**TABLE OF CONTENTS** **Section**     **Page**  1.  BASIC LEASE PROVISIONS  1  2.  DEFINITIONS  2  3.  PREMISES  4  4.  TERM; DELIVERY OF PREMISES  5  5.  RENT  6  6.  SECURITY DEPOSIT  7  7.  USE  7  8.  MAINTENANCE, REPAIRS AND ALTERATIONS  8  9.  TAXES  1010.  UTILITIES  1011.  INSURANCE  1012.  WAIVER AND INDEMNITY  1213.  DAMAGE AND DESTRUCTION  1214.  CONDEMNATION  1415.  ASSIGNMENT AND SUBLETTING  1416.  DEFAULT BY TENANT; REMEDIES  1617.  TENANT’S INSOLVENCY  1818.  DEFAULT BY LANDLORD  1819.  SUBORDINATION AND ESTOPPEL  1920.  HAZARDOUS MATERIALS  2021.  NOTICE  2122.  OTHER TERMS AND CONDITIONS  2123.  GENERAL PROVISIONS  2224.  ADDENDUM  26 **EXHIBITS** A  Site PlanB  Premises and Improvements to PremisesC  Rules and RegulationsD  Signage CriteriaE  Environmental QuestionnaireF  **[Intentionally Omitted]**
**STANDARD INDUSTRIAL LEASE–NET**  **THIS STANDARD INDUSTRIAL LEASE–NET**(**“Lease”**), dated for reference purposes onlyJune 5, 2001 is made at San Diego, California, between H. G. FENTON COMPANY, a California corporation (**“Landlord”**), and MAD CATZ, INC., a California corporation (**“Tenant”**).  1.**  BASIC LEASE PROVISIONS**.    The words and figures set forth in this Section 1 are used as definedterms in this Lease.  1.1**  Premises**:    The real property andimprovements which are the subject of this Lease. The Premises consist of **14,022** Rentable Square Feet (rsf) as depicted on Exhibit B. The address for the Premises is 7480 Mission Valley Road, Suite 101, San Diego California 92108 1.2**  Building**:    The single-story building addressed at7480 Mission Valley Road, San Diego, California, consisting of 28,354 rsf.  1.3**  Project**:    The three (3) Buildings, including all appurtenances and common area thereto, located at 7460, 7470 and 7480 Mission Valley Road, San Diego, California, consisting ofapproximately 112,358 rentable square feet.  1.4**  Term**:    Sixty (60) months.  1.5  **Commencement and Expiration Dates**:  (a)  Commencement Date: September 1, 2001  (b)  ExpirationDate: August 31, 2006  (c)  Delivery of the Premises (estimated): June 15, 2001 1.6**  Extension Option Period**:    Subject to the provisionsof Section 24  1.7  **Initial Monthly Base Rent(NNN)**:    $20,331.90  1.8**  Prepaid BaseRent**:    $20,331.90  1.9  **Periodic Increase In Base Rent(NNN)**:  **Lease Year**  **Base Rent**      2  $21,145.18      3  $21,990.98      4  $22,870.62      5  $23,785.45 1.10**  Security DepositAmount**:    $20,331.90  1.11**  Tenant ImprovementAllowance**:    Not Applicable  1.12  **Tenant’s Share ofOperating Expenses**:  (a)  Real Property Taxes: 12.48%  (b)  Other Operating Expenses: 12.48%  1.13**  Permitted Use**:    General offices, administration sales, marketing, design, customer service and related supportfor computer and video game peripheral manufacturer and any other use permitted under all applicable laws and zoning.  1.14**  Tenant’s Guarantor(s)**:    Not Applicable  1.15**  Broker(s)**:  The Irving Hughes Group—TenantCB Richard Ellis—Landlord1.16**  Parking**:  56 unreserved spaces  FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                1 
1.17  **Landlord’s Address for Notice**:  H. G. Fenton Company7588 Metropolitan DriveSan Diego, California 92108Tel: (619) 400-0120Fax:(619) 400-0111Attention: Property Manager1.18  **Tenant’s Address for Notice**:  Mad Catz, Inc.7480 Mission Valley Road, Suite 101San Diego, CA 92108Tel: (619)Fax: (619)Attention: 1.19  **Addendum**:    Section 24.  2.  **DEFINITIONS**.    The captions appearing in this Section 2 are used as defined terms in this Lease.  2.1**  Additional Rent**.    All sums payable by Tenant hereunder other than Base Rent, including without limitation:Tenant’s Share of Operating Expenses; late charges; interest on past due amounts; attorneys’ fees; and reimbursements to Landlord of sums advanced by Landlord to cure any default or discharge any obligation of Tenant hereunder. 2.2**  Base Rent**.    The basic monthly rent payable by Tenantfor the use and occupancy of the Premises, in accordance with Section 5 of this Lease.  2.3**  Business Park**.    The Mission Valley Heights planned industrial development of which the Project is a part. The Business Park consists of Lots 1, 2 and 4 through 29 of MISSION VALLEY HEIGHTSin the City of San Diego, County of San Diego, State of California, according to Map thereof No. 11034 on file in the Office of the County Recorder of San Diego County. When fully built-out, the Business Park will contain approximately 1,456,500rentable square feet of improved space.  2.4**  CommencementDate**.    The first day of the Term, as determined in accordance with Section 4.1 below.  2.5**  Common Areas**.    All areas and facilities outside the Premises and within the Building and Project that Tenant is permitted to use, as provided and designated by the Landlord from time totime for the general non-exclusive use of Landlord, Tenant and other tenants of the Building and Project and their respective employees, suppliers, shippers, customers, invitees, licensees or other visitors, including without limitation hallways,entryways, common rest rooms on multi-tenant floors, elevators, stairways, common pipes, conduits, wires and appurtenant equipment serving the Premises, parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways,parkways, driveways and landscaped areas.  2.6**  Declaration**.    The recorded Declaration of Covenants, Conditions and Restrictions for the Business Park, as the same may be amended from time to time.  2.7**  Delivery of the Premises**.    The date of the inspection and acceptance (ordeemed acceptance) of the Premises by Tenant, following Landlord’s notice that Landlord’s Delivery Work has been substantially completed in accordance with Exhibit B attached hereto.  2.8**  Hazardous Materials**.    Any and all materials or substances which have been determined to be nuisance ordangerous, toxic or hazardous or a pollutant or contaminant, including but not limited to any hydrocarbon material, flammable explosives, asbestos, urea formaldehyde, radioactive materials or waste, or other hazardous, toxic, contaminating orpolluting materials, substances or wastes, including, without limitation, any “hazardous substances”, “hazardous wastes”, “hazardous materials” or “toxic substances” under any Hazardous Materials Laws. 2.9**  Hazardous Materials Laws**.    All federal, state andlocal laws, ordinances and regulations, including, but not limited to, the Federal Water Pollution Control Act (33 U.S.C. §1251, et seq.), Resource Conservation & Recovery Act (42 U.S.C. §6901, et seq.), Safe Drinking Water Act (42U.S.C. §3000f, et seq.), Toxic Substances Control Act (15 U.S.C. §2601, et seq.), the Clean Air Act (42 U.S.C. §7401, et seq.), Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §9601, et seq.),California HEALTH & SAFETY CODE (§25100, et seq., §39000, et seq.), California Safe Drinking Water & Toxic Enforcement Act of 1986 (California HEALTH & SAFETY CODE §25249.5, et seq.), California WATER CODE (§13000, etseq.), and other comparable federal, state or local law, regulation or interpretation thereof, whether currently in force or enacted in the future, together with any licenses, permits, plans or approvals generated pursuant to or as a result of anysuch law, which regulates or proscribes the use, storage, disposal, cleanup, transportation, release or threatened release into the environment or presence of Hazardous Materials.  2.10**  Lease Year**.    A period of twelve consecutive full calendar months. The first Lease Year shall begin on theCommencement Date if the Commencement Date is the first day of a calendar month; otherwise, the first Lease Year shall begin on the first day of the first full calendar month after the month in which the Commencement Date occurs. Each succeedingLease Year shall begin on the anniversary of the beginning of the first Lease Year. If   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                2 
Tenant should extend the Term pursuant to any extension option granted herein, the first day of the Extension Term shallalso be deemed to be the first day of a Lease Year for all purposes of this Lease.  2.11**  Tenant’s Work**.    The improvements and other work, if any, to be accomplished by Tenant in accordance with Exhibit B.  2.12**  Landlord’s Delivery Work**.    All items of Landlord’s Work except those which Landlord reasonably cannotcomplete prior to the Commencement Date, *e.g.,* Landlord’s Work that cannot be performed by Landlord until Tenant (i) provides Landlord with plans and specifications therefor, or (ii) obtains a building permit, or (iii) completes thoseitems of Tenant’s Work that are necessarily completed prior to a particular item of Landlord’s Work.  2.13**  Landlord’s Work**.    The improvements and other work, if any, to be accomplished by Landlord in accordance with Exhibit B.  2.14**  Mortgage**.    Any mortgage, trust deed or other encumbrance, and all renewals, extensions or replacements thereof,now or hereafter imposed by Landlord upon the real property which includes the Premises.  2.15**  Mortgagee**.    The holder of a Mortgage.  2.16**  Operating Expenses**.    In calculating Operating Exepenses and in determining which costs are operating expenses, and notwithstanding anything to the contrary herein contained, Landlord issoley responsible for Capital Improvements, while Tenant is ultimatley responsible (through the paying of Operating Expenses) for those expenses related to the Premises.  Pursuant to the foregoing, Operating Expenses include:  (a)  The operation, and maintenance, in neat, clean and good order and condition of (i) the Common Areas of the Project, including without limitation all parking areas, loading and unloadingareas, trash areas, roadways, sidewalks, walkways, parkways, driveways, landscaped areas, and irrigation systems, common area lighting facilities, and fences and gates; (ii) fire detection in the Project, including sprinkler system maintenance andrepair; and (iii) unless allocated directly to Tenant pursuant to Section 8.1(b), the Building’s heating, ventilation and air conditioning (**“HVAC”**) systems.  (b)  Trash disposal for the Project, and to the extent any such services are provided, janitorial service, security services, gardening, painting,plumbing, electrical, carpentry, window washing, signage and equipment rental expenses, and any other service to be provided by Landlord that is elsewhere in the Lease stated to be an item of Operating Expenses.  (c)  Real Property Taxes to be paid by Landlord.  (d)  Utilities not separately metered to Tenant or other tenants of the Project.  (e)  Please provide list  (Tenant shall not be responsible for any capital improvements).  (f)  A property management fee in the amount of fifteen percent ( (10%) of the preceding items of Operating Expenses.  (g)  Dues and assessments payable to the Business Park’s property owners association (if any).  The inclusion of the improvements, facilities and services set forth in the foregoing definition shall not be deemed Landlord’s representation that such improvements or facilities exist, nor shallit impose on Landlord any obligation either to have those improvements or facilities or to provide those services, unless the improvements or facilities already exist in the Project or Landlord already provides the services as of the CommencementDate, or unless Landlord has agreed to do so elsewhere in the Lease.  2.17**  RealProperty Taxes**.    All general property and improvement taxes and all forms of assessment, special assessment or reassessment, license fee, license tax, business license tax, commercial rental tax, in lieu tax, levy, charge,penalty (to the extent not imposed as a result of Landlord’s negligence) or similar imposition, imposed by any authority having the direct power to tax, including any city, county, state or federal government, or any school, agricultural,lighting, drainage or other improvement or special assessment district thereof, or any agency or public body, as against any legal or equitable interest of Landlord in the Premises and all improvements thereon and thereto as they presently exist oras they may be expanded, developed, constructed or altered from time to time, including but not limited to: specifically excluding Landlord’s federal, state or city income, franchise, corporate, personal property, stock transfer, revenues,inheritance or estate taxes; (b) any assessments, taxes, fees, levies or charges in addition to, or in substitution, partially or totally, for any assessment, tax, fee, levy or charge previously included within the definition of real property taxbefore adoption of Proposition 13 by the voters of the State of   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                3 
 California in the June 1978 election, it being acknowledged by Tenant andLandlord that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services that were beforeProposition 13 provided without charge to property owners or occupants; and (c) any assessment, tax, fee, levy or charge upon this transaction or any document to which Tenant is a party which is imposed on the creation or transfer of an interest oran estate in the Premises. It is the intention of Tenant and Landlord that all new and increased assessments, taxes, fees, levies and charges, and all similar assessments, taxes, fees, levies and charges be included within the definition of RealProperty Taxes for the purposes of this Lease. Real Property Taxes for the first year of the Term shall be calculated as if the Premises and related improvements were fully assessed. If at any time during the Term the laws concerning the methods ofreal property taxation prevailing at the commencement of the Lease Term are changed so that a tax or excise on rents or any other tax, however described, is levied or assessed against Landlord as a substitution in whole or in part for any realproperty taxes, then Real Property Taxes shall include, but not be limited to, any such assessment, tax, fee, levy or charge allocable to or measured by the area of the Premises or the rent payable hereunder, including, without limitation, any grossincome tax with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof. With respect to anyassessments that may be levied against or upon the Premises, the Building or all or any portion of the Project and that under the laws then in force may be evidenced by improvement or other bonds, or may be paid in annual installments, there shallbe included within the definition of Real Property Taxes with respect to any tax fiscal year only the amount currently payable on such tax, bond or assessment, including interest, for such tax fiscal year or the current annual installment for suchtax fiscal year.  3.  **PREMISES.** 3.1**  Lease of Premises**.    In consideration of the rent and covenants set forth below, Landlord hereby leases thePremises to Tenant, and Tenant hires the Premises from Landlord, for the term, at the rental, and upon all of the conditions set forth herein. Except as otherwise provided herein, this Lease is subject to: (ii) all covenants, conditions,restrictions, easements, mortgages, deeds of trust, leases, ground or underlying leases, rights of way, reciprocal easement agreements to which Landlord is a party which affect the Project and all other matters now or hereafter affecting the Projector the Premises; and (ii) all zoning laws, ordinances and building codes now or hereafter affecting the Project or the Premises. In the event Landlord has a leasehold interest in the Project or the Premises, this Lease shall terminate upon thetermination of such leasehold interest whether such termination is voluntary, involuntary, or by operation of law, without liability of Landlord (unless otherwise specifically set forth herein).  3.2**  Landlord’s Reserved Rights**.    Landlord reserves to itself the absolute rights: (i) to use the roof,exterior walls and area beneath the Premises, and (ii) to install, use, maintain and replace equipment, machinery, pipes, conduits and wiring located within the Premises which serve other parts of the Project, in a manner and in locations that donot unreasonably interfere with Tenant’s use of the Premises.  3.3**  Condition ofPremises**.    Tenant acknowledges that except to the extent expressly set forth in this Lease or in a written addendum or amendment hereto, neither Landlord nor its agents have made (i) any promise to alter, remodel orotherwise improve, or (ii) any representation or warranty with respect to the condition of, the Premises, the Building or any part of the Project or improvements thereon or therein. Tenant’s taking possession of the Premises shall be deemedacceptance of the Premises by Tenant, and shall be deemed conclusively to establish that the Premises are in good and satisfactory condition as of the date Tenant takes possession. Subject to the completion of any Landlord’s Work, Tenantaccepts possession of the Premises in their current, “as is”, condition, and acknowledges that it has inspected the Premises before signing this Lease and is fully aware of the condition of the Premises. Notwithstanding the foregoing, andprior to Landlord’s Delivery of the Premises, Landlord shall inspect any existing HVAC system (consisting of any air distribution duct work, compressors and any other related components or equipment); electrical system (consisting of wall andfloor outlets, flourescent lighting and distribution panel[s]); and plumbing system (consisting of water supply, sinks, drains, restroom facilities, water heater[s] and sprinkler systems, if any) collectively (“Existing Utility Systems”)located in or on the Premises to ensure that each Existing Utility System and any related component is in proper working order and condition. In addition Landlord shall ensure that the Premises is thoroughly cleaned.  3.4**  Rights in Common Areas**.    Landlord grants to Tenant and to Tenant’semployees, invitees and licensees a non-exclusive license during the Term to use the Common Areas, subject to the terms and conditions of this Lease. Tenant acknowledges that others, including without limitation Landlord and other tenants of theBuilding and Project, and their respective employees, invitees and visitors, and other persons authorized by Landlord, will also be entitled to use the Common Areas. Without advance notice to Tenant and without any liability to Tenant in anyrespect, Landlord shall have the right to:  (a)  Establish and enforce reasonable rulesand regulations concerning the maintenance, management, use and operation of the Common Areas.  (b)  Close off any of the Common Areas to whatever extent required in the opinion of Landlord and its counsel to prevent a dedication of any of the Common Areas or the accrual of any rights by any person or the public tothe Common Areas, provided such closure does not deprive Tenant of the substantial benefit and enjoyment of the Premises.  (c)  Temporarily close any of the Common Areas for maintenance, alteration or improvement purposes.   FWP NNN Indust. 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 (d)  Select, appoint or contract with any person forthe purpose of operating and maintaining the Common Areas, subject to such terms and at such rates as Landlord deems reasonable and proper.  (e)  Change the size, use, shape or nature of any portions of the Common Areas, provided such change does not deprive Tenant of the unfettered enjoyment and use of the Premises. So long asTenant is not thus deprived of the unfettered enjoyment and useof the Premises, Landlord will also have the right at any time to change the arrangement or location of, or both, or to regulate or eliminate the use of, any concourse, parking spaces,garage, or any elevators, stairs, toilets or other public conveniences in the Project, without incurring any liability to Tenant or entitling Tenant to any abatement of rent, and such action will not constitute an actual or constructive eviction ofTenant.  (f)  Erect one or more additional buildings on the Common Areas, expand theexisting buildings or other buildings to cover a portion of the Common Areas, convert Common Areas to a portion of the Building or other buildings, or convert any portion of such other buildings to Common Areas. Upon erection of any additionalbuildings or change in the Common Areas, the portion of the Project upon which buildings or structures have been erected will no longer be deemed to be a part of the Common Areas. In the event of any such changes in the size or use of the CommonAreas of the Project, Landlord may make an appropriate adjustment in the Building’s or any other buildings’ pro rata share of exterior Common Areas of the Project as appropriate, and a corresponding adjustment to Tenant’s Share ofOperating Expenses. As long as our expenses are not increased due to such occurance.  4.  **TERM;DELIVERY OF PREMISES.** 4.1**  Term**.    The Term shall befor the number of months set forth at Section 1.4 above, beginning on the Commencement Date and ending on the Expiration Date. Notwithstanding the foregoing, if Delivery of the Premises has not occurred by the Commencement Date, then theCommencement Date shall be the actual date of Delivery of the Premises, as advanced day-for-day for each day’s delay therein that is Tenant Delay. Landlord shall not be liable for any (we want a reduction in rent, etc.) damage incurred byTenant as a result of any delay in Delivery of the Premises, and this Lease shall not thereby become void or voidable. **“Tenant Delay”** means delay in the Delivery of the Premises caused by any of the following: (i) non-compliance byTenant with matters to be performed by Tenant or Tenant’s agents as specified in Exhibit B; (ii) Tenant’s failure to respond within a reasonable time during the design or construction periods to requests for approval, consent, explanationor interpretation of anything relating to the construction of Landlord’s Work; (iii) the effect of any change orders or other revisions of any items of Landlord’s Work initiated or necessitated by Tenant or its agents; or (iv) any othercause within Tenant’s exclusive control that adversely affects the date of Delivery of the Premises.  4.2**  Delivery of the Premises**.    Upon completion of Landlord’s Delivery Work, the parties shall jointly inspect the Premises. If any defects in Landlord’s Delivery Work exist at thetime of such inspection, Tenant shall notify Landlord thereof in writing upon its inspection of the Premises and Landlord shall correct such defects; provided, however, that Delivery of the Premises to Tenant shall be delayed only if the existenceof any such defects would materially adversely affect Tenant’s occupancy of the Premises, in which case the date of Delivery of the Premises shall be the date upon which Landlord notifies Tenant that such defects have been substantiallycorrected. Upon inspection and Delivery of the Premises to Tenant, Tenant shall at Landlord’s request sign a written statement acknowledging Tenant’s inspection and acceptance of the Premises. If Tenant shall fail to contact Landlord andinspect the Premises within five (5) days after notice from Landlord that Landlord’s Delivery Work has been substantially completed, Landlord’s notice shall be conclusive and binding and Delivery of the Premises shall be deemed to haveoccurred on the last day of the five-day period. If a dispute shall arise between Landlord and Tenant as to the completion of any of Landlord’s Work, the certificate of Landlord’s architect shall be binding and conclusive upon all parties.Notwithstanding the foregoing, unless otherwise agreed to, if Tenant shall begin Tenant’s Work or shall otherwise occupy the Premises prior to substantial completion of Landlord’s Delivery Work, Delivery of the Premises shall be deemed tohave been the date of such commencement of Tenant’s Work or other occupancy of the Premises.  4.3**  Termination for Non-Commencement**.    Notwithstanding the foregoing, in the event that Delivery of the Premises has not occurred within onemonth after the Commencement Date set forth inSection 1.5(a), then for a period of ten (10) days after the expiration of such one-month period either party not in default hereunder may cancel and terminate this Lease, without any liability to the other party, upon written notice to the otherparty; and provided further, however, that if such written notice of termination is not delivered by either party within the thirty (30)-day period, the foregoing right to terminate this Lease shall itself terminate and be of no further force oreffect.          4.4**  Memorandum of CommencementDate**.    Following the Delivery of the Premises, Landlord shall prepare and forward to Tenant two copies of a written Memorandum of Commencement Date, signed by Landlord, confirming the Commencement Date and the date on whichthe Term will expire. Within thirty (30) days after receipt thereof, Tenant shall sign and return one copy of the Memorandum of Commencement Date, indicating either Tenant’s agreement with the matters set forth therein or any areas ofdisagreement. Tenant’s failure to return a copy of the Memorandum of Commencement Date within such thirty (30) day period shall be conclusively deemed Tenant’s agreement with all matters set forth therein. Any dispute or disagreement onTenant’s part as to the Commencement Date set forth in such memorandum shall, at the election of either party, be submitted to final, binding arbitration in San Diego, California under the Commercial Arbitration Rules of the AmericanArbitration Association.  4.5  **Early Possession**.    Landlordherein agrees to grant Delivery of the Premises to Tenant on or about the date set forth in Section 1.5 (c) above. Such occupancy shall be subject to all provisions of this Lease   FWP NNN Indust. 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excluding payment of monthly Base Rent (however, not Tenant’s Share of Operating Expenses) for the period fromDelivery of the Premises to the actual Commencement Date).  5.**  RENT**.  5.1**  General**.    From and after the Commencement Date, Tenant agrees to pay Landlord,in advance, on the first day of each and every calendar month during the Term, Base Rent and Additional Rent as specified in this Section. Payment of all such rent shall be without offset or demand, shall be in lawful money of the United States ofAmerica and shall be made at the address set forth for Landlord herein or at such other place as Landlord may direct.  5.2**  Base Rent**.    Base Rent shall initially be in the amount per month set forth in Section 1.7.  5.3**  Annual Adjustment to Base Rent**.    Base Rent shall be increased during the Term in accordance with the scheduleset forth in Section 1.9.  5.4**  Operating Expenses**.    Theparties intend that, subject only to the specific exceptions set forth herein, this Lease be absolutely net to Landlord. Accordingly, in addition to Base Rent and subject to the provisions of this Section, Tenant shall pay, as Additional Rent,Tenant’s Share of Operating Expenses incurred by Landlord during each calendar year of the Term, pursuant to the following terms and conditions:  (a)  Landlord shall provide to Tenant, at or before the Commencement Date, a good faith estimate of Tenant’s Share of Operating Expenses thatLandlord anticipates will actually be incurred for the calendar year in which the Commencement Date occurs. Landlord shall also provide to Tenant, as soon as possible following the first day of each succeeding calendar year, a good faith estimate ofTenant’s Share of Operating Expenses with respect to such succeeding calendar year of the Term.  (b)  Each annual estimate of Tenant’s Share of Operating Expenses determined by Landlord pursuant to this Section shall be divided into twelve (12) equal monthly installments. Tenant shall pay to Landlord such monthlyinstallment of Tenant’s Share of Operating Expenses with each monthly payment of Base Rent. In the event the estimated amount of Tenant’s Share of Operating Expenses has not yet been determined for any calendar year, Tenant shall pay themonthly installment in the estimated amount determined for the preceding calendar year until the estimate for the current calendar year has been provided to Tenant, at which time Tenant shall pay any shortfall for the preceding months of thecalendar year and shall thereafter make the monthly installment payment in accordance with the current estimate.  (c)  Within sixty (60) days following the end of each calendar year of the Term, Landlord shall determine and provide to Tenant a statement setting forth the amount of Operating Expenses actually incurred with respect tosuch calendar year. In the event that Tenant’s Share of such actual Operating Expenses exceeds the sum of the monthly installments actually paid by Tenant for such calendar year, Tenant shall pay the difference to Landlord, within thirty (30)days following receipt of such statement. In the event the sum of such installments exceeds Tenant’s Share of such Operating Expenses actually incurred, the difference shall be applied as a credit to future installments of Tenant’s Shareof Operating Expenses.  (d)  Upon written request of Tenant, Landlord shall provide anaccounting of the Operating Expenses for the preceding calendar year. Landlord shall keep at its home office full, accurate and separate books of account with backup documentation of Operating Expenses for a period of three full years after the endof each calendar year, which Tenant shall have the right to examine and copy at no expense to Landlord, at reasonable times and upon reasonable notice. Tenant shall have the right, upon twenty (20) days’ prior notice to Landlord, not morefrequently than annually and at Tenant’s sole cost and expense, to conduct an audit of Landlord’s books and records regarding such Operating Expenses to confirm the accuracy of Landlord’s accounting; provided, however, that such auditshall not unreasonably interfere with the conduct of Landlord’s business.  5.5**  Late Charges**.    Tenant acknowledges that late payment by Tenant to Landlord of Base Rent or Additional Rent due hereunder will cause Landlord to incur costs not contemplated by this Lease,the exact amount of which is extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Landlord by the terms of any mortgage or deed of trust coveringthe Premises. Therefore, if any payment of Base Rent or Additional Rent is not paid within ten (10) calendar days after the date due, Tenant shall pay to Landlord of the amount of Two Hundred Fifty Dollars ($250.00). The parties agree that such latecharge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of the late payment by Tenant. The late charge shall be deemed Additional Rent and the right to require it shall be in addition to all ofLandlord’s other rights and remedies hereunder or at law and shall not be construed as limiting Landlord’s remedies in any manner.          6.  **SECURITY DEPOSIT**.    Tenant shall pay to Landlord, immediately upon execution of this Lease, a security deposit in the amount set forth atSection 1.10 (**“Security Deposit”**). The Security Deposit shall be held by Landlord as security for the faithful performance by Tenant of all of the terms, covenants and conditions of this Lease to be kept and performed by Tenant. IfTenant defaults with respect to any provision of this Lease, including, but not limited to, the provisions relating to the payment of rent, Landlord may (but shall not be required to) use, apply or retain all or any part of the Security Deposit forthe payment of any rent or any other sum in default, or for the payment of any other amount which Landlord may spend or become obligated to spend by reason of Tenant’s default or to compensate Landlord for any other loss or damage whichLandlord may suffer by reason of Tenant’s default. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the Security Deposit or any balance thereof shall be returned to Tenant (or at Landlord’soption, to the last assignee of Tenant’s interests   FWP NNN Indust. 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hereunder) at the expiration of the Term, provided that Landlord may retain the Security Deposit until such time as any amount due from Tenantunder this Lease has been determined and paid in full.  7.**  USE**.  7.1**  Permitted Use**.    The Premises shall be used and occupied only for the purposesand activities set forth in Section 1.13 above, and for no other uses or purposes whatsoever. If any governmental license or permit shall be required for the proper and lawful conduct of Tenant’s business or other activity carried on in thePremises, or if a failure to procure such a license or permit might or would in any way affect Landlord or the Business Park, then Tenant, at Tenant’s expense, shall (i) duly procure and thereafter maintain such license or permit and submit thesame for inspection by Landlord, (ii) install and pay for any improvements, changes or alterations in the Premises, required by any governmental authority, as a result of its proposed use of the Premises or its manner of operation, and (iii) at alltimes, comply with the requirements of each such license or permit. Tenant warrants that it has investigated whether its proposed use of the Premises and its proposed manner of operation will comply with, and Tenant assumes the risk that itsproposed use of the Premises and its proposed manner of operation are and will continue to be in compliance with, all applicable land use approvals, laws and regulations, including without limitation all zoning laws regulating the use of andenjoyment of the Premises. Tenant agrees that under no circumstances shall Tenant be released in whole or in part from any of its obligations under this Lease as a result of any governmental authority’s disallowing or limiting Tenant’sproposed use of the Premises or its manner of operation.  7.2**  Condition ofPremises**.    Landlord warrants to Tenant, but without regard either to any Tenant’s Work or to the use for which Tenant will use the Premises, that as of the date of Delivery of the Premises, the Premises do not violatethe Declaration or any other covenants or restrictions of record or any applicable building code, regulation or ordinance in effect on the date of this Lease. In the event it should be determined that this warranty has been violated, then afterwritten notice from Tenant, Landlord shall promptly, at its sole cost and expense, rectify any such violation. In the event Tenant does not give Landlord any such written notice of violation within one (1) year after the Commencement Date, thecorrection of such violation shall thereafter be Tenant’s obligation, to be performed at Tenant’s sole cost and expense. The foregoing warranty shall be of no force or effect if, prior to the date of this Lease, Tenant was the owner oroccupant of the Premises, in which event Tenant shall correct any such violation, whenever determined to exist, at Tenant’s sole cost and expense.  7.3**  Compliance With Requirements**.    (If change effects capitol improvements, then Landlord should pay. If changeeffects Premises, Tenant should pay). Subject to Section 7.2 above, Tenant shall, at Tenant’s expense, promptly comply with all applicable statutes, ordinances, rules, regulations, applicable covenants and restrictions of record, andrequirements of any fire insurance underwriters or rating bureaus, now in effect or which may hereafter come into effect during the Term, whether or not they reflect a change in policy from that now existing, relating in any manner to the Premisesand the occupation and use by Tenant of the Premises. Tenant shall not use or permit the use of the Premises in any manner that will tend to create waste or a nuisance or shall tend to disturb other occupants of the Business Park. Without limitingthe generality of the foregoing, Tenant shall, at its sole cost and expense, comply promptly with all Hazardous Materials Laws and with all environmental laws and ordinances applicable to the conduct of Tenant’s business, including all airquality and air pollution regulations of the regional air pollution control district. If at any time it reasonably appears to Landlord that Tenant is not fulfilling its obligations under this Section, Landlord may cause to be performed, atTenant’s sole cost, an audit or inspection of the Premises to evaluate Tenant’s compliance herewith.  7.4**  Compliance With Americans With Disabilities Act**.    The parties acknowledge that the design and construction of certain areas of the Building and/or the Common Areas and Premises may notpresently be in compliance with Title III of the Americans With Disabilities Act (**“ADA”**) and other applicable laws and regulations that relate to access by the disabled or handicapped. For any non-compliance that exists prior to theCommencement Date, Landlord shall be responsible, at its sole expense, for any necessary alterations or improvements to the Building or the Common Areas to the extent necessary to correct any such non-compliance. Landlord agrees that no cost orexpense related to such alterations or improvements required as of result of accessibility requirements imposed by the ADA (or comparable state laws) that are in effect on the Commencement Date shall be included in Operating Expenses. After theCommencement Date, Tenant shall be responsible for compliance with the ADA and related statutes with respect to any alterations or improvements to the Premises made by Tenant and the operation of any businesses conducted from the Premises; Landlordshall have no responsibility or liability with respect thereto. In the event of any changes to the ADA or other applicable statutes, or any rules or regulations promulgated pursuant thereto, that become effective after the Commencement Date of thisLease, Tenant shall be responsible, at its sole expense, for any necessary alterations or improvements to the Premises, and Landlord shall be responsible for any necessary alterations or improvements to the Building or any Common Areas; provided,however, that Landlord shall not include in Operating Expenses amortization of any ADA cost incurred solely for improvements to the leased Premises or another tenant in the Business Park and not part of a more general program of compliance withamendments to or subsequent regulations issued under the ADA.          7.5**  Rules and Regulations**.    Tenant shall at all times comply with the Declaration and with the rules and regulations for the Business Park. Acopy of the rules and regulations in existence on the date of this Lease is attached hereto as Exhibit C, but Landlord reserves the right to amend the rules and regulations at any time by giving notice of amendment to Tenant, if Landlord determinessuch amendments to be to the best interests of the Building and its tenants. Tenant shall not be bound by any such amended rules and regulations until Tenant has received a written copy thereof. Landlord agrees that the rules and regulations shallbe enforced in a uniform and non-discriminatory manner; provided, however, that Landlord shall not be liable to Tenant for Landlord’s failure to enforce the rules and regulations against any other tenants of the Project.  8.  **MAINTENANCE, REPAIRS AND ALTERATIONS**.   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                7 
 8.1  **Tenant’s Obligations**.  (a)  Tenant shall keep and maintain in good, sanitary order, condition, and repair (includingreplacement of parts and equipment if necessary) the Premises and every part thereof and any and all appurtenances thereto wherever located, including, without limitation, the interior surfaces of the exterior wall, the exterior and interior portionof all doors, door frames, door checks, windows (including window sashes, casements and frames), plate glass, storefront, Tenant’s signs, all plumbing and sewage facilities within the Premises (including free flow up to the main sewer line),fixtures, heating and air conditioning and electrical systems (whether or not located in the Premises), sprinkler system, walls, floor and ceilings, and all other repairs, replacements, renewals and restorations, interior and exterior, ordinary andextraordinary, foreseen and unforeseen, and all other work performed, and additions, alterations, and improvements installed by or on behalf of Tenant. Any glass broken shall be replaced by Tenant, with glass of the same quality, size and kind. IfTenant shall fail to replace same within seventy-two (72) hours after such glass is broken, Landlord shall have the right, but shall not be obligated, to replace such glass, in which event Tenant shall, promptly upon demand therefor by Landlord,reimburse Landlord for expenses incurred by Landlord in connection therewith.  (b)  Landlord herein elects to maintain the HVAC system through a maintenance contract which will be procured by Landlord. Tenant shall reimburse Landlord, upon demand and as Additional Rent, for Landlord’s coststhereof. The parties acknowledge that throughout the initial Term and any Extension Term, Tenant shall be responsible for payment to Landlord upon demand and as Additional Rent, of any part or component that may need repair or replacement for theHVAC System(s) which serve only the Premises.  (c)  8.2**  Condition on Termination**.    On the last day of the Term, or on any soonertermination, Tenant shall surrender the Premises to Landlord in the same condition as received, ordinary wear and tear excepted, clean and free of debris. Any damage or deterioration of the Premises shall not be deemed ordinary wear and tear if thesame could have been prevented by good maintenance practices. Tenant shall repair any damage to the Premises occasioned by the installation or removal of Tenant’s trade fixtures, alterations, furnishings and equipment, and shall leave all airlines, power panels, electrical distribution systems, lighting fixtures, HVAC systems, plumbing and fencing in good operating condition.  8.3**  Landlord’s Rights**.    If Tenant fails to perform Tenant’s obligations under Section 8.1 or 8.2 or under any other provision of this Lease, Landlordmay enter the Premises after three (3) days’ prior written notice to Tenant (except in the case of emergency, in which case no notice shall be required) and perform such obligations on Tenant’s behalf and put the Premises in good order,condition and repair, and the cost thereof together with interest thereon from the date incurred at the maximum rate then allowed by law shall be due and payable as Additional Rent to Landlord together with Tenant’s next Base Rent installment. 8.4**  Landlord’s Obligations**.    the parties intend thatLandlord shall have the obligation to repair and maintain the structure of the Premises or the equipment therein, Landlord shall have no obligation to make repairs under this Section until a reasonable time after receipt of written notice fromTenant of the need for such repairs.  8.5  **Alterations and Additions**. (a)  Tenant shall not, without Landlord’s prior written consent which shall not beunreasonably withheld, make any alterations, improvements, additions, or Utility Installations in, to or about the Premises. Tenant shall make no change or alteration to the exterior of the Building without Landlord’s prior written consent,which consent may be withheld for any reason in Landlord’s sole discretion,signage and which may at Landlord’s discretion be conditioned upon Tenant’s providing Landlord, at Tenant’s sole cost and expense, a lien and completionbond in an amount equal to one and one-half (11⁄2) times the cost of the work. As used in this Section, the term **“Utility Installations”** shall mean carpeting, window coverings, air lines, power panels, electrical distributionsystems, lighting fixtures, space heaters, air conditioning, plumbing and fencing. Landlord may require that Tenant remove at the expiration of the Term any or all alterations, improvements, additions or Utility Installations which were not part ofthe original Tenant Improvements, and restore the Premises and the Common Areas to their prior condition. Should Tenant make any alterations, improvements, additions or Utility Installations without the prior approval of Landlord, Landlord may, atany time during the Term of this lease, require that Tenant remove any or all of the same.          (b)  Except for improvements to be accomplished by Landlord at its expense, if any, Tenant shall pay, when due, all claims for labor or materials furnished or alleged to havebeen furnished to or for Tenant at or for use in the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Building or any interest therein. Tenant shall give Landlord not less than ten days’notice prior to the commencement of any work in the Premises, and Landlord shall have the right to post notices of non-responsibility in or on the Premises or the Building as provided by law. If Tenant shall, in good faith, contest the validity ofany such lien, claim or demand, then Tenant shall, at its sole expense, defend itself and Landlord against the same and shall pay and satisfy any adverse judgment that may be rendered thereon before the enforcement thereof against the Landlord orthe Building, upon the condition that if Landlord shall require, Tenant shall furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to one and one-half (11⁄2) times the amount of such contested lien claim   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                8 
or demand, indemnifying Landlord against liability for such claim or lien and for all costs of defense thereof, ofobtaining the release of any lien, and of making the Building free from the effect of such lien or claim. In addition, Landlord may require Tenant to pay Landlord’s attorneys’ fees and costs in participating in such action if Landlordshall decide it is in Landlord’s best interest to do so. In any event, Landlord may pay the lien claim prior to the enforcement thereof, in which event Tenant shall reimburse Landlord in full, including attorneys’ fees for any suchexpense, as Additional Rent, with the next due rents.  (c)  All alterations,improvements, additions and Utility Installations (exclusive of all trade fixtures of Tenant) which may be made on the Premises, shall be the property of Landlord and shall remain upon and be surrendered with the Premises at the expiration of theLease term, unless Landlord requires their removal. Notwithstanding the provisions of this Section 8.6, Tenant’s machinery and equipment (other than Utility Installations), other than that which is affixed to the Premises so that it cannot beremoved without material damage to the Premises or the Building, shall remain the property of Tenant and may be removed by Tenant subject to the provisions of Section 8.2.  9.  **TAXES**.  9.1**  Real Property Taxes**.    Landlord shall pay all Real Property Taxes with respect to the Building and the Project, which shall be included in Operating Expenses. If the Premises are separatelyassessed, or included within an assessor’s parcel that does not encompass the entire Project, Landlord shall adjust Tenant’s Share of Operating Expenses as it relates to Real Property Taxes, to reflect the proportion between the area ofthe Premises and the total area of the assessor’s parcel encompassing the Premises.  9.2**  Personal Property Taxes**.    Tenant shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Tenantcontained in the Premises or elsewhere. When possible, Tenant shall cause said trade fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Landlord. If any of Tenant’ssaid personal property shall be assessed with Landlord’s real property, Tenant shall pay to Landlord the taxes attributable to Tenant within ten days after a receipt of a written statement setting forth the taxes applicable to Tenant’sproperty.  10.**  UTILITIES**.    Tenant shall be solely responsible for, shallarrange for, and shall promptly pay all charges, including meter and connection fees, for water, gas, electricity, sewer, and any other utility used upon or furnished to the Premises. In the event any such utility is not separately metered, Tenantshall pay its share of the cost thereof, as equitably determined by Landlord, as Additional Rent, as part of Operating Expenses. In this regard, Tenant acknowledges and agrees that if Tenant’s use of the Premises results in a disproportionatelyheavy use of water or other commonly metered utilities, then Landlord, at Landlord’s discretion, and in a reasonable and equitable manner, may adjust Tenant’s Share of Operating Expenses to reflect such disproportionately heavy use.Landlord does not warrant that any services Landlord supplies will not be interrupted, *e.g.,* because of accidents, repairs, alterations, improvements or any reason beyond the reasonable control of Landlord. No such interruption shall: (i) beconsidered an eviction or disturbance of Tenant’s use and possession of the Premises; (ii) entitle Tenant to terminate this Lease; (iii) make Landlord liable to Tenant for damages; (iv) abate Base Rent, Additional Rent or any other sums duehereunder; or (v) relieve Tenant from performing its obligations hereunder reasonable time.  11.  **INSURANCE**.  11.3**  LiabilityInsurance—Tenant**.    Prior to the earlier of the Commencement Date or Tenant’s occupancy of the Premises, Tenant, at its own expense, shall obtain from and shall thereafter keep in force with companies reasonablyacceptable to Landlord, commercial general liability insurance applying to the use and occupancy of the Premises, or any areas adjacent thereto, and the business operated by Tenant or any other occupant on the Premises. Such insurance shall: includebroad form contractual liability insurance coverage specifically insuring all of Tenant’s indemnity obligations under this Lease; have a minimum combined single limit liability of at least $2,000,000; be written to apply to all bodily injury,property damage, personal injury and other covered loss, however occasioned, occurring during the policy term; contain endorsements deleting any employee exclusion on personal injury coverage; include products and completed operations coverage;provide for severability of interests or a cross-liability provision or endorsement; be endorsed to delete any liquor liability exclusion; and afford coverage for all claims based on acts, omissions, injury and damage, which claims occurred or arose(or the onset of which occurred or arose) in whole or in part during the policy period. The foregoing policy of insurance shall name Landlord and any parties designated by Landlord as additional insureds, and shall include a per-locationendorsement, Form C62504 or equivalent. In addition, Tenant shall maintain non-owned automobile liability insurance. The policy limits herein specified shall be increased from time to time upon written demand from Landlord, if circumstancesreasonably justify such increases. Tenant shall furnish Landlord with a certificate of such insurance within thirty days after the Commencement Date and whenever requested shall satisfy Landlord that such policy is in full force and effect. Thepolicy shall be endorsed to provide that its coverage shall be primary and noncontributing with any insurance carried by Landlord and shall be further endorsed to provide that it shall not be canceled or altered without thirty days’ priorwritten notice to Landlord.  11.4**  LiabilityInsurance—Landlord**.    Landlord shall obtain and keep in force during the Term commercial general liability insurance, insuring against liability for injury to or death of persons and loss of or damage to propertyoccurring in or on the Common Areas. Landlord’s liability insurance shall be in amount of not less than $2,000,000 combined single limit per occurrence for bodily and personal injury and property damage.  11.5  **Property Insurance—Landlord**.   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                9 
 (a)  Landlord shall maintain in full force and effect at all times astandard policy or policies insuring against “all risk” perils (also known as “special perils”) covering the Building and other improvements owned by Landlord in the Business Park in an amount at least sufficient to avoid theeffects of coinsurance provisions of the policy or policies (*i.e.*, not less than ninety percent [90%] of the actual replacement cost of the Building and other improvements, without deduction for depreciation and excluding foundations,excavation costs and the cost of underground flues, pipes and drains, if such costs are properly excludable under coinsurance requirements). Such insurance shall include (i) a standard form of lender’s loss payable endorsement, issued to theholder or holders of a mortgage or deed of trust secured in whole or in part by the Building and the other property on which the insured improvements are located; (ii) at Landlord’s sole option, coverage for flood or earthquake or both; and(iii) rental income insurance equal to Base Rent and Operating Expenses for up to one year. In addition, Landlord shall obtain and keep in force during the Term such other insurance as Landlord deems advisable.  (b)  Tenant shall pay for any increase in the property insurance of the Building or such other building or buildings if theincrease is caused by Tenant’s acts, omissions, use or occupancy of the Premises. Tenant shall not do or permit to be done anything which shall invalidate the insurance policies referred to in this Section 11.3. If Tenant does or permits to bedone anything which shall increase the cost of the insurance policies referred to in this Section 11.3, then Tenant shall within thirty (30) days after demand therefor by Landlord reimburse Landlord for any additional premiums attributable to anyact or omission or operation of Tenant causing such increase in the cost of insurance. Landlord shall deliver to Tenant a written statement setting forth the amount of any such insurance cost increase and showing in reasonable detail the manner inwhich it has been computed.  11.6**  InsurancePolicies**.    Each policy of insurance required to be maintained by Tenant hereunder shall name Landlord, and any other parties in interest designated by Landlord, as additional insureds and shall contain a clause that theinsurer will not cancel or change such insurance without first giving Landlord thirty (30) days’ prior written notice. Such insurance may be furnished by Tenant under any blanket policy carried by it or under a separate policy therefor;provided that such blanket policy shall contain an endorsement that names Landlord (and any other parties in interest designated by Landlord) as an additional insured, references the Premises and guarantees that a minimum limit equal to theinsurance amounts required in this Lease will be available specifically for the Premises. All insurance shall be with a good and solvent insurance company authorized to do business in the State in which the Business Park is located, having a minimumrating of A- and X in Best’s Insurance Guide. A copy of the paid-up policy or other evidence reasonably satisfactory to Landlord shall be delivered to Landlord prior to the Term Commencement Date and not less than thirty (30) days prior to eachrenewal or extension of such policy of insurance. In the event that Tenant shall deliver a certificate of insurance in lieu of a copy of the paid-off insurance policy at any time during the Term of this Lease, a copy of such insurance policy shallbe provided to Landlord as soon thereafter as practicable. No policy of insurance under this Section shall provide for a deductible in excess of Ten Thousand Dollars ($10,000), provided that Tenant shall remain obligated for the insurancedeductible. All public liability, property damage or casualty policies and the coverage evidenced thereby shall be primary with respect to any policies carried by Landlord and any coverage carried by Landlord shall pay only amounts in excess of thelimits in said policies of Tenant. In addition to the foregoing, in the event Tenant fails to provide or keep in force any of the insurance required pursuant to this Section 11, then Landlord, in its discretion and without waiving any of its rightsunder this Lease, may provide such insurance, in which event the cost thereof shall be payable by Tenant to Landlord as Additional Rent on the first day of the calendar month immediately following demand therefor from Landlord.  11.7**  Waiver of Subrogation**.    Each party hereby waives any and allrights of recovery against the other party hereto and its officers, agents, employees, or representatives, and Tenant hereby waives any rights it may have against any trust deed holder, for the loss, damage, or injury to property arising from anyevent which is covered by insurance against fire, vandalism, malicious mischief, and extended coverage, and such other perils as are from time to time included in the “all risk” insurance policy(ies) carried by Landlord and Tenant pursuantto this Section 11, provided that such waiver shall apply only to the extent of any recovery by the injured party under such insurance. In the event the other party is a self-insurer (as may be permitted herein), such waiver shall be to the limit ofthat insurance required to be carried hereunder. Each party hereto, on behalf of its respective insurance companies hereby waives, to the extent of any recovery under any such insurance policies, any right of subrogation that one may have againstthe other, and Tenant, on behalf of its insurance companies, hereby waives any right of subrogation which such insurer may have against any trust deed holder. Each party hereto shall cause its respective insurance policies to contain endorsementsevidencing such waivers of subrogation. The foregoing releases and waivers of subrogation shall be operative only so long as same shall neither preclude the obtaining of insurance nor diminish, reduce or impair the liability of any insurer. In theevent that a waiver of subrogation cannot be obtained, the other party is relieved of the obligation to obtain a waiver of subrogation rights with respect to the particular insurance involved.  12.  **WAIVER AND INDEMNITY**.          12.1**  Waiver and Exemption of Landlord From Liability**.    Tenant hereby agrees that except for damage or injury resulting from Landlord’snegligence or willful misconduct, Landlord shall not be liable for injury to Tenant’s business or any loss of income, including damage to the goods, wares, merchandise or other property of Tenant or of Tenant’s employees, invitees,customers, or any other person in or about the Premises, or the Common Areas. Landlord shall not be liable, except when the damage or injury is a result of Landlord’s negligence or willful misconduct, for injury to the person of Tenant,Tenant’s employees, agents or contractors, 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   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                10 
cause, whether said damage or injury results from conditions arising upon the Premises, or the Common Areas or from othersources or places and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to Tenant. Landlord shall not be liable for any damages arising from any act or neglect of any other tenant, occupantor use of the Business Park or from the failure of Landlord to enforce the provisions of any other lease in the Business Park. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to property of Tenant orinjury to persons, in, upon or about the Premises and elsewhere arising from the above or any other causes, and Tenant hereby waives all claims in respect thereof against Landlord.  12.2**  Tenant’s Indemnity**.    Tenant shall indemnify, protect, defend, and hold Landlord and Landlord’sofficers, directors, employees and agents (collectively, **“representatives”**) harmless from and against any and all claims, actions, demands, proceedings, losses, damages, costs of any kind or character (including reasonableattorneys’ fees and court costs), expenses, liabilities, judgments, fines, penalties, or interest (collectively, **“Losses”**), arising from or out of Tenant’s use of the Premises, or from the conduct of Tenant’s businessor from any activity, work or things done, permitted or suffered by Tenant in or about the Premises or elsewhere. Tenant shall also indemnify, protect, defend, and hold Landlord and Landlord’s representatives harmless from and against any andall Losses arising from any breach or default in the performance of any obligation on Tenant’s part to be performed under the terms of this Lease, or arising from any act or omission of Tenant, or any of Tenant’s agents, contractors, oremployees, and from and against all costs, attorneys’ fees, expenses and liabilities reasonably incurred in the defense of any such claim or any action or proceeding brought thereon; and in case any action or proceeding be brought againstLandlord or any of Landlord’s representatives by reason of any such claim, Tenant upon notice from Landlord shall defend the same at Tenant’s expense by counsel reasonably satisfactory to Landlord and Landlord shall cooperate with Tenantin such defense. Neither termination of this Lease nor completion of the acts to be performed under this Lease shall release Tenant from its obligations to defend or indemnify Landlord as required hereunder so long as the event upon which any suchLoss is predicated shall have occurred prior to the effective date of any such termination or completion.  12.3**  Landlord’s Indemnity**.    Landlord shall defend, indemnify and hold Tenant and Tenant’s representatives harmless from and against any and all Losses arising in any way from (i)negligence or willful misconduct of Landlord; or (ii) any breach or default in the performance of any obligation on Landlord’s part to be performed under this Lease. Landlord shall defend any such action or proceeding brought against Tenant orits representatives at Landlord’s expense with counsel reasonably satisfactory to Tenant. Neither termination of this Lease nor completion of the acts to be performed under this Lease shall release Landlord from its obligations to defend orindemnify Tenant as required hereunder so long as the event upon which any such Loss is predicated shall have occurred prior to the effective date of any such termination or completion.  13.  **DAMAGE AND DESTRUCTION**.  13.1  **Definitions**.  (a)**  “PartialDamage”** shall mean if the Premises are damaged or destroyed to the extent that the cost of repair is less than fifty percent (50%) of the then replacement cost of the Premises.  (b)**  “Total Destruction”** shall mean if the Premises are damaged or destroyed to the extent that the cost of repair is fiftypercent (50%) or more of the then replacement cost of the Premises.  (c)**  “Insured Loss”** shall mean damage or destruction which was covered by an event required to be covered by the insurance described in Section 11.3. The fact that an Insured Loss has a deductible amountshall not make the loss an uninsured loss.  (d)**  “Replacement Cost”**shall mean the amount of money necessary to be spent in order to repair or rebuild the damaged area to the condition that existed immediately prior to the damage occurring, excluding all improvements made by tenants.  13.2  **Partial Damage**.  (a)  Insured Loss: Subject to the provisions of Sections 13.4 and 13.5, if at any time during the Term there is damage which is an Insured Lossand which falls into the classification of Partial Damage, then Landlord shall, at Landlord’s expense, repair such damage to the Premises, but not Tenant’s fixtures or equipment, as soon as reasonably possible and this Lease shall continuein full force and effect. In no event, however, shall Landlord be obligated to spend for such repairs more than the amount of available insurance proceeds, plus the amount of any deductible elected by Landlord.          (b)  Uninsured Loss: Subject to the provisions of Sections 13.4 and 13.5, if atany time during the Term there is damage which is not an Insured Loss and which falls within the classification of Partial Damage, unless caused by a negligent or willful act of Tenant (in which event Tenant shall make the repairs at Tenant’sexpense), which damage causes substantial interference with the normal conduct of Tenant’s business, Landlord may at Landlord’s option either (i) repair such damage as soon as reasonably possible at Landlord’s expense, in which eventthis Lease shall continue in full force and effect, or (ii) give written notice to Tenant within thirty days after the date of the occurrence of such damage of Landlord’s intention to cancel and terminate this Lease as of the date of theoccurrence of such damage. In the event Landlord elects to give such notice of Landlord’s intention to cancel and terminate this Lease, Tenant shall have the right within ten days after the receipt of such notice to give written notice toLandlord of Tenant’s intention to repair such damage at Tenant’s expense, without reimbursement from Landlord, in which event this Lease shall continue in full force and effect, and Tenant shall proceed to make such repairs as soon  FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                11 
as reasonably possible. If Tenant does not give such notice within such ten-day period this Lease shall be canceled andterminated as of the date of the occurrence of such damage.  13.3  **TotalDestruction**.    Subject to the provisions of Sections 13.4 and 13.5, if at any time during the Term there is damage, whether or not it is an Insured Loss, which falls into the classification of Total Destruction, thenLandlord may at Landlord’s option either (i) repair such damage or destruction, but not Tenant’s fixtures, equipment or tenant improvements (except for tenant improvements initially constructed at the commencement of the Term), as soon asreasonably possible at Landlord’s expense, and this Lease shall continue in full force and effect, or (ii) give written notice to Tenant within thirty days after the date of occurrence of such damage of Landlord’s intention to cancel andterminate this Lease, in which case this Lease shall be canceled and terminated as of the date of the occurrence of such damage.  13.4  **Damage Near End of Term**.    Subject to the following sentence, if at any time during the last year of the Term of this Lease as extended from time to timethere is substantial damage, whether or not an Insured Loss, which falls within the classification of Partial Damage, Landlord may at its option cancel and terminate this Lease as of the date of occurrence of such damage by giving written notice toTenant, within thirty days after the date of occurrence of such damage, of Landlord’s election to terminate. Notwithstanding the foregoing, in the event that Tenant has an option to extend or renew this Lease, and the time within which saidoption may be exercised has not yet expired, Tenant shall exercise such option, if it is to be exercised at all, no later than thirty days after the occurrence of an Insured Loss falling within the classification of Partial Damage during the lastyear of the Term. If Tenant duly exercises such option during the thirty day period, Landlord shall, at Landlord’s expense, repair such damage, but not Tenant’s fixtures, equipment or tenant improvements, as soon as reasonably possible andthis Lease shall continue in full force and effect; provided, however, that in no event shall Landlord be obligated to spend for such repairs more than the amount of available insurance proceeds, plus the amount of any deductible elected byLandlord. If Tenant fails to exercise such option during the thirty day period, then Landlord may at Landlord’s option terminate and cancel this Lease as of the date of the occurrence of such damage.  13.5  **Abatement of Rent**.    In the event Landlord repairs or restores the Premisespursuant to the provisions of this Section 13, 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 normal and customary use of thePremises is impaired. Except for abatement of rent, if any, Tenant shall have no claim against Landlord for any damage suffered by reason of any such damage, destruction, repair or restoration, except if such damage was caused by Landlordsnegligence or willful conduct.  13.6  **Waiver**.    Landlord andTenant waive the provisions of any statutes which relate to termination of leases when leased property is destroyed and agree that such event shall be governed by the terms of this Lease.  14.  **CONDEMNATION**.  14.1**  Total Condemnation of Premises**.    If the whole of the Premises shall be taken by any public authority under condemnation, the power of eminent domain, or by a sale in lieu thereof underthreat of condemnation (collectively “taking” or “taken” as the case may be), then the Term shall cease as of the day Tenant’s use of the building is impaired by such taking of possession pursuant to such taking, whicheveroccurs first and the Rent shall be paid up to that day. Landlord shall refund such rent as may have been paid in advance for the period subsequent to the date of such possession.  14.2  **Partial Condemnation**.  (a)  If less than the whole but more than twenty percent (20%) of the Premises shall be taken, Tenant shall have the right to terminate this Lease or, subject to Landlord’s right oftermination as set forth in Section 14.2(b), to continue in possession of the remainder of the Premises and shall notify Landlord in writing within ten (10) days after notice of such taking of Tenant’s intention. If twenty percent (20%) or lessof the Premises shall be so taken, the Term shall cease with respect to the part so taken as of the day possession shall be taken, and Tenant shall pay rent up to that day for the part so taken.  (b)  If more than twenty percent (20%) of the Building or more than twenty percent (20%) of the Premises shall be taken, Landlord may, bynotice to Tenant delivered on or before the date surrendering possession, terminate this Lease.  (c)  In the event this Lease is not so terminated, Tenant shall remain in the portion of the Premises not so taken, and all of the terms, provisions, covenants, conditions, and agreements contained herein shall continue ineffect with respect to the portion not so taken, except that Base Rent shall be reduced in proportion to the amount of the Premises taken, and Landlord shall, to the extent of severance damages received by Landlord in connection with suchcondemnation, repair any damage to the Premises caused by such condemnation except to the extent that Tenant has been reimbursed therefore by the condemning authority.          14.3**  Landlord’s and Tenant’s Damages**.    Any award for the taking of all orany part of the Premises under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of Landlord, whether such award shall be made as compensation for diminution in value of the leasehold orfor the taking of the fee, or as severance damages; provided, however, that Tenant shall be entitled to any award for loss of or damage to Tenant’s trade fixtures, moving costs and removable personal property to the extent separately  FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                12 
awarded. Tenant shall have the right to negotiate its award separately with the condemning authority; provided, however,that Tenant’s right to pursue its claim shall be subordinate to the right of Landlord’s first lien mortgagee to the extent required to discharge the first lien mortgage after application of Landlord’s award.  15.  **ASSIGNMENT AND SUBLETTING**.  15.1**  Landlord’s Consent Required**.    Tenant shall not voluntarily or by operation of law assign, transfer,mortgage, sublet, or otherwise transfer or encumber all or any part of Tenant’s interest in the Lease or in the Premises, without Landlord’s prior written consent, which shall not be unreasonably withheld. Any attempted assignment,transfer, mortgage, encumbrance or sublease without such consent shall be void, and shall constitute a breach of this Lease without the need for notice to Tenant.  15.2**  Procedure**.    In the event Tenant wishes to sublet or assign the Premises, or any portion thereof, Tenant shallsubmit in writing to Landlord (i) the name of the proposed sublessee or assignee, (ii) a statement describing the nature of the business to be carried on in the Premises, (iii) a copy of the proposed sublease or assignment, including all terms andconditions thereof, (iv) Landlord’s lease application form, completed by the proposed assignee or sublessee, (v) financial statements for the proposed assignee or sublessee, which shall include, at a minimum, prior year and year to date(current to within six months) balance sheets, income and expense statements and sources and uses of cash statements, and (vi) such other financial information regarding such sublessee or assignee as Landlord shall reasonably request.  15.3  **Provisions Applicable to Both Assignment and Subletting**.  (a)  No sublessee or assignee shall further assign or sublet all or any part of the Premises withoutLandlord’s prior written consent.  (b)  The consent by Landlord to any assignmentor sublease shall not constitute a consent to any subsequent assignment or sublease by Tenant or to any assignment or sublease by the sublessee. However, Landlord may consent to subsequent subleases and assignments of the sublease or any amendmentsor modifications thereto, provided Landlord notifies Tenant or anyone else liable on the Lease or sublease and Landlord shall obtain their consent thereto.  Any profits from a third party sublease or assignment shall be split equally between Landlord and Tenant after Tenant’s costs of subleasing have been first deducted (including commissions, legalfees, tenant improvements and any other concessions reasonably required to induce a subtenant).  (c)  In the event of any default under this Lease, Landlord may proceed directly against Tenant, any guarantors or any one else responsible for the performance of this Lease, including the sublessee, without firstexhausting Landlord’s remedies against any other person or entity responsible therefore to Landlord, or any security held by Landlord or Tenant.  15.4**  Provisions Applicable to Subletting**.    Regardless of Landlord’s consent, the following terms and conditionsshall apply to any sublease by Tenant of all or any part of the Premises and shall be included in subleases.  (a)  Tenant hereby assigns and transfers to Landlord fifty percent (50 %) of Tenant’s interest in all rentals and income arising from any sublease made by Tenant, and Landlord may collect such rent and income and applythe same toward Tenant’s obligations under this Lease; provided, however, that until a default shall occur in the performance of Tenant’s obligations under this Lease, Tenant may receive, collect and enjoy the rents accruing under suchsublease. Landlord shall not, by reason of any assignment of such sublease to Landlord or by reason of the collection of the rents from a sublessee, be deemed liable to the sublessee for any failure of Tenant to perform and comply with any ofTenant’s obligations to such sublessee under such sublease. Tenant hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Landlord stating that a default exists in the performance of Tenant’sobligations under this Lease, to pay to Landlord the rents due and to become due under the sublease. Tenant agrees that such sublessee shall have the right to rely upon any such statement and request from Landlord, and that such sublessee shall paysuch rents to Landlord without any obligation or right to inquire as to whether such default exists and notwithstanding any notice from or claim from Tenant to the contrary. Tenant shall have no right or claim against such sublessee or Landlord forany such rents so paid by said sublessee to Landlord.  (b)  No sublease entered into byTenant shall be effective unless and until it has been approved in writing by Landlord. By entering into a sublease, any sublessee shall be deemed, for the benefit of Landlord, to have assumed and agreed to comply with all of Tenant’sobligation hereunder, except to the extent such obligations are contrary to or inconsistent with provisions contained in a sublease to which Landlord has expressly consented in writing.  (c)  Landlord’s written consent to any sublease of the Premises by Tenant shall not constitute an acknowledgment that no default then existsunder this Lease of the obligations to be performed by Tenant nor shall such consent be deemed a waiver of any then existing default, except as may be otherwise stated by Landlord at the time in writing.   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                13 
 (d)  With respect to any sublease to which Landlord hasconsented, Landlord agrees to deliver a copy of any notice of default by Tenant to the sublessee. Such sublessee shall have the right to cure a default of Tenant within ten days after service of said notice of default upon such sublessee, and thesublessee shall have a right of reimbursement and offset from and against Tenant for any such defaults cured by the sublessee.  (e)  If Tenant’s obligations under this Lease have been guaranteed by third parties, then a sublease, and Landlord’s consent thereto, shall not be effective unless said guarantorsgive their written consent to such sublease and the terms thereof.  (f)  The consent byLandlord to any sublease shall not release Tenant from its obligations or alter the primary liability of Tenant to pay the rent and perform and comply with all of the obligations of Tenant to be performed under this Lease.  (g)  In the event Tenant shall default in the performance of its obligations under this Lease, Landlord, at itsoption and without any obligation to do so, may require any sublessee to attorn to Landlord, in which event Landlord shall undertake the obligations of Tenant under such sublease from the time of the exercise of said option to the termination ofsuch sublease; provided, however, Landlord shall not be liable for any prepaid rents or security deposit paid by such sublessee to Tenant or for any other prior defaults of Tenant under such sublease.  (h)  Each and every consent required of Tenant under a sublease shall also require the consent of Landlord. 15.5**  Attorneys’ Fees**.    In the event Tenant shallassign or sublet the Premises or request the consent of Landlord to any assignment or sublease or if Tenant shall request the consent of Landlord for any act Tenant proposes to do, then Tenant shall pay Landlord’s reasonable attorneys’fees incurred in connection therewith, such attorneys’ fees not to exceed $500.00 for each such request.  15.6**  Continuing Liability of Tenant**.    No transfer permitted by this Section shall release Tenant or change Tenant’s primary liability to pay the rent and to perform all other obligationsof Tenant under this Lease. Landlord’s acceptance of rent from any other person is not a waiver of any provision of this Section. Consent to one transfer is not a consent to any subsequent transfer. If Tenant’s transferee defaults underthis Lease, Landlord may proceed directly against Tenant without pursuing remedies against the transferee. Landlord may consent to subsequent assignments or modifications of this Lease by Tenant’s transferee, without notifying Tenant orobtaining its consent. Such action shall not relieve Tenant of its liability under this Lease.  15.7**  Effect of Termination**.    In the event of Tenant’s surrender of this Lease or the termination of this Lease in any other manner, Landlord may, at its option, either terminate any or allsubtenancies or succeed to the interest of Tenant as sublessor thereunder. No merger shall result from Tenant’s sublease of the Premises under this Section, Tenant’s surrender of this Lease or the termination of this Lease in any othermanner.  16.  **DEFAULT BY TENANT; REMEDIES**.  16.1**  Events of Default**.    The occurrence of any of the following (each, a **“Default”**) shallconstitute a material breach or default by Tenant of its obligations hereunder:  (a)  Failure by Tenant to pay rent when due if the failure continues for ten (10) days after notice has been given to Tenant that the rent is delinquent.  (b)  Failure by Tenant to perform any provision of this Lease required of it other than clause (a) above if the failure is not cured within thirty(30) business days after notice has been given to Tenant. If, however, the failure cannot reasonably be cured within the cure period, Tenant shall not be in default of this Lease if Tenant commences to cure the failure within the cure period anddiligently and in good faith continues to cure the failure.  (c)  To the extentpermitted by law, a general assignment by Tenant or any Guarantor of the Lease for the benefit of creditors, or the filing by or against Tenant or any Guarantor of any proceeding under any insolvency or bankruptcy law, unless in the case of aproceeding filed against Tenant or any Guarantor the same is dismissed within ninety (90) days, or the appointment of a trustee or receiver to take possession of all or substantially all of the assets of Tenant or any Guarantor, unless possession isrestored to Tenant or such Guarantor within sixty (60) days, or any execution or other judicially authorized seizure of all or substantially all of Tenant’s assets located upon the Premises or of Tenant’s interest in this Lease, unlesssuch seizure is discharged within thirty days (each, an **“Insolvency Event”**). (Tenant’s asset based lender can cure default).          16.2**  Default Notices**.    Notices given under this Section will specify the alleged failure or breach and theapplicable Lease provisions; and shall demand that Tenant perform the provisions of this Lease or pay the rent that is delinquent, as the case may be, within the applicable period of time or quit the Premises. No such notice shall be deemed aforfeiture or a termination of this Lease unless Landlord so elects in the notice. The purpose of the notice requirements in this Section is to extend the notice requirements of the unlawful detainer statutes. Such notice shall, however, be in lieuof and not in addition to any notice required under the unlawful detainer statutes.  16.3**  Landlord’s Remedies**.    Landlord shall have the below listed remedies if Tenant commits a default. These remedies are not exclusive; they are cumulative to any remedies now or laterallowed by law.  (a)  Landlord may terminate Tenant’s right to possession of thePremises at any time. No act by Landlord other than giving notice of termination 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 protectLandlord’s interest under this   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                14 
 Lease shall not constitute a termination of Tenant’s right to possession. Ontermination, Landlord shall have the right to recover from Tenant:  (i)  The worth atthe time of the award of the unpaid rent that had been earned at the time of termination of this Lease;  (ii)  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 termination of this Lease until the time of award exceeds the amount of the loss of rent thatTenant proves could have been reasonably avoided;  (iii)  The worth at the time of theaward of the amount by which unpaid rent for the balance of the Term after the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided; and  (iv)  Any other amount, including reasonable attorneys’ fees and court costs, necessary to compensate Landlord for all detriment proximatelycaused by Tenant’s default or which in the ordinary course of things would be likely to result therefrom.  (b)  Landlord may exercise the remedy provided in California CIVIL CODE §1951.4.  (c)  Landlord may, after expiration of any applicable cure period, unless there is an emergency (in which case Landlord need not wait), correct or remedy any failure of Tenant not timely cured. The reasonable cost paid byLandlord to correct or remedy any such default will immediately become due and payable to Landlord as additional rent.  (d)  Nothing contained in this Lease shall limit Landlord to the remedies specifically set forth in this Section 16.3. Upon Tenant’s default or breach, Landlord shall be entitled to exercise any right orremedy then provided by law, including without limitation the right to obtain injunctive relief and the right to recover all damages caused by Tenant’s default or breach in the performance of any of its obligations under this Lease. 16.4**  Interest**.    Any amount owed to Landlord under theterms and provisions of this Lease which is not paid when due shall bear interest at the highest rate allowed by applicable law from the date the same becomes due and payable by the terms and provisions of this Lease until paid, unless otherwisespecifically provided in this Lease.  16.5**  Mitigation**.    Efforts by Landlord to mitigate damages caused by Tenant’s breach shall not be construed as a waiver of Landlord’s right to recover damages.  16.6**  Right of Landlord to Re-Enter**.    In the event of any termination of thisLease, Landlord shall have the immediate right to enter upon and repossess the Premises, and any personal property of Tenant may be removed from the Premises and stored in any public warehouse at the risk and expense of Tenant.  16.7**  Recapturable Expenses**.    Tenant acknowledges that Landlord hasundertaken or may undertake certain expenses in connection with the Lease, including payment of some or all of the following: excluding brokerage commissions, the costs of any Landlord’s Work, moving expenses or other categories of cost orexpense (**“Recapturable Expenses”**). Notwithstanding any provision or implication to the contrary in this Lease, in the event of premature termination of the Term of this Lease pursuant to Section 16.3(a) following Tenant’sdefault, there shall be immediately due and payable from Tenant, as Additional Rent which has been fully earned at the time of termination, the unamortized portion of the Recapturable Expenses actually incurred by Landlord. For purposes of thisSection, the unamortized portion of the Recapturable Expenses shall be determined by multiplying the total Recapturable Expenses actually incurred by Landlord by a fraction, the numerator of which is the number of months remaining in the Termfollowing premature termination in which unabated Base Rent would have been payable to Landlord pursuant to the Lease, and the denominator of which is the total number of months in the Term, both before and after the premature termination, in whichunabated Base Rent was paid or would have been payable to Landlord had the Lease not been terminated. Any Recapturable Expenses due to Landlord in accordance with this Section shall be in addition to any sums otherwise recoverable pursuant toSection 16.3(a) of this Lease.  17.  **TENANT’S INSOLVENCY**.  17.1**  Applicability of Section**.    In addition to any rights or remedies of Landlordunder the terms of this Lease, the following provisions shall specifically apply upon the occurrence of an Insolvency Event (as defined in Section 16.1(c) above).  17.2  **Assumption Or Rejection Of Lease**.          (a)  Notwithstanding anything to the contrary contained herein, Tenant as debtor in possession and any receiver or trustee in bankruptcy forTenant (collectively, **“Tenant’s Trustee”**) shall either assume or reject this Lease within sixty (60) days following the entry of an order for relief or within such earlier time as may be provided by applicable law. (b)  Notwithstanding anything to the contrary contained herein, in the event that thisLease is attempted to be assumed under the Bankruptcy Code by Tenant’s Trustee during the existence of any Default by Tenant, no such attempted assumption shall be effective unless and until Tenant’s Trustee: (i) cures, or provides  FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                15 
adequate assurance that it will promptly cure, such Default; and (ii) compensates, or provides adequate assurance that itwill promptly compensate, Landlord for any actual pecuniary loss to Landlord resulting from such Default; and (iii) provides adequate assurance of future performance of Tenant’s obligations and covenants under this Lease. Landlord shall beentitled to reimbursement from the estate of Tenant for all actual costs incurred by Landlord in considering any proposed assignee of the Lease pursuant to this Section 17.  (c)  Tenant’s Trustee may assign this Lease pursuant to the provisions of the Bankruptcy Code only if: (A) Tenant’s Trustee assumes theLease in accordance with the above provisions of this Section 17.2; and (B) the assignee of Tenant’s Trustee assumes all of the obligations arising under this Lease and provides adequate assurance of its future performance of Tenant’sobligations and covenants under this Lease (whether or not a Default has occurred under the Lease). Any such assignee shall, upon demand, execute and deliver to Landlord, an instrument confirming such assumption.  (d)  For purposes of Section 17.2(b) and (c), the term “adequate assurance of future performance”shall include, without limitation, at least the following:  (i)  Any proposed assigneemust have, as demonstrated to Landlord’s satisfaction, a net worth (as defined in accordance with generally accepted accounting principles consistently applied) in an amount sufficient to assure that the proposed assignee will have theresources to meet the financial responsibilities under this Lease, including the payment of all rent. The financial condition and resources of Tenant and any Guarantor(s) are material inducements to Landlord entering into this Lease.  (ii)  Any assumption of this Lease by a proposed assignee shall not adversely affect Landlord’srelationship with any of the remaining tenants in the Premises, taking into consideration any and all other “use” clauses and/or “exclusivity” clauses which may then exist under their leases with Landlord.  (iii)  Any proposed assignee must not be engaged in any business or activity which it will conducton the Premises and which will subject the Premises to contamination by any Hazardous Materials.  (iv)  The percentage rent, if any, due under this Lease shall not decline substantially.  (v)  Any assumption or assignment of this Lease shall not breach substantially any provision in any other lease, financing agreement, or master agreement relating to the Business Park;  (vi)  Any assumption or assignment of this Lease shall not alter or affect materially any other obligation orduty of Tenant nor be used to circumvent the remainder of the provisions of this Lease.   18.  **DEFAULT BY LANDLORD.** 18.1**  Landlord’sDefault**.    Landlord shall be in default if Landlord fails to perform any provision of this Lease required of it and the failure is not cured within thirty (30) days after notice has been given to Landlord. If, however, thefailure cannot reasonably be cured within the cure period, Landlord shall not be in default of this Lease if Landlord commences to cure the failure within the cure period and diligently and in good faith continues to cure the failure. Notices givenunder this Section shall specify the alleged breach and the applicable Lease provisions. If Landlord shall at any time default beyond the applicable notice and cure period, Tenant shall have the right to cure such default on Landlord’s behalf.Any sums expended by Tenant in doing so, and all reasonably necessary incidental costs and expenses incurred in connection therewith, shall be payable by Landlord to Tenant within thirty days following demand therefore by Tenant; (Please providerent offset language in the event Landlord is in default.)  18.2**  Notice toMortgagee(s)**.    Whenever Tenant serves notice on Landlord of Landlord’s default, written notice shall also be served at the same time upon the Mortgagee under any first- or second-priority Mortgage; provided, however,that Tenant shall have no obligation to provide such notice unless and until Tenant has received written notice of the Mortgagee’s existence and address. Such Mortgagee shall have the periods of time within which to cure Landlord’sdefaults as are provided in Section 18.1, which periods shall commence to run thirty (30) days after the commencement of the periods within which Landlord must cure its defaults under Section 18.1. In this connection, any representative of theMortgagee shall have the right to enter upon the Premises for the purpose of curing Landlord’s default. Such Mortgagee shall notify Landlord and Tenant of the address of such Mortgagee to which such notice shall be sent, and the agreements ofTenant under this Section are subject to prior receipt of such notice. If the nature of the default is such that the Mortgagee’s possession is required to cure the default, then Tenant will not terminate the Lease so long as such Mortgageecommences proceedings to obtain possession of the Premises within the period of time afforded to the Mortgagee to cure such default, and once the Mortgagee has obtained possession, diligently proceeds to cure the default. Nothing contained in thisLease shall be construed to impose any obligation on any Mortgagee to cure any default by Landlord under the Lease.  19.  **SUBORDINATION AND ESTOPPEL.** 19.1**  Subordination**.    Subject to the provisions of this Section 19, at the option and upon written declaration of Landlord, this Lease and the leasehold estate created hereby shall be subject,subordinate and inferior to the lien and charge of any Mortgage; provided, however, that this Lease shall not be subordinate to any Mortgage arising after the date of this Lease, or any renewal, extension or replacement thereof, unless and untilLandlord provides Tenant with an agreement from the Mortgagee of the type normally provided by commercial lenders in southern   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                16 
California (**“Non-Disturbance Agreement”**), setting forth that so long as Tenant is not in defaulthereunder, Landlord’s and Tenant’s rights and obligations hereunder shall remain in force and Tenant’s right to possession shall be upheld. Subject to the foregoing condition, (i) Landlord hereby expressly reserves the right, at itsoption and declaration, to place Mortgages upon and against the Premises and/or any part thereof, superior in lien and effect to this Lease and the estate created hereby, and (ii) Landlord shall be entitled to sign, acknowledge and record in theOffice of the County Recorder of the County in which the Premises are situated, a declaration that this Lease and leasehold estate are subject, subordinate and inferior to any Mortgage placed or to be placed by Landlord upon or against the Premisesand/or any part thereof (in favor of any Mortgagee, trustee or title insurance company insuring the interest of any such Mortgagee), recordation of which shall, of and by itself and without further notice to or act or agreement of Tenant, make thisLease and the estate created hereby subject, subordinate and inferior thereto. Notwithstanding the foregoing, Tenant shall, promptly following a request by Landlord and after receipt of the Non-Disturbance Agreement, execute and acknowledge anysubordination agreement or other documents required to establish of record the priority of any such Mortgage over this Lease, so long as such agreement does not otherwise increase Tenant’s obligations or diminish Tenant’s rights hereunder. 19.2**  Attornment**.    In the event of foreclosure of anyMortgage, whether superior or subordinate to this Lease, then (a) this Lease shall continue in force; (b) Tenant’s quiet possession shall not be disturbed if Tenant is not in default hereunder; (c) Tenant shall attorn to and recognize theMortgagee or purchaser at foreclosure sale (**“New Owner”**) as Tenant’s landlord for the remaining term of this Lease; and (d) the New Owner shall not be bound by (i) any payment of rent for more than one month in advance, (ii)any amendment, modification or ending of this Lease without the New Owner’s consent after the New Owner’s name is given to Tenant, unless the amendment, modification or ending is specifically authorized by the original Lease and does notrequire Landlord’s prior agreement or consent, or (iii) any liability for any act or omission of a prior Landlord. At the request of the New Owner, Tenant shall execute a new lease for the Premises.  19.3**  Estoppel Certificate**.    Tenant shall execute and deliver to Landlord, withinten days after receipt of Landlord’s request, any estoppel certificate or other statement to be furnished to any prospective purchaser of or any lender against the Premises. Such estoppel certificate shall acknowledge and certify each of thefollowing matters, to the extent each may be true: that the Lease is in effect and not subject to any rental offsets, claims or defenses to its enforcement; the commencement and termination dates of the Term; that Tenant is paying rent on a currentbasis; that any Landlord’s Work required to be furnished under the Lease has been completed in all respects; that the Lease constitutes the entire agreement between Tenant and Landlord relating to the Premises; that Tenant has accepted thePremises and is in possession thereof; that the Lease has not been modified, altered or amended except in specified respects by specified instruments; and that Tenant has no notice of any prior assignment, hypothecation or pledge of rents or theLease. Tenant shall also, upon request of Landlord, certify and agree for the benefit of any Mortgagee against the Premises or the Building that Tenant will not look to such Mortgagee: as being liable for any act or omission of Landlord; as beingobligated to cure any defaults of Landlord under the Lease which occurred prior to the time Mortgagee, its successors or assigns, acquired Landlord’s interest in the Premises by foreclosure or otherwise; as being bound by any payment of BaseRent or Additional Rent by Tenant to Landlord for more than one month in advance; or as being bound by Landlord to any amendment or modification of the Lease without Mortgagee’s written consent.  19.4**  Remedies**.    Failure of the Tenant to sign any statement or instrumentdelivered by Landlord or Mortgagee to effectuate the provisions of this Section 19 within ten (10) days after request to do so by Landlord shall constitute a material breach of this Lease, and Landlord shall have the right, by not less than ten (10)days’ notice to Tenant, to declare this Lease terminated and the Term ended; in which event, this Lease shall cease and terminate on the date specified in such notice with the same force and effect as though the date set forth in such noticewere the date originally set forth herein and fixed as the Expiration Date, and Tenant shall vacate and surrender the Premises but shall remain liable as hereinafter provided. The foregoing shall be in addition to, rather than in lieu of, anyremedies or rights Landlord may now or hereafter have hereunder or at law or in equity.  20.  **HAZARDOUS MATERIALS.** 20.1**  Tenant’sEnvironmental Questionnaire**.    Tenant warrants and represents, and acknowledges that this Lease was entered into by Landlord in material reliance upon, the information set forth in the environmental questionnaire, in theform attached as Exhibit E, that was previously delivered by Tenant to Landlord.  20.2  **Tenant’s Obligations.**         (a)  Tenant shall at all times and in all respects comply with all Hazardous Materials Laws, and shall, at its own expense, procure, maintain in effect and comply with allconditions of any and all permits, licenses, and other governmental and regulatory approvals required for Tenant’s use of the Premises, including, without limitation, discharge of (appropriately treated) materials or wastes into or through anysanitary sewer serving the Premises. Except as discharged into the sanitary sewer in strict accordance and conformity with all applicable Hazardous Materials Laws, Tenant shall cause any and all Hazardous Materials removed from the Premises to beremoved and transported solely by duly licensed haulers to duly licensed facilities for final disposal of such materials and wastes. Tenant shall in all respects handle, treat, deal with and manage any and all Hazardous Materials in, on, under orabout the Premises in total conformity with all applicable Hazardous Materials Laws and prudent industry practices regarding management of such Hazardous Materials.  (b)  Upon expiration or earlier termination of the Term, Tenant shall cause all Hazardous Materials to be removed from the Premises andtransported for use, storage or disposal in accordance with and compliance with all applicable Hazardous Materials Laws.   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                17 
 (c)  Except in the event of an emergency, Tenant shallnot take any remedial action in response to the presence of any Hazardous Materials in or about the Premises, nor enter into any settlement agreement, consent decree or other compromise in respect to any claims relating to any Hazardous Materials inany way connected with the Premises, without first notifying Landlord of Tenant’s intention to do so and affording Landlord ample opportunity to appear, intervene or otherwise appropriately assert and protect Landlord’s interest withrespect thereto.  (d)  Tenant shall immediately notify Landlord in writing of: (i) anyenforcement, cleanup, removal or other governmental or regulatory action instituted, completed or threatened pursuant to any Hazardous Materials Laws; (ii) any claim made or threatened by any person against Tenant or the Premises relating to damage,contribution, cost recovery compensation, loss or injury resulting from or claimed to result from any Hazardous Materials; and (iii) any reports made to any environmental agency arising out of or in connection with any Hazardous Materials in orremoved from the Premises, including any complaints, notices, warnings or asserted violations in connection therewith. Tenant shall also supply to Landlord as promptly as possible, and in any event within five business days after Tenant firstreceives or sends the same, copies of all claims, reports, complaints, notices, warnings or asserted violations, relating in any way to the Premises or Tenant’s use thereof. Tenant shall promptly deliver to Landlord copies of hazardous wastemanifests reflecting the legal and proper disposal of all Hazardous Materials removed from the Premises.  20.3**  Indemnity**.    With respect to Tenant’s use and occupancy of the Premises and Common Areas, Tenant shall indemnify, defend (by counsel reasonably acceptable to Landlord), protect, andhold Landlord and each of Landlord’s officers, directors, shareholders, employees, agents, attorneys, successors and assigns, free and harmless from and against any and all claims, liabilities, penalties, forfeitures, losses or expenses(including attorneys’ fees), or death of or injury to any person or damage to any property whatsoever, arising from or caused in whole or in part, directly or indirectly, by (a) the presence in, on, under or about the Premises, or discharge inor from the Premises, of any Hazardous Materials that arose or occurred during Tenant’s occupancy thereof that are caused by Tenant; (b) Tenant’s use, analysis, storage, transportation, disposal, release, threatened release, discharge orgeneration of Hazardous Materials to, in, on, under, about or from the Premises; or (c) Tenant’s failure to comply with any Hazardous Materials Law. Tenant’s obligations hereunder shall include, without limitation, and whether foreseeableor unforeseeable, all costs of any required or necessary repair, cleanup or detoxification or decontamination of the Premises, or the preparation and implementation of any closure, remedial action or other required plans in connection therewith, andshall survive the expiration or earlier termination of the Term. For purposes of the release and indemnity provisions hereof, any acts or omissions of Tenant, or by employees, agents, assignees, subtenants, contractors or subcontractors of Tenant orothers acting for or on behalf of Tenant (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to Tenant.  21.**  NOTICE**.    All notices, demands or requests from one party to the other shall be in writing. Notices may be personally delivered, sent by Federal Express orother reputable express delivery service, sent by telecopier with first-class mail backup, or sent by certified mail, postage prepaid, to the addresses set forth at Section 1.17 or 1.18, as applicable. Notices shall be deemed received upon actualdelivery to the addressee with respect to personal or express delivery service or telecopier, and three (3) days after deposit in the mails with respect to mailing. Each party shall have the right, from time to time, to designate a different addressby notice given in conformity with this Section to the other party.  22.  **OTHER TERMS ANDCONDITIONS.** 22.1**  Signage**.    Tenant shall not place orpermit to be placed, any sign, advertisement, notice or other similar matter on the doors, windows, exterior walls, roof or other areas of the Premises which are open to the view of persons outside the Premises, except in accordance withLandlord’s signage plan which is attached as Exhibit D.  22.2**  Parking**.    In connection with its use and occupancy of the Premises, Tenant shall have the right to park in the parking area of the Project, at no additional charge and on a non-reservedbasis and on terms and conditions to be established by the Landlord from time to time during the Term, no more than the number of vehicles set forth in Section 1.16. The parking authorized by this Section shall be for personal transportation to andfrom the Premises, and not for long-term storage of automobiles or for short- or long-term storage of boats, trailers or recreational vehicles. Landlord reserves the right to designate certain parking areas in the Project as being for the exclusiveuse of other tenants of the Project.  22.3**  Site Plan**.    Thepurpose of the site plan attached hereto as Exhibit A is to show the intended development of the Project, the approximate locations of building areas, traffic lanes, sidewalks, parking areas, curb cuts and abutting thoroughfares, and of thePremises, and those intended to be leased to other tenants, whether named thereon or not. All such information is subject to change at Landlord’s option without notice, and no rights are granted to Tenant by the inclusion of said plot plan as apart of this Lease. No representations or warranties are made by Landlord that the Project or the Business Park will be developed as shown. The foregoing is in addition to, not in substitution of, all rights reserved to Landlord pursuant to Section3 above.          22.4**  Easements**.    Landlord reserves to itself the right, from time to time, to grant such easements, rights and dedications as Landlord deemsnecessary or desirable, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with Tenant’s normal conduct of its business on thePremises. Tenant shall sign any of the aforementioned documents upon request of Landlord and failure to do so shall constitute a material default of this Lease by Tenant without the need for further notice to Tenant, unless the easement disturbs orinterferes with Tenant’s use and enjoyment of the leasehold. Landlord shall compensate Tenant for such disturbance.   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                18 
 22.5**  No Light, Air or ViewEasements**.    No diminution or shutting off of light, air or view by any structure which may be erected on lands adjacent to the Building shall in any way affect this Lease or impose any liability on Landlord.  22.6**  Security Measures**.    Tenant acknowledges that Landlord does notintend to provide guard service or other security measures for the benefit of the Premises. Tenant assumes all responsibility for the protection of Tenant, its agents, and invitees and the property of Tenant and of Tenant’s agents and inviteesfrom acts of third parties, and assumes all risk in connection with any failure to provide or lack of such security measures. Tenant hereby waives any and all claims for damages to persons or property sustained by Tenant, or by any other person orentity, arising from, out of or in connection with, or alleged to arise from, out of or in connection with, Landlord’s not providing any security measure for the Premises or Project. Nothing herein contained shall prevent Landlord, atLandlord’s sole option, from providing security protection for the Premises, in which event the costs thereof shall be included within Operating Expenses.  22.7**  Holding Over By Tenant**.    Tenant agrees upon the expiration or termination of this Lease, immediately andpeaceably to yield up and surrender the Premises; notice to quit or vacate is hereby expressly waived. Tenant shall be liable to Landlord for any and all damages incurred by Landlord as the result of any failure by Tenant to timely surrenderpossession of the Premises as required herein. If Tenant shall hold over after the expiration of this Lease for any cause, such holding over shall be deemed a tenancy at sufferance or, at the sole discretion of Landlord, a tenancy frommonth-to-month, in which event such month-to-month tenancy shall be upon the same terms, conditions and provisions set forth in this Lease, at one hundred twenty five percent (125%) the Base Rent that was in effect immediately prior to thetermination.  22.8**  Landlord’s Right ofEntry**.    Landlord and Landlord’s agents may enter upon the Premises at any reasonable time and upon reasonable notice (except no notice shall be required in an emergency) to make such repairs, additions or improvementsas Landlord shall deem necessary; to post such notices as Landlord may deem necessary to exempt Landlord and Landlord’s interest in the Building and Premises from responsibility on account of any work or repairs done by Tenant upon or inconnection with the Premises; to inspect and examine the Premises and see that the covenants hereof are being kept and performed; or to exhibit the Premises to prospective tenants or purchasers.  22.9**  Furnishing of Financial Statements**.    Tenant acknowledges that Landlord entered into this Lease in relianceupon receiving current and periodic financial reports documenting the progress of Tenant’s business operations. Accordingly, if so requested by Landlord or Landlord’s Mortgagee or prospective Mortgagees for purposes of financing theProject, Tenant shall deliver to Landlord, within thirty (30) days after request therefore financial statements reflecting Tenant’s current financial condition and financial statements for each of the two (2) years prior to the then-currentfiscal statement year. Such statements shall be prepared in accordance with generally accepted accounting principles and, if such is the normal practice of Tenant, shall be audited by an independent certified public accountant. Landlord shall keepall such financial statements and the information contained therein confidential.  22.10**  Auctions**.    Tenant shall not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction upon the Premises, without first having obtained Landlord’s priorwritten consent. Notwithstanding anything to the contrary in this Lease, Landlord shall not be obligated to exercise any standard of reasonableness in determining whether to grant such consent.  22.11**  Other Tenancies**.    Landlord reserves the absolute right to effect such other tenancies in the BusinessCenter as Landlord, in the exercise of its sole business judgment, shall determine to promote the best interest thereof. Tenant does not rely on the fact, nor does Landlord represent, that any specific tenants shall, during the Term of this Lease,occupy any space in the Business Park, notwithstanding the appearance of any names of tenants on the site plan attached hereto as Exhibit A, or any replacements or substitutions thereof.  22.12**  Brokers’ Fees**.    Landlord has agreed to pay a fee for brokerage services rendered in this transaction tothe broker(s) identified in Section 1.15. Such brokerage commission shall be payable in accordance with the separate written agreement between Landlord and such broker(s), which alone shall govern such brokers’ entitlement to any commission.Landlord and Tenant each represent and warrant to the other that no broker, agent or finder, licensed or otherwise has been engaged by it, respectively, in connection with the transaction contemplated by this Agreement, other than the broker(s)named above. In the event of any other claim for broker’s, agent’s or finder’s fee or commission in connection with this transaction, the party upon whose alleged statement, representation or agreement such claim or liability arisesshall indemnify, save, hold harmless and defend the other party from and against such claim and liability.  23.  **GENERAL PROVISIONS.**         23.1**  Exculpation**.    The obligations of Landlord under this Lease do not constitute personal obligations of Landlord or its directors, officers orshareholders, and Tenant shall look solely to the Project and to no other assets of Landlord for satisfaction of any liability with respect to this Lease, and agrees not to seek recourse against the directors, officers or shareholders of Landlord,nor against any of their personal assets, for such satisfaction.   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                19 
 23.2**  Conveyance ByLandlord**.    Landlord shall be free at all times, without need of consent or approval by Tenant, to assign its interest in this Lease and/or to convey fee title to the Premises. Each conveyance by Landlord of Landlord’sinterest in the Lease or the Premises prior to expiration or termination hereof shall be subject to this Lease and shall relieve the grantor of any further obligations or liability as Landlord, and Tenant shall look solely to Landlord’ssuccessor in interest for all future obligations of Landlord. Tenant hereby agrees to attorn to Landlord’s successors in interest, whether such interest is acquired by sale, transfer, foreclosure, deed in lieu of foreclosure or otherwise. Theterm “Landlord” as used in this Lease, so far as covenants and obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner at the time in question of the fee title of the Premises. Without furtheragreement, the transferee of such title shall be deemed to have assumed and agreed to observe and perform any and all obligations of Landlord hereunder during its ownership of the Premises.  23.3**  Quiet Enjoyment**.    Landlord agrees that so long as Tenant is not in default hereunder Tenant shall have thequiet enjoyment of the Premises without hindrance on the part of Landlord. Landlord further agrees that Landlord will warrant and defend Tenant in the peaceful and quiet enjoyment of the Premises against the lawful claims of all persons claiming by,through or under Landlord.  23.4**  No Accord andSatisfaction**.    No payment by Tenant or receipt by Landlord of a lesser amount than the rent herein stipulated shall be deemed to be other than on account of the earliest stipulated rent, nor shall any endorsement orstatement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord shall accept such check or payment without prejudice to Landlord’s right to recover the balance of such rent orpursue any other remedy in this Lease provided.  23.5**  Waiver**.    No delay or omission in the exercise of any right or remedy of Landlord for any Default by Tenant hereunder shall impair such right or remedy or be construed as a waiver thereof.One or more waivers of any covenant or condition by Landlord shall not be construed as a waiver of a subsequent breach of the same covenant or condition, and the consent or approval by Landlord to or of any act by Tenant requiring Landlord’sconsent or approval shall not be deemed to render unnecessary Landlord’s consent or approval to or of any subsequent similar act by Tenant. No breach of a covenant or condition of this Lease shall be deemed to have been waived by Landlordunless such waiver is in writing signed by Landlord. The acceptance of any rent or other charges hereunder shall not be deemed a waiver of any breach or Default hereunder other than the payment of the amount accepted by Landlord. (Needs to be abilateral waiver agreement).  23.6**  Cumulative Rights**.    Thevarious rights, options, elections, powers and remedies contained in this Lease shall be construed as cumulative and no one of them shall be exclusive of any of the others, or of any other legal or equitable remedy which either party might otherwisehave in the event of breach or default in the terms hereof, and the exercise of one right or remedy by such party shall not impair its right to any other right or remedy until all obligations imposed upon the other party have been fully performed. 23.7**  Independent Covenants**.    This Lease shall beconstrued as though the covenants herein between Landlord and Tenant are independent and not dependent, and Tenant hereby expressly waives the benefit of any statute to the contrary and agrees that if Landlord fails to perform its obligations setforth herein, Tenant shall not be entitled to make any repairs or perform any acts hereunder at Landlord’s expense or to any setoff of the rent or other amounts owing hereunder against Landlord; provided, however, the foregoing shall in no wayimpair the right of Tenant to commence a separate action against Landlord for any violation by Landlord of the provisions hereof so long as notice is first given to Landlord and any Mortgagee (of whose address Tenant has theretofore been notified)and an opportunity is granted to Landlord and such holder to correct such violation as provided above.  23.8**  Relationship of the Parties**.    Nothing contained herein shall be deemed or construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent or ofpartnership or of joint venture between the parties hereto, it being understood and agreed that neither the method of computation of rent, nor any other provision contained herein, nor any acts of the parties hereto, shall be deemed to create anyrelationship between the parties hereto other than the relationship of landlord and tenant.  23.9**  Force Majeure**.    If either party is delayed in the performance of any covenant of this Lease because of any of the following causes, then such performance shall be excused for the period ofthe delay and the period for such performance shall be extended for a period equivalent to the period of such delay: acts of the other party; action of the elements; war, riot or civil insurrection; building moratoria, trip generation restrictionsor other similar action by the City of San Diego or other governmental agency or entity; labor disputes; inability to procure or a general shortage of labor or materials in the normal channels of trade; delay in transportation; delay in inspections;or any other cause beyond the reasonable control of the party so obligated, whether similar or dissimilar to the foregoing, financial inability excepted; provided, however, that except as specifically set forth elsewhere in this Lease, no suchevents shall affect Tenant’s obligation to pay Base Rent, Additional Rent or any other amount payable under this Lease, nor shall such events affect the length of the Term (except to the extent expressly provided herein).  23.10**  Consents**.    With respect to any provision of this Lease whicheither provides or is held to provide that Landlord shall not unreasonably withhold or unreasonably delay any consent or approval, Tenant shall not be entitled to make any claim for, and Tenant hereby expressly waives, any claim for damages, itbeing understood and agreed that Tenant’s sole remedy therefore shall be an action for specific performance.  23.11**  Counterparts**.    This Lease may be executed in two or more counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.  23.12**  Authority**.    Each individual executing this Lease on behalf ofsuch entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of said entity. Upon the request of the other   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                20 
party, any such party shall, at the time of the execution of this Lease, deliver to the other party evidence of suchauthority satisfactory to the other party.  23.13**  Recording**.    Tenant shall not record this Lease or any short form or memorandum version hereof without the prior written consent of Landlord, which may be withheld at Landlord’s solediscretion.  23.14**  Interpretation and Use ofPronouns**.    Wherever herein the singular number is used, the same shall include the plural, and the masculine gender shall include the feminine and the neuter genders. All conditions contained herein shall be deemedcovenants. The words “breach” or “default” are used interchangeably herein and each shall be deemed to include the other.  23.15**  Captions and Interpretations**.    Section titles or captions contained in this Lease are inserted as a matter of convenience and for reference and in no waydefine, limit, extend or describe the scope of this Lease or any provision hereof. No provision in this Lease is to be interpreted for or against either party because that party or its legal representative drafted such provision.  23.16**  Severability**.    If any term, covenant, condition or provision ofthis Lease is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.  23.17**  Applicable Law**.    This Lease shall be governed by, and construed inaccordance with, the laws of the State of California, notwithstanding the fact that Landlord or Tenant may be located in another State or that this Lease may be executed in another State. If any provision of this Lease or the application thereof toany person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Lease shall not be affected thereby, and each provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. Anyaction brought to enforce or nullify this Lease or the provisions hereof shall be brought in San Diego County, California, and in no other forum.  23.18**  Waiver of Right of Redemption**.    Tenant hereby waives for Tenant and for all those claiming under Tenant all right now or hereafter existing to redeem, bystatute or by order or judgment of any court or by any legal process or writ, Tenant’s right of occupancy of the Premises after any termination of this Lease. Tenant hereby waives its rights under California CODE OF CIVIL PROCEDURE §1179. 23.19**  Joint and Several Obligations**.    If there shall bemore than one Tenant, they shall all be bound jointly and severally by the terms, provisions, covenants, conditions, and agreements herein. No rights, however, shall inure to the benefit of any assignee of Tenant unless the assignment to suchassignee has been approved by Landlord in writing as required hereunder.  23.20**  Successors and Assigns**.    The covenants and conditions herein contained shall, subject to the provisions as to assignments, apply to and bind the heirs, successors, executors,administrators and assigns of the respective parties hereof. If this Lease is signed by more than one person as Tenant, their obligation shall be joint and several.  23.21**  Time of the Essence**.    Time is expressly declared to be of the essence of this Lease, and of all covenants andconditions herein contained.  23.22**  No Third-PartyBeneficiaries**.    The provisions of this Lease are solely for the benefit of the parties hereto, and no broker or other third party shall be entitled to any benefits hereof or hereunder.  23.23**  Entire Agreement**.    This Lease and the exhibits, and the Addendum, if any,attached hereto and forming a part hereof, set forth all the terms, provisions, covenants, conditions, promises, agreements and understandings between Landlord and Tenant concerning the Premises. There are no warranties, representations, covenants,promises, agreements, conditions or understandings, either oral or written, between them other than set forth herein. No alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing andsigned by each party.          23.24**  No Option ByLandlord**.    Preparation of this Lease by Landlord or Landlord’s agent and submission of same to Tenant shall not be deemed an option or offer to lease the Premises on the terms and conditions contained herein or areservation of the Premises in favor of Tenant. This Lease shall become binding upon Landlord only upon Landlord’s execution and delivery of this Lease to Tenant. The receipt (which shall include the cashing, deposit or other negotiation ofchecks, money orders and the like) of any moneys by Landlord which are tendered by Tenant along with a Tenant-executed copy of this Lease, or at any time prior to Landlord’s delivery of a fully executed copy of this Lease to Tenant, shall notconstitute an acceptance of Tenant’s offer to lease as contained herein. Tenant acknowledges that Landlord will not deliver a fully executed copy of this Lease until Landlord has received both any Guaranties required hereunder, and suchcorporate resolutions or other information as reasonably satisfies Landlord as to the incumbency and authority to sign of each individual signing this Lease or any Guaranty. Tenant also acknowledges that the fully executed Lease will not bedelivered by Landlord to Tenant unless and until approved by Landlord’s lender, and that in determining whether to approve, Landlord’s lender will consider Tenant’s lease application, credit information, biographical data onTenant’s key officers or principals, and financial statements relating to Tenant’s business. Notwithstanding the foregoing, delivery of this Lease by Tenant to Landlord after signature by Tenant shall constitute an option which can beaccepted by Landlord at any time until two (2) weeks after delivery of the signed Lease by Tenant.   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                21 
 23.25**  Exhibits**.    Allexhibits described herein, if any, are part of this Lease and by this reference are expressly incorporated herein. This Lease contains the following Exhibits:  Exhibit A    Project Site Plan Exhibit B    Premises and Improvements to Premises Exhibit C    Rules andRegulations Exhibit D    Signage Criteria Exhibit E    Environmental Questionnaire ExhibitF    [Intentionally Omitted]  23.26**  Addendum**.    The attached Addendum, if any is specified in Section 1.19 above, is part of this Lease and by this reference is expressly incorporated herein.  IN WITNESS WHEREOF, the parties hereto have executed this Lease on the date(s) set forth by their respective signatures.  **[SIGNATURE BLOCK ON FOLLOWING PAGE]**  FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                22 
 **Landlord:** H. G. FENTON COMPANY,  a California corporationBy: /s/    KEVIN D. HILL  **Kevin D. Hill,****Director ofLeasing**By: /s/    MICHAEL P. NEAL  **Michael P. Neal,****VicePresident, COO** Date: July 9, 2001 **Tenant:** MADCATZ, INC.,  a California corporationBy: /s/    ANDREW SCHMIDTBy: /s/    WHITNEY PETERSON Date: July 6, 2001  FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                23 
 **ADDENDUM TO LEASE** The following additional provisions are a part of, and incorporated in, the Lease to which this Addendum is attached. In the event of any conflict between the provisions ofthis Addendum and the body of the Lease, this Addendum shall control.  24.*****  ***OPTION TOEXTEND********.    Subject to satisfaction of the conditions precedent set forth below, Tenant shall have one (1) option to extend the Term (**“Extension Option”**), for one (1) period of thirty-six (36)months, beginning the day after the expiration of the initial Term, (**“Extension Term”**), on the following terms and conditions:  24.1  The Extension Option shall be subject to satisfaction of each of the following conditions precedent, which are solely for the benefit of, and may be waived unilaterally by, Landlord: (a)  The Extension Option shall be exercised by written notice delivered by Tenant toLandlord not earlier than sixteen (16) months nor later than nine (9) months, prior to the end of the initial Term;  (b) Tenant shall be in occupancy of at least fifty-one percent (51%) of the area of the Premises directly or through a wholly owned subsidiary (at any tier), and not through an unaffiliated assignee or sublessee; and (c) The Lease shall be in effect and Tenant shall not be in default of any material provisionthereof both on the day such written notice is delivered to Landlord and on the last day of the Term or an Extension Term; provided, however, if Tenant is in default but the cure period has not run, this condition shall be deemed satisfied if Tenantcures the default within the applicable cure period.  24.2  Along with Tenant’swritten notice of the exercise of the Renewal Option, Tenant shall provide Landlord Tenant’s calculation of the Fair Market Rent which Landlord, within thirty (30) days of Landlord’s receipt thereof, shall either (i) accept Tenant’soffer or (ii) reject Tenant’s offer and provide Tenant Landlord’s own calculation of Fair Market Rent. If Landlord and Tenant, or their representatives, are unable to reach agreement within sixty (60) days of delivery of Landlord’scalculation Fair Market Rent to Tenant, Landlord and Tenant shall mutually appoint an arbitrator to determine which of the Fair Market Rent calculations is the closest to its own calculation or valuation. The closer of Landlord or Tenant’s FairMarket Rent calculation to that of the arbitrator shall become binding. The fees for the arbitrator shall be paid by the party whose calculation of Fair Market Rent varied the most from the arbitrator.**** **Landlord:** H. G. FENTON COMPANY,  a California corporationBy: /s/    KEVIN D. HILL  **Kevin D. Hill,****Director ofLeasing**By: /s/    MICHAEL P. NEAL  **Michael P. Neal,****VicePresident, COO** Date: July 9, 2001 **Tenant:** MADCATZ, INC.,  a California corporationBy: /s/    ANDREW SCHMIDT   By: /s/    WHITNEY PETERSON Date: July 6, 2001   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                24 
 **EXHIBIT A** **SITE PLAN**      FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                25 
 **EXHIBIT B** **DESIGN AND CONSTRUCTION OF ADDITIONAL IMPROVEMENTS** Landlord and Tenant mutually agree that and certain improvements (if any) to the Premises shall be constructed by Landlord as follows:  1.**  DESCRIPTION OF IMPROVEMENTS** (a)  In amplification of Section 3.3 of the Lease, the Premises to be provided by Landlord, at Landlord’s expense, shall consist of all improvements currently existing in the Premises (the**“ExistingImprovements”**) in their “as is where is” condition which shall include at a minimum, a concrete floor, exterior building walls, and service points from which electrical and telephone service to the Premises can be made.Tenant’s taking possession of the Premises shall be deemed acceptance of the Premises by Tenant, and shall be deemed conclusively to establish that the Premises are in good and satisfactory condition as of the date Tenant takes possession.Tenant accepts possession of the Premises in their current, “as is”, condition, and acknowledges that it has inspected the Premises before signing this Lease and is fully aware of the condition of the Premises. Additionally, Tenantacknowledges that Landlord shall not be required to perform any work or make any improvements to the Premises, except for the work listed in Section 2 below (the **“Additional Improvements”**).  (b)  The completion of the Additional Improvements by Landlord shall be deemed Landlord’s Work for allpurposes of the Lease.  (c)  Landlord shall complete the Additional Improvements priorto the Commencement Date.  2.  **ADDITIONAL IMPROVEMENTS TO BE COMPLETED BY LANDLORD** Landlord shall not be required to perform any work or make any improvements to the Premises.  IN WITNESS WHEREOF, the parties hereto have executed this Lease on the date(s) set forth by their respective signatures.  **Landlord:** H. G. FENTON COMPANY,  a California corporationBy: /s/    KEVIN D.HILL          **Kevin D. Hill,****LeasingManager**By: /s/    MICHAEL P.NEAL          **Michael P. Neal,****VicePresident, COO** Date: July 9, 2001 **Tenant:** MADCATZ, INC.,  a California corporationBy: /s/    ANDREWSCHMIDT        By: /s/    WHITNEYPETERSON          [Two (2) Authorized Signatures Required] Date: July 6, 2001   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                B-1 
 **Exhibit B-1** **APPROVED SPACE PLAN AND SPECIFICATIONS** ***[To be prepared by Landlord, approved by Tenant and attached hereto,******in accordance with Paragraph 2 above.]***      FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                B-2 
 **EXHIBIT C** **RULES AND REGULATIONS** Tenant and itsemployees, agents, licensees and visitors will at all times observe faithfully, and comply strictly with, the Rules and Regulations set forth on this Exhibit C. Landlord may from time to time reasonably amend, delete or modify existing rules andregulations, or adopt reasonable new rules and regulations for the use, safety, cleanliness and care of the Premises, the Building and the Business Park, and the comfort, quiet and convenience of occupants of the Business Park. Modifications oradditions to the Rules and Regulations will be effective upon notice to Tenant from Landlord. In the event of any breach of any rules or regulations or any amendments or additions to such Rules and Regulations, Landlord will have all remedies whichthis Lease provides for default by Tenant, and will, in addition, have any remedies available at law or in equity, including the right to enjoin any breach of such Rules and Regulations. Landlord will not be liable to Tenant for violation of suchRules and Regulations by any other tenant, its employees, agents, visitors or licensees, or any other person. In the event of any conflict between the provisions of this Lease and the Rules and Regulations, the provisions of the Lease will govern.Tenant shall not be in default until written notice of a violation of one or more of the Rules and Regulations is given to Tenant.  A.  The plumbing facilities shall not be used for any purpose other than that for which they are constructed, and no foreign substance of any kind shall be thrown therein, and the expense ofany breakage, stoppage or damage resulting from a violation of this provision shall be borne by Tenant who shall, or whose employees, agents and invitees shall, have caused it.  B.  Except as to Tenant’s customary improvements, Tenant shall not deface wall, ceilings, glass, partitions, floors, doors, wood, paint,stone or metal work of the Premises or the Business Park by marking, nailing, drilling or otherwise defacing.  C.  Tenant shall not use, keep or permit to be used or kept, any foul or obnoxious gas or substance in the Premises or permit or suffer the Premises to be used or occupied in any manner offensive or objectionable toLandlord or other occupants of the Building or Business Park by reason of any noise, odors and/or vibrations.  D.  Tenant, or its agents, shall not play any musical instrument or make or permit any improper noises in the Business Park.  E.  Tenant, or its employees, shall not loiter in the entrance or corridors of the Building or Business Park, or in any way obstruct thesidewalks, hallways and stairways and shall use the same only as a means of access to and from the Premises.  F.  Tenant may limit weight, size and position of all safes, fixtures and other equipment used in the Premises. In the event Tenant shall require extra heavy equipment, Tenant shall notify Landlord of such fact and shallpay the cost of structural bracing to accommodate same. All damage done to the Premises or the Business Park by putting in, or taking out, or maintaining extra heavy equipment shall be repaired at the expense of Tenant.  G.  Tenant shall not do anything in the Premises, or bring or keep anything therein, which will in any wayincrease or tend to increase the risk of fire or the rate of fire insurance or which shall conflict with the regulations of the Fire Department or the law or with any insurance policy on the Premises or any part thereof, or with any rules orregulations established by any administrative body or official having jurisdiction, and it shall not use any machinery therein, even though its installation may have been permitted, which may cause any unreasonable noise, or jar or tremor to thefloor or walls, or which by its weight might injure the floors of the Premises.  H.  Keys for the Premises shall be provided to Tenant by Landlord and Tenant shall return to Landlord any such keys upon termination of the Lease. Tenant shall not change locks or install other locks on doors of thePremises without receiving prior written approval from Landlord and providing Landlord with appropriate keys for such locks.  I.  No personnel shall enter or remain in the Business Park while intoxicated or under the influence of liquor or drugs. Landlord shall have the right to exclude or expel from the any personho, in the absolute discretion of Landlord, is under the influence of liquor or drugs.  J.  Tenant and its agents and employees shall not bring into nor keep within the premises any animal or bird. Tenant and its agents and employees shall not throw refuse or other substances or litter of any kind in or aboutthe Business Park, except in receptacles places therein for such purposes by Landlord or governmental authorities.  K.  Tenant shall not install any form of window covering or ventilators or similar devices visible from the outside of the Premises without the prior written consent of Landlord.  L.  All freight must be moved into, within and out of the premises only during such hours and according to suchregulations as may be posted from time to time by Landlord.  M.  No aerial shall beerected on the roof or exterior walls of the Premises or on the grounds, without in each instance the written consent of Landlord. Any aerial so installed without such written consent shall be subject to removal without notice at any time. N.  Tenant shall not burn any trash or garbage at any time in or about the BusinessPark.   FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                C-1 
 O.  Tenant shall use, at its cost, such pestextermination at such intervals as Landlord may require.  P.  No waiver of any rule orregulation by Landlord shall be effective unless expressed in writing and signed by Landlord or its authorized agent.  Q.  Tenant shall abide by any additional rules or regulations which are ordered or requested by any governmental or military authority.  R.  In the event of any conflict between these Rules and Regulations or any further or modified rules and regulations from time to time issued byLandlord and the Lease, the Lease shall govern and control.  S.  All extension signsshall be in accordance with Landlord’s sign plan. No other signage shall be used by Tenant except that which is approved in writing by Landlord.      FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                C-2 
 **EXHIBIT D** **SIGNAGE CRITERIA**      FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                D-1 
 **EXHIBIT E** **ENVIRONMENTAL QUESTIONNAIRE**      FWP NNN Indust. Form 3/96 Initials:               *June 5, 2001*                E-1