it waive Landlord's right of re-entry or any other right contained herein.


20. ABANDONMENT OR VACATING PREMISES:   Tenant shall, during the term of this Lease occupy the leased premises and shall retain and maintain during normal business hours the furniture fixtures and other personal property of Tenant on the leased premises under the supervision or control ozone or more officers or employees of Tenant.


(a) This lease and all of the rights of the Tenant hereto are hereby made subject and subordinate at all time to all ground or underlying leases including any ground leases entered into by the Landlord as Tenant and to all mortgages which may now or hereafter affect such leases or the real property of which the leased premises form a parts and to all renewals modifications consolidations, replacements, and extensions thereof. This clause shall be self- operative and no further instrument of subordination shall be required by any ground or underlying lease Landlord or mortgagee. In confirmation of such subordination Tenant shall execute promptly any certificate that the Landlord may request. Tenant hereby constitutes and appoints Landlord the Tenant's attorney-in-fact irrevocably to execute and deliver such certificate or certificates for and on behalf of the tenant. Provided however that notwithstanding the foregoing, any such Landlord aforesaid or the party secured by any mortgage shall have the right to recognize this Lease and in the event of re-entry by any such landlord aforesaid or of any foreclosure sale under such mortgage, this Lease shall continue in full force and effect at the option of such reentering Landlord aforesaid or of the party secured by such mortgage or the purchaser under any such foreclosure sale; and the Tenant covenants and agrees that it will at the written request of any such party, execute, acknowledge and deliver any instrument that



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has for its purpose and effect the subordination of this Lease to the lien or rights of all ground or underlying leases and to all mortgages.


(b) Tenant will notify Mortgagee, by registered or certified mail return receipt requested of any default of Landlord which would entitle Tenant to cancel the Lease or abate the rent payable thereunder and agrees that notwithstanding any provision of the Lease, no notice of cancellation thereof nor any abatement shall be effective unless Mortgagee has received the notice aforesaid and has failed within 30 days of the date thereof to cure or if the default cannot be cured within 30 days has failed to commence and to diligently prosecute the cure of Landlord's default which gave rise to such right of cancellation or abatement.


21. INDEMNIFICATION: The Landlord shall not be liable for any damage or injury to any person or property whether it be the person or property of the Tenant the Tenant's employees, agents, guests, invitees or otherwise by reason of Tenant's occupancy of the leased premises or because of fire flood windstorm Acts of God or for any other reason. The Tenant agrees to indemnify, defend and save harmless the Landlord from and against any and all loss, damage. claim demand liability or expense by reason of damage to person or property which may arise or be claimed to have arisen as a result of the occupancy or use of said leased premises by the Tenant or by reason thereof or in connection therewith or in any way arising on account of any injury or damage caused to any person or property on or in the leased premises providing however, that Tenant shall not indemnify as to the loss or damage due to fault of Landlord.


22. LIMITATION OF LIABILITY: The term Landlord as used in this Lease shall be limited to mean and include only the owner or owners at the time in question of the fee of the leased premises and in no event shall such term of any covenant be construed to impose a personal obligation upon the Property Manager and Leasing Broker who is an independent real estate broker and, as such as independent contractor authorized by the owner of the leased premises to secure leases and to manage the leased premises pursuant to a written Management Contract. Nothing herein shall be construed to imply or impose upon either the Property Manager and Leasing Broker or the owner of the leased premises, a general agency relationship.

In the event of any transfer of title to the leased premises, the Landlord herein shall be automatically freed and relieved from all personal liability with respect to performance of any covenant or obligation on the part of Landlord, provided any deposits or advance rents held by Landlord are turned over to the grantee and said grantee expressly assumes subject to the limitations of this paragraph, all the terms, covenants and conditions of the Lease to be performed on the part of Landlord it being intended hereby that the covenants and obligations contained in this Lease on the part of Landlord shall subject as aforesaid be binding on Landlord, its successors and assigns, only during their respective successive periods of ownership.


23. EVENTS OF DEFAULT AND LANDLORD'S REMEDIES: All rights and remedies of the Landlord herein enumerated in the event of a default shall be cumulative and nothing herein shall exclude any other right or remedy allowed by law.


(a) If any voluntary or involuntary petition or similar proceeding under any section or sections of any bankruptcy act shall be filed by or against Tenant or any voluntary or  involuntary proceeding in any court or tribunal shall be instituted to declare Tenant insolvent or unable to pay Tenant's Debts then and in any such event Landlord may if Landlord elects but not otherwise, either with or without notice of election and with or without entry or other action by Landlord forthwith terminate this Lease, and notwithstanding any other provision of this Lease, Landlord shall forthwith upon such termination be entitled to recover damages in an amount equal to the then present value of the rent specified in Paragraph 3 of the Lease for the residue of the stated term hereof, less the fair rental value of the leased premises for the residue of the stated term.


(b) lf the Tenant defaults in the payment of rent or in the prompt and full performance of any provision of this Lease, or in the leasehold interest of the Tenant being levied upon under execution or being attached by process of law or if the Tenant makes an assignment for the benefit of creditors or if a receiver can be appointed for any property of the Tenant or if the Tenant abandons the leased premises. then and in any such event the Landlord may, if the Landlord so elects but not otherwise, and with or without notice of such election and with or without any demand whatsoever, forthwith terminate this Lease and the Tenant's right to possession of the leased premises, or without terminating this Lease forthwith terminate the Tenant's



8


right to possession of the leased premises but the Tenant shall remain liable for damages as permitted by law and as provided for herein.


(c) Upon any termination of this lease whether by lapse of time or otherwise or upon any termination of the Tenant's right to possession without termination of the Lease, the Tenant shall surrender possession and vacate the leased premises immediately and deliver possession thereof to the Landlord and without prejudice to any other remedy which Landlord may have, Tenant does hereby grant to the Landlord in such event full and free license to enter into and upon the leased premises (by picking locks and changing locks if deemed necessary by Landlord) with or without process of law to repossess the leased premises and to expel or remove the Tenant and any others who may be occupying or within the leased premises and to remove any and all property therefrom, using such force as may be necessary without being deemed in any manner guilty of trespass, eviction of forcible entry or detainer without relinquishing the Landlord's right to rent or any other right given to the Landlor d hereunder or by operation of law.


The Tenant expressly waives the service of any demand for the payment of rent or for possession and the service of any notice of the Landlord's election to terminate this Lease or to re-enter the lease premises including any and every form of demand and notice prescribed by any statute or other law and agrees that the simple breach of any covenant or provision of the Lease by the Tenant shall of itself without the service of any notice or demand whatsoever permit the exercise by Landlord of any of the remedies provided to Landlord hereunder.


(d) If the Tenant abandons the leased premises or otherwise entitles the Landlord so to elect, and the Landlord elects to terminate the Tenant's right to possession only, without terminating the Lease, the Landlord may at the Landlord's option enter into the leased premises, remove the Tenant's signs and other evidences of tenancy and take and hold possession thereof as in Paragraph 23 (c) provided without such entry and possession terminating the Lease or releasing the Tenant in whole or in part from the Tenant's obligations to pay the rent hereunder for the full term and in any such case the Tenant shall pay forthwith to the Landlord a sum equal to the entire amount of the rent specified in Paragraph 3 of this Lease for the residue of the stated term plus any other sums then due hereunder. Upon and after entry into possession without termination of the Lease the Landlord may but need not relet the leased premises or any part thereof for the account of the Tenant to any p erson, firm or corporation other than the Tenant for such rent for such time and upon such terms as the Landlord in the Landlord's sole discretion shall determine and the Landlord shall not be required to accept any tenant offered by the Tenant or to observe any instructions given by the Tenant about such reletting. In any such case, the Landlord may make repairs, alterations, and additions in or to the leased premises and redecorate the same to the extent deemed by the Landlord necessary or desirable and the Tenant shall upon demand pay the costs thereof, together with Landlord's expenses of the reletting. If Tenant's account is not sufficient to pay monthly the full amount of the rent reserved in this Lease, together with the cost of repairs alterations additions redecorating and the Landlord's expenses, the Tenant shall pay to the Landlord the amount of each monthly deficiency upon demand; and if the consideration so collected from any such reletting is more than sufficient to pay the full amount of the r ent reserved herein together with the costs and expenses of the Landlord, the Landlord at the end of the stated term of the Lease, Landlord shall account for the surplus to the Tenant.  


(e) The Tenant shall pay upon demand all the Landlord's costs charges and expenses, including the fees of Landlord's attorneys, leasing agents and others retained by the Landlord incurred in enforcing the Tenant's obligations hereunder or incurred by the Landlord in any litigation (including appeals), negotiation or transaction in which the Tenant causes the Landlord without the Landlord's fault. to become involved or concerned.


(f) Tenant hereby, irrevocably appoints Landlord as agent and attorney-in- fact of Tenant to enter upon the leased premises in the event of default by Tenant in the payment of any rent herein reserved, or in the performance of any term covenant or condition herein contained to be kept or performed by Tenant and to remove any and all furniture and personal property whatsoever situated upon the leased premise. Any property of the Tenant not removed from the leased premises after the end of term however terminated and any and all property which may be removed from the leased premises by the Landlord pursuant to the authority of this Lease or of law, and to which the Tenant is or may be entitled, may be handled, removed



9


or stored by Landlord at the risk cost and expense of Tenant and Landlord shall in no event be responsible for the value preservation or safekeeping thereof. Tenant shall pay to Landlord upon demand all expenses incurred in such removal and all storage charges against such property so long as the same shall be in Landlord's possession or under Landlord's control.


Landlord may place such property in storage for the account of and at the expense of Tenant and if Tenant fails to pay the cost of storing property after it has been stored for a period of thirty (30) days or more, Landlord may sell any or all of such property, at public or private sale in such manner and at such time and place as Landlord in its sole discretion may deem proper, without notice to or demand upon Tenant for payment of any part of such charges or the removal of any such property, and shall apply the proceeds of such sale first to the cost and expenses of such sale, including reasonable attorney's fees; second, to the payment of the sums of money which may then or thereafter be due to Landlord from Tenant under any of the terms hereof; and third the balance if any to Tenant. The removal and storage of Tenant's property as above provided shall not constitute a waiver of Landlord's lien thereon.


(g) The Landlord may resort to any one or more of such remedies or rights and adoption of one or more such remedies or rights shall not necessarily prevent the enforcement of others concurrently or thereafter.


LANDLORD'S LIEN: As security for Tenant's payment of rent damages and all other payments required to be made by this Lease Tenant hereby grants to Landlord a lien upon all property of Tenant now or subsequently located upon the leased premises. If Tenant abandons or vacates any substantial portion of the leased premises or is in default in the payment of any rentals, damage or other payments required to be made by this Lease Landlord may take any action it deem necessary and may be available to it in the State of Florida. The proceeds of the sale of the personal property shall be applied by Landlord toward the cost of the sale and then toward the payment of all sums then due by Tenant to Landlord under the terms of this Lease.


25. UNIFORM COMMERCIAL CODE: To the extent, if any, this Lease grants Landlord any lien or lien rights greater than provided by the laws of the State of Florida pertaining to "Landlord's Liens," this Lease is intended as and constitutes a security agreement within the meaning of the Uniform Commercial Code of this state and Landlord in addition to the rights prescribed in this Lease, shall have all or the rights, titles, liens and interest in and to tenant's property now or hereafter located upon the leased premises which are granted a secured party, as that term is defined under this state's Uniform Commercial Code to secure the payment to Landlord or the various amounts provided in this Lease. The Tenant agrees to and shall execute and deliver to Landlord such "Financing Statements" and such further assurances as Landlord may, from time to time consider necessary to create perfect and preserve the Landlord's liens upon all fixtures equipment and other personal property herein described and all additions substitutions replacements and accessions thereto and all proceeds of its or their sale or other disposition. The Landlord at the expense of Landlord, may cause such Financing Statements and assurances to be recorded and re-recorded, filed and re-filed, and renewed or continued at such time and place as may be required or permitted by to create perfect and preserve such liens. In the event Tenant fails to promptly execute and return to Landlord such Financing Statements as Landlord may require to creates preserve and perfect its lien, Tenant shall and does hereby designate Landlord to act as Tenant's agent for the sole and limited purpose of executing such Financing Statements and any such execution by Landlord pursuant to this Lease shall be effective and binding upon Tenant as though executed originally by Tenant.


Tenant's designation of Landlord as agent hereunder shall not be subject to revocation until this Lease is terminated.


26. INCREASE IN INSURANCE: Tenant shall not do or permit anything to be done upon, or bring or keep or permit anything to be brought or kept into or on, the leased premises     which shall increase the rate of insurance on the building or on the property located therein, if by reason of the failure of Tenant to comply with the terms of this Lease or by reason of Tenant's occupancy (even though permitted or contemplated by this Lease) the insurance rate shall at any time be higher than it would otherwise be, Tenant shall reimburse Landlord for that part of all insurance premiums charged because of such violation or occupancy by Tenant. The Tenant shall not install any electrical equipment that overloads the lines in the leased premises.



10


Tenant agrees to comply with any requirements or recommendations made by Landlord's insurance underwriter inspectors.


27. FLOOR LOAD LIMITS: Tenant shall not place a load upon any floor of the leased premises exceeding the floor load per square foot area which it was designed to carry and which is allowed by law. Landlord reserves the right to prescribe the weight and position of all safes, business machines and mechanical equipment. Such installations shall be placed and maintained by Tenant, at Tenant's expense, in settings sufficient, in Landlord's judgement, to absorb and prevent vibration noise and annoyance.


28. REPRESENTATIONS: Tenant has examined and knows the condition of the leased premises and has received the same in good order and repair and no representations as to the condition of repair or otherwise have been made by Landlord or the agent of Landlord prior to or at the execution of this Lease that are not expressed herein.


29. DEFAULT UNDER OTHER LEASE: If the term of any lease, other than this Lease, made by the Tenant for any premises in the building shall be terminated or terminable after the making of this Lease because of any default by the Tenant under such other lease such fact shall empower the Landlord, at the Landlord's sole option, to terminate this Lease by notice to the Tenant.


30. TENANT INSURANCE: The Tenant shall keep and maintain at all times during the term of this Lease or any renewal or extension thereof, at its own cost and expense insurance against any and all accidents or casualties that may occur to employees, patrons, patients or the public or damage to property in and about the leased premises. all of said insurance likewise to be in recognized companies of first grade and in amounts satisfactory to and sufficient to protect the interest of Landlord; in the event of the default thereof, Landlord may, at its option effect and maintain such insurance and the premium or premiums thus paid shall be added to the installment of rent next coming due and the payment thereof enforced in the same manner as the installments of rent herein provided. Tenant shall furnish to landlord insurance certificates evidencing compliance with the above requirements upon commencement of this Lease and continue to furnish renewal certificates as such policies expire it being understood that the minimum limits of said insurance shall be $500,000 one person, $1,000,000 one accident for bodily injury and $250,000 for property damage, unless otherwise agreed in writing by the Landlord.


31.     PARTIAL INVALIDITY: If any term or provision of this Lease or application thereof to any person or circumstance shall to any extent be invalid or unenforceable the remainder of this Lease of the application or such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and such term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.


32. REVISIONS: This Lease shall not be altered, changed or amended, except by an instrument in writing signed by both parties hereto. Landlord may at any time change the name and number of the building, remodel or alter the same, or the location of any entrance thereto, or any other portion thereof not occupied by Tenant and the salve shall not constitute a constructive or actual total or partial eviction.


33. ESTOPPEL LETTERS: At any time. and from time to time upon not less than fifteen (15)   days prior written request by Landlord Tenant shall execute acknowledge and deliver to the Landlord a statement in writing certifying whether this Lease is unmodified and in full force and effect (or if there have been modifications that the same is in full force and effect as modified) stating the modifications and the dates to which the annual rent and other charges have been paid and stating whether or not to the best knowledge of the signer of the certificate the Landlord is in default in performance of any other covenants agreements or condition contained in this Lease and if so, specifying each such default of which the signer may have knowledge. It is intended that any such statement furnished by Tenant may be relied upon by Landlord or by any other person or persons having a valid interest therein including a purchaser or potential purchaser of the property,


34. EASEMENT: It is expressly agreed that the Tenant does not hereby and shall not by any use hereafter acquire any right or easement to use of any door or passageway in any portion of the building or in any



11


premises adjoining such building, except the easement of necessity for ingress and egress, if any. in the doors and passageway directly connecting with leased premises provided however it is expressly agreed that the Landlord shall have the right to close or obstruct any door or passageway into or from or connecting with the leased premises and to interfere with the use thereof whenever Landlord deems it necessary to effect alterations on repairs thereto or in and about any premises adjoining such doors or passageways. The use of any door or passageway into or from or connecting with any premises or building adjoining the building in which the premises hereby leased are situated may be regulated discontinued or prohibited at any time by the Landlord without notice to Tenant.


35. NON-REINSTATEMENT: No receipt of money by the Landlord from the Tenant after the termination of this Lease or after the service of any notice or after the commencement of any suit, or after final judgement of possession of the leased premises shall reinstate, continue or extend the term of this Lease or affect any such notice, demand or suit.


36. EFFECT OF SUBMISSION: Submission of this instrument for examination does not constitute a reservation of or option for the premises. The instrument becomes effective as a lease upon execution and delivery by both Landlord and Tenant.


37. SUCCESSORS AND PERMITTED ASSIGNS: This Lease shall bind and inure to the benefit of the successors, permitted assigns, heirs, executers, administrators and legal representatives of the parties hereto.


38. NON-WAIVER: No waiver of any covenant or condition of this Lease by either party shall be deemed to imply or constitute a further waiver of the same covenant or condition or any other covenant or condition of-this Lease.


39. PARKING: Tenant is hereby granted the non-exclusive privilege to use parking spaces in the parking lot for use by itself, its employees and visitors, provided Landlord shall reserve the right to assign parking spaces to Tenant or to limit Tenant's parking privileges to a number of spaces equal to its pro rate share of all parking spaces within the parking lot based upon the ratio of Tenant's square footage to the total square footage in the building in which Tenant is located within East Pointe Business Center. Tenant shall abide by all rules and regulations as concern the use of the aforementioned parking areas as may new exist or as may hereinafter be promulgated by the Landlord and a violation of this clause and/or the rules referred to above shall constitute, upon reasonable notice to Tenant at the option of Landlord a default by the Tenant in the term, conditions and covenants of this Lease or Landlord shall have the right to revoke Tenant's parking privileges pro vided by this paragraph and such revocation shall not affect any other right, duties or obligations as provided for in this Lease.


40. NO LANDLORD PERSONAL LIABILITY: There shall not be any personal liability on the part of Landlord or any joint venturer or partner in Landlord in respect to Landlord's obligations under or with respect to this Lease. In the event of default by Landlord with respect to any of its obligations under or with respect to this Lease Tenant shall look solely to the interest and equity of Landlord in the Land and Building of which the lease premises form a part, for any satisfaction or recovery of a judgement against Landlord. In no event shall Landlord or Landlord's partners or joint venturer or any of their assets other than their interest and equity in such Land and Building be liable for any such judgement. If Tenant shall acquire a lien on any of the other properties or assets of Landlord or Landlord's joint venturers or partners by judgement or otherwise arising out of or by virtue of this Lease Tenant shall promptly release such lien on such other properties and assets b y executing acknowledging and delivering to Landlord an instrument to that effect proposed by Landlord's attorneys.


41.   TENANT BROKERS: Tenant hereby agrees to pay, defend, and hold harmless Landlord from and against any claims demands or causes of action asserted against Landlord by brokers, finders, or other similar people who have or alleged to have been retained or otherwise employed by Tenant, and all liability. costs and expenses, including legal fees incurred by Landlord in connection with such claims demands or causes of action.


42. RELOCATION: In the event Tenant occupies less than 10%   of the net rentable area of the building, Landlord shall have the right at Landlord's sole expense, to relocate Tenant to space within the building.



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Such relocation by Landlord shall only be for the purpose of accommodating another Tenant requiring over 10%   of the net rentable space in the building.


Tenant shall be given written notice 30 days prior to any such relocation.


43. EXHIBIT: Attached. hereto, and by this reference made a part hereof are the following Exhibits to this Lease Agreement:   [space for initial]  

Addendum

Exhibit "A" - Floor Plan

Exhibit ''B'' - Suite Location Plan Plan Exhibit ''C'' - Rules and Regulations     


44. ENTIRE AGREEMENT: This Lease contains and embodies the entire agreement of the parties hereto and no representations inducements or agreements, oral or otherwise, between the parties not contained and embodied herein shall be of any force or effect and that same may not be modified, changed, or terminated in whole or in part orally or in any other manner than by an agreement in writing duly signed by all of the parties hereto.


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


IN WITNESS WHEREOF, this Lease has been duly executed by the parties hereto, under seal as of the day and year above written.


WITNESSES:  

LANDLORD:


EAST POINTE BUSINESS CENTER

Witnesses:  /s/ [illegible] Wingate  

  

             

By: Commercial Management Associates Inc.

Under Authority Granted by Landlord

By:  /s/[illegible]   

Its: President


WITNESSES:

TENANT:

VIEW SYSTEMS INC  

Witnesses:

/s/ Charlotte DeLoof

By: /s/ Gunther Than

/s/ Kate Fieden

Its: CEO












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ADDENDUM


1) ELECTRICITY: Landlord and Tenant acknowledge that the same electric meter services Suites 5 and 7. The electric service is in Landlord's name.


Tenant agrees to pay its proportionate share of the monthly electric bill (proportionate share shall be Tenant's leased area divided by the total area of suites 5 and 7 or 1,299 /3,876 square feet or .3351%) upon receipt of invoice for its electric use.


2) RIGHT OF FIRST REFUSAL: Landlord hereby grants to Tenant a right of first refusal to lease Suite 5 comprised of approximately 2,577 square feet should said space become available. If Landlord desires to lease such space to a third party, Landlord shall first notify Tenant in writing of its intention to offer such space for lease. Tenant shall have five days from receipt of such notice to notify Landlord in writing of Tenant's intent to exercise its right of first refusal. If Tenant does not exercise its right of first refusal, then the right of first refusal shall terminate and Landlord may lease such space to any third party. If Tenant elects to exercise its right of first refusal to lease Suite 5, the term shall be extended so that a minimum of two years shall remain, otherwise subject to all of the same terms, covenants and conditions of this Lease.

Within five days from the date of Tenant's election to exercise its right of first refusal, Tenant shall execute a modification and ratification of this Lease to reflect the new terms; otherwise Tenant's right or first refusal shall terminate   and Landlord may lease such space to any third party.


3) POSSESSION: Tenant shall take possession of the Leased Premises in "As Is Where Is" condition. Landlord shall not be responsible for any improvements to the Leased Premises as a condition of this Lease.







EXHIBIT “A”

 DRAWING


EXHIBIT “B”

DRAWING


EXHIBIT ''C''

RULES AND REGULATIONS





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 EX-10.8 3 viewexh108calease.htm LEASE AGREEMENT: VIEW SYSTEMS AND OFFICE WORLD, DATED FEB. 20, 2006 COMMERCIAL LEASE

Exhibit 10.8







COMMERCIAL LEASE

(General Form)


1.

PARTIES

This lease is made and entered into this 20th day of FEBRUARY, 2006 by and between OFFICE WORLD (hereinafter referred to as “Landlord”) and VIEW SYSTEMS INC. (hereinafter referred to as “Tenant”).


2.

PREMISES

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, on the terms and conditions hereinafter set forth that certain real property and the building and other improvements located thereon situated in the City of LOMITA, County of LOS ANGELES, State of CA, commonly known as OFFICE WORLD PLAZA – 26302 S. WESTERN AVE., SUITE 8, LOMITA, CA 90717-3536 and described as MULTI-TENANT OFFICE BUILDING (Said real property is hereinafter called the “Premises.”)


3.

TERM

The term of this Lease shall be for 12 MONTH, commencing on 03-01-2006 and ending on 02-28-2007, unless sooner terminated as hereinafter provided.


4.

RENT

Tenant shall pay Landlord as rent for the Premises the following sums per month, in advance on the first day of each month during the term of this Lease.


During the first through 1 year of the term of this Lease, the sum of EIGHT HUNDRED FIFTY DOLLARS ($850.00) dollars per month.


During the ___ year through the ___ year of the term of this Lease, the sum of _____ ($    ) dollars per month.


During the ___ year through the ___ year of the term of this Lease, the sum of _____ ($    ) dollars per month.


Tenant shall pay to Landlord upon the execution of this Lease the sum of _______ ($    ) dollars as rent for _______. Rent for any period during the term of this Lease which is for less than one (1) month, shall be a pro rate portion of the monthly installment. Rent shall be payable without notice or demand and without any deduction, off-set, or abatement in lawful money of the United States to the Landlord at the address stated herein for notices or to such other persons or such other places as the Landlord may designate to the Tenant in writing.


5.

SECURITY DEPOSIT

Tenant shall deposit with Landlord upon the execution of this Lease the sum of EIGHT HUNDRED FIFTY DOLLARS ($850.00) dollars as a security deposit for the Tenant’s faithful performance of the provisions of this Lease. If Tenant fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Landlord may use the security deposit, or any portion of it, to cure the default or compensate Landlord for all damages sustained by Landlord resulting from Tenant’s default. Tenant shall immediately on demand pay to Landlord the sum equal to that portion of the security deposit expended or applied by Landlord which was provided for in this paragraph so as to maintain the security deposit in the sum initially deposited with Landlord. Landlord shall not be required to keep the security deposit separate from its general account, nor shall Landlord be required to pay Te nant any interest on the security deposit. If Tenant performs all of Tenant’s obligations under this Lease, the security deposit or that portion thereof which has not previously been applied by the Landlord, shall be returned to Tenant within fourteen (14) days after the expiration at the term of this Lease, or after Tenant has vacated the Premises, whichever is later.



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6.

USE

Tenant shall use the Premises only for AS OFFICE and for no other purpose without the Landlord’s prior written consent. Tenant shall not do, bring or keep anything in or about the Premises that will cause a cancellation of any insurance covering the Premises or the building in which the Premises are located. If the rate of any insurance carried by the Landlord is increased as a result of Tenant’s use, Tenant shall pay to Landlord within ten (10) days after written demand from Landlord, the amount of any such increase. Tenant shall comply with all laws concerning the Premises in compliance and conformity with all laws relating to the condition, use, or occupancy of the Premises by Tenant during the term of this Lease. Tenant shall not use or permit the use of the Premises in any manner that will tend to create waste or a nuisance or, if there shall be more than one tenant of the building containing the Pre mises, which shall unreasonably disturb any other tenant.

Tenant hereby accepts the Premises in their condition existing as of the date that Tenant possesses the Premises, subject to all applicable zoning, municipal, county and state laws, ordinances, regulations governing or regulating the use of the Premises and accepts this Lease subject thereto and to all matters disclosed thereby. Tenant hereby acknowledges that neither the Landlord not the Landlord’s agent has made any representation or warranty to Tenant as to the suitability of the Premises for the conduct of Tenant’s business.


7.

TAXES

(a)

Real Property Taxes
________ shall pay all real property taxes and general assessments levied and assessed against the Premises during the term of this Lease.

If it shall be Tenant’s obligation to pay such real property taxes and assessments hereunder, Landlord shall use its best efforts to cause the Premises to be separately assessed from other real property owned by the Landlord. If Landlord is unable to obtain such a separate assessment, the assessor’s evaluation based on the building and other improvements that are a part of the Premises shall be used to determine the real property taxes. If this evaluation is not available, the parties shall equitably allocate the property taxes between the building and other improvements that are a part of the Premises and all buildings an other improvements included in the tax bill. In making the allocation, the parties shall reasonably evaluate the factors to determine the amount of the real property taxes so that the allocation of the building and other improvements that are a part of the Premises will not be less than the ra tio of the total number of square feet in all buildings and other improvements included in the tax bill.

Real property taxes attributable to land in the Premises shall be determined by the ratio that the total number of square feet in the Premises bears to the total number of square feet of land included in the tax bill.


(b)

Personal Property Taxes

Tenant shall pay prior to the delinquency all taxes assessed against and levied upon the trade fixtures, furnishings, equipment, and other personal property of Tenant contained in the Premises. Tenant shall endeavor to cause such trade fixtures, furnishings, and equipment and all other personal property to be assessed and billed separately from the property of the Landlord. If any Tenant’s said personal property shall be assessed with Landlord’s property, Tenant shall pay to Landlord the taxes attributable to Tenant within ten (10) days after the receipt of a written statement from Landlord’s setting forth the taxes applicable to Tenant’s property.


8.

UTILITIES

Tenant shall make all arrangements and pay for all water, gas, heat, light, power, telephone and other utility services supplied to the Premises together with any taxes thereon and for all connection charges. If any such services are not separately metered to Tenant, the Tenant shall pay a reasonable proportion, to be determined by Landlord, of all charges jointly metered with other premises.


9.

MAINTENANCE AND REPAIRS

(a)

Landlord’s Obligations

Except as provided in Article 12, and except for damage caused by any negligent or intentional act or omission of Tenant, Tenant’s agents, employees, or invitees, Landlord at its sole cost and expense shall keep in good condition and repair the foundations, exterior walls, and exterior roof of the Premises. Landlord shall also maintain the unexposed electrical, plumbing, and sewage systems including, without limitation, those portions of the systems lying outside the Premises: window frames, gutters, and down spouts on the building, all sidewalks, landscaping and other improvements that are a part of the Premises or of which the Premises are a part. The Landlord shall also maintain the heating, ventilating and air conditioning systems servicing the Premises. Landlord shall resurface or restripe the parking area on or adjacent to the Premises when necessary. Landlord shall have thirty (30) days after notice from Tenan t to commence to perform its obligations under this Article 9, except that Landlord shall perform its obligations immediately if the nature of the problem presents a hazard or emergency situation. If the Landlord does not perform its obligations within this time limit set forth in this paragraph, Tenant can perform said obligations and shall have the right to be reimbursed for the amount that Tenant actually expends in the performance of Landlord’s obligations. If Landlord does not reimburse Tenant within thirty (30) days after demand from Tenant, Tenant’s sole remedy shall be to institute suit against the Landlord, and Tenant shall not have the right to withhold from future rent the sums Tenant has expended.

(b)

Tenant’s Obligations

Subject to the provisions of Sub-paragraph (a) above and Article 12, Tenant and Tenant’s sole cost and expense shall keep in good order, condition and repair the Premises and every part thereof including, without limitation, all Tenant’s personal property, fixtures, signs, store fronts, plate glass, show windows, doors, interior walls, interior ceiling, and lighting facilities. If Tenant fails to perform Tenant’s obligation as stated herein, Landlord ay at its option (but shall not be required to), enter the Premises, after ten (10) days prior written notice to Tenant, put the same in good order, condition and repair, and the costs thereof together with interest thereon at the rate of ten (10%) percent per annum shall become due and payable as additional rental to Landlord together with Tenant’s next rental installment.




10.

ALTERATIONS AND ADDITIONS



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(a)

Tenant shall not, without the Landlord’s prior written consent, make any alterations, improvements, or additions in or about the Premises except for non-structural work which does not exceed $1,000.00 in cost. As a condition to giving any such consent, the Landlord may require the Tenant to remove any such alterations, improvements, or additions at the expiration of the term, and to restore the Premises to their prior condition by giving Tenant thirty (30) days written notice prior to the expiration of the term that Landlord requires Tenant to remove any such alterations, improvements, or additions that Tenant has made to the Premises. If Landlord so elects, Tenant at its sole cost shall restore the Premises to the condition designated by Landlord in its election before the last day of the term of the Lease.

Before commencing any work relating to the alterations, additions, or improvements affecting the Premises, Tenant shall notify Landlord in writing of the expected date of the commencement of such work so that Landlord can post and record the appropriate notices of non-responsibility to protect Landlord from any mechanic’s liens, materialman liens, or any other liens, In any event, Tenant shall pay, when due, all claims for labor and materials furnished to or for Tenant at or for use in the Premises. Tenant shall not permit any mechanic’s liens or materianman’s liens to be levied against the Premises for any labor or material furnished to Tenant or claimed to have been furnished to Tenant or Tenant’s agents or contractors in connection with work of any character performed or claimed to have been performed on the Premises by or at the direction of Tenant. Tenant shall have the right to assess the validit y of any such lien if, immediately on demand by Landlord, Tenant procures and records a lien release bond meeting the requirements of California Civil Code Section 3143 and shall provide for the payment of any sum that the claimant may recover on the claim (together with the costs of suit, if it is recovered in the action).

Unless the Landlord requires their removal as set forth above, all alterations, improvements, or additions which are made on the Premises by the Tenant shall become the property of the Landlord and remain upon and be surrendered with the Premises at the expiration of the term. Notwithstanding the provisions of this paragraph, Tenant’s trade fixtures, furniture, equipment, and other machinery, other than that which is affixed to the Premises so that it cannot be removed without material or structural damage to the Premises, shall remain the property of the Tenant and removed by Tenant at the expiration of the term of this Lease.


11.

INSURANCE INDEMNITY

(a) Fire Insurance

____ at its cost shall maintain during the term of this lease on the Premises a policy or policies of standard fire and extended coverage insurance to the extent of at least ninety (90%) percent of full replacement value thereof. Said insurance policies shall be issued in the names of Landlord and Tenant, as their interests may appear.

Tenant at its cost shall maintain during the term of this Lease on all its personal property. Tenant’s improvements, and alterations in or about the Premises, a policy of standard fire and extended coverage insurance with vandalism and malicious mischief endorsements, to the extent of their full replacement value. The proceeds from any such policy shall be used by Tenant for the replacement of personal property or the restoration of Tenant’s improvements or alterations.

(b) Liability Insurance

Tenant at its sole cost and expense shall maintain during the term of this Lease public liability and property damage insurance with a single combined liability limit of five hundred thousand ($500,000.00) dollars, and property damage limits of not less than one hundred thousand ($100,000.00) dollars, insuring against liability of Tenant and its authorized representatives arising out of and in connection with Tenant’s use or occupancy of the Premises. Both public liability insurance and property damage insurance shall insure performance by Tenant of the indemnity provisions in Sub-paragraph (d) below, but the limits of such insurance shall not, however, limit the liability of the Tenant hereunder. Both Landlord and Tenant shall be named as additional insureds, and the policies shall contain cross-liability endorsements. If Tenant shall fail to procure and maintain such insurance the Landlord may, but shall not be req uired to, procure and maintain same at the expense of Tenant and the cost thereof, together with interest thereon at the rate of ten (10%) percent per annum, shall become due and payable as additional rental to Landlord together with Tenant’s next rental installment.

(c) Waiver of Subrogation

Tenant and Landlord each waives any and all rights of recovery against the other, or against the officers, employees, agents, and representatives of the other, for loss of or damage to such waiving party or its property or the property of others under its control, where such loss or damage is insured against under any insurance policy in force at the time of such loss or damage. Each party shall cause each insurance policy obtained by it hereunder to provide that the insurance company waives all right of recovery by way of subrogation against either party in connection with any damage covered by any such party.

(d) Hold Harmless

Tenant shall indemnify and hold Landlord harmless from and against any and all claims arising from Tenant’s use or occupancy of the Premises or from the conduct of its business or from any activity, work, or things which may be permitted or suffered by Tenant in or about the Premises including all damage, costs, attorney’s fees, expenses and liabilities incurred in the defense of any claim or action or proceeding arising therefrom. Except for Landlord’s willful or grossly negligent conduct, Tenant hereby assumes all risk of damage to property or injury to person in or about the Premises from any cause, and Tenant hereby waives all claims in respect thereof against Landlord.

(e) Exemption of Landlord from Liability

Except for Landlord’s willful or grossly negligent conduct, Tenant hereby agrees that Landlord shall not be liable for any injury to Tenant’s business or loss of income therefrom or for damage to the goods, wares, merchandise, or other property of Tenant, Tenant’s employees, invitees, customers, or any other person in or about the Premises; nor shall Landlord be liable for injury to the person of Tenant, Tenant’s employees, agents, contractors, or invitees, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water, or rain or from the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning, or lighting fixtures or from any other cause, whether such damage results from conditions arising upon the Premises or upon other portions of the building in which the Premises are a part, or from any other sources or p laces. Landlord shall not be liable to Tenant for any damages arising from any act or neglect of any other tenant, if any, of the building in which the premises are located.





12.

DAMAGE OR DESTRUCTION

(a)

Damage – Insured



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If during the term of this lease the Premises and/or the building and other improvements in which the Premises are located are totally or partially destroyed rendering the Premises totally or partially inaccessible or unusable, and such damage or destruction was caused by a casualty covered under an insurance policy required to be maintained hereunder. Landlord shall restore the Premises and/or the building and other improvements in which the Premises are located into substantially the same condition as they were in immediately before such damage or destruction provided that the restoration can be made under the existing laws and can be completed within one hundred twenty (120) working days after the date of such destruction of damage. Such destruction or damage shall not terminate this Lease.

If the restoration cannot be made in said 120 day period, then within fifteen (15) days after the parties hereto determine that the restoration cannot be made in the time stated in this paragraph, Tenant may terminate this Lease immediately by giving notice to Landlord and the Lease will be deemed cancelled as of the date of such damage or destruction. If Tenant fails to terminate this Lease and the restoration is permitted under the existing laws, Landlord, at its option, may terminate this Lease or restore the Premises and or any other improvements in which the Premises are located within a reasonable time and this Lease shall continue in full force and effect. If the existing laws do not permit the restoration, either party can terminate this lease immediately by giving notice to the other party.

Notwithstanding the above, if the Tenant is the insuring party and if the insurance proceeds received by Landlord are not sufficient to effect such repair, Landlord shall give notice to Tenant of the amount required in addition to the insurance proceeds to effect such repair. Tenant may at Tenant’s option, contribute the required amount, but upon failure to do so within thirty (30) days following such notice, Landlord’s sole remedy shall be at Landlord’s option and with no liability to Tenant, to cancel and terminate this Lease. If Tenant shall contribute such amount to Landlord within said thirty (30) day period, Landlord shall make such repairs as soon as reasonably possible and this Lease shall continue in full force and effect Tenant shall in no event have any right to reimbursement for any amount so contributed.

(b)

Damage – Uninsured

In the event that the Premises are damaged or destroyed by a casualty which is not covered by the fire and extended coverage insurance which is required to be carried by the party designated in Article 11(a) above, then Landlord shall restore the same, provided that if the damage or destruction is to an extent greater than ten (10%) percent of the then replacement cost of the improvements on the Premises (exclusive of Tenant’s trade fixtures and equipment and exclusive of foundations and footings) then Landlord may elect not to restore and to terminate this Lease. Landlord must give to Tenant written notice of its intention not to restore within thirty (30) days from the date of such damage or destruction, and if not given Landlord shall be deemed to have elected to restore and in such event shall repair any damage as soon as reasonably possible. In the event that Landlord elects to give such notice of the Landlord&# 146;s intention to cancel and terminate this Lease, Tenant shall have the right within ten (10) days after receipt of such notice, to give written notice to Landlord of Tenant’s intention to repair such damage at Tenant’s expense, without reimbursement from Landlord, in which event the Lease shall continue in full force and effect and Tenant shall proceed to make such repairs as soon as reasonably possible. If the Tenant does not give such notice within such 10 day period, this Lease shall be cancelled and be deemed terminated as of the date of the occurrence of such damage or destruction.

(c)

Damage Near the End of the Term

If the premises are totally or partially destroyed or damaged during the last twelve (12) months of the term of this Lease, Landlord may, at Landlord’s option, cancel and terminate this Lease as of the date of the cause of such damage by giving written notice to Tenant of Landlord’s election to do so within 30 days after the date of the occurrence of such damage, provided, however, that, if the damage or destruction occurs within the last 12 months of the term and if within 15 (fifteen) days after the date of such damage or destruction, Tenant exercises any option to extend the term provided herein, Landlord shall restore the Premises, if obligated to do so as provided in subparagraph (a) or (b) above.

(d)

Abatement of Rent

If the Premises are partially or totally destroyed or damaged and Landlord or Tenant repairs or restores them pursuant to the provision of this Article 12, the rent payable hereunder for the period during which such damage, repair or restoration continues shall be abated in proportion to the degree to which Tenant’s reasonable use of the Premises is impaired. Except for the abatement of rent, if any, Tenant shall have no claim against Landlord for any damages suffered by reason of any such damage, destruction, repair, or restoration.

(e)

Trade Fixtures and Equipment

If Landlord is required or elects to restore the Premises as provided in this Article, Landlord shall not be required to restore Tenant’s improvements, trade fixtures, equipment or alterations made by Tenant, such excluded items being the sole responsibility of the Tenant to restore hereunder.

(f)

Total Destruction – Multitenant Building

If the Premises are a part of a multitenant building and there is destruction to the Premises and/or the building of which the Premises are a part that exceeds Fifty (50%) percent of the then replacement value of the Premises and/or the building in which the Premises are a part from any cause whether or not covered by the insurance described in Article 11 above, Landlord may, at its option, elect to terminate this Lease (whether or not the Premises are destroyed) so long as Landlord terminates the leases of all other tenants in the building of which the Premises are a part, effective as of the date of such damage or destruction.


13.

CONDEMNATION

 If the Premises or any portion thereof are taken by the power of eminent domain, or sold by Landlord under the threat of exercise of said power (all of which is herein referred to as “condemnation”), this Lease shall terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever occurs first. If more than twenty (20%) percent of the floor area of any buildings on the Premises, or more than twenty (20%) percent of the land area of the Premises not covered with buildings, as taken by condemnation, either Landlord or Tenant may terminate this Lease as of the date the condemning authority takes possession by notice in writing of such election within twenty (20) days after Landlord shall have notified Tenant of such taking or, in the absence of such notice, then within twenty (20) days after the condemning authority shall have taken possession.

If the Lease is not terminated by either Landlord or Tenant as provided hereinabove, then it shall remain in full force and effect as to the portion of all Premises remaining provided that the rental shall be reduced in proportion to the floor area of the buildings taken within the Premises as it bears to the total floor area of all buildings located on the Premises. In the event this Lease is not so terminated, then Landlord agrees at Landlord’s sole cost and expense to as soon as reasonably possible restore the Premises to a complete unit of like quality and character as existed prior to the condemnation.



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All awards for the taking of any part of the Premises or any payment made under the threat of the exercise of the power of eminent domain shall be the property of the Landlord, whether made as compensation for the domination of the value of the leasehold or for the taking of the fee or as severance damages provided, however that Tenant shall be entitled to any award for loss or damage to Tenant’s trade fixtures and removable personal property.

Each party hereby waives the provisions of Code of Civil Procedures 1765 130 allowing either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the Premises.

Rent shall be abated or reduced during the period from the date of taking until the completion of restoration by the Landlord, but all other obligations of Tenant under this Lease shall remain in full force and effect. The abatement or reduction of the rent shall be based on the extent to which the restoration interferes with Tenant’s use of the Premises.


14.

ASSIGNMENT AND SUBLETTING

Tenant shall not voluntarily or by operation of law assign, transfer, sublet, mortgage, or otherwise transfer or encumber all or any part of Tenant’s interest in this Lease or in the Premises without Landlord’s prior written consent which consent shall not be unreasonably withheld. Any attempted assignment transfer mortgage, encumbrance, or subletting without such consent shall be void and shall constitute a breach of this Lease. If Tenant is a corporation, any dissolution, merger, consolidation, or other reorganization of Tenant or the sale or other transfer of a controlling percentage of the capital stock of Tenant, or the sale of at least 51% (fifty one) percent of the value of the assets of Tenant, shall be deemed a voluntary assignment. The phrase “controlling percentage” means the ownership of, and the right to vote, stock possessing at least fifty one (51%) percent of the total combined voting p ower of all classes of Tenant’s capital stock issued, outstanding, and entitled to vote for the election of directors. This paragraph shall not apply to corporations the stock of which is traded through an exchange or over the counter.

Regardless of Landlord’s consent, no subletting or assignment shall release Tenant or Tenant’s obligation to pay the rent and to perform all other obligations to be performed by the Tenant hereunder for the term of the Lease. The acceptance of rent by Landlord from any other person shall not be deemed a waiver by Landlord of any provisions hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting.


15.

DEFAULT

(a)

Events of Default

The presence of any one or more of the following events shall constitute a default and breach of this Lease by Tenant:

1.

Failure to pay rent when due if the failure continues for five (5) days after written notice has been given to Tenant

2.

Abandonment and vacation of the premises. Failure to occupy the premises for fourteen (14) consecutive days shall be deemed an abandonment and vacation.

3.

Failure to perform any other provision of this Lease if the failure to perform is not cured within thirty (30) days after written notice thereof has been given to Tenant by Landlord. If the default cannot reasonably be cured within said thirty (30) day period. Tenant shall not be in default under this Lease if Tenant commences to cure the default within thirty (30) day period and diligently prosecutes the same to completion.

4.

The making by Tenant of any general assignment, or general arrangement, or general arrangement for the benefit of creditors: the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy unless the same is dismissed within sixty (60) days, the appointment of a trustee or receiver to take possession of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in the Lease where possession is not restored to Tenant within thirty (30) days or the attachment, execution, or other seizure of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in the Lease, where such seizure is not discharged within thirty (30) days.

Notices given under this paragraph shall specify the alleged default and the applicable lease provising 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. No such notice shall be deemed a forfeiture or a termination of the Lease unless Landlord so elects in the notice.

(b)

Landlord’s Remedies

The landlord shall have the following remedies if Tenant commits a default under this Lease. These remedies are not exclusive but are cumulative and in addition to any remedies now or hereafter allowed by law.

Landlord can continue this Lease in full force and effect and the Lease will continue in effect so long as Landlord does not terminate Tenant’s right to possession, and the Landlord shall have the right to collect rent when due. During the period that Tenant is in default, Landlord can enter the Premises and relet them or any part of them, to third parties for Tenant’s account. Tenant shall be liable immediately to the Landlord for all costs the Landlord incurs in reletting the premises, including without limitation, brokers’ commissions, expenses of remodeling the Premises required by the reletting and like costs. Reletting can be for a period shorter or longer than the remaining term of this Lease. Tenant shall pay to Landlord the rent due under this Lease on the dates the rent is due, less the rent Landlord receives from any reletting. No act by Landlord allowed by this paragraph shall terminate this Lea se unless Landlord notifies Tenant that Landlord elects to terminate this Lease. After Tenant’s default and for so long as Landlord has not terminated Tenant a right to possession of the Premises if Tenant obtains Landlord’s consent. Tenant shall have the right to assume or sublet its interest in the Lease, but Tenant shall not be released from liability. Landlord’s consent to the proposed assignment or subletting shall not be unreasonably withheld.

If Landlord elects to relet the Premises in this paragraph, any rent that Landlord receives from such reletting shall apply first to the payment of any indebtedness from Tenant to Landlord other than the rent due from Tenant to Landlord, secondly, to all costs, including maintenance incurred by Landlord in such reletting and third, to any rent due and unpaid under this Lease. After deducting the payments referred to in this paragraph, any sum remaining from the rent Landlord receives from such reletting shall be held by Landlord and applied in payment of future rent as rent becomes due under this Lease. In no event shall tenant be entitled to any excess rent received by Landlord. If on the date rent is due under this lease the rent received from the reletting is less than that rent due on that date, Tenant shall pay to Landlord, in addition to the remaining rent due, all costs including maintenance, that Landlord shall ha ve incurred in reletting that remain after applying the rent received from reletting as provided in this paragraph.

Landlord can, at its option, terminate Tenant’s right to possession of the Premises at any time. No act by landlord other than giving written notice to Tenant shall terminate this lease. Acts of maintenance, efforts to relet the Premises, or the appointment of a receiver on Landlord’s initiative to protect Landlord’s interest in this Lease shall not constitute a termination of Tenant’s right to possession in the event of such termination, Landlord has the right to recover from Tenant:



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1.

The worth, at the time of the award, of the unpaid rent that had been earned at the time of the termination of the Lease

2.

The worth, at the time of the award, of the amount by which the unpaid rent that would have been earned after the date of the termination of this Lease until the time of the award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided.

3.

The worth, at the time of the award, of the amount by which the unpaid rent for the balance of the term after the time of the award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided and

4.

Any other amount, including court costs necessary to compensate Landlord for all detriment proximately caused by Tenant’s default.

The worth at the time of the award as used in 1 & 2 of this paragraph is to be computed by allowing interest at the maximum rate an individual is permitted by law to charge. The worth at the time of the award as referred to in 3 of this paragraph is to be composed by discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one (1%) percent.

If Tenant is in default under the terms of this Lease, Landlord shall have the additional right to have a receiver appointed to collect rent and conduct Tenant’s business. Neither the filing of a petition for the appointment of a receiver nor the appointment itself shall constitute an election by Landlord to terminate the Lease.

Landlord at any time after Tenant commits a default can cure the default at Tenant’s cost and expense. If Landlord at any time by reason or Tenant’s default, pays any sum or does any act that requires the payment of any sum, the sum paid by Landlord shall be due immediately from Tenant to Landlord at the time the sum is paid, and if paid at a later date shall bear interest at the maximum rate an individual is permitted by law to charge from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together with interest thereon, shall be considered additional rent.


16.

SIGNS

Tenant shall not have the right to place, construct, or maintain any sign, advertisement, awning, barrier, or other exterior decorations on the building or other improvements that are a part of the Premises without Landlord’s prior, written consent which consent shall not be unreasonably withheld.


17.

EARLY POSSESSION

In the event that the Landlord shall permit Tenant to occupy the Premises prior to the commencement date of the term of this Lease, such occupancy shall be subject to all the provisions of this Lease. Said early possession shall not advance the termination date of this Lease.


18.

SUBORDINATION

This Lease, at Landlord’s option, shall be subordinate to any ground lease, mortgage, deed of trusts, or any other hypothecation for security now or hereafter placed upon the real property of which the Premises are a part and to any and all advances made on the security thereof and to all renewal, modification, and extensions thereof. Notwithstanding any such subordination, Tenant’s right to quiet possession of the Premises shall not be disturbed if Tenant is not in default and so long as Tenant shall pay the rent and observe and perform all the other provisions of this Lease unless this Lease is otherwise terminated pursuant to its terms. If any mortgage, trustee, or ground lessor shall elect to have this Lease prior to the lien of its mortgage or deed of trust or ground lease, and shall give written notice therof to Tenant, this Lease shall be deemed prior to such mortgage, deed of trust, or ground lease, whet her this Lease is dated prior to or subsequent to the date of such mortgage, deed of trust of ground lease or the date of recording thereof. Tenant agrees to execute any documents requiring to effect such subordination or to make this Lease, prior to the lien of any mortgage, deed of trust, or ground lease, as the case may be, and failing to do so within ten (10) days after written demand from Landlord does hereby make constitute and irrevocably appoint Landlord as Tenant’s attorney in fact and in Tenant’s name, place, and stead to do so.


19.

SURRENDER

On the last day of the term hereof, or on any sooner termination, Tenant shall surrender the Premises to Landlord in good condition broom clean ordinary wear and tear accepted. Tenant shall repair any damage to the Premises occasioned by its use thereof, or by the removal of Tenant’s trade fixtures, furnishings, and equipment which repair shall include the patching and filling of holes and repair of structural damage. Tenant shall remove all of its personal property and fixtures on the Premises prior to the expiration of the term of this Lease and if required by Landlord pursuant to Article 10a above, any alterations, improvements, additions made by Tenant to the Premises. If Tenant fails to surrender the Premises to Landlord on the expiration of the Lease as required by this paragraph. Tenant shall hold Landlord harmless from all damages resulting from Tenant’s failure to vacate the Premises, including, without limitation, claims made by any succeeding tenant resulting from Tenant’s failure to surrender the Premises.


20.

HOLDING OVER

If the Tenant, with the Landlord’s consent, remains in possession of the Premises after the expiration of the term of this Lease, such possession by Tenant shall be deemed to be a tenancy from month to month at a rental in the amount of the last monthly rental plus all other charges payable hereunder upon all the provisions of this Lease applicable to month to month tenancy.


21.

BINDING ON SUCCESSORS AND ASSIGNS

The terms, conditions and covenants of this Lease shall be binding upon and shall inure to the benefit of each of the parties hereto, their heirs, personal representatives, successors, and assigns.


22.

NOTICES

Whenever under this Lease a provision is made for any demand, notice or declaration of any kind, it shall be in writing and served either personally or sent by registered or certified United States mail, postage prepaid, addressed at the addresses set forth below.

To Landlord At: _____________________

Tenant At:_____________________________


Such notices shall be deemed to be received within forty eight (48) hours from the time of mailing, if mailed as provided for in this paragraph.



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23.

LANDLORD’S RIGHT TO INSPECTION

Landlord and Landlord’s agent shall have the right to enter the Premises at reasonable times for the purpose of inspecting same, showing the same to prospective purchasers and lenders, and making such alterations, repairs, improvements, or additions to the Premises or to the building of which the Premises are a part as Landlord may deem necessary or desirable. Landlord may at any time place on or about the Premises any ordinary “for sale” signs and Landlord may at any time during the last one hundred twenty (120) days of the term of this Lease place on or about the Premises any ordinary “For Sale or Lease” signs, all without rebate of rent or liability to Tenant.


24.

CHOICE OF LAW

This Lease shall be governed by the laws of the state where the Premises are located.


25.

ATTORNEY’S FEES

If either Landlord or Tenant becomes a party to any litigation or arbitration concerning this Lease, the Premises, or the building or other improvements in which the Premises are located, by reason of any act or omission of the other party or its authorized representatives, and not by reason of any act or omission of the party that becomes a party to that litigation or any act or omission of its authorized representatives, the party that causes the other party to become involved in the litigation shall be liable to that party for reasonable attorney’s fees and court costs incurred by it in the litigation.

If either party commences an action against the other party arising out of or in connection with this Lease, the prevailing party shall be entitled to have and recover from the losing party reasonable attorney’s fees and costs of suit.


26.

LANDLORD’S LIABILITY

The term “Landlord” as used in this Lease shall mean only the owner or owners at the time in question of the fee title or a Lessee’s interest in a ground lease of the Premises, and in the event of any transfer of such title or interest, Landlord herein named (and in case of any subsequent transfers to the then successor) shall be relieved from and after the date of such transfer of all liability in respect to Landlord’s obligations thereafter to be performed. The obligations contained in this Lease to be performed by Landlord shall be binding upon the Landlord’s successors and assigns, only during their respective periods of ownership.


27.

WAIVERS

No waiver by Landlord of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Tenant of the same or any other provision. Landlord’s consent to or approval of any set shall not be deemed unnecessary the obtaining of Landlord’s consent to or approval of any subsequent act by Tenant. The acceptance of rent hereunder by Landlord shall not be a waiver of any preceding breach by Tenant of any provision hereof, other than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of its acceptance of such rent.


28.

INCORPORATION OF PRIOR AGREEMENTS

This lease contains all agreements of the parties with respect to any matter mentioned herein. No prior agreement or understanding pertaining to any such matter shall be effective. This lease may be modified only in writing, and signed by the parties in interest at the time of such modification.


29.

TIME

Time is of the essence of this Lease.



30.

SEVERABILITY

The unenforceability, invalidity, or illegality of any provision of this Lease shall not render the other provisions hereof unenforceable, invalid or illegal.


31.

ESTOPPEL CERTIFICATES

Each party, within ten (10) days after notice from the other party, shall execute and deliver to the other party a certificate stating that this Lease is unmodified and in full force and effect, or in full force and effect as modified, and stating the modification. The certificate shall also state the amount of minimum monthly rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent, if any, as well as acknowledging that there are not, to that party’s knowledge, any uncured defaults on the part of the other party, or specifying such defaults, if any, which are claimed. Failure to deliver such a certificate within ten (10) days shall be conclusive upon the party failing to deliver the certificate to the benefit of the party requesting the certificate that this Lease is in full force and effect, that there are not uncured defaults hereunder, and has not been modifie d except as may be represented by the party requesting the certificate.


32.

COVENANTS AND CONDITIONS

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


33.

SINGULAR AND PLURAL

When required by the context of this Lease, the singular shall indicate the plural.


34.

JOINT AND SEVERAL OBLIGATIONS

Party shall mean Landlord and Tenant: and if more than one person or entity is the Landlord or Tenant, the obligations imposed on that party shall be joint and several.


35.

OPTION TO EXTEND

Provided that Tenant shall not then be in default hereunder, Tenant shall have the option to extend the term of this Lease for ___ additional ____ year periods upon the same terms and conditions herein contained, except for fixed minimum monthly rentals upon delivery by Tenant to Landlord of written notice of its election to exercise such options at lease ninety (90) days prior to the expiration of the original (or extended) term hereof. The parties hereto shall have thirty (30) days after the Landlord receives the option notice in which to agree on the minimum monthly rental during the extended term(s). If the parties agree on the minimum monthly rent for the extended term(s) during the period, they shall



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immediately execute an amendment to this Lease stating the minimum monthly rent, in the event that there is more than one option to extend the term of this Lease, the parties hereto shall negotiate the minimum monthly rent as set forth herein for each extended term of this Lease. If the parties hereto are unable to agree on the minimum monthly rent for the extended terms within said thirty (30) day period, the option notice shall be of no effect and this Lease shall expire at the end of the term. Neither party to this Lease shall have the right to have a court or other third party set the minimum monthly rent.


36.

ADDENDUM

Any addendum attached hereto and either signed or initialed by the parties shall be deemed a part hereof and shall supercede any conflicting terms or provisions contained in this Lease.



The parties hereto have executed this Lease on the date first above written.


LANDLORD

TENANT


BY: /s/ Mary Sugiura                                   

BY: /s/ Gunther Than, CEO, View Systems, Inc.




Notice: The California Department of Justice, sheriff’s departments, police departments serving jurisdictions of 200,000 or more and many other local law enforcement authorities maintain for public access to database of the locations of persons required to register pursuant to paragraph (1) of subdivision (a) of Section 299.4 of the Penal Code. The data base is updated on a quarterly basis and is a source of information about the presence of these individuals in any neighborhood. The Department of Justice also maintains a Sex Offender Identification Line through which inquiries about individuals may be made. This is a “900” telephone service. Callers must have specific information about individuals they are checking. Information regarding neighborhoods is not available through the “900” telephone service.






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 EX-31.1 4 viewex311.txt CHIEF EXECUTIVE OFFICER CERTIFICATION Exhibit 31.1 CHIEF EXECUTIVE OFFICER CERTIFICATION I, Gunther Than, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of View Systems, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report. 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent function): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. /s/ Gunther Than Date: August 14, 2006 ____________________________________ Gunther Than, Chief Executive Officer EX-31.2 5 viewex312.txt PRINCIPAL FINANCIAL OFFICER CERTIFICATION Exhibit 31.2 PRINCIPAL FINANCIAL OFFICER CERTIFICATION I, Gunther Than, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of View Systems, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report. 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent function): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. /s/ Gunther Than Date: August 14, 2006 _________________________________________ Gunther Than, Principal Financial Officer EX-32.1 6 viewex321.txt SECTION 1350 CERTIFICATION Exhibit 32.1 View Systems, Inc. CERTIFICATION OF PERIODIC REPORT Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 18 U.S.C. Section 1350 The undersigned executive officer of View Systems, Inc. certifies (the "Company") pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: (A) the quarterly report on Form 10-QSB of the Company for the quarter ended June 30, 2006, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (B) the information contained in the Form 10-QSB fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: August 14, 2006 /s/ Gunther Than ____________________________________ Gunther Than Chief Executive Officer Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----