**Exhibit 10.20**

**AIR COMMERCIAL REAL ESTATE ASSOCIATIONSTANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE – NET(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)**

**1.             BasicProvisions**(**“Basic Provisions”**).

1.1           **Parties:**This Lease (**“Lease”**), dated for reference purposes onlyMarch 6, 2007, is made by and between VRS Chatsworth LLC, a Virginia limitedliability company (**“Lessor”**) andNatrol, Inc., a Delaware corporation (**“Lessee”**),(collectively the **“Parties,”**orindividually a **“Party”**).

1.2           **Premises:**That certain real property,including all improvements therein or to be provided by Lessor under the termsof this Lease, and commonly known as 21411 Prairie Street, located in theCounty of Los Angeles, State of California and generally described as (describebriefly the nature of the property and, if applicable, the **“Project”**, if the property is locatedwithin a Project) an approximately 93,120 square foot concrete tilt-upindustrial building situated on approximately [insert land area] square feet ofland, as more particularly described on Exhibit 1 (which is incorporated hereinby reference) (**“Premises”**). **(See also Paragraph 2)**

1.3           **Term:** Five (5) years and Zero (0) months (**“Original Term”**) commencing see Paragraph51.1 (**“CommencementDate”**) and ending see Paragraph 51.2 (**“Expiration Date”**). As used in this Lease, “Term” shall mean the Original Termand all extensions or renewals thereof. **(See alsoParagraph 3)**

1.4           **Early Possession:**N/A (**“Early Possession Date”**). (See alsoParagraphs 3.2 and 3.3)

1.5           **Base Rent:**$61,459.00 per month (**“Base Rent”**), payable on the first (1st)day of each month commencing on the Commencement Date. **(See alsoParagraph 4)**

x If thisbox is checked, there are provisions in this Lease for the Base Rent to beadjusted. See Paragraph 53.

1.6           **Base Rent and Other Monies Paid Upon ~~Execution~~**the Commencement Date:

(a)           **BaseRent:**$ TBD for the period see Paragraph 51.3

(b)           **SecurityDeposit:**$61,459.00 (**“SecurityDeposit”**). (See also Paragraph 5)

(c)           **AssociationFees:**$N/A for the period

(d)           **Other:**$ TBD for Lessor’s Reimbursable Expenses as provided in Paragraph51.3.

(e)           **TotalDue Upon Execution of this Lease:**$see Paragraph 51.3.

1.7           **Agreed Use:**warehousing, lightmanufacturing of non-hazardous consumer products, and/or offices. (See alsoParagraph 6)

1.8           **Insuring Party:**Lessor is the **“Insuring Party”**unless otherwise statedherein. (See also Paragraph 8)

1.9           **Real Estate Brokers:**(See also Paragraph15)

(a) **Representation:**Thefollowing real estate brokers (the **“Brokers”**)and brokerage relationships exist in this transaction (check applicable boxes):

o                                                                            represents Lessorexclusively ( **“Lessor’s Broker”**);

o                                                                            representsLessee exclusively (**“Lessee’s Broker”**);or

x CB Richard Ellis, Inc. (BennettRobinson) represents both Lessor and Lessee ( **“DualAgency”**).

(b) **Payment toBrokers:**~~Upon execution and delivery of this Lease by bothParties, Lessor~~ Pursuant to thePurchase Contract (as defined inParagraph 51.1), Lessee shall pay to the Broker the fee agreed to intheir separate written agreement ~~(or if there is no such agreement, the sumof or % of the total Base Rent)~~ for the brokerage services rendered by theBrokers in connection with the Purchase Contract and theOriginal Term of this Lease. Lessor and Brokers have entered into a separate written agreement with respect to thepayment of commissions due, if any, for periods after the Original Term.

1.10         **Guarantor.**The obligations of the Lesseeunder this Lease are to be guaranteed by N/A (**“Guarantor”**).(See also Paragraph 37)

1.11         **Attachments.**Attached hereto are thefollowing, all of which constitute a part of this Lease:

x an Addendum consisting of Paragraphs 51through 55.28                    ;

o a plot plan depicting the Premises;

o a current set of the Rules and Regulations;

o a Work Letter;

x other (specify): Exhibit 1 (legaldescription of Premises) and Exhibit 2 (Alterations required to be removed byLessee upon surrender).

 
| **INITIALS**                                             | ** ** | **INITIALS**         |
|----------------------------------------------------------|------------|----------------------|
| **©2001 -  AIR COMMERCIAL REAL ESTATE ASSOCIATION** | ** ** | **FORM STN-8-5/05E** |

 

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**2.             Premises.**

2.1           **Letting.**Lessor hereby leases to Lessee,and Lessee hereby leases from Lessor, the Premises, for the term, at therental, and upon all of the terms, covenants and conditions set forth in thisLease. Unless otherwise provided herein, any statement of size set forth inthis Lease, or that may have been used in calculating Rent, is an approximationwhich the Parties agree is reasonable and any payments based thereon are notsubject to revision whether or not the actual size is more or less. **Note: Lessee is advised to verify the actual sizeprior to executing this Lease.**

2.2           **~~Condition.~~**~~Lessor shall deliver thePremises to Lessee broom clean and free of debris on the Commencement Date orthe Early Possession Date, whichever first occurs ( **“Start Date”**), and, so long as the required service contractsdescribed in Paragraph 7.1(b) below are obtained by Lessee and in effect withinthirty days following the Start Date, warrants that the existing electrical,plumbing, fire sprinkler, lighting, heating, ventilating and air conditioningsystems ( **“HVAC”**), loading doors,sump pumps, if any, and all other such elements in the Premises, other thanthose constructed by Lessee, shall be in good operating condition on said date,that the structural elements of the roof, bearing walls and foundation of anybuildings on the Premises (the **“Building”**)shall be free of material defects, and that the Premises do not containhazardous levels of any mold or fungi defined as toxic under applicable stateor federal law. If a non-compliance with said warranty exists as of the StartDate, or if one of such systems or elements should malfunction or fail withinthe appropriate warranty period, Lessor shall, as Lessor’s sole obligation withrespect to such matter, except as otherwise provided in this Lease, promptlyafter receipt of written notice from Lessee setting forth with specificity thenature and extent of such non-compliance, malfunction or failure, rectify sameat Lessor’s expense. The warranty periods shall be as follows: (i) 6 months asto the HVAC systems, and (ii) 30 days as to the remaining systems and otherelements of the Building. If Lessee does not give Lessor the required noticewithin the appropriate warranty period, correction of any such non-compliance,malfunction or failure shall be the obligation of Lessee at Lessee’s sole costand expense.~~ Certain Definitions:As used in this Lease, (a) “Start Date” shall mean the Commencement Date or theEarly Possession Date, whicheverfirst Occurs, (b) “HVAC” shall mean the heating, ventilating and airconditioning systems of the Premises, (c) “Building” shall mean the building on the Premises, and (d) “ApplicableRequirements” shall mean building codes, applicable laws, covenants or restrictions of record,regulations and ordinances.

2.3           **Compliance.**~~Lessor warrants that to thebest of its knowledge the improvements on the Premises comply with the buildingcodes, applicable laws, covenants or restrictions of record, regulations, andordinances ( **“Applicable Requirements”**)that were in effect at the time that each improvement, or portion thereof, wasconstructed. Said warranty does not apply to the use to which Lessee will putthe Premises, modifications which may be required by the Americans withDisabilities Act or any similar laws as a result of Lessee’s use (see Paragraph50), or to any Alterations or Utility Installations (as defined in Paragraph7.3(a)) made or to be made by Lessee.~~**NOTE:Lessee is responsible for determining whether or not the****Applicable Requirements, and especially the zoning,are appropriate for Lessee’s intended use, and acknowledges that past uses ofthe****Premises may no longer beallowed.**~~If the Premises do not comply with said warranty, Lessorshall, except as otherwise provided, promptly after receipt of written noticefrom Lessee setting forth with specificity the nature and extent of suchnon-compliance, rectify the same at Lessor’s expense. If Lessee does not giveLessor written notice of a non-compliance with this warranty within 6 monthsfollowing the Start Date, correction of that non-compliance shall be theobligation of Lessee at Lessee’s sole cost and expense.~~ If the ApplicableRequirements are hereafter changed so as to require during the term of thisLease the construction of an addition to or an alteration of the Premisesand/or Building, the remediation of any Hazardous Substance not caused by Lessee or the Lessee Partieseither before or after the Commencement Date , or the reinforcement orother physical modification of the Unit, Premises and/or Building ( **“Capital Expenditure”**), Lessor and Lesseeshall allocate the cost of such work as follows:

(a) Subject to Paragraph 2.3(c) below, if such CapitalExpenditures are required as a result of the specific and unique use of thePremises by Lessee as compared with uses by tenants in general, Lessee shall befully responsible for the cost thereof, provided, however that if such CapitalExpenditure is required during the last~~2 years~~ 12 months****of thisLease and the cost thereof exceeds 6 months’ Base Rent, Lessee may insteadterminate this Lease unless Lessor notifies Lessee, in writing, within 10 daysafter receipt of Lessee’s termination notice that Lessor has elected to pay thedifference between the actual cost thereof and an amount equal to 6 months’Base Rent. If Lessee elects termination, Lessee shall immediately cease the useof the Premises which requires such Capital Expenditure and deliver to Lessorwritten notice specifying a termination date at least 90 days thereafter. Suchtermination date shall, however, in no event be earlier than the last day thatLessee could legally utilize the Premises without commencing such CapitalExpenditure.

(b) If such Capital Expenditure is not the result ofthe specific~~and unique~~ use of the Premises by Lessee (such as,governmentally mandated seismic modifications), then Lessor and Lessee shallallocate the obligation to pay for such costs pursuant to the provisions ofParagraph 7.1(d); provided, however, that if such Capital Expenditure isrequired during the last 2 years of this Lease or if Lessor reasonablydetermines that it is not economically feasible to pay its share thereof,Lessor shall have the option to terminate this Lease upon 90 days prior writtennotice to Lessee unless Lessee notifies Lessor, in writing, within 10 daysafter receipt of Lessor’s termination notice that Lessee will pay for suchCapital Expenditure. If Lessor does not elect to terminate, and fails to tenderits share of any such Capital Expenditure, Lessee may advance such funds anddeduct same, with Interest, from Rent until Lessor’s share of such costs havebeen fully paid. If Lessee is unable to finance Lessor’s share, or if thebalance of the Rent due and payable for the remainder of this Lease is notsufficient to fully reimburse Lessee on an offset basis, Lessee shall have theright to terminate this Lease upon 30 days written notice to Lessor.

(c) Notwithstanding the above, the provisionsconcerning Capital Expenditures are intended to apply only to non-voluntary,unexpected, and new Applicable Requirements. If the Capital Expenditures areinstead triggered by Lessee as a result of an actual or proposed change in use,change in intensity of use, or modification to the Premises then, and in thatevent, Lessee shall either: (i) immediately cease such changed use or intensityof use and/or take such other steps as may be necessary to eliminate therequirement for such Capital Expenditure, or (ii) complete such CapitalExpenditure at its own expense. Lessee shall not, however, have any right toterminate this Lease.

2.4           **Acknowledgements.**Lessee acknowledges that:(a) it has been advised by Lessor and/or Brokers to satisfy itself with respectto the condition of the Premises (including but not limited to the electrical,HVAC and fire sprinkler systems, security, environmental aspects, andcompliance with Applicable Requirements and the Americans with DisabilitiesAct), and their suitability for Lessee’s intended use, (b) Lessee has made suchinvestigation as it deems necessary with reference to such matters and assumesall responsibility therefor as the same relate to its occupancy of thePremises, and (c) neither Lessor, Lessor’s agents, nor Brokers have made anyoral or written representations or warranties with respect to said mattersother than as set forth in this Lease. In addition, Lessor acknowledges that:(i) Brokers have made no representations, promises or warranties concerningLessee’s ability to honor the Lease or suitability to occupy the Premises, and(ii) it is Lessor’s sole responsibility to investigate the financial capabilityand/or suitability of all proposed tenants.

~~2.5           **Lessee as Prior Owner/Occupant.**The warrantiesmade by Lessor in Paragraph 2 shall be of no force or effect if immediately~~

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~~priorto the Start Date Lessee was the owner or occupant of the Premises. In suchevent, Lessee shall be responsible for any necessary corrective work.~~

3.             **Term.**

3.1           **Term.**The Commencement Date, ExpirationDate and Original Term of this Lease are as specified in Paragraph 1.3.

~~3.2           **Early Possession.**If Lessee totally orpartially occupies the Premises prior to the Commencement Date, the obligationto pay Base Rent shall be abated for the period of such early possession. Allother terms of this Lease (including but not limited to the obligations to payReal Property Taxes and insurance premiums and to maintain the Premises) shallbe in effect during such period. Any such early possession shall not affect theExpiration Date.~~

~~3.3           **Delay In Possession.**Lessor agrees to useits best commercially reasonable efforts to deliver possession of the Premisesto Lessee by the Commencement Date. If, despite said efforts, Lessor is unableto deliver possession by such date, Lessor shall not be subject to anyliability therefor, nor shall such failure affect the validity of this Lease.Lessee shall not, however, be obligated to pay Rent or perform its otherobligations until Lessor delivers possession of the Premises and any period ofrent abatement that Lessee would otherwise have enjoyed shall run from the dateof delivery of possession and continue for a period equal to what Lessee wouldotherwise have enjoyed under the terms hereof, but minus any days of delaycaused by the acts or omissions of Lessee. If possession is not deliveredwithin 60 days after the Commencement Date, Lessee may, at its option, bynotice in writing within 10 days after the end of such 60 day period, cancelthis Lease, in which event the Parties shall be discharged from all obligationshereunder. If such written notice is not received by Lessor within said 10 dayperiod, Lessee’s right to cancel shall terminate. If possession of the Premisesis not delivered within 120 days after the Commencement Date, this Lease shallterminate unless other agreements are reached between Lessor and Lessee, inwriting.~~

~~3.4           **Lessee Compliance.**Lessor shall not berequired to deliver possession of the Premises to Lessee until Lessee complieswith its obligation to provide evidence of insurance (Paragraph 8.5). Pendingdelivery of such evidence, Lessee shall be required to perform all of itsobligations under this Lease from and after the Start Date, including thepayment of Rent, notwithstanding Lessor’s election to withhold possessionpending receipt of such evidence of insurance. Further, if Lessee is requiredto perform any other conditions prior to or concurrent with the Start Date, theStart Date shall occur but Lessor may elect to withhold possession until suchconditions are satisfied.~~

4.             **Rent.**

4.1.            **Rent Defined.**All monetary obligations ofLessee to Lessor under the terms of this Lease (except for the SecurityDeposit) are deemed to be rent (**“Rent”**).

4.2           **Payment.**Lessee shall unconditionally cause payment of Rentto be received by Lessor in lawful money of the United States, without offsetor deduction (except as specifically permitted in this Lease), on or before theday on which it is due. All monetary amounts shall be rounded to the nearestwhole dollar. In the event that any invoice prepared by Lessor is inaccuratesuch inaccuracy shall not constitute a waiver and Lessee shall be obligated topay the amount set forth in this Lease. Rent for any period during the termhereof which is for less than one full calendar month shall be prorated basedupon the actual number of days of said month. Payment of Rent shall be made toLessor at its address stated herein or to such other persons or place as Lessormay from time to time designate in writing. Acceptance of a payment which isless than the amount then due shall not be a waiver of Lessor’s rights to thebalance of such Rent, regardless of Lessor’s endorsement of any check sostating. In the event that any check, draft, or other instrument of paymentgiven by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay toLessor the sum of $25 in addition to any Late Charge and Lessor, at its option,may require all future Rent be paid by cashier’s check. Payments will beapplied first to accrued late charges and attorney’s fees, second to accruedinterest, then to Base Rent and Common Area Operating Expenses, and anyremaining amount to any other outstanding charges or costs.

4.3           **Association Fees.**In addition to the BaseRent, Lessee shall pay to Lessor each month an amount equal to any owner’sassociation or condominium fees levied or assessed against the Premises. Saidmonies shall be paid at the same time and in the same manner as the Base Rent.

5.             **SecurityDeposit.**Lessee shall deposit with Lessor upon execution hereof theSecurity Deposit as security for Lessee’s faithful performance of itsobligations under this Lease. If Lessee fails to pay Rent, or otherwiseDefaults under this Lease, Lessor may use, apply or retain all or any portionof said Security Deposit for the payment of any amount due Lessor or toreimburse or compensate Lessor for any liability, expense, loss or damage whichLessor may suffer or incur by reason thereof. If Lessor uses or applies all orany portion of the Security Deposit, Lessee shall within 10 days after writtenrequest therefor deposit monies with Lessor sufficient to restore said SecurityDeposit to the full amount required by this Lease. ~~If the Base Rentincreases during the term of this Lease, Lessee shall, upon written requestfrom Lessor, deposit additional moneys with Lessor so that the total amount ofthe Security Deposit shall at all times bear the same proportion to theincreased Base Rent as the initial Security Deposit bore to the initial BaseRent. Should the Agreed Use be amended to accommodate a material change in thebusiness of Lessee or to accommodate a sublessee or assignee, Lessor shall havethe right to increase the Security Deposit to the extent necessary, in Lessor’sreasonable judgment, to account for any increased wear and tear that thePremises may suffer as a result thereof. If a change in control of Lesseeoccurs during this Lease and following such change the financial condition ofLessee is, in Lessor’s reasonable judgment, significantly reduced, Lessee shalldeposit such additional monies with Lessor as shall be sufficient to cause theSecurity Deposit to be at a commercially reasonable level based on such changein financial condition.~~ Lessor shall not be required to keep the SecurityDeposit separate from its general accounts. Within 14 days after the expirationor termination of this Lease, if Lessor elects to apply the Security Depositonly to unpaid Rent, and otherwise within 30 days after the Premises have beenvacated pursuant to Paragraph 7.4(c) below, Lessor shall return that portion ofthe Security Deposit not used or applied by Lessor. No part of the SecurityDeposit shall be considered to be held in trust, to bear interest or to beprepayment for any monies to be paid by Lessee under this Lease.

6.             **Use.**

6.1           **Use.**Lessee shall use and occupy the Premises only for the Agreed Use, ~~orany other legal use which is reasonably comparable thereto,~~ and for noother purpose. Lessee shall not use or permit the use of the Premises in amanner that is unlawful, creates damage, waste or a nuisance, or that disturbsoccupants of or causes damage to neighboring premises or properties. Other thanguide, signal and seeing eye dogs, Lessee shall not keep or allow in thePremises any pets, animals, birds, fish, or reptiles. Lessor shall notunreasonably withhold or delay its consent to any 

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writtenrequest for a modification of the Agreed Use , so long as the same will notimpair the structural integrity of the improvements on the Premises , is not a part of the “adult entertainment” industry or involves the use ofHazardous Substances not previously approved by Lessor pursuant to Paragraph 55.12 or otherwisepermitted in accordance with Paragraph 6.2(a) (with regard to PermittedHazardous Substances) ~~orthe mechanical or electrical systems therein, and/or is not significantly moreburdensome to the Premises.~~ If Lessor elects to withhold consent, Lessorshall within ~~7~~ 10 business daysafter such request give written notification of same, which notice shallinclude an explanation of Lessor’s objections to the change in the Agreed Use.

6.2           **Hazardous Substances.**

(a) **Reportable UsesRequire Consent.**The term **“HazardousSubstance”**as used in this Lease shall mean any product, substance,or waste whose presence, use, manufacture, disposal, transportation, orrelease, either by itself or in combination with other materials expected to beon the Premises, is either: (i) ~~potentially~~ injurious to the publichealth, safety or welfare, the environment or the Premises, (ii) regulated ormonitored by any governmental authority, or (iii) a basis for potentialliability of Lessor to any governmental agency or third party under anyapplicable statute or common law theory. Hazardous Substances shall include, butnot be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or anyproducts, by-products or fractions thereof. Lessee shall not engage in anyactivity in or on the Premises which constitutes a Reportable Use of HazardousSubstances without the express prior written consent of Lessor and timelycompliance (at Lessee’s expense) with all Applicable Requirements. **“Reportable Use”**shall mean (i) theinstallation or use of any above or below ground storage tank, (ii) thegeneration, possession, storage, use, transportation, or disposal of aHazardous Substance that requires a permit from, or with respect to which areport, notice, registration or business plan is required to be filed with, anygovernmental authority, and/or (iii) the presence at the Premises of aHazardous Substance with respect to which any Applicable Requirements requiresthat a notice be given to persons entering or occupying the Premises orneighboring properties. Notwithstanding the foregoing, Lessee may use anyordinary and customary materials reasonably required to be used in the normalcourse of the Agreed Use described onthe HazMat Certificate, ordinary office supplies (copier toner, liquidpaper, glue, etc.) and common household cleaning materials, so long as such useis in compliance with all Applicable Requirements, is not a Reportable Use, anddoes not expose the Premises or neighboring property to any meaningful risk ofcontamination or damage or expose Lessor to any liability therefor (collectively, the “Permitted Hazardous Substances”). In addition,Lessor may condition its consent to any Reportable Use upon receiving suchadditional assurances as Lessor reasonably deems necessary to protect itself,the public, the Premises and/or the environment against damage, contamination,injury and/or liability, including, but not limited to, the installation (andremoval on or before Lease expiration or termination) of protectivemodifications (such as concrete encasements) and/or increasing the SecurityDeposit.

(b) **Duty to Inform Lessor.**If Lessee knows, or has reasonable cause to believe, that aHazardous Substance has come to be located in, on, under or about the Premises,other than as previously consented to by Lessor, Lessee shall immediately givewritten notice of such fact to Lessor, and provide Lessor with a copy of anyreport, notice, claim or other documentation which it has concerning thepresence of such Hazardous Substance.

(c) **LesseeRemediation.**Lessee shall not cause or permit any HazardousSubstance to be spilled or released in, on, under, or about the Premises(including through the plumbing or sanitary sewer system) and shall promptly,at Lessee’s expense, comply with all Applicable Requirements and take allinvestigatory and/or remedial action reasonably recommended, whether or notformally ordered or required, for the cleanup of any contamination of, and forthe maintenance, security and/or monitoring of the Premises or neighboringproperties, that was caused or materially contributed to by Lessee, orpertaining to or involving any Hazardous Substance brought onto the Premisesduring the term of this Lease, by or for Lessee, or any third party.

(d) **LesseeIndemnification.**Lessee shall indemnify, defend and hold Lessor, itsagents, employees, lenders and ground lessor, if any, harmless from and againstany and all loss of rents and/or damages, liabilities, judgments, claims,expenses, penalties, and attorneys’ and consultants’ fees arising out of orinvolving any Hazardous Substance brought onto the Premises, whether prior to or after the Commencement Date, by or for Lessee or Lessee’s employees, agents, invitees,Affiliates, assignees, sublessees, successors and assigns (collectively, the “Lessee Parties”), ~~or anythird party~~ (provided, however, that Lessee shall have no liability underthis Lease with respect to underground migration of any Hazardous Substanceunder the Premises from adjacent properties not caused or contributed to byLessee or the Lessee Parties).Lessee’s obligations shall include, but not be limited to, the effects of anycontamination or injury to person, property or the environment created orsuffered by Lessee, and the cost of investigation, removal, remediation,restoration and/or abatement, and shall survive the expiration or terminationof this Lease. **No termination, cancellationor release agreement entered into by Lessor and Lessee shall release Lesseefrom its obligations under this****Leasewith respect to Hazardous Substances, unless specifically so agreed by Lessorin writing at the time of such agreement.**

(e) **LessorIndemnification.**Lessor and its successors and assigns shallindemnify, defend, reimburse and hold Lessee, its employees and lenders,harmless from and against any and all environmental damages, including the costof remediation, which result from Hazardous Substances ~~which existed on thePremises prior to Lessee’s occupancy~~ not caused or contributed to, whether prior to or after the Commencement Date, by Lessee or the LesseeParties or which are caused by the gross negligence or willfulmisconduct of Lessor, its agents or employees. Lessor’s obligations, as andwhen required by the Applicable Requirements, shall include, but not be limitedto, the cost of investigation, removal, remediation, restoration and/orabatement, and shall survive the expiration or termination of this Lease.

(f) **Investigationsand Remediations.**Lessor shall retain the responsibility and pay forany investigations or remediation measures required by governmental entitieshaving jurisdiction with respect to the existence of Hazardous Substances onthe Premises ~~prior to Lessee’s occupanc,~~ unless such remediation measureis required as a result of Lessee’s orany of the Lessee Parties’ use (including “Alterations”, as defined inparagraph 7.3(a) below) of the Premises, or as a result of any Hazardous Substance Condition caused or contributedto by Lessee, whether prior toor after the Commencement Date, in which event Lessee shall beresponsible for such payment. Lessee shall cooperate fully in any such activitiesat the request of Lessor, including allowing Lessor and Lessor’s agents to havereasonable access to the Premises at reasonable times in order to carry outLessor’s investigative and remedial responsibilities.

(g) **Lessor Termination Option.**If a HazardousSubstance Condition (see Paragraph 9.1(e)) occurs during the term of thisLease, unless Lessee or a Lessee Party****is ~~legally~~ responsibletherefor under the provisions of thisLease (in which case Lessee shall make the investigation and remediationthereof required by the Applicable Requirements and this Lease shall continuein full force and effect, but subject to Lessor’s rights under Paragraph 6.2(d)and Paragraph 13), Lessor may, at Lessor’s option, either (i) investigate andremediate such Hazardous Substance Condition, if required, as soon asreasonably possible at Lessor’s expense, in which event this Lease shallcontinue in full force and effect, or (ii) if the estimated cost to remediatesuch condition exceeds ~~12~~9****times the then monthly Base Rent or$100,000, whichever is greater, give written 

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noticeto Lessee, within 30 days after receipt by Lessor of knowledge of theoccurrence of such Hazardous Substance Condition, of Lessor’s desire toterminate this Lease as of the date 60 days following the date of such notice.In the event Lessor elects to give a termination notice, Lessee may, within 10days thereafter, give written notice to Lessor of Lessee’s commitment to paythe amount by which the cost of the remediation of such Hazardous Substance Conditionexceeds an amount equal to ~~12~~ 9 times the then monthly Base Rent or$100,000, whichever is greater. Lessee shall provide Lessor with said funds orsatisfactory assurance thereof within 30 days following such commitment. Insuch event, this Lease shall continue in full force and effect, and Lessorshall proceed to make such remediation as soon as reasonably possible after therequired funds are available. If Lessee does not give such notice and providethe required funds or assurance thereof within the time provided, this Leaseshall terminate as of the date specified in Lessor’s notice of termination.

6.3           **Lessee’s Compliance with Applicable Requirements.**Exceptas otherwise provided in this Lease, Lessee shall, at Lessee’s sole expense,fully, diligently and in a timely manner, materially comply with all ApplicableRequirements, the requirements of any applicable fire insurance underwriter orrating bureau, and the recommendations of Lessor’s engineers and/or consultantswhich relate in any manner to the such Requirements, without regard to whethersuch Requirements are now in effect or become effective after the Start Date.Lessee shall, within 10 days after receipt of Lessor’’s written request,provide Lessor with copies of all permits and other documents, and otherinformation evidencing Lessee’s compliance with any Applicable Requirementsspecified by Lessor, and shall immediately upon receipt, notify Lessor inwriting (with copies of any documents involved) of any threatened or actualclaim, notice, citation, warning, complaint or report pertaining to orinvolving the failure of Lessee or the Premises to comply with any ApplicableRequirements. Likewise, Lessee shall immediately give written notice to Lessorof: (i) any water damage to the Premises and any suspected seepage, pooling,dampness or other condition conducive to the production of mold; or (ii) anymustiness or other odors that might indicate the presence of mold in thePremises.

6.4           **Inspection; Compliance.**Lessor andLessor’’s **“Lender”**(as defined inParagraph 30) and consultants shall have the right to enter into Premises atany time, in the case of an emergency, and otherwise at reasonable times afterreasonable telephonic notice, subject to Lessor’s compliance with Lessee’s security requirements,for the purpose of inspecting the condition of the Premises and forverifying compliance by Lessee with this Lease. Lessee shall be entitled to have its representatives accompany Lessor,its Lender and their consultants on the Premises. The cost of any such inspections shall be paid byLessor, unless a violation of Applicable Requirements by Lessee, or a Hazardous Substance Condition (see paragraph 9.1) caused by Lessee is found to exist orbe imminent, or the inspection is requested or ordered by a governmentalauthority. In such case, Lessee shall upon request reimburse Lessor for thecost of such inspection, so long as such inspection is reasonably related tothe violation or contamination. In addition, Lessee shall provide copies of allrelevant material safety data sheets ( **MSDS**)to Lessor within 10 days of the receipt of a written request therefor.

7.             **Maintenance;Repairs, Utility Installations; Trade Fixtures and Alterations.**

7.1           **Lessee’s Obligations.**

(a) **In General.**Subjectto the provisions of Paragraph ~~2.2 (Condition),~~ 2.3 (Compliance), 6.3(Lessee’s Compliance with Applicable Requirements), 7.2 (Lessor’s Obligations),9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee’ssole expense, keep the Premises, Utility Installations (intended for Lessee’sexclusive use, no matter where located), and Alterations in good order,condition and repair (whether or not the portion of the Premises requiringrepairs, or the means of repairing the same, are reasonably or readily accessibleto Lessee, and whether or not the need for such repairs occurs as a result ofLessee’s use, any prior use, the elements or the age of such portion of thePremises), including, but not limited to, all equipment or facilities, such asplumbing, HVAC equipment, electrical, lighting facilities, boilers, pressurevessels, fire protection system, fixtures, walls (interior and exterior),foundations, ceilings, roofs, roof drainage systems, floors, windows, doors,plate glass, skylights, landscaping, driveways, parking lots, fences, retainingwalls, signs, sidewalks and parkways located in, on, or adjacent to thePremises. Lessee, in keeping the Premises in good order, condition and repair,shall exercise and perform good maintenance practices, specifically includingthe procurement and maintenance of the service contracts required by Paragraph7.1(b) below. Lessee’s obligations shall include restorations, replacements orrenewals when necessary to keep the Premises and all improvements thereon or apart thereof in good order, condition and state of repair. Lessee shall, duringthe term of this Lease, keep the exterior appearance of the Building in afirst-class condition (including, e.g. graffiti removal) consistent with theexterior appearance of other similar facilities of comparable age and size inthe vicinity, including, when necessary, the exterior repainting of theBuilding.

(b) **ServiceContracts.**Lessee shall, at Lessee’s sole expense, procure andmaintain contracts, with copies to Lessor, in customary form and substance for,and with contractors specializing and experienced in the maintenance of thefollowing equipment and improvements, if any, if and when installed on thePremises: (i) HVAC equipment, ~~(ii) boiler, and pressure vessels, (iii) fireextinguishing systems, including fire alarm and/or smoke detection,~~ (iv)landscaping and irrigation systems, (v) roof covering and drains, (vi)clarifiers. ~~(vii) basic utility feed to the perimeter of the Building , and(viii) any other equipment, if reasonably required by Lessor.~~ However,Lessor reserves the right, upon notice to Lessee, to procure and maintain anyor all of such service contracts, and Lessee shall reimburse Lessor, upondemand, for the cost thereof.

(c) **Failure toPerform.**If Lessee fails to perform Lessee’s obligations under thisParagraph 7.1, Lessor may enter upon the Premises after 10 days’ prior writtennotice to Lessee (except in the case of an emergency, in which case no noticeshall be required), perform such obligations on Lessee’s behalf, and put thePremises in good order, condition and repair, and Lessee shall promptly pay toLessor a sum equal to ~~115% of~~ the cost thereof.

(d) **Replacement.**Subjectto Lessee’s indemnification of Lessor as set forth in Paragraph 8.7 below, andwithout relieving Lessee of liability resulting from Lessee’s failure toexercise and perform good maintenance practices, if an item described inParagraph 7.1(b) cannot be repaired other than at a cost which is in excess of50% of the cost of replacing such item, then such item shall be replaced byLessor, and the cost thereof shall be prorated between the Parties and Lesseeshall only be obligated to pay, each month during the remainder of the term ofthis Lease, on the date on which Base Rent is due, an amount equal to theproduct of multiplying the cost of such replacement by a fraction, thenumerator of which is one, and the denominator of which is ~~144 (ie. 1/144thof the cost per month)~~120 (i.e.,1/120th of the cost per month) with respect to replacement of the roof, and 84 (i.e., 1/84th of the cost per month) withrespect to all other capital replacements. Lessee shall pay interest onthe unamortized balance (at a rateequal to the lesser of ten percent (10%) per annum or the maximum lawfulamount) but may prepay its obligation at any time.

7.2           **Lessor’s Obligations.**Subject to theprovisions of Paragraphs ~~2.2 (Condition),~~2.3 (Compliance), **7.1(d) (Replacement),**9 (Damage orDestruction) **,**~~and~~ 14(Condemnation), and 55.16 (Performanceof Certain Work by Lessor), it is intended by the Parties hereto thatLessor have no obligation, in any manner whatsoever, to repair and maintain thePremises, or the equipment therein, all of which obligations are 

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intendedto be that of the Lessee. It is the intention of the Parties that the terms ofthis Lease govern the respective obligations of the Parties as to maintenanceand repair of the Premises, and they expressly waive the benefit of any statutenow or hereafter in effect to the extent it is inconsistent with the terms ofthis Lease.

7.3           **Utility Installations; Trade Fixtures; Alterations.**

(a) **Definitions.**Theterm **“Utility Installations”**refersto all floor and window coverings, air and/or vacuum lines, power panels,electrical distribution, security and fire protection systems, communicationcabling, lighting fixtures, HVAC equipment, plumbing, and fencing ~~in or on~~ installed or constructed within thePremises after the Commencement Date.The term **“Trade Fixtures”**shallmean Lessee’s machinery and equipment that can be removed without doingmaterial damage to the Premises. The term **“Alterations”**shall mean any modification of the improvements, other than UtilityInstallations or Trade Fixtures, madeto the Premises after the Commencement Date, whether by addition ordeletion. “**Lessee Owned Alterations and/orUtility Installations ”** are defined as Alterations and/or UtilityInstallations made by Lessee after the Commencement Date that are notyet owned by Lessor pursuant to Paragraph 7.4(a).

(b) **Consent.**Except as otherwise expressly provided inthis Lease, Lessee shall not make any Alterations or UtilityInstallations to the Premises without Lessor’s prior written consent. Lesseemay, however, make non-structural Alterationsand Utility Installations to the interior of the Premises (excluding theroof) , and may install its TradeFixtures, without such consent but upon notice to Lessor, as long asthey are not visible from the outside, do not involve puncturing, relocating orremoving the roof or any ~~existing~~ structural bearing walls, will not affect the ~~electrical,plumbing, HVAC, and/or~~ life safety systems, and the cumulative cost thereofduring this Lease as extended does not exceed ~~a sum equal to 3 month’s BaseRent~~ $200,000 in theaggregate or a sum equal to ~~one month’s Base Rent~~ $50,000 in any one year.Notwithstanding the foregoing, Lessee shall not make or permit any roofpenetrations and/or install anything on the roof without the prior writtenapproval of Lessor. Lessor may, as a precondition to granting such approval, requireLessee to utilize a contractor ~~chosen and/or~~ approved by Lessor, such approval not to be unreasonably withheld or delayed. Lessor may require the use of its contractorif proposed Alterations affect the structural aspects of the Building or the failure to do so will void a warrantyapplicable to the Premises. Any Alterations or Utility Installationsthat Lessee shall desire to make and which require the consent of the Lessorshall be presented to Lessor in written form with reasonably detailed plans. Consent shall be deemed conditionedupon Lessee’s: (i) acquiring all applicable governmental permits, (ii)furnishing Lessor with copies of both the permits and the plans andspecifications prior to commencement of the work, and (iii) compliance with allconditions of said permits and other Applicable Requirements in a prompt andexpeditious manner. Any Alterations or Utility Installations shall be performedin a workmanlike manner with good and sufficient materials. Lessee shallpromptly upon completion furnish Lessor with as-built plans and specifications.For work which costs an amount in excess of ~~one month’s~~ six (6) months’ Base Rent, Lessor maycondition its consent upon Lessee providing a lien and completion bond in anamount equal to 150% of the estimated cost of such Alteration or UtilityInstallation and/or upon Lessee’s posting an additional Security Deposit withLessor , said additional Security Deposit (if any) to be returned to Lessee uponcompletion, in the manner required under this Lease, of such work (including Lessor’s receipt of finalunconditional lien releases with respect thereto).

(c) **Liens; Bonds.**Lesseeshall pay, when due, all claims for labor or materials furnished or alleged tohave been furnished to or for Lessee at or for use on the Premises, whichclaims are or may be secured by any mechanic’s or materialmen’s lien againstthe Premises or any interest therein. Lessee shall give Lessor not less than 10days notice prior to the commencement of any work in, on or about the Premises,and Lessor shall have the right to post notices of non-responsibility. IfLessee shall contest the validity of any such lien, claim or demand, thenLessee shall, at its sole expense defend and protect itself, Lessor and thePremises against the same and shall pay and satisfy any such adverse judgmentthat may be rendered thereon before the enforcement thereof. If Lessor shallrequire, Lessee shall furnish a surety bond in an amount equal to 150% of theamount of such contested lien, claim or demand, indemnifying Lessor againstliability for the same. If Lessor elects to participate in any such action,Lessee shall pay Lessor’s attorneys’ fees and costs.

7.4           **Ownership; Removal; Surrender; and Restoration.**

(a) **Ownership.**Subjectto Lessor’s right to require removal or elect ownership as hereinafterprovided, all Alterations and Utility Installations made by Lessee shall be theproperty of Lessee, but considered a part of the Premises. Lessor may, at anytime, elect in writing to be the owner of all or any specified part of theLessee Owned Alterations and Utility Installations. Unless otherwise instructedper paragraph 7.4(b) hereof, all Lessee Owned Alterations and UtilityInstallations shall, at the expiration or termination of this Lease, become theproperty of Lessor and be surrendered by Lessee with the Premises.

(b) **Removal.**Within 90 days prior to the expiration of theTerm, Lessee shall deliver a list of all Alterations and Utility Installations made to the Premisesafter the Commencement Date, if any. Within 30 days following said delivery, ~~Bydelivery to Lessee of written notice from Lessor not earlier than 90 and notlater than 30 days prior to the end of the term of this Lease,~~ Lessor mayrequire that any or all Lessee Owned Alterations or Utility Installations made after the Commencement Date beremoved by the expiration or termination of this Lease. Provided Lessee timely delivers Lessor the notice described in the firstsentence of this Paragraph 7.4(b), Lessor’s failure to give the written notice described in thesecond sentence of this Paragraph 7.4(b) within such time shall constituteLessor’s election that suchLessee Owned Alterations or Utility Installations not be removed. If Lessee hasconstructed Alterations or Utility Installations after the Commencement Date and fails to deliver to Lessorthe notice described in the first sentence of this Paragraph 7.4(b), Lessee shall be required toremove all Alterations and Utility Installations constructed after theCommencement Date and requestedby Lessor within 30 days after the expiration or earlier termination of thisLease. Notwithstanding the foregoing,Lessee shall be obligated to remove all of its Trade Fixtures from thePremises, as well as those Alterations and Utility Installations described in Exhibit 2 attachedhereto and incorporated herein by reference. Lessor may require theremoval at any time of all or any part of any Lessee Owned Alterations orUtility Installations made after theCommencement Date without the required consent.

(c) **Surrender;Restoration.**Lessee shall surrender the Premises by the ExpirationDate or any earlier termination date, with all of the improvements, parts andsurfaces thereof broom clean and free of debris, and in ~~good operatingorder, condition and state of repair~~, the same operating order,condition and state of repair as existed on the Commencement Date, ordinarywear and tear excepted. “Ordinary wear and tear” shall not include any damageor deterioration that would have been prevented by good maintenance practice except to the extent Lessor has elected to maintain any service contractspursuant to Paragraph 7.1(b) above. ~~Notwithstanding the foregoing, ifthis Lease is for 12 months or less, then Lessee shall surrender the Premisesin the same condition as delivered to Lessee on the Start Date with NOallowance for ordinary wear and tear.~~ Lessee shall repair any damageoccasioned by the installation, maintenance or removal (whenever installed) of Trade Fixtures, Lessee owned Alterationsand/or Utility Installations, furnishings, and equipment as well as the removalof any storage tank installed by or for Lessee. Lessee 

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shallcompletely remove from the Premises any and all Hazardous Substances broughtonto the Premises by or for Lessee orthe Lessee Parties, whetherbefore or after the Commencement Date, ~~or any third party (exceptHazardous Substances which were deposited via underground migration from areasoutside of the Premises, or if applicable, the Premises)~~ even if suchremoval would require Lessee to perform or pay for work that exceeds statutoryrequirements. Trade Fixtures shall remain the property of Lessee and shall beremoved by Lessee. Any personal property of Lessee not removed on or before theExpiration Date or any earlier termination date shall be deemed to have beenabandoned by Lessee and may be disposed of or retained by Lessor as Lessor maydesire. The failure by Lessee to timely vacate the Premises pursuant to thisParagraph 7.4(c) without the express written consent of Lessor shall constitutea holdover under the provisions of Paragraph 26 below.

8.             **Insurance;Indemnity.**

8.1           **Payment For Insurance.**Lessee shall pay forall insurance required under thisLease. ~~Paragraph 8 except to the extent of the cost attributable toliability insurance carried by Lessor under Paragraph 8.2(b) in excess of$2,000,000 per occurrence.~~ Premiums for policy periods commencing prior toor extending beyond the Lease term shall be prorated to correspond to the Leaseterm. ~~Payment shall be made by Lessee to Lessor within 10 days followingreceipt of an invoice~~. SeeParagraph 55.27.

8.2           **Liability Insurance.**

(a) **Carried byLessee.**Lessee shall obtain and keep in force a Commercial GeneralLiability policy of insurance protecting Lessee and Lessor as an additional insuredagainst claims for bodily injury, personal injury and property damage basedupon or arising out of the ownership, use, occupancy or maintenance of thePremises and all areas appurtenant thereto. Such insurance shall be on anoccurrence basis providing single limit coverage in an amount not less than ~~$1,000,000~~ $2,000,000 per occurrence withan annual aggregate of not less than ~~$2,000,000~~ $5,000,000; provided,however, that Lessee may provide such coverage through a combination of primaryand excess or “umbrella” coverage so long as the same covers all damages and the form is approved by Lessor inits reasonable discretion. Lessor hereby approves of the liability insurance maintained by Lessee asof the Commencement Date. Lessee shall add Lessor as an additionalinsured by means of an endorsement at least as broad as the Insurance ServiceOrganization’s “Additional Insured-Managers or Lessors of Premises” and “Amendment of the Pollution Exclusion” Endorsements****andcoverage shall also be extended to include damage caused by heat, smoke orfumes from a hostile fire. The policy shall not contain any intra-insuredexclusions as between insured persons or organizations, but shall includecoverage for liability assumed under this Lease as an “**insured contract**” for the performance ofLessee’s indemnity obligations under this Lease. The limits of said insuranceshall not, however, limit the liability of Lessee nor relieve Lessee of anyobligation hereunder. Lessee shall provide an endorsement on its liability policy(ies)which provides that its insurance shall be primary to and not contributory withany similar insurance carried by Lessor, whose insurance shall be consideredexcess insurance only.

(b) **Carried byLessor.**Lessor shall maintain liability insurance as described inParagraph 8.2(a), in addition to, and not in lieu of, the insurance required tobe maintained by Lessee. Lessee shall not be named as an additional insuredtherein.

8.3           **Property Insurance - Building, Improvements and RentalValue.**

(a) **Building andImprovements.**The Insuring Party shall obtain and keep in force apolicy or policies in the name of Lessor, with loss payable to Lessor, anyground-lessor, and to any Lender insuring loss or damage to the Premises. Theamount of such insurance shall be equal to the full insurable replacement costof the Premises, as the same shall exist from time to time, or the amountrequired by any Lender, but in no event more than the commercially reasonableand available insurable value thereof. If Lessor is the Insuring Party,however, Lessee Owned Alterations and Utility Installations made after the Commencement Date,Trade Fixtures, and Lessee’s personal property shall be insured by Lessee underParagraph 8.4 rather than by Lessor. If the coverage is available andcommercially appropriate, such policy or policies shall insure against allrisks of direct physical loss or damage (except the perils of flood and/orearthquake unless required by a Lender), including coverage for debris removaland the enforcement of any Applicable Requirements requiring the upgrading,demolition, reconstruction or replacement of any portion of the Premises as theresult of a covered loss. Said policy or policies shall also contain an agreedvaluation provision in lieu of any coinsurance clause, waiver of subrogation,and inflation guard protection causing an increase in the annual propertyinsurance coverage amount by a factor of not less than the adjusted U.S.Department of Labor Consumer Price Index for All Urban Consumers for the citynearest to where the Premises are located. If such insurance coverage has adeductible clause, the deductible amount shall not exceed $1 0,000 per occurrence, and Lessee shallbe liable for such deductible amount in the event of an Insured Loss. Lessor may satisfy such coverage requirementswith blanket policies, so long as the same otherwise provides the coverage to the Premises required underthis Lease.

(b) **Rental Value.**TheInsuring Party shall obtain and keep in force a policy or policies in the name ofLessor with loss payable to Lessor and any Lender, insuring the loss of thefull Rent for one year with an extended period of indemnity for an additional180 days (“Rental Value insurance”). Said insurance shall contain an agreedvaluation provision in lieu of any coinsurance clause, and the amount ofcoverage shall be adjusted annually to reflect the projected Rent otherwisepayable by Lessee, for the next 12 month period. Lessee shall be liable for anydeductible amount in the event of such loss.

~~(c) **AdjacentPremises.**If the Premises are part of a larger building, or of agroup of buildings owned by Lessor which are adjacent to the Premises, theLessee shall pay for any increase in the premiums for the property insurance ofsuch building or buildings if said increase is caused by Lessee’s acts,omissions, use or occupancy of the Premises.~~

8.4           **Lessee’s Property; Business Interruption Insurance ;**Workers Compensation Insurance.

(a) **Property Damage.**Lessee shall obtain and maintain insurance coverage on all ofLessee’s personal property, Trade Fixtures, and Lessee Owned Alterations andUtility Installations. Such insurance shall be full replacement cost coveragewith a deductible of not to exceed $10,000per occurrence. The proceeds from any such insurance shall be used by Lesseefor the replacement of personal property, Trade Fixtures and Lessee OwnedAlterations and Utility Installations. Byway of example, and not limitation, such policies shall provide protectionagainst any peril includedwithin the classification “fire and extended coverage”, against vandalism andmalicious mischief, theft, and sprinkler leakage. Lessee shall provide Lessor with written evidence thatsuch insurance is in force.

(b) **Business****Interruption.**Lesseeshall obtain and maintain loss of income and extra expense insurance in amountsas will reimburse Lessee for direct or indirect loss of earnings attributableto all perils commonly insured against by prudent lessees in the business ofLessee or attributable to prevention of access to the Premises as a result ofsuch perils.

(c) **No****Representation ofAdequate Coverage.**Lessor makes no representation that the limits orforms of coverage of insurance specified herein are adequate to cover Lessee’sproperty, business operations or obligations under this Lease.

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(d) Workers CompensationInsurance. Lessee shall, at all times during the term hereof, maintain ineffect workers’ compensation insurance as required by applicable law.

8.5           **Insurance Policies.**Insurance requiredherein shall be by companies duly licensed or admitted to transact business inthe state where the Premises are located, and maintaining during the policyterm a “General Policyholders Rating” of at least A-, X ~~VI~~, as set forth in the most current issue of “Best’sInsurance Guide”, or such other rating as may be required by a Lender. Notwithstanding the foregoing, Lessor hereby approves of Lessee’s insurance carriersproviding such coverage as of the Commencement Date. Lessee shall not door permit to be done anything which invalidates the required insurancepolicies. Lessee shall, prior to the Start Date, deliver to Lessor certifiedcopies of policies of such insurance or certificates evidencing the existenceand amounts of the required insurance. No such policy shall be cancelable orsubject to modification except after 30 days prior written notice to Lessor.Lessee shall, at least 10 days prior to the expiration of such policies,furnish Lessor with evidence of renewals or “insurance binders” evidencingrenewal thereof, or Lessor may order such insurance and charge the cost thereofto Lessee, which amount shall be payable by Lessee to Lessor upon demand. Suchpolicies shall be for a term of at least one year, or the length of theremaining term of this Lease, whichever is less. If either Party shall fail toprocure and maintain the insurance required to be carried by it, the otherParty may, but shall not be required to, procure and maintain the same.

8.6           **Waiver of Subrogation.**Without affectingany other rights or remedies, Lessee and Lessor each hereby release and relievethe other, and waive their entire right to recover damages against the other,for loss of or damage to its property arising out of or incident to the perilsrequired to be insured against herein. The effect of such releases and waiversis not limited by the amount of insurance carried or required, or by anydeductibles applicable hereto. The Parties agree to have their respectiveproperty damage insurance carriers waive any right to subrogation that such companiesmay have against Lessor or Lessee, as the case may be, so long as the insuranceis not invalidated thereby.

8.7           **Indemnity.**Except for Lessor’s grossnegligence or willful misconduct, Lessee shall indemnify, protect, defend andhold harmless the Premises, Lessor and its agents, Lessor’s master or groundlessor, partners and Lenders, from and against any and all claims, loss ofrents and/or damages, liens, judgments, penalties, attorneys’ and consultants’fees, expenses and/or liabilities arising out of, involving, or in connectionwith, the use and/or occupancy of the Premises by Lessee. If any action orproceeding is brought against Lessor by reason of any of the foregoing matters,Lessee shall upon notice defend the same at Lessee’s expense by counselreasonably satisfactory to Lessor and Lessor shall cooperate with Lessee insuch defense. Lessor need not have first paid any such claim in order to bedefended or indemnified.

8.8           **Exemption of Lessor and its Agents from Liability**.~~Notwithstanding~~ Except to theextent caused by the gross negligenceor breach of this Lease by Lessor or its agents, neither Lessor nor its agentsshall be liable under any circumstances for: (i) injury or damage to the personor goods, wares, merchandise or other property of Lessee, Lessee’s employees,contractors, invitees, customers, or any other person in or about the Premises,whether such damage or injury is caused by or results from fire, steam,electricity, gas, water or rain, indoor air quality, the presence of mold or fromthe breakage, leakage, obstruction or other defects of pipes, fire sprinklers,wires, appliances, plumbing, HVAC or lighting fixtures, or from any othercause, whether the said injury or damage results from conditions arising uponthe Premises or upon other portions of the building of which the Premises are apart, or from other sources or places, (ii) any damages arising from any act orneglect of any other tenant of Lessor or from the failure of Lessor or itsagents to enforce the provisions of any other lease in the Project, or (iii)injury to Lessee’s business or for any loss of income or profit therefrom.Instead, it is intended that Lessee’s sole recourse in the event of suchdamages or injury be to file a claim on the insurance policy(ies) that Lesseeis required to maintain pursuant to the provisions of paragraph 8.

8.9           **Failure to Provide Insurance.**~~Lessee~~ Each Party acknowledges that anyfailure on its part to obtain or maintain the insurance required herein willexpose Lessor the other Party torisks and potentially cause ~~Lessor~~ it to incur costs not contemplated by this Lease , ~~the extentof which will be extremely difficult to ascertain. Accordingly, for any monthor portion thereof that Lessee does not maintain the required insurance and/ordoes not provide Lessor with the required binders or certificates evidencingthe existence of the required insurance, the Base Rent shall be automaticallyincreased, without any requirement for notice to Lessee, by an amount equal to10% of the then existing Base Rent or $100, whichever is greater. The partiesagree that such increase in Base Rent represents fair and reasonablecompensation for the additional risk/costs that Lessor will incur by reason ofLessee’s failure to maintain the required insurance. Such increase in Base Rentshall in no event constitute a waiver of Lessee’s Default or Breach withrespect to the failure to maintain such insurance, prevent the exercise of anyof the other rights and remedies granted hereunder, nor relieve Lessee of itsobligation to maintain the insurance specified in this Lease.~~

9.             **Damageor Destruction.**

9.1           **Definitions.**

(a) **“PremisesPartial Damage”**shall mean damage or destruction to the improvementson the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which canreasonably be repaired in 6 9 monthsor less from the date of the damage or destruction. Lessor shall notify Lesseein writing within ~~30~~ 60 daysfrom the date of the damage or destruction as to whether or not the damage isPartial or Total. Notwithstanding the foregoing, Premises Partial Damage shallnot include damage to windows, doors, and/or other similar items which Lesseehas the responsibility to repair or replace pursuant to the provisions ofParagraph 7.1.

(b) **“Premises TotalDestruction”**shall mean damage or destruction to the Premises, otherthan Lessee Owned Alterations and Utility Installations and Trade Fixtures,which cannot reasonably be repaired in ~~6~~9 months or less from the date of the damage or destruction.Lessor shall notify Lessee in writing within ~~30~~ 60 days from the date of the damage or destruction as to whetheror not the damage is Partial or Total.

(c) **“Insured Loss”**shallmean damage or destruction to improvements on the Premises, other than LesseeOwned Alterations and Utility Installations and Trade Fixtures and those portions of the Premises requiredto be restored by Lessee prior to its surrender of the Premises, as described in Exhibit 2,which was caused by an event required to be covered by the insurance describedin Paragraph 8.3(a), irrespective of any deductible amounts or coverage limitsinvolved.

(d) **“ReplacementCost”**shall mean the cost to repair or rebuild the improvementsowned by Lessor at the time of the occurrence to their condition existingimmediately prior thereto, including demolition, debris removal and upgradingrequired by the operation of Applicable Requirements, and without deduction fordepreciation.

(e) **“HazardousSubstance Condition”**shall mean the occurrence or discovery of acondition involving the presence of, or a contamination by, a HazardousSubstance as defined in Paragraph 6.2(a), in, on, or under the Premises whichrequires repair, remediation, or restoration.

9.2           **Partial Damage - Insured Loss.**If a PremisesPartial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor’s 

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expense,repair such damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterationsand Utility Installations , and notthose portions of the Premisesrequired to be restored by Lessee prior to its surrender of the Premises, asdescribed in Exhibit 2 ) as soon as reasonably possible and this Leaseshall continue in full force and effect; provided, however, that Lessee shall,at Lessor’s election, make the repair of any damage or destruction the totalcost to repair of which is $10,000 or less, and, in such event, Lessor shallmake any applicable insurance proceeds available to Lessee on a reasonablebasis for that purpose. Notwithstanding the foregoing, if the required insurancewas not in force or the insurance proceeds are not sufficient to effect suchrepair, the Insuring Party shall ,subject to Paragraph 55.26, promptly contribute the shortage in proceeds(except as to the deductible which is Lessee’s responsibility) as and whenrequired to complete said repairs. In the event, however, such shortage was dueto the fact that, by reason of the unique nature of the improvements, fullreplacement cost insurance coverage was not commercially reasonable andavailable, Lessor shall have no obligation to pay for the shortage in insuranceproceeds or to fully restore the unique aspects of the Premises unless Lesseeprovides Lessor with the funds to cover same, or adequate assurance thereof,within 10 days following receipt of written notice of such shortage and requesttherefor. If Lessor receives said funds or adequate assurance thereof withinsaid 10 day period, the party responsible for making the repairs shall completethem as soon as reasonably possible and this Lease shall remain in full forceand effect. If such funds or assurance are not received, Lessor maynevertheless elect by written notice to Lessee within 10 days thereafter to:(i) make such restoration and repair as is commercially reasonable with Lessorpaying any shortage in proceeds, in which case this Lease shall remain in fullforce and effect, or (ii) have this Lease terminate 30 days thereafter. Lesseeshall not be entitled to reimbursement of any funds contributed by Lessee torepair any such damage or destruction. Premises Partial Damage due to flood orearthquake , the cost of repair ofwhich exceeds $100,000, shall be subject to Paragraph 9.3,notwithstanding that there may be some insurance coverage, but the net proceedsof any such insurance shall be made available for the repairs if made by eitherParty.

9.3           **Partial Damage - Uninsured Loss.**If aPremises Partial Damage that is not an Insured Loss occurs, unless caused by anegligent or willful act of Lessee (in which event Lessee shall make therepairs at Lessee’s expense), Lessor may either: (i) repair such damage as soonas reasonably possible at Lessor’s expense, in which event this Lease shallcontinue in full force and effect, or (ii) terminate this Lease by givingwritten notice to Lessee within 30 days after receipt by Lessor of knowledge ofthe occurrence of such damage. Such termination shall be effective ~~60~~ 120 days following the date of suchnotice. In the event Lessor elects to terminate this Lease, Lessee shall havethe right within 10 days after receipt of the termination notice to givewritten notice to Lessor of Lessee’s commitment to pay for the repair of suchdamage without reimbursement from Lessor. Lessee shall provide Lessor with saidfunds or satisfactory assurance thereof within 30 days after making suchcommitment. In such event this Lease shall continue in full force and effect,and Lessor shall proceed to make such repairs as soon as reasonably possibleafter the required funds are available. If Lessee does not make the required commitment,this Lease shall terminate as of the date specified in the termination notice.

9.4           **Total Destruction.**Notwithstanding anyother provision hereof, if a Premises Total Destruction occurs, this Leaseshall terminate 60 days following such Destruction. If the damage ordestruction was caused by the ~~gross~~ negligence or willful misconduct ofLessee, Lessor shall have the right to recover Lessor’s damages from Lessee,except as provided in Paragraph 8.6.

9.5           **Damage Near End of Term.**If at any timeduring the last ~~6~~ 12 monthsof this Lease there is damage for which the cost to repair exceeds ~~onemonth’s~~ three months’ BaseRent, whether or not an Insured Loss, Lessor may terminate this Lease effective~~60~~ 90 days following thedate of occurrence of such damage by giving a written termination notice toLessee within 30 days after the date of occurrence of such damage.Notwithstanding the foregoing, if Lessee at that time has an exercisable optionto extend this Lease or to purchase the Premises, then Lessee may preserve thisLease by, (a) exercising such option and (b) providing Lessor with any shortagein insurance proceeds (or adequate assurance thereof) needed to make therepairs on or before the earlier of (i) the date which is 10 days afterLessee’s receipt of Lessor’s written notice purporting to terminate this Lease,or (ii) the day prior to the date upon which such option expires. If Lesseeduly exercises such option during such period and provides Lessor with funds(or adequate assurance thereof) to cover any shortage in insurance proceeds,Lessor shall, at Lessor’s commercially reasonable expense, repair such damageas soon as reasonably possible and this Lease shall continue in full force andeffect. If Lessee fails to exercise such option and provide such funds orassurance during such period, then this Lease shall terminate on the datespecified in the termination notice and Lessee’s option shall be extinguished.

9.6           **Abatement of Rent; Lessee’s Remedies.**

(a) **Abatement.**Inthe event of Premises Partial Damage or Premises Total Destruction or aHazardous Substance Condition for which Lessee is not responsible under thisLease, the Rent payable by Lessee for the period required for the repair,remediation or restoration of such damage shall be abated in proportion to thedegree to which Lessee’s use of the Premises is impaired ~~, but not to exceedthe proceeds received from the Rental Value insurance.~~ All otherobligations of Lessee hereunder shall be performed by Lessee, and Lessor shallhave no liability for any such damage, destruction, remediation, repair orrestoration except as provided herein.

(b) **Remedies.**IfLessor shall be obligated to repair or restore the Premises and does notcommence, in a substantial and meaningful way, such repair or restorationwithin 90 days after such obligation shall accrue, Lessee may, at any timeprior to the commencement of such repair or restoration, give written notice toLessor and to any Lenders of which Lessee has actual notice, of Lessee’selection to terminate this Lease on a date not less than 60 days following thegiving of such notice. If Lessee gives such notice and such repair orrestoration is not commenced within 30 days thereafter, this Lease shallterminate as of the date specified in said notice. If the repair or restorationis commenced within such 30 days, this Lease shall continue in full force andeffect. “Commence” shall mean either the unconditional authorization of thepreparation of the required plans, or the beginning of the actual work on the Premises,whichever first occurs.

9.7           **Termination; Advance Payments.**Upontermination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, anequitable adjustment shall be made concerning advance Base Rent and any otheradvance payments made by Lessee to Lessor. Lessor shall, in addition, return toLessee so much of Lessee’s Security Deposit as has not been, or is not thenrequired to be, used by Lessor.

9.8           **Waive Statutes.**Lessor and Lessee agreethat the terms of this Lease shall govern the effect of any damage to ordestruction of the Premises with respect to the termination of this Lease andhereby waive the provisions of any present or future statute to the extentinconsistent herewith.

10.           **RealProperty Taxes.**

10.1         **Definition.**As used herein, the term **“RealProperty Taxes”**shall include any form of assessment; real estate,general, special, ordinary or extraordinary, or rental levy or tax (other thaninheritance, personal income or estate taxes); improvement bond; and/or licensefee imposed upon or levied against any legal or equitable interest of Lessor inthe Premises or the Project, Lessor’s right to other income therefrom, and/orLessor’s 

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businessof leasing, by any authority having the direct or indirect power to tax andwhere the funds are generated with reference to the Building address and wherethe proceeds so generated are to be applied by the city, county or other localtaxing authority of a jurisdiction within which the Premises are located. RealProperty Taxes shall also include any tax, fee, levy, assessment or charge, orany increase therein: (i) imposed by reason of events occurring during the termof this Lease, including but not limited to, a change in the ownership of thePremises, and (ii) levied or assessed on machinery or equipment provided byLessor to Lessee pursuant to this Lease.

10.2         **Payment of Taxes.**In addition to Base Rent,Lessee shall pay to Lessor an amount equal to the Real Property Tax installmentdue at least 20 days prior to the applicable delinquency date. If any suchinstallment shall cover any period of time prior to Lessee’s occupancy, or after the expiration or termination of thisLease, Lessee’s share of such installment shall be prorated. ~~In the eventLessee incurs a late charge on any Rent payment,~~ Lessor may estimate thecurrent Real Property Taxes, and require that such taxes be paid in advance toLessor by Lessee monthly in advance with the payment of the Base Rent. Suchmonthly payments shall be an amount equal to the amount of the estimatedinstallment of taxes divided by the number of months remaining before the monthin which said installment becomes delinquent. When the actual amount of theapplicable tax bill is known, the amount of such equal monthly advance paymentsshall be adjusted as required to provide the funds needed to pay the applicabletaxes. If the amount collected by Lessor is insufficient to pay such RealProperty Taxes when due, Lessee shall pay Lessor, upon demand, such additionalsum as is necessary. Advance payments may be intermingled with other moneys ofLessor and shall not bear interest. In the event of a Breach by Lessee in theperformance of its obligations under this Lease, then any such advance paymentsmay be treated by Lessor as an additional Security Deposit but if Lessee is not in Breach, applied to the payment of Real Property Taxeswhen due, and Lessee’s obligations with respect thereto shall be deemed to have been satisfied to theextent thereof.

10.3         **Joint Assessment.**If the Premises are notseparately assessed, Lessee’s liability shall be an equitable proportion of theReal Property Taxes for all of the land and improvements included within thetax parcel assessed, such proportion to be conclusively determined by Lessorfrom the respective valuations assigned in the assessor’s work sheets or suchother information as may be reasonably available.

10.4         **Personal Property Taxes.**Lessee shall pay,prior to delinquency, all taxes assessed against and levied upon Lessee OwnedAlterations, Utility Installations, Trade Fixtures, furnishings, equipment andall personal property of Lessee. When possible, Lessee shall cause its LesseeOwned Alterations and Utility Installations, Trade Fixtures, furnishings,equipment and all other personal property to be assessed and billed separately fromthe real property of Lessor. If any of Lessee’s said property shall be assessedwith Lessor’s real property, Lessee shall pay Lessor the taxes attributable toLessee’s property within 10 days after receipt of a written statement settingforth the taxes applicable to Lessee’s property.

11.           **Utilitiesand Services.**Lessee shall pay for all water, gas, heat, light,power, telephone, trash disposal and other utilities and services supplied tothe Premises, together with any taxes thereon. If any such services are notseparately metered or billed to Lessee, Lessee shall pay a reasonableproportion, to be determined by Lessor, of all charges jointly metered orbilled. There shall be no abatement of rent and Lessor shall not be liable inany respect whatsoever for the inadequacy, stoppage, interruption ordiscontinuance of any utility or service due to riot, strike, labor dispute,breakdown, accident, repair or other cause beyond Lessor’s reasonable controlor in cooperation with governmental request or directions.

12.           **Assignmentand Subletting.**

12.1         **Lessor’s Consent Required.**

(a) Lessee shall not voluntarily or by operation oflaw assign, transfer, mortgage or encumber (collectively, **“assign or****assignment”**) or sublet all or any part of Lessee’s interest inthis Lease or in the Premises without Lessor’s prior written consent.

(b) Unless Lessee is a corporation and its stock ispublicly traded on a national stock exchange, a change in the control of Lesseeshall constitute an assignment requiring consent. The transfer, on a cumulativebasis, of 25% or more of the voting control of Lessee shall constitute a changein control for this purpose.

(c) The involvement of Lessee or its assets in anytransaction, or series of transactions (by way of merger, sale, acquisition,financing, transfer, leveraged buy-out or otherwise), whether or not a formalassignment or hypothecation of this Lease or Lessee’s assets occurs, whichresults or will result in a reduction of the Net Worth of Lessee by an amountgreater than 25% of such Net Worth as it was represented at the time of theexecution of this Lease or at the time of the most recent assignment to whichLessor has consented, or as it exists immediately prior to said transaction ortransactions constituting such reduction, whichever was or is greater, shall beconsidered an assignment of this Lease to which Lessor may withhold itsconsent. **“Net Worth of Lessee”**shallmean the net worth of Lessee ~~(excluding any guarantors)~~ establishedunder generally accepted accounting principles.

(d) An assignment or subletting without consent shall~~,at Lessor’s option,~~ be a Default curable after notice per Paragraph 13.1(d).  ~~Paragraph13.1(c), or a noncurable Breach without the necessity of any notice and graceperiod. If Lessor elects to treat such unapproved assignment or subletting as anoncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30days written notice, increase the monthly Base Rent to 110% of the Base Rentthen in effect. Further, in the event of such Breach and rental adjustment, (i)the purchase price of any option to purchase the Premises held by Lessee shallbe subject to similar adjustment to 110% of the price previously in effect, and(ii) all fixed and non-fixed rental adjustments scheduled during the remainderof the Lease term shall be increased to 110% of the scheduled adjusted rent.~~

(e) Lessee’s remedy for any breach of Paragraph 12.1by Lessor shall be limited to compensatory damages and/or injunctive relief and recovery of attorneys’ fees as providedin this Lease.

(f) Lessor may reasonably withhold consent to aproposed assignment or subletting if Lessee is in Default at the time consentis requested.

(g) Notwithstanding the foregoing, allowing a ~~diminimus~~ de minimis portion of thePremises, ie. 20 square feet or less, to be used by a third party vendor inconnection with the installation of a vending machine or payphone shall notconstitute a subletting. 

(h) Subject to Paragraph12.1(c), Lessee shall have the right to assign this Lease or sublease some orall of the Premises without the need to obtain Lessor’sconsent (but upon written notice to Lessor), if such assignment or sublease isto any person or entity who orwhich controls, is controlled by or is under common control with Lessee, orwhich acquires all of Lessee’s assetsand operations at the Premises. Each of the foregoing assignees and sublesseesdescribed in this Paragraph 12.1(h) shall be referred to as an “Affiliate”.

12.2         **Terms and Conditions Applicable to Assignment andSubletting.**

(a) Regardless of Lessor’s consent, no assignment orsubletting shall: (i) be effective without the express written assumption by 

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suchassignee or sublessee of the obligations of Lessee under this Lease, (ii)release Lessee of any obligations hereunder, or (iii) alter the primaryliability of Lessee for the payment of Rent or for the performance of any otherobligations to be performed by Lessee.

(b) Lessor may accept Rent or performance of Lessee’sobligations from any person other than Lessee pending approval or disapprovalof an assignment. Neither a delay in the approval or disapproval of suchassignment nor the acceptance of Rent or performance shall constitute a waiveror estoppel of Lessor’s right to exercise its remedies for Lessee’s Default orBreach.

(c) Lessor’s consent to any assignment or sublettingshall not constitute a consent to any subsequent assignment or subletting.

(d) In the event of any Default or Breach by Lessee,Lessor may proceed directly against Lessee, ~~any Guarantors~~ or anyone elseresponsible for the performance of Lessee’s obligations under this Lease,including any assignee or sublessee, without first exhausting Lessor’s remediesagainst any other person or entity responsible therefor to Lessor, or anysecurity held by Lessor.

(e) Each request for consent to an assignment orsubletting shall be in writing, accompanied by information relevant to Lessor’sdetermination as to the financial and operational responsibility andappropriateness of the proposed assignee or sublessee, including but notlimited to the intended use and/or required modification of the Premises, ifany ~~, together with a fee of $500 as consideration for Lessor’s consideringand processing said request~~. Lessee agrees to provide Lessor with suchother or additional information and/or documentation as may be reasonablyrequested. (See also Paragraph 36)

(f) Any assignee of, or sublessee under, this Leaseshall, by reason of accepting such assignment, entering into such sublease, orentering into possession of the Premises or any portion thereof, be deemed tohave assumed and agreed to conform and comply with each and every term,covenant, condition and obligation herein to be observed or performed by Lesseeduring the term of said assignment or sublease, other than such obligations asare contrary to or inconsistent with provisions of an assignment or sublease towhich Lessor has specifically consented to in writing where such consent isrequired hereunder.

(g) Lessor’s consent to any assignment or sublettingshall not transfer to the assignee or sublessee any Option granted to theoriginal Lessee by this Lease unless such transfer is specifically consented toby Lessor in writing. (See Paragraph 39.2)

12.3         **Additional Terms and Conditions Applicable toSubletting.**The following terms and conditions shall apply to anysubletting by Lessee of all or any part of the Premises and shall be deemedincluded in all subleases under this Lease whether or not expresslyincorporated therein:

(a) Lessee hereby assigns and transfers to Lessor allof Lessee’s interest in all Rent payable on any sublease, and Lessor maycollect such Rent and apply same toward Lessee’s obligations under this Lease;provided, however, that until a Breach shall occur in the performance ofLessee’s obligations, Lessee may collect said Rent. In the event that theamount collected by Lessor exceeds Lessee’s then outstanding obligations anysuch excess shall be refunded to Lessee. Lessor shall not, by reason of theforegoing or any assignment of such sublease, nor by reason of the collectionof Rent, be deemed liable to the sublessee for any failure of Lessee to performand comply with any of Lessee’s obligations to such sublessee. Lessee herebyirrevocably authorizes and directs any such sublessee, upon receipt of awritten notice from Lessor stating that a Breach exists in the performance ofLessee’s obligations under this Lease, to pay to Lessor all Rent due and tobecome due under the sublease. Sublessee shall rely upon any such notice fromLessor and shall pay all Rents to Lessor without any obligation or right toinquire as to whether such Breach exists, notwithstanding any claim from Lesseeto the contrary.

(b) In the event of a Breach by Lessee, Lessor may, atits option, require sublessee to attorn to Lessor, in which event Lessor shallundertake the obligations of the sublessor under such sublease from the time ofthe exercise of said option to the expiration of such sublease; provided,however, Lessor shall not be liable for any prepaid rents or security depositpaid by such sublessee to such sublessor or for any prior Defaults or Breachesof such sublessor.

~~(c) Any matter requiring the consent of the sublessorunder a sublease shall also require the consent of Lessor.~~

(d) No sublessee shall further assign or sublet all orany part of the Premises without Lessor’s prior written consent.

(e) Lessor shall deliver a copy of any notice ofDefault or Breach by Lessee to the sublessee, who shall have the right to curethe Default of Lessee within the grace period, if any, specified in suchnotice. The sublessee shall have a right of reimbursement and offset from andagainst Lessee for any such Defaults cured by the sublessee.

13.           **Default;Breach; Remedies.**

13.1         **Default; Breach.**A **“Default”**is defined as a failure by theLessee to comply with or perform any of the terms, covenants, conditions orRules and Regulations under this Lease. A **“Breach”**is defined as the occurrence of one or more of the followingDefaults, and the failure of Lessee to cure such Default within any applicablegrace period:

(a) The abandonment of the Premises; or the vacatingof the Premises without providing a commercially reasonable level of security,or where the coverage of the property insurance described in Paragraph 8.3 isjeopardized as a result thereof, or without providing reasonable assurances tominimize potential vandalism.

(b) The failure of Lessee to make any payment of Rentor any Security Deposit required to be made by Lessee hereunder, whether toLessor or to a third party, when due, to provide reasonable evidence ofinsurance or surety bond, or to fulfill any obligation under this Lease whichendangers or threatens life or property, where such failure continues for aperiod of ~~3 business~~ 5 calendar days following written notice to Lessee.

(c) The commission of waste, act or acts constitutingpublic or private nuisance, and/or an illegal activity on the Premises byLessee, where such actions continue for a period of ~~3~~ 5 business daysfollowing written notice to Lessee.

(d) The failure by Lessee to provide (i) reasonablewritten evidence of compliance with Applicable Requirements, (ii) the servicecontracts, (iii) the rescission of an unauthorized assignment or subletting,(iv) an Estoppel Certificate, (v) a requested subordination, ~~(vi) evidenceconcerning any guaranty and/or Guarantor,~~(vii) any document requestedunder Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) anyother documentation or information which Lessor may reasonably require ofLessee under the terms of this Lease, where any such failure continues for aperiod of ~~10~~ 15 business days following written notice to Lessee.

(e) A Default by Lessee as to the terms, covenants,conditions or provisions of this Lease, or of the rules adopted under Paragraph40 hereof, other than those described in subparagraphs 13.1(a), (b), (c) or(d), above, where such Default continues for a period of 30 days after writtennotice; provided, however, that if the nature of Lessee’s Default is such thatmore than 30 days are reasonably required for its cure, then it shall not bedeemed to be a Breach if Lessee commences such cure within said 30 day periodand thereafter diligently prosecutes such cure to completion.

(f) The occurrence of any of the following events: (i)the making of any general arrangement or assignment for the benefit ofcreditors; (ii) becoming a **“debtor”** asdefined in 11 U.S.C. §101 or any successor statute thereto (unless, in the caseof a petition filed against Lessee, 

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thesame is dismissed within 60 days); (iii) the appointment of a trustee orreceiver to take possession of substantially all of Lessee’s assets located atthe Premises or of Lessee’s interest in this Lease, where possession is notrestored to Lessee within 30 days; or (iv) the attachment, execution or otherjudicial seizure of substantially all of Lessee’s assets located at thePremises or of Lessee’s interest in this Lease, where such seizure is notdischarged within 30 days; provided, however, in the event that any provisionof this subparagraph is contrary to any applicable law, such provision shall beof no force or effect, and not affect the validity of the remaining provisions.

(g) The discovery that any financial statement ofLessee ~~or of any Guarantor~~ given to Lessor was materially false.

(h) So long as Lessor owns and Lessee leases those certain premises located at 9453 OwensmoutnAvenue, Chatsworth, California(the “Other Premises”), the occurrence of a Breach under that certain StandardIndustrial/Commercial Multi-TenantLease - Net, of even date herewith, by and between Lessor and Lessee, withrespect to the Other Premises. ~~If the performance of Lessee’sobligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii)the termination of a Guarantor’s liability with respect to this Lease otherthan in accordance with the terms of such guaranty, (iii) a Guarantor’sbecoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor’srefusal to honor the guaranty, or (v) a Guarantor’s breach of its guaranty obligationon an anticipatory basis, and Lessee’s failure, within 60 days followingwritten notice of any such event, to provide written alternative assurance orsecurity, which, when coupled with the then existing resources of Lessee,equals or exceeds the combined financial resources of Lessee and the Guarantorsthat existed at the time of execution of this Lease.~~

13.2         **Remedies.**If Lessee fails to perform any ofits affirmative duties or obligations, within 10 days after written notice (orin case of an emergency, without notice), Lessor may, at its option, performsuch duty or obligation on Lessee’s behalf, including but not limited to theobtaining of reasonably required bonds, insurance policies, or governmentallicenses, permits or approvals. Lessee shall pay to Lessor an amount equal to ~~115%of~~ the costs and expenses incurred by Lessor in such performance uponreceipt of an invoice therefor. In the event of a Breach, Lessor may, with orwithout further notice or demand, and without limiting Lessor in the exerciseof any right or remedy which Lessor may have by reason of such Breach:

(a) Terminate Lessee’s right to possession of thePremises by any lawful means, in which case this Lease shall terminate andLessee shall immediately surrender possession to Lessor. In such event Lessorshall be entitled to recover from Lessee: (i) the unpaid Rent which had beenearned at the time of termination; (ii) the worth at the time of award of theamount by which the unpaid rent which would have been earned after terminationuntil the time of award exceeds the amount of such rental loss that the Lesseeproves could have been reasonably avoided; (iii) the worth at the time of awardof the amount by which the unpaid rent for the balance of the term after thetime of award exceeds the amount of such rental loss that the Lessee provescould be reasonably avoided; and (iv) any other amount necessary to compensateLessor for all the detriment proximately caused by the Lessee’s failure toperform its obligations under this Lease or which in the ordinary course ofthings would be likely to result therefrom, including but not limited to thecost of recovering possession of the Premises, expenses of reletting, includingnecessary renovation and alteration (tothe extent described in Paragraph7.4(c) and Exhibit 2) of the Premises, reasonable attorneys’ fees, andthat portion of any leasing commission paid by Lessor in connection with thisLease applicable to the unexpired term of this Lease ; provided, however, that in no event shall Lessor be entitled to double recovery from Lessee for damageincurred as a result of such Breach. The worth at the time of award ofthe amount referred to in provision (iii) of the immediately preceding sentenceshall be computed by discounting such amount at the discount rate of theFederal Reserve Bank of the District within which the Premises are located atthe time of award plus one percent. Efforts by Lessor to mitigate damagescaused by Lessee’s Breach of this Lease shall not waive Lessor’s right to recoverdamages under Paragraph 12. If termination of this Lease is obtained throughthe provisional remedy of unlawful detainer, Lessor shall have the right torecover in such proceeding any unpaid Rent and damages as are recoverabletherein, or Lessor may reserve the right to recover all or any part thereof ina separate suit. If a notice and grace period required under Paragraph 13.1 wasnot previously given, a notice to pay rent or quit, or to perform or quit givento Lessee under the unlawful detainer statute shall also constitute the noticerequired by Paragraph 13.1. In such case, the applicable grace period requiredby Paragraph 13.1 and the unlawful detainer statute shall run concurrently, andthe failure of Lessee to cure the Default within the greater of the two suchgrace periods shall constitute both an unlawful detainer and a Breach of thisLease entitling Lessor to the remedies provided for in this Lease and/or bysaid statute.

(b) Continue the Lease and Lessee’s right topossession and recover the Rent as it becomes due, in which event Lessee maysublet or assign, subject only to reasonable limitations. Acts of maintenance,efforts to relet, and/or the appointment of a receiver to protect the Lessor’sinterests, shall not constitute a termination of the Lessee’s right topossession.

(c) Pursue any other remedy now or hereafter availableunder the laws or judicial decisions of the state wherein the Premises arelocated. The expiration or termination of this Lease and/or the termination ofLessee’s right to possession shall not relieve Lessee from liability under anyindemnity provisions of this Lease as to matters occurring or accruing duringthe term hereof or by reason of Lessee’s occupancy of the Premises.

~~13.3         **Inducement Recapture.**Any agreement forfree or abated rent or other charges, or for the giving or paying by Lessor toor for Lessee of any cash or other bonus, inducement or consideration forLessee’s entering into this Lease, all of which concessions are hereinafterreferred to as **“Inducement Provisions,”**shallbe deemed conditioned upon Lessee’s full and faithful performance of all of theterms, covenants and conditions of this Lease. Upon Breach of this Lease byLessee, any such Inducement Provision shall automatically be deemed deletedfrom this Lease and of no further force or effect, and any rent, other charge,bonus, inducement or consideration theretofore abated, given or paid by Lessorunder such an inducement Provision shall be immediately due and payable byLessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee.The acceptance by Lessor of rent or the cure of the Breach which initiated theoperation of this paragraph shall not be deemed a waiver by Lessor of theprovisions of this paragraph unless specifically so stated in writing by Lessorat the time of such acceptance.~~

13.4         **Late Charges.**Lessee hereby acknowledgesthat late payment by Lessee of Rent will cause Lessor to incur costs notcontemplated by this Lease, the exact amount of which will be extremelydifficult to ascertain. Such costs include, but are not limited to, processingand accounting charges, and late charges which may be imposed upon Lessor byany Lender. Accordingly, if any Rent shall not be received by Lessor within ~~5~~ 10 days after such amount shallbe due, then, without any requirement for notice to Lessee, Lessee shallimmediately pay to Lessor a one-time late charge equal to ~~10%~~ 5% of each such overdue amount or$100, whichever is greater. The Parties hereby agree that such late charge representsa fair and reasonable estimate of the costs Lessor will incur by reason of suchlate payment. Acceptance of such late charge by Lessor shall in no eventconstitute a waiver of Lessee’s Default or Breach with respect to such overdueamount, nor prevent the exercise of any of the other rights and remediesgranted hereunder. In the event that a late charge is payable hereunder,whether or not collected, for 3 consecutive installments of Base Rent, thennotwithstanding any provision of this Lease to the contrary, Base Rent shall,at Lessor’s option, become due and payable quarterly in advance.

13.5         **Interest.**Any monetary payment due Lessorhereunder, other than late charges, not received by Lessor, when due as toscheduled payments (such as Base Rent) or within 30 days following the date onwhich it was due for non-scheduled payment, shall bear interest from the date 

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whendue, as to scheduled payments, or the 31st day after it was due as tonon-scheduled payments. The interest ( **“Interest”**)charged shall be computed at the rate of 10% per annum but shall not exceed themaximum rate allowed by law. Interest is payable in addition to the potentiallate charge provided for in Paragraph 13.4.

13.6         **Breach by Lessor.**

(a) **Notice ofBreach.**Lessor shall not be deemed in breach of this Lease unlessLessor fails within a reasonable time to perform an obligation required to beperformed by Lessor. For purposes of this Paragraph, a reasonable time shall inno event be ~~less~~ more than30 days after receipt by Lessor, and any Lender whose name and address shallhave been furnished Lessee in writing for such purpose, of written noticespecifying wherein such obligation of Lessor has not been performed; provided,however, that if the nature of Lessor’s obligation is such that more than 30days are reasonably required for its performance, then Lessor shall not be inbreach if performance is commenced within such 30 day period and thereafterdiligently pursued to completion.

(b) **Performance by Lessee on Behalf of Lessor.**In the eventthat neither Lessor nor Lender cures said breach within 30 days after receiptof said notice, or if having commenced said cure they do not diligently pursueit to completion within a reasonabletime, then after Lessee gives Lessor a second written noticeand Lessor fails to commence the cure within 3 business days after said notice,Lessee may elect to cure said breach at Lessee’s expense and offset fromRent the actual and reasonable cost to perform such cure, provided, however,that such offset shall not exceed an amount equal to the greater of one month’sBase Rent or the Security Deposit, reserving Lessee’s right to seekreimbursement from Lessor for any such expense in excess of such offset. Lesseeshall document the cost of said cure and supply said documentation to Lessor.

14.           **Condemnation.**If the Premises or any portion thereof are taken under the power ofeminent domain or sold under the threat of the exercise of said power(collectively **“Condemnation”**),this Lease shall terminate as to the part taken as of the date the condemningauthority takes title or possession, whichever first occurs. If more than 10%of the Building, or more than 25% of that portion of the Premises not occupiedby any building, is permanently takenby Condemnation (or taken for more than90 days in a temporary taking by Condemnation) and such taking materially and adversely affects Lessee’s useor occupancy of the Premises , Lessee may, at Lessee’s option, to beexercised in writing within 10 days after Lessor shall have given Lesseewritten notice of such taking (or in the absence of such notice, within 10 daysafter the condemning authority shall have taken possession) terminate thisLease as of the date the condemning authority takes such possession. If Lesseedoes not terminate this Lease in accordance with the foregoing, this Leaseshall remain in full force and effect as to the portion of the Premisesremaining, except that the Base Rent shall be reduced in proportion to thereduction in utility of the Premises caused by such Condemnation , subject to Paragraph 55.26 below. Condemnation awardsand/or payments shall be the property of Lessor, whether such award shall bemade as compensation for diminution in value of the leasehold, the value of thepart taken, or for severance damages; provided, however, that Lessee shall beentitled to ~~any~~ pursue aseparate award for compensation for Lessee’s relocation expenses, lossof business goodwill and/or Trade Fixtures, without regard to whether or notthis Lease is terminated pursuant to the provisions of this Paragraph. AllAlterations and Utility Installations made to the Premises by Lessee after the Commencement Date for which Lessorwill require removal pursuant to Paragraph 7.4(c), and those portions of the Premises described on Exhibit 2,for purposes of Condemnation only, shall be considered the property of theLessee and Lessee shall be entitled to any and all compensation which ispayable therefor. ~~In the event that this Lease is not terminated by reasonof the Condemnation, Lessor shall repair any damage to the Premises caused bysuch Condemnation.~~

15.           **BrokerageFees.**

15.1         **Additional Commission.**In addition to thepayments owed pursuant to Paragraph 1.9 above, and unless Lessor and theBrokers otherwise agree in writing, Lessor agrees that: (a) if Lessee exercisesany Option, ~~(b) if Lessee acquires any rights to the Premises or otherpremises owned by Lessor and located within the same Project, if any, withinwhich the Premises is located, (c) if Lessee remains in possession of thePremises, with the consent of Lessor, after the expiration of this Lease, or(d) if Base Rent is increased, whether by agreement or operation of anescalation clause herein,~~ then, Lessor shall pay Brokers a fee pursuant to the separate written agreementdescribed in Paragraph 1.9(b). ~~in accordance with the schedule of theBrokers in effect at the time of the execution of this Lease.~~

15.2         **Assumption of Obligations.**Any buyer ortransferee of Lessor’s interest in this Lease shall be deemed to have assumedLessor’s obligation hereunder. Brokers shall be third party beneficiaries ofthe provisions of Paragraphs 1.9, 15, 22 and 31. ~~If Lessor fails to pay toBrokers any amounts due as and for brokerage fees pertaining to this Lease whendue, then such amounts shall accrue Interest. In addition, if Lessor fails topay any amounts to Lessee’s Broker when due, Lessee’s Broker may send writtennotice to Lessor and Lessee of such failure and if Lessor fails to pay suchamounts within 10 days after said notice, Lessee shall pay said monies to itsBroker and offset such amounts against Rent. In addition, Lessee’s Broker shallbe deemed to be a third party beneficiary of any commission agreement enteredinto by and/or between Lessor and Lessor’s Broker for the limited purpose ofcollecting any brokerage fee owed.~~

15.3         **Representations and Indemnities of BrokerRelationships.**Lessee and Lessor each represent and warrant to theother that it has had no dealings with any person, firm, broker or finder(other than the Brokers, if any) in connection with this Lease, and that no oneother than said named Brokers is entitled to any commission or finder’s fee inconnection herewith. Lessee and Lessor do each hereby agree to indemnify,protect, defend and hold the other harmless from and against liability forcompensation or charges which may be claimed by any such unnamed broker, finderor other similar party by reason of any dealings or actions of the indemnifyingParty, including any costs, expenses, attorneys’ fees reasonably incurred withrespect thereto.

16.           **EstoppelCertificates.**

(a) Subject toParagraph 55.22, each ~~Each~~ Party (as **“Responding Party”**) shall within 10 days after written noticefrom the other Party (the **“Requesting Party”**)execute, acknowledge and deliver to the Requesting Party a statement in writingin form similar to the then most current **“Estoppel Certificate”**form published by the AIR Commercial Real Estate Association, plus suchadditional information, confirmation and/or statements as may be reasonablyrequested by the Requesting Party.

(b) If the Responding Party is required and shall failto execute or deliver the Estoppel Certificate within such 10 day period, theRequesting Party may execute an Estoppel Certificate stating that: (i) theLease is in full force and effect without modification except as may berepresented by the Requesting Party, (ii) there are no uncured defaults in theRequesting Party’s performance, and (iii) if Lessor is the Requesting Party, 

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notmore than one month’s rent has been paid in advance. Prospective purchasers andencumbrancers may rely upon the Requesting Party’s Estoppel Certificate, andthe Responding Party shall be estopped from denying the truth of the factscontained in said Certificate.

(c) If Lessor desires to finance, refinance, or sellthe Premises, or any part thereof, orif Lessor is reasonably concerned about Lessee’s financial condition, Lessee ~~and all Guarantors~~shall deliver to any potential lender or purchaser designated by Lessor suchfinancial statements as may be reasonably required by such lender or purchaser,including but not limited to Lessee’s financial statements for the past 3years. All such financial statements shall be received by Lessor and suchlender or purchaser in confidence and shall be used only for the purposesherein set forth. So long as the stockof Lessee is publicly traded on a national stock exchange, Lessee’s delivery ofits publicly-available financial statementsshall satisfy its obligations under this Paragraph 16(c).

17.           **Definitionof Lessor.**The term **“Lessor”**asused herein shall mean the owner or owners at the time in question of the feetitle to the Premises, or, if this is a sublease, of the Lessee’s interest inthe prior lease. In the event of a transfer of Lessor’s title or interest inthe Premises or this Lease, Lessor shall deliver to the transferee or assignee(in cash or by credit) any unused Security Deposit held by Lessor. Except asprovided in Paragraph 15, upon such transfer or assignment and delivery of theSecurity Deposit, as aforesaid, the prior Lessor shall be relieved of allliability with respect to the obligations and/or covenants under this Leasethereafter to be performed by the Lessor. Subject to the foregoing, theobligations and/or covenants in this Lease to be performed by the Lessor shallbe binding only upon the Lessor as hereinabove defined. 

18.           **Severability.**The invalidity of any provision of this Lease, as determined by acourt of competent jurisdiction, shall in no way affect the validity of anyother provision hereof.

19.           **Days.**Unless otherwise specifically indicated to the contrary, the word“days” as used in this Lease shall mean and refer to calendar days.

20.           **Limitationon Liability.**~~The~~ Notwithstandinganything to the contrary in this Lease, the obligations of Lessor underthis Lease shall not constitute personal obligations of Lessor or its partners,members, directors, officers or shareholders, and Lessee shall look to thePremises and the proceeds of any insurance maintained byLessor hereunder , and to no other assets of Lessor, for thesatisfaction of any liability of Lessor with respect to this Lease, and shallnot seek recourse against Lessor’s investmentadvisors, partners, members, directors, officers or shareholders, or anyof their personal assets for such satisfaction.

21.           **Timeof Essence.**Time is of the essence with respect to the performanceof all obligations to be performed or observed by the Parties under this Lease.

22.           **NoPrior or Other Agreements; Broker Disclaimer.**This Lease containsall agreements between the Parties with respect to ~~any matter~~~~mentionedherein~~ Lessee’s lease of thePremises, and no other prior or contemporaneous agreement orunderstanding shall be effective. Lessor and Lessee each represents and warrantsto the Brokers that it has made, and is relying solely upon, its owninvestigation as to the nature, quality, character and financial responsibilityof the other Party to this Lease and as to the use, nature, quality andcharacter of the Premises. Brokers have no responsibility or liability with respect thereto orwith respect to any default or breach hereof by either Party. The Purchase Contract shall govern the terms of Lessor’s purchase of thePremises from Lessee’s Affiliate, and shall remain in effect as and to theextent provided therein. ~~Theliability (including court costs and attorneys’ fees), of any Broker withrespect to negotiation, execution, delivery or performance by either Lessor orLessee under this Lease or any amendment or modification hereto shall belimited to an amount up to the fee received by such Broker pursuant to thisLease; provided, however, that the foregoing limitation on each Broker’sliability shall not be applicable to any gross negligence or willful misconductof such Broker.~~

23.           **Notices.**

23.1         **Notice Requirements.**All notices requiredor permitted by this Lease or applicable law shall be in writing and may bedelivered in person (by hand or by courier) or may be sent by regular,certified or registered mail or U.S. Postal Service Express Mail, with postageprepaid, or by facsimile transmission, and shall be deemed sufficiently givenif served in a manner specified in this Paragraph 23. The addresses notedadjacent to a Party’s signature on this Lease shall be that Party’s address fordelivery or mailing of notices. Either Party may by written notice to the otherspecify a different address for notice~~, except that upon Lessee’s takingpossession of the Premises, the Premises shall constitute Lessee’s address fornotice~~. A copy of all notices to Lessor shall be concurrently transmittedto such party or parties at such addresses as Lessor may from time to timehereafter designate in writing.

23.2         **Date of Notice.**Any notice sent byregistered or certified mail, return receipt requested, shall be deemed givenon the date of delivery shown on the receipt card, or if no delivery date isshown, the postmark thereon. If sent by regular mail the notice shall be deemedgiven 72 hours after the same is addressed as required herein and mailed withpostage prepaid. Notices delivered by United States Express Mail or overnightcourier that guarantee next day delivery shall be deemed given 24 hours afterdelivery of the same to the Postal Service or courier. Notices transmitted byfacsimile transmission or similar means shall be deemed delivered upontelephone confirmation of receipt (confirmation report from fax machine issufficient), provided a copy is also delivered via delivery or mail. If noticeis received on a Saturday, Sunday or legal holiday, it shall be deemed receivedon the next business day.

24.           **Waivers.**No waiver by ~~Lessor~~ either Party of the Default or Breachof , or failure to perform, anyterm, covenant or condition hereof by ~~Lessee~~ the other Party, shall be deemed a waiver of any other term,covenant or condition hereof, or of any subsequent Default or Breach ~~byLessee~~ of, or failure to perform, thesame or of any other term, covenant or condition hereof. Lessor’s consent to,or approval of, any act shall not be deemed to render unnecessary the obtainingof Lessor’s consent to, or approval of, any subsequent or similar act byLessee, or be construed as the basis of an estoppel to enforce the provision orprovisions of this Lease requiring such consent. The acceptance of Rent byLessor shall not be a waiver of any Default or Breach by Lessee. ~~Any~~ Except as provided in Paragraph 43 below, anypayment by Lessee may be accepted by Lessor on account of moneys ordamages due Lessor, notwithstanding any qualifying statements or conditionsmade by Lessee in connection therewith, which such statements and/or conditionsshall be of no force or effect whatsoever unless specifically agreed to inwriting by Lessor at or before the time of 

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depositof such payment.

~~25.           **DisclosuresRegarding The Nature of a Real Estate Agency Relationship.**~~

~~(a)           Whenentering into a discussion with a real estate agent regarding a real estatetransaction, a Lessor or Lessee should from the outset understand what type ofagency relationship or representation it has with the agent or agents in thetransaction. Lessor and Lessee acknowledge being advised by the Brokers in thistransaction, as follows:~~

~~(i)              Lessor’sAgent. A Lessor’s agent under a listing agreement with the Lessor acts asthe agent for the Lessor only. A Lessor’s agent or subagent has the followingaffirmative obligations: To the Lessor: A fiduciary duty of utmost care,integrity, honesty, and loyalty in dealings with the Lessor. To the Lesseeand the Lessor: a. Diligent exercise of reasonable skills and care inperformance of the agent’s duties. b. A duty of honest and fair dealing andgood faith. c. A duty to disclose all facts known to the agent materiallyaffecting the value or desirability of the property that are not known to, orwithin the diligent attention and observation of, the Parties. An agent is notobligated to reveal to either Party any confidential information obtained fromthe other Party which does not involve the affirmative duties set forth above.~~

~~(ii)           Lessee’sAgent. An agent can agree to act as agent for the Lessee only. In thesesituations, the agent is not the Lessor’s agent, even if by agreement the agentmay receive compensation for services rendered, either in full or in part fromthe Lessor. An agent acting only for a Lessee has the following affirmativeobligations. To the Lessee: A fiduciary duty of utmost care, integrity,honesty, and loyalty in dealings with the Lessee. To the Lessee and theLessor: a. Diligent exercise of reasonable skills and care in performanceof the agent’s duties. b. A duty of honest and fair dealing and good faith. c.A duty to disclose all facts known to the agent materially affecting the valueor desirability of the property that are not known to, or within the diligentattention and observation of, the Parties. An agent is not obligated to revealto either Party any confidential information obtained from the other Partywhich does not involve the affirmative duties set forth above.~~

~~(iii)            AgentRepresenting Both Lessor and Lessee. A real estate agent, either actingdirectly or through one or more associate licenses, can legally be the agent ofboth the Lessor and the Lessee in a transaction, but only with the knowledgeand consent of both the Lessor and the Lessee. In a dual agency situation, the agenthas the following affirmative obligations to both the Lessor and the Lessee: a.A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealingswith either Lessor or the Lessee. b. Other duties to the Lessor and the Lesseeas stated above in subparagraphs (i) or (ii). In representing both Lessor andLessee, the agent may not without the express permission of the respectiveParty, disclose to the other Party that the Lessor will accept rent in anamount less than that indicated in the listing or that the Lessee is willing topay a higher rent than that offered. The above duties of the agent in a realestate transaction do not relieve a Lessor or Lessee from the responsibility toprotect their own interests. Lessor and Lessee should carefully read allagreements to assure that they adequately express their understanding of thetransaction. A real estate agent is a person qualified to advise about realestate. If legal or tax advice is desired, consult a competent professional.~~

~~(b)           Brokershave no responsibility with respect to any default or breach hereof by eitherParty. The Parties agree that no lawsuit or other legal proceeding involvingany breach of duty, error or omission relating to this Lease may be broughtagainst Broker more than one year after the Start Date and that the liability(including court costs and attorneys’ fees), of any Broker with respect to anysuch lawsuit and/or legal proceeding shall not exceed the fee received by suchBroker pursuant to this Lease; provided, however, that the foregoing limitationon each Broker’s liability shall not be applicable to any gross negligence orwillful misconduct of such Broker.~~

~~(c)           Lessorand Lessee agree to identify to Brokers as “Confidential” any communication orinformation given Brokers that is considered by such Party to be confidential.~~

26.           **NoRight To Holdover.**Lessee has no right to retain possession of thePremises or any part thereof beyond the expiration or termination of thisLease. In the event that Lessee holds over, then the Base Rent shall beincreased to ~~150%~~125%****of the Base Rent applicableimmediately preceding the expiration or termination for the first sixty (60) days of such holding over, and thereafter 150%of the Base Rent applicable immediatelypreceding the expiration or termination. Nothing contained herein shallbe construed as consent by Lessor to any holding over by Lessee.

27.           **CumulativeRemedies.**No remedy or election hereunder shall be deemed exclusivebut shall, wherever possible, be cumulative with all other remedies at law orin equity.

28.           **~~Covenantsand Conditions;~~ Construction of Agreement.**~~All provisions ofthis Lease to be observed or performed by Lessee are both covenants andconditions.~~ In construing this Lease, all headings and titles are for the convenienceof the Parties only and shall not be considered a part of this Lease. Wheneverrequired by the context, the singular shall include the plural and vice versa.This Lease shall not be construed as if prepared by one of the Parties, butrather according to its fair meaning as a whole, as if both Parties hadprepared it.

29.           **BindingEffect; Choice of Law.**This Lease shall be binding upon the Parties,their personal representatives, successors and assigns and be governed by thelaws of the State in which the Premises are located. Any litigation between theParties hereto concerning this Lease shall be initiated in the county in whichthe Premises are located.

30.           **Subordination;Attornment; Non-Disturbance.**

30.1         **Subordination.**~~This~~ Subject to Paragraph 30.3 below, this Leaseand any Option granted hereby shall be subject and subordinate to any groundlease, mortgage, deed of trust, or other hypothecation or security device(collectively, **“Security Device”**),now or hereafter placed upon the Premises, to any and all advances made on thesecurity thereof, and to all renewals, modifications, and extensions thereof.Lessee agrees that the holders of any such Security Devices (in this Leasetogether referred to as **“Lender”**)shall have no liability or obligation to perform any of the obligations ofLessor under this Lease. Any Lender may elect to have this Lease and/or anyOption granted hereby superior to the lien of its Security Device by givingwritten notice thereof to Lessee, whereupon this Lease and such Options shallbe deemed prior to such Security Device, notwithstanding the relative dates ofthe documentation or recordation thereof.

30.2         **Attornment.**In the event that Lessortransfers title to the Premises, or the Premises are acquired by another uponthe foreclosure or termination of a Security Device to which this Lease issubordinated (i) Lessee shall, subject to the non-disturbance provisions ofParagraph 30.3, attorn to such new owner, and upon request, enter into a newlease, containing all of the terms and provisions of this Lease, with such newowner for the 

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remainderof the term hereof, or, at the election of the new owner, this Lease willautomatically become a new lease between Lessee and such new owner, for theremainder of the term hereof, and (ii) Lessor shall thereafter be relieved ofany further obligations hereunder and such new owner shall assume all ofLessor’s obligations, except that such new owner shall not: (a) be liable forany act or omission of any prior lessor or with respect to events occurringprior to acquisition of ownership; (b) be subject to any offsets or defenseswhich Lessee might have against any prior lessor, (c) be bound by prepayment ofmore than one month’s rent , or (d) be liable for the return of any security depositpaid to any prior lessor unless thesecurity deposit has beenreceived by such new owner.

30.3         **Non-Disturbance.**With respect to SecurityDevices entered into by Lessor after the execution of this Lease, Lessee’ssubordination of this Lease shall be subject to receiving a commerciallyreasonable non-disturbance agreement (a **“Non-DisturbanceAgreement”**) from the Lender which Non-Disturbance Agreementprovides that Lessee’s possession of the Premises, and this Lease, includingany options to extend the term hereof, will not be disturbed so long as Lesseeis not in Breach hereof and attorns to the record owner of the Premises.Further, within 60 days after the execution of this Lease, Lessor shall use itscommercially reasonable efforts to obtain a Non-Disturbance Agreement from theholder of any pre-existing Security Device which is secured by the Premises. Inthe event that Lessor is unable to provide the Non-Disturbance Agreement withinsaid 60 days, then Lessee may, at Lessee’s option, directly contact Lender andattempt to negotiate for the execution and delivery of a Non-DisturbanceAgreement.

30.4         **Self-Executing.**The agreements contained inthis Paragraph 30 shall be effective without the execution of any furtherdocuments; provided, however, that, upon written request from Lessor or aLender in connection with a sale, financing or refinancing of the Premises,Lessee and Lessor shall execute such further writings as may be reasonablyrequired to separately document any subordination, attornment and/or Non-DisturbanceAgreement provided for herein.

31.           **Attorneys’Fees.**If any Party ~~or Broker~~ brings an action or proceedinginvolving the Premises whether founded in tort, contract or equity, or todeclare rights hereunder, the Prevailing Party (as hereafter defined) in anysuch proceeding, action, or appeal thereon, shall be entitled to reasonableattorneys’ fees. Such fees may be awarded in the same suit or recovered in aseparate suit, whether or not such action or proceeding is pursued to decisionor judgment. The term, **“Prevailing Party”**shallinclude, without limitation, a Party ~~or Broker~~ who ~~substantially~~obtains ~~or defeats the relief sought, as the case may be, whether bycompromise, settlement~~, a final,non-appealable judgment, or the abandonment by the other Party ~~orBroker~~ of its claim or defense. The attorneys’ fees award shall not becomputed in accordance with any court fee schedule, but shall be such as tofully reimburse all attorneys’ fees reasonably incurred. In addition, Lessorshall be entitled to attorneys’ fees, costs and expenses incurred in thepreparation and service of valid noticesof Default and consultations in connection therewith, whether or not a legalaction is subsequently commenced in connection with such Default or resultingBreach ($200 is a reasonable minimum per occurrence for such services andconsultation).

32.           **Lessor’sAccess; Showing Premises; Repairs.**Subject to compliance with Lessee’s security requirements, Lessorand Lessor’s agents shall have the right to enter the Premises at any time, inthe case of an emergency, and otherwise at reasonable times after reasonableprior notice (which may be verbal) forthe purpose of showing the same to prospective purchasers, lenders, or during the last nine months of the Term, to tenants, and making suchalterations, repairs, improvements or additions to the Premises as Lessor may ~~deemnecessary or desirable~~ be permitted or required to make, and theerecting, using and maintaining of utilities, services, pipes and conduitsthrough the Premises and/or other premises as long as there is no materialadverse effect to Lessee’s use of oraccess to the Premises or anymaterial portion thereof. All such activities authorized under this Paragraph 32 shall be without abatement ofrent or liability to Lessee.

33.           **Auctions.**Lessee shall not conduct, nor permit to be conducted, any auctionupon the Premises without Lessor’s prior written consent. Lessor shall not beobligated to exercise any standard of reasonableness in determining whether topermit an auction.

34.           **Signs.**Lessor may place on the Premises ordinary “ **For Sale**” signs at any time and ordinary “ **For Lease**” signs during the last 6 monthsof the term hereof. Except for ordinary “for sublease” signs, Lessee shall notplace any sign upon the Premises without Lessor’s prior written consent. Allsigns must comply with all Applicable Requirements. Lessor hereby approves of Lessee’s signs existing as of the CommencementDate.

35.           **Termination;Merger.**Unless specifically stated otherwise in writing by Lessor,the voluntary or other surrender of this Lease by Lessee, the mutualtermination or cancellation hereof, or a termination hereof by Lessor forBreach by Lessee, shall automatically terminate any sublease or lesser estatein the Premises; provided, however, that Lessor may elect to continue any oneor all existing subtenancies. Lessor’s failure within ~~10~~ 30 days following any such event toelect to the contrary by written notice to the holder of any such lesserinterest, shall constitute Lessor’s election to have such event constitute thetermination of such interest.

36.           **Consents.**Except as otherwise provided herein, wherever in this Lease theconsent of a Party is required to an act by or for the other Party, suchconsent shall not be unreasonably withheld or delayed. Lessor’s actualreasonable costs and expenses (including but not limited to architects’,attorneys’, engineers’ and other consultants’ fees) incurred in theconsideration of, or response to, a request by Lessee for any Lessor consent,including but not limited to consents to an assignment, a subletting or thepresence or use of a Hazardous Substance, shall be paid by Lessee upon receiptof an invoice and supporting documentation therefor. Lessor’s consent to anyact, assignment or subletting shall not constitute an acknowledgment that noDefault or Breach by Lessee of this Lease exists, nor shall such consent bedeemed a waiver of any then existing Default or Breach, except as may beotherwise specifically stated in writing by Lessor at the time of such consent.The failure to specify herein any particular condition to Lessor’s consentshall not preclude the imposition by Lessor at the time of consent of suchfurther or other conditions as are then reasonable with reference to the particularmatter for which consent is being given. In the event that either Partydisagrees with any determination made by the other hereunder and reasonablyrequests the reasons for such determination, the determining party shallfurnish its reasons in writing and in reasonable detail within 10 business daysfollowing such request.

~~37.           **Guarantor.**~~

~~37.1         **Execution.**The Guarantors, if any, shall each execute a guaranty in the formmost recently published by the AIR Commercial Real Estate Association, and eachsuch Guarantor shall have the same obligations as Lessee under this Lease.~~

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~~37.2         **Default.**It shall constitute a Default ofthe Lessee if any Guarantor fails or refuses, upon request to provide: (a)evidence of the execution of the guaranty, including the authority of the partysigning on Guarantor’s behalf to obligate Guarantor, and in the case of acorporate Guarantor, a certified copy of a resolution of its board of directorsauthorizing the making of such guaranty, (b) current financial statements, (c) anEstoppel Certificate, or (d) written confirmation that the guaranty is still ineffect.~~

38.           **QuietPossession.**Subject to payment by Lessee of the Rent and performanceof all of the covenants, conditions and provisions on Lessee’s part to beobserved and performed under this Lease, Lessee shall have quiet possession andquiet enjoyment of the Premises during the term hereof.

39.           **Options.**If Lessee is granted an Option, as defined below, then the followingprovisions shall apply:

39.1         **Definition. “Option”**shall mean: (a) theright to extend the term of or renew this Lease or to extend or renew any leasethat Lessee has on other property of Lessor; (b) the right of first refusal orfirst offer to lease either the Premises or other property of Lessor; (c) theright to purchase or the right of first refusal to purchase the Premises orother property of Lessor.

39.2         **Options ~~Personal To Original Lessee~~ May Not BeSeparated.** Any Optiongranted to Lessee in this Lease ~~is personal to the original Lessee, and~~cannot be assigned or exercised by anyone other than said original Lessee or an Affiliate and only while theoriginal Lessee or an Affiliate is in full possession of at least 50% of the Premises.****~~and,if requested by Lessor, with Lessee certifying that Lessee has no intention ofthereafter assigning or subletting.~~

39.3         **Multiple Options.**In the event that Lesseehas any multiple Options to extend or renew this Lease, a later Option cannotbe exercised unless the prior Options have been validly exercised.

39.4         **Effect of Default on Options.**

(a) Lessee shall have no right to exercise an Option:(i) during the period commencing with the giving of any notice of Default andcontinuing until said Default is cured, ~~(ii) during the period of time anyRent is unpaid (without regard to whether notice thereof is given Lessee),~~ or****(iii)during the time Lessee is in Breach of this Lease, or (iv) in the event thatLessee has been given 3 or more valid notices of separate Default, whether ornot the Defaults are cured, during the 12 month period immediately precedingthe exercise of the Option.

(b) The period of time within which an Option may beexercised shall not be extended or enlarged by reason of Lessee’s inability toexercise an Option because of the provisions of Paragraph 39.4(a).

(c) An Option shall terminate and be of no furtherforce or effect, notwithstanding Lessee’s due and timely exercise of theOption, if, after such exercise and prior to the commencement of the extendedterm or completion of the purchase, (i) Lessee ~~fails to pay Rent for aperiod of 30 days after such Rent becomes due~~ commits a Default under Paragraph 13.1(f) above (without anynecessity of Lessor to give notice thereof), or (ii) if Lessee commits a Breachof this Lease.

~~40.           **MultipleBuildings.**If the Premises are a part of a group of buildingscontrolled by Lessor, Lessee agrees that it will abide by and conform to allreasonable rules and regulations which Lessor may make from time to time forthe management, safety, and care of said properties, including the care andcleanliness of the grounds and including the parking, loading and unloading ofvehicles, and to cause its employees, suppliers, shippers, customers,contractors and invitees to so abide and conform. Lessee also agrees to pay itsfair share of common expenses incurred in connection with such rules andregulations.~~

41.           **SecurityMeasures.**Lessee hereby acknowledges that the Rent payable to Lessorhereunder does not include the cost of guard service or other securitymeasures, and that Lessor shall have no obligation whatsoever to provide same.Lessee assumes all responsibility andliability for the protection of the Premises, Lessee, its agents , employees, contractors and inviteesand their property from the acts of third parties.

42.           **Reservations.**Lessor reserves to itself the right, from time to time, to grant,without the consent or joinder of Lessee, such easements, rights anddedications that Lessor deems necessary, and to cause the recordation of parcelmaps and restrictions, so long as such easements, rights, dedications, maps andrestrictions do not unreasonably and/ormaterially interfere with the use of the Premises by Lessee. Lesseeagrees to sign any documents reasonably requested by Lessor to effectuate anysuch easement rights, dedication, map or restrictions. Lessee hereby approves of all easements affecting the Premises as of the Commencement Date.

43.           **PerformanceUnder Protest.**If at any time a dispute shall arise as to any amountor sum of money to be paid by one Party to the other under the provisionshereof, the Party against whom the obligation to pay the money is assertedshall have the right to make payment “under protest” and such payment shall notbe regarded as a voluntary payment and there shall survive the right on thepart of said Party to institute suit for recovery of such sum. If it shall beadjudged that there was no legal obligation on the part of said Party to paysuch sum or any part thereof, said Party shall be entitled to recover such sumor so much thereof as it was not legally required to pay. A Party who does notinitiate suit for the recovery of sums paid “under protest” ~~with~~ within 6 months shall be deemed tohave waived its right to protest such payment.

44.           **Authority;Multiple Parties; Execution.**

(a) If either Party hereto is a corporation, trust,limited liability company, partnership, or similar entity, each individualexecuting this Lease on behalf of such entity represents and warrants that heor she is duly authorized to execute and deliver this Lease on its behalf. EachParty shall, within 30 days after request, deliver to the other Partysatisfactory evidence of such authority.

~~(b) If this Lease is executed by more than one personor entity as “Lessee”, each such person or entity shall be jointly andseverally liable hereunder. It is agreed that any one of the named Lesseesshall be empowered to execute any amendment to this Lease, or other documentancillary thereto and bind all of the named Lessees, and Lessor may rely on thesame as if all of the named Lessees had executed such document.~~

(c) This Lease may be executed by the Parties incounterparts, each of which shall be deemed an original and all of whichtogether shall constitute one and the same instrument.

45.           **Conflict.**Any conflict between the printed provisions of this Lease andtypewritten or handwritten provisions shall be controlled by the 

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typewrittenor handwritten provisions.

46.           **Offer.**Preparation of this Lease by either Party or their agent andsubmission of same to the other Party shall not be deemed an offer to lease tothe other Party. This Lease is not intended to be binding until executed anddelivered by all Parties hereto.

47.           **Amendments.**This Lease may be modified only in writing, signed by the Parties ininterest at the time of the modification. As long as they do not materiallychange Lessee’s obligations hereunder, Lessee agrees to make such reasonablenon-monetary modifications to this Lease as may be reasonably required by aLender in connection with the obtaining of normal financing or refinancing ofthe Premises.

~~48.           Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TOTRIAL BY JURY IN ANY ACTION OR PROCEEDINGINVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.~~

49.           **Mediationand Arbitration of Disputes.**An Addendum requiring the Mediationand/or the Arbitration of all disputes between the Parties and/or Brokersarising out of this Lease o**is**x**is not**attached to this Lease.

50.           **Americanswith Disabilities Act.**Since compliance with the Americans withDisabilities Act (ADA) is dependent upon Lessee’s specific use of the Premises,Lessor makes no warranty or representation as to whether or not the Premisescomply with ADA or any similar legislation. In the event that Lessee’s use ofthe Premises requires modifications or additions to the Premises in order to bein ADA compliance, Lessee agrees to make any such necessary modifications and/oradditions at Lessee’s expense.

LEASE CONTINUES ON NEXT PAGE

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ADDENDUM TO LEASE

 

This Addendum tothe Standard Industrial/Commercial [Single - Lessee Lease – Net](the “**Addendum**”) is entered into by andbetween VRS Chatsworth LLC, a Virginia limited liability company (“Lessor”),and Natrol, Inc., a Delaware corporation (“Lessee”). To the extent that theprovisions of this Addendum are inconsistent with the terms and conditions ofthe lease to which it is attached (the ”**Lease**”),the provisions of this Addendum shall control. Capitalized terms in thisAddendum shall have the same meaning as capitalized terms in the Lease.

**51.          Additional Matters Relating toCommencement and Expiration Dates.**

51.1         The Commencement Date shall be thatdate upon which Lessor acquires the Premises pursuant to the closing of thatcertain Purchase Agreement dated March 29, 2007, by and between Realty AdvisorsAssociates, LLC, as purchaser, and Natrol Real Estate, Inc. and Natrol RealEstate II, Inc., collectively as seller (the “**PurchaseContract**”).

51.2         The Expiration Date shall be the datewhich is the day prior to the fifth (5th) anniversary of the Commencement Date.

51.3         The Base Rent and Lessor’s ReimbursableExpenses for the first month of the Original Term shall be prorated, based uponthe closing date of the transactions pursuant to the Purchase Contract. Uponsuch closing, the Base Rent, Lessor’s Reimbursable Expenses through the end ofthe calendar month in which such closing occurs, and the Security Deposit, eachshall be credited to Lessor through the escrow under the Purchase Contract, andshall be deemed, for purposes of this Lease, to have been paid by Lessee toLessor thereupon. Lessee’s first payment of Base Rent thereafter shall be dueupon the first day of the calendar month following such closing under thePurchase Contract.

51.4         Upon the request of either Party, theother Party shall acknowledge in writing the amount of Base Rent and Lessor’sReimbursable Expenses paid on behalf of Lessee at the closing under thePurchase Contract and enter into a written confirmation of the CommencementDate.

**52.          Management Fee.** Forso long as Lessor retains a separate property manager for the Premises, Lessorshall be entitled to collect, and Lessee shall pay to Lessor, a propertymanagement fee equal to two percent (2%) of the Base Rent.

**53.          Base Rent Increases.**On each anniversary of the Commencement Date during the Original Term, themonthly Base Rent shall increase by three percent (3%) from the rate applicablein the prior year (i.e., Lease Year 2, $63,303.00; Lease Year 3, $65,202.00;Lease Year 4, $67,158.00; and Lease Year 5, $69,173.00).

**54.          Options to Extend.**Subject to Paragraph 39 of the Lease, Lessor hereby grants to Lessee theoptions to extend of this Lease (individually, an **“Option”,**and collectively, the **“Options”,**andrespectively, the “**First Option**”and “**Second Option**”) for two (2) consecutiveperiods of five (5) years each (the first such period being referred to hereinas the **“First****OptionPeriod”,**and the second such period being referred to herein as the **“Second Option Period”**), commencing upon the expiration ofthe Original Term or the First Option Period, as the case may be, upon each andall of the following terms and conditions:

(a)           Lessee gives to Lessor, and Lessoractually receives, on a date which is prior to the date that the First OptionPeriod or Second Option Period, as applicable, would commence (if such Optionwere to be exercised) by at least twelve (12) and not less than nine (9)months, a binding written notice of the exercise of the applicable Option, timebeing of the essence. If said notification of the exercise of said Option isnot so given and received, the Option shall automatically expire;

(b)           All of the terms and conditions ofthis Lease shall apply, except where specifically modified by this Paragraph 54.Lessee shall only be entitled to exercise the Second Option if Lessee hastimely and properly exercised the First Option;

(c)           The monthly Base Rent for each monthof the First Option Period and Second Option Period shall be the PrevailingMarket Rent for the Premises as of 120 days prior to the commencement of theFirst Option Period and the Second Option Period, as the case may be.

(d)           The term **“PrevailingMarket Rent”** as used in this Paragraph 54 is defined to mean thefair market rent of the Premises according to comparable properties in thegeneral area. In determining fair market monthly rent it shall be assumed that:

(i)            The Premises are in good conditionand repair and are required to be maintained by Lessee, as modified by the AIRForm lease.

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(ii)           The Premises would be leased for theperiod of the Option being exercised by a tenant with the credit standing ofLessee, as the same exists at the time of exercise.

(iii)          The Premises would be leased on thesame terms of this Lease insofar as the obligations for repair, maintenance,insurance and real estate taxes existed as of the expiration of the OriginalTerm or First Option Period, as applicable, of this Lease.

(iv)          Consideration shall be given on arenewal (as opposed to a new lease) basis to the following, if any: toallowances for market-based real estate brokerage commissions, free rent andother inducements then being offered in the market for comparable premises.

(v)           The Premises will be used for the usepermitted under Paragraph 1.7.

(e)           Using the above assumptions, thePrevailing Market Rent shall be determined by Lessor and submitted to Lessee (“**Lessor’s Submission**”) within the twenty (20) day periodfollowing Lessee’s exercise of the First Option or Second Option, asapplicable. If Lessee disagrees with the Prevailing Market Rent in Lessor’sSubmission, Lessee shall, within twenty (20) days after receipt of Lessor’sSubmission, submit to Lessor in writing Lessee’s judgment as to the PrevailingMarket Rent (“**Lessee’s Judgment**”). In the event thatLessor fails to timely generate Lessor’s Submission, then Lessee may commencesuch negotiations by providing the initial notice, in which event Lessor shallhave twenty (20) days (“**Lessor’s Review Period**”)after receipt of Lessee’s notice of the new rental within which to accept suchrental. In the event Lessor fails to accept in writing such rental proposed byLessee, then such proposal shall be deemed rejected, and Lessor and Lesseeshall attempt in good faith to agree upon such Prevailing Market Rate, usingtheir best good faith efforts. If Lessor and Lessee fail to reach agreementwithin fifteen (15) days following Lessor’s Review Period (which shall be, insuch event, the “**Outside Agreement Date**”in lieu of the above definition of such date), then the Prevailing Market Rentshall be determined in accordance with Subsections (i) through (v) below:

(i)            Withinseven (7) days following the Outside Agreement Date, Lesser and Lessee shalleach select one (1) independent broker with at least fifteen (15) years ofexperience in office/manufacturing/industrial space in the West San FernandoValley submarket in Los Angeles, California (a “**QualifiedBroker**”), to determine the Prevailing Market Rate. If one partyshall fail to select a Qualified Broker within the seven (7) day period, thenthe Qualified Broker chosen by the other party shall be the sole arbitrator. Ifthe two appointed independent Qualified Brokers are unable to agree onPrevailing Market Rate within a second period of seven (7) days following theirappointment, the two independent Qualified Brokers shall within seven (7) daysfrom the date that they were required to agree on the Prevailing Market Ratebut were unable to do so, select a third independent Qualified Broker(the “**Third Qualified Broker**”) and theThird Qualified Broker shall be the sole arbitrator of the Prevailing MarketRate. Neither Lessor nor Lessee, nor there respective Qualified Brokers, shallhave consulted with such Third Qualified Broker as to their respective opinionas to the Prevailing Market Rent prior to the appointment. Such Third QualifiedBroker may hold such hearings and require such additional submittals from theParties as the Third Qualified Broker, in his or her sole discretion,determines is necessary. In addition, Lessor or Lessee may submit to the ThirdQualified Broker, with a copy to the other party, within five (5) business daysafter the appointment of the Third Qualified Broker, any market data andadditional information such Party deems relevant to the determination of thePrevailing Market Rent (“**Data**”), and theother Party may submit a reply in writing within five (5) business days afterreceipt of such Data.

(ii)           TheThird Qualified Broker shall, within thirty (30) days of his or herappointment, determine the Prevailing Market Rate based on the factorsdescribed herein.

(iii)          Thedecision of the Third Qualified Broker shall be final and binding upon Lessorand Lessee.

(iv)          Ifthe initial Qualified Brokers selected by Lessor and Lessee fail to agree onthe Third Qualified Broker, then the appointment of the Third Qualified Brokershall be made by the Presiding Judge of the Los Angeles County Superior Court,or if he or she refuses to act, by any judge having jurisdiction over thePremises.

(v)           Thecost of the Third Qualified Broker shall be paid in equal shares by Lessor andLessee.

(f)            If for any reason the PrevailingMarket Rent has not been determined by the commencement of the applicableOption Period, Lessee shall continue paying rent at the rate previously ineffect or as specified in Lessee’s Judgment, whichever is greater, and theParties shall promptly make the appropriate adjustments as soon as thePrevailing Market Rent is determined.

**55.          Miscellaneous.**

55.1.        **No Representations orWarranties**. Notwithstanding anything in the Lease to the contrary,Lessee accepts the Premises in its “as is” “where is” condition as of theCommencement Date and acknowledges that Lessor has made no representation orwarranty as to the suitability of the Premises for the conduct of Lessee’sbusiness, and Lessee waives any implied warranty that the Premises are suitablefor Lessee’s intended purposes. Notwithstanding anything in the Lease to thecontrary, Lessor makes no representation or warranty that Lessee’s use is permittedby applicable zoning laws or other laws and regulations. In no event shall anyportion of the Premises be used for retail sales.

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Lessee shall notinitiate, submit an application for, or otherwise request, any land useapprovals or entitlements with respect to the Premises, including, withoutlimitation, any variance, conditional use permit or rezoning, without firstobtaining Lessor’s prior written consent, which may be given or withheld inLessor’s sole discretion. Lessee shall not (a) install any antenna, dish orother device on the roof of the Building or outside of the Premises, (b) makeany penetrations into the roof of the Building, (c) place loads upon floors,walls or ceilings in excess of the load such items were designed to carry, (d)place or store, nor permit any other person or entity to place or store, anyproperty, equipment, materials, supplies or other items outside of the Buildingin which the Premises is located, except if approved by Lessor or (e) changethe exterior of the Premises. Lessee agrees that Lessor shall not be liable toLessee for its failure to furnish water, gas, electricity, telephone, sewer,refuse and trash collection or any other utility services or building serviceswhen such failure is occasioned, in whole or in part, by repairs, replacementsor improvements, by any strike, lockout or other labor trouble, by inability tosecure electricity, gas, water, telephone service or other utility at thePremises, by any accident, casualty or event arising from any cause whatsoever,including the negligence of Lessor, its employees, agents and contractors, byact, negligence or default of Lessee or any other person or entity, or by anyother cause, and such failures shall never be deemed to constitute an evictionor disturbance of Lessee’s use and possession of the Premises or relieve Lesseefrom the obligation of paying Rent or performing any of its obligations underthis Lease. Furthermore, Lessor shall not be liable under any circumstances forloss of property or for injury to, or interference with, Lessee’s business,including, without limitation, loss of profits, however occurring, through orin connection with or incidental to a failure to furnish any such services orutilities. Lessor may comply with voluntary controls or guidelines promulgatedby any governmental entity relating to the use or conservation of energy,water, gas, light or electricity or the reduction of automobile or otheremissions without creating any liability of Lessor to Lessee under this Lease. Notwithstandingthe foregoing, Lessor shall be liable to the extent of Landlord’s grossnegligence or willful misconduct.

55.2.        **Intentionally deleted**.

55.3.        **Tax Protest**. From time to time Lessor may challenge theassessed value of the Premises as determined by applicable taxing authoritiesand/or Lessor may attempt to cause the Real Property Taxes to be reduced onother grounds. If Lessor is successful in causing the Real Property Taxes to bereduced or in obtaining a refund, rebate, credit or similar benefit (hereinaftercollectively referred to as a “**reduction**”),Lessor shall credit the reduction(s) to Real Property Taxes for the calendaryear(s) to which a reduction applies and to recalculate the Real Property Taxesowed by Lessee for years in which the reduction applies based on the reducedReal Property Taxes. All costs incurred by Lessor in obtaining the RealProperty Tax reductions shall be considered a Lessor’s Reimbursable Expenses,and Lessor shall determine, in its reasonable discretion, to which years anyreductions will be applied. In addition, all accounting and related costsincurred by Lessor in making the adjustments shall be a Lessor’s ReimbursableExpense. Lessor shall have the right to compensate a person or entity itemploys to obtain a reduction in Real Property Taxes by giving such person orentity a percentage of any reduction or credit obtained, and in this event thereduction or credit obtained by Lessor shall be deemed to be the reduction orcredit given by the taxing authority less the compensation paid to such personor entity. Lessee waives any right to contest or challenge taxes; provided,however, that Lessor shall reasonably consider any request from Lessee thatLessor challenge the assessed value of the Premises. Notwithstanding the foregoing,if, on final appeal, the costs of pursuing the Real Property Tax protestexceeds the savings for one (1) year, Lessor shall be responsible for all costsrelated to the challenge of Real Property Taxes and the same shall notconstitute Lessor Reimbursable Expenses.

55.4.        **Intentionally deleted.**

55.5.        **Lessor’s Rights**.Lessor shall have the right, so long as the address of the Premises set forthin Paragraph 1.2 remains valid, to designate another address of the Premisesupon not less than ninety (90) days prior written notice.

55.6.***       *IntentionallyDeleted**.

55.7.**        Intentionallydeleted.**

55.8.        **View**. Theobstruction of Lessee’s view, air or light by any structure erected in thevicinity of the Project, whether by Lessor or third parties, shall in no way affectthis Lease or impose any liability upon Lessor.

55.9.        **Transfers**. Lesseeshall fully comply at its sole expense with all present or future programsimplemented or required by any governmental or quasi-governmental entity tomanage parking, transportation, air pollution or traffic in and around thePremises or the metropolitan area in which the Premises is located.

55.10.      **No Recording**. Neither this Lease, nor any memorandum,affidavit or other writing with respect thereto, shall be recorded by Lessee orby anyone acting through, under or on behalf of Lessee.

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55.11.**      WAIVER OF JURY TRIAL**.TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSOR AND LESSEE HEREBYWAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM,COUNTERCLAIM OR CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARINGBROUGHT BY EITHER LESSOR AGAINST LESSEE OR LESSEE AGAINST LESSOR ON ANY MATTERWHATSOEVER ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THERELATIONSHIP OF LESSOR AND LESSEE, LESSEE’S USE OR OCCUPANCY OF THE PREMISES,OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANYLAW, STATUTE, OR REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER INEFFECT.

55.12.      **Hazardous SubstancesDisclosure Statement**. Prior to executing this Lease, Lessee hasdelivered to Lessor Lessee’s executed initial Hazardous Substances DisclosureCertificate (the **“Initial HazMatCertificate”**). Lessee covenants, represents and warrants to Lessorthat the information contained in the Initial HazMat Certificate is true andcorrect in all material respects and accurately describes in all materialrespects the use(s) of Hazardous Substances which will be made and/or used onthe Premises by Lessee. Notwithstanding anything contained in the Lease to thecontrary (except for Permitted Hazardous Substances), Lessee shall not have theright to use any Hazardous Substances at the Premises that are not described onthe Initial HazMat Certificate or to increase the quantity of any HazardousMaterial used at the Premises beyond the quantity described on the InitialHazMat Certificate, without Lessor’s approval, which may be withheld in Lessor’ssole discretion. Upon the prior written request of Lessor, Lessee shall deliverto Lessor a new Hazardous Substances Disclosure Certificate (each, a **“Supplemental HazMat Certificate”**) executed by Lessee anddescribing Lessee’s then-present use of Hazardous Substances on the Premises. TheInitial HazMat Certificate and Supplemental HazMat Certificates requiredhereunder shall be in the form attached hereto as **Exhibit 3**.

55.13.      **Assignment and Subletting.**

(a)           **General Information**.In addition to any other information requested by Lessor pursuant to Paragraph12 of the Lease, Lessee’s written request for Lessor’s consent shall includeall of the following information: (a) financial statements for the proposedassignee or subtenant for the past three (3) years (or if the proposed assigneeor subtenant has not been in existence for three (3) years, for as many yearsas the proposed assignee or subtenant has been in existence), (b) a reasonablydetailed description of the business the proposed assignee or subtenant intendsto operate at the Premises, (c) the proposed effective date of the assignmentor sublease, (d) a copy of the proposed sublease or assignment agreement whichincludes all of the terms and conditions of the proposed sublease orassignment, (e) a detailed description of any Alterations the proposed assigneeor subtenant desires to make to the Premises, and (f) a Hazardous SubstancesDisclosure Statement substantially in the form of **Exhibit 3**attached hereto.

(b)           **Transfer Premium**.Lessor shall be entitled to receive from Lessee (as and when received byLessee) as an item of additional rent one-half of the Transfer Premiumreceived by Lessee from the subtenant or assignee in excess of the amountspayable by Lessee to Lessor under the Lease. The Transfer Premium shall bereduced by the reasonable brokerage commissions, cost of Alterations and legalfees actually paid by Lessee in order to assign the Lease or to sublet aportion of the Premises. “Transfer Premium” shall mean all Base Rent,additional rent or other consideration of any type whatsoever payable by theassignee or subtenant in excess of the Base Rent and additional rent payable byLessee under this Lease. If less than all of the Premises is transferred, theBase Rent and the additional rent shall be determined on aper-leasable-square-foot basis. “Transfer Premium” shall also include, but notbe limited to, key money and bonus money paid by the assignee or subtenant toLessee in connection with such Transfer, and any payment in excess offair-market value for services rendered by Lessee to the assignee or subtenantor for assets, fixtures, inventory, equipment or furniture transferred byLessee to the assignee or subtenant in connection with such Transfer.

(c)           **Recapture**. Exceptwith regard to transfers to Affiliates, Lessor shall have the option, by givingwritten notice to Lessee within fifteen (15) days after receipt of any requestby Lessee to assign or sublease this Lease, to terminate this Lease as to saidportion Lessee desires to transfer effective as of the date that is thirty (30)days after the date of Lessor’s written notice.

55.14.      **Lessor****Insurance**. Lessor shall maintain the insurance described inSection 8.3 of the Lease. Notwithstanding anything in the Lease to thecontrary, there shall be no limitation on the amount of liability insurancethat may be purchased by Lessor or the types of insurance that may be purchasedby Lessor, and all of Lessor’s insurance costs may be included in Lessor’sReimbursable Expenses. Subject to the preceding sentence, Lessor shall have theright to determine in its sole discretion the types and amounts of insurance itobtains with respect to the Premises. Lessor, at Lessor’s sole election, mayinsure the Premises for losses or damage resulting from the perils ofterrorism, flood and/or earthquake, and the cost of such insurance shall beincluded as a Lessor’s Reimbursable Expense. Lessee shall not have the right topurchase insurance on behalf of Lessor; provided, however, in the event thatafter the initial Lessor transfers the Premises to a new owner that is notaffiliated with the initial Lessor, Lessee objects to Lessor’s estimate of thecost of the earthquake coverage, Lessee shall be permitted to recommend toLessor a less expensive company meeting the requirements of Section 8.5 of theLease (“**Lessee’s Recommended Insurance Company**”).In the event said coverage is less than the rate offered by Lessor’s insurancecompany, then Lessor shall be required to purchase insurance from Lessee’sRecommended Insurance Company.

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55.15.      **Intentionally Deleted**.

55.16.      **Performance of CertainWork by Lessor**. Notwithstanding Lessee’s obligations under Paragraph7.1 of the Lease, Lessor shall employ contractors to perform all repairs,maintenance and replacement of the sprinkler systems, fire alarm systems andfire detection systems that service the Premises. The items described in theprevious sentence that Lessor will cause to be repaired, maintained andreplaced are hereinafter referred to as the **“LessorMaintenance Items”**. Lessor shall determine in its sole discretionthe scope and timing of the performance of such Lessor Maintenance Items, andLessee shall not perform such Lessor Maintenance Items. Lessee shallimmediately give Lessor written notice of any repair or maintenance required byLessor pursuant to this section, after which Lessor shall have a reasonabletime in which to complete such repair or maintenance. Lessor shall include thecost of Lessor Maintenance Items as Lessor’s Reimbursable Expenses. The cost ofreplacing Lessor Maintenance Items (as opposed to repairing Lessor MaintenanceItems) shall be amortized as provided in Paragraph 7.1(d) of the Lease. Lessorshall be permitted to require Lessee to maintain Lessor Maintenance Items uponthirty (30) days advance written notice to Lessee, in which case Lessee shallbe liable for all costs associated therewith, subject to Section 7.1(d) of theLease.

55.17.      **Intentionally Deleted**.

55.18.      **Certain Repairs**.In addition to Lessee’s other obligations under the Lease, Lessee shall pay atLessee’s sole cost and expense for the cost of repairing all damage to thePremises resulting from the acts of vandalism, malicious mischief, burglary andother acts of Lessee, its employees, invitees, contractors and other thirdparties. Such damages shall include, but are not limited to, damages toexterior walls, roofs, vents and overhead doors. In addition, if Lessee dirtiesor soils the exterior of the Premises, Lessee shall pay to Lessor on demand thecost of cleaning the exterior of the Premises.

55.19.      **Intentionally deleted.**

55.20.      **Intentionally deleted.**

55.21.      **Lessor Default**.Notwithstanding anything in the Lease to the contrary, this Lease and theobligations of each Party hereunder (other than Lessee’s obligation to pay Rentor other monetary obligations which can be fulfilled with the payment of moneysuch as insurance premiums), shall not be affected or impaired because theother Party is unable to fulfill any of its obligations hereunder or is delayedin doing so, if such inability or delay is caused by reason of fire,earthquake, weather delays or other acts of God, strikes, boycotts, terrorism,war, riot, insurrection, embargoes, shortages of equipment, labor or materials,delays in issuance of governmental permits or approvals, or any other causebeyond the reasonable control of such Party, and the time for such Party’sperformance shall be extended for the period of any such delay. Any claim,demand, right or defense by Lessee that arises out of this Lease or thenegotiations which preceded this Lease shall be barred unless Lessee commencesan action thereon, or interposes a defense by reason thereof, within twelve(12) months after the date of the inaction, omission, event or action that gaverise to such claim, demand, right or defense. Lessee hereby waives its right torecover consequential damages (including, but not limited to, lost profits) orpunitive damages arising out of a Lessor default.

55.22.      **Estoppel Certificates**.Lessor shall have no obligation to provide an Estoppel Certificate to Lesseeother than in response to Lessee’s request for same in connection with (a) thesale by Lessee of its business at the Premises and/or (b) the request of Lessee’slender or prospective lender.

55.23.      **Intentionally deleted.**

55.24.      **Signs and Alarm Systems**.Lessor shall have the right to approve in Lessor’s sole and absolute discretionall signs installed after the Commencement Date and (to the extent they tieinto the Premises’ fire sprinklers and/or fire alarm systems) alarm systemsprior to their installation, and all signs and alarm systems shall be installedat Lessee’s sole cost and expense. Lessee shall remove all signs and alarmsystems upon the termination of the Lease, and Lessee shall repair any damageto the Premises and Building caused by such removal, at Lessee’s sole cost andexpense.

55.25.      **Intentionally deleted.**

55.26       **Lessor’s Rights**. Notwithstanding anything in the Lease to the contrary, (a) if there is PremisesPartial Damage and Lessor is required to pay $250,000 or more of the availableinsurance proceeds to Lessor’s Lender, then Lessor may terminate this Lease bygiving written notice to Lessee of its election to terminate within 120 daysafter the damage and not less than 60 days prior to the date of termination,and (b) if there is Premises Partial Damage and Lessor receives proceeds fromits insurer which are insufficient to complete the required restoration by$250,000 or more, then Lessor may terminate this Lease by giving written noticeof its election to terminate within 120 days after the damage and not less than60 days prior to the date of termination.  If Lessor elects to terminatein accordance with clause (b) of the preceding sentence, Lessee may, withinthirty (30) days after Lessor’s notice of termination is given, deliver toLessor any shortage in insurance proceeds (or adequate assurance thereof), inwhich event this Lease shall not terminate, and Lessor shall proceed to makethe required repairs.

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55.27.      **Lessor’s ReimbursableExpenses**. Notwithstanding anything in the Lease to the contrary,Lessee shall pay Lessor’s Reimbursable Expenses. For the purposes of thisLease, the term “Lessor’s Reimbursable Expenses” shall mean any expensesincurred by Lessor for the sprinkler system, fire detection system and firealarm system, the management fee described in Section 52 above, Real PropertyTaxes, all of Lessor’s insurance costs, including, deductibles, costs toprotest Real Property Taxes (except as provided in Section 55.3 above),payments made by Lessor under any easement, license, operating agreement,declaration, restrictive covenant or other agreement relating to the sharing ofcosts among property owners, the cost of all business licenses, permits orsimilar fees relating to the operation, ownership, repair or maintenance of thePremises (other than the cost of licenses, permits or similar fees relating tothe operation of Lessor as opposed to the Premises), and the cost of any otheritem the cost of which is stated in the Lease to be a Lessor’s ReimbursableExpense. Notwithstanding anything in the Lease to the contrary, the followingitems shall be treated as Lessor’s Reimbursable Expenses and not capitalimprovements: (i) the cost of painting all or part of the Premises and (ii) thecost of resurfacing and restriping roadways and parking areas. References tofacilities, services, utilities or other items in this Paragraph 55.27 shallnot impose an obligation on Lessor to have said facilities or to provide saidservices unless such facilities and services already exist at the Premises. Lessorwill, from time to time, estimate what Lessor’s Reimbursable Expenses will beand the same shall be payable by Lessee monthly during each calendar year ofthe Lease Term, on the same day as the Base Rent is due hereunder. In the eventthat Lessee pays Lessor’s estimate of Lessor’s Reimbursable Expenses, Lessorshall use its best efforts to deliver to Lessee within 120 days after theexpiration of each calendar year a reasonably detailed statement (the **“Statement”**) showing Lessor’s Reimbursable Expenses incurredduring such year. Lessor’s failure to deliver the Statement to Lessee withinsaid period shall not constitute Lessor’s waiver of its right to collect saidamounts or otherwise prejudice Lessor’s rights hereunder. If the total ofLessee’s payments under this Paragraph 55.27 during said calendar year exceedthe amount indicated on the Statement, Lessee shall be entitled to credit theamount of such overpayment against Lessor’s Reimbursable Expenses next fallingdue. If the amount to be paid by Lessee as indicated on the Statement exceedsthe total of Lessee’s payments under this Paragraph 55.27 during said calendaryear, Lessee shall pay to Lessor the amount of the deficiency within thirty(30) days after delivery of the Statement by Lessor to Lessee. Lessor andLessee shall forthwith adjust between them by cash payment any balancedetermined to exist with respect to that portion of the last calendar year forwhich Lessee is responsible for Lessor’s Reimbursable Expenses, notwithstandingthat the Lease term may have terminated before the end of such calendar year,and this provision shall survive the expiration or earlier termination of theLease.

55.28       **Condemnation**.  If a temporary taking by Condemnationlasts for less than ninety (90) days, Lessee’s Base Rent shall be abated duringsaid period but Lessee shall not have the right to terminate this Lease. If Lessee does not terminate this Lease in accordance with Section 14 above,this Lease shall remain in full force and effect as to the portion of thePremises remaining, except that the Base Rent shall be reduced in proportion tothe reduction in utility of the Premises caused by such condemnation, but in noevent shall such reduction in Base Rent exceed the amount which Lessor wascompensated by the condemning authority for loss of any rent. In the event thatthis Lease is not terminated by reason of such condemnation, and subject to therequirements of any Lender, Lessor shall to the extent of severance damagesreceived by Lessor in connection with such condemnation, repair any damage tothe Premises caused by such condemnation (but not damage to any Trade Fixtures,to any Alterations or Utility Installations made after the Commencement Date,nor to those portions of the Premises described on Exhibit 2). In the event therequirements of any Lender prevent Lessor from repairing the Premises (otherthan Lessee’s Trade Fixtures, any Alterations or Utility Installations madeafter the Commencement Date, and those portions of the Premises described onExhibit 2, with respect to which Lessor shall have no repair obligation),Lessor promptly shall notify Lessee in writing of the estimated shortage inproceeds, and Lessee shall elect, within 10 business days after such notice,whether to (a) terminate this Lease 60 days thereafter by written notice toLessor, or (b) if approved by Lender, pay for the repair cost of the Premisesin excess of the amount of such proceeds available to Lessor (in which eventLessee shall provide the funds or satisfactory assurance thereof to Lessorwithin 30 days after such election), in which event this Lease shall not terminate. The option in Paragraph (b) shall only be permitted if said arrangement isapproved by Lender. Lessee’s failure to make an election within the timeprovided shall constitute Lessee’s election to terminate this Lease 60 daysafter the expiration of said 10 business day period.  Paragraph 14together with this Paragraph 55.28, not general principles of law or CaliforniaCode of Civil Procedure sections 1230.010 et seq., shall govern the rights andobligations of Lessor and Lessee with respect to the condemnation of all or anyportion of the Premises.

55.29       **Adequate Assurance**.****As used in the Lease, the term “adequate assurance thereof”or words of like import shall mean an irrevocable unconditional letter ofcredit issued to Lessor as the Beneficiary, in form acceptable to Lessor or anescrow arrangement reasonably acceptable to Lessor.

LESSOR AND LESSEEHAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISIONCONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMEDCONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE ISEXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATETHE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

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ATTENTION: NOREPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATEASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, EFFECT, OR TAXCONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIESARE URGED TO:

1.             SEEK ADVICE OF COUNSEL AS TO THELEGAL AND TAX CONSEQUENCES OF THIS LEASE.

2.             RETAIN APPROPRIATE CONSULTANTS TOREVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULDINCLUDE BUT NOT BE LIMITED TO THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,THE ZONING OF THE PREMISES, THE STRUCTUAL INTEGRITY OF THE PREMISES, THECONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE AMERICANS WITHDISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.

The Parties hereto haveexecuted this Lease at the place and on the dates specified above theirrespective signatures.
| Executed at:                          |                   |                         | Executed at:   | Chatsworth, CA          |
|---------------------------------------|------------------------|------------------------------|----------------|-------------------------|
| On:                                   |                   | , 2007                       |           | On:                     | April 2 | , 2007 |
| ** **                            | ** **             |                         |
| **LESSOR:**                           | ** **             | **LESSEE:**                  |
| ** **                            | ** **             |                         |
| VRS Chatsworth  LLC,                  |                   | Natrol, Inc.,                |
| a Virginia  limited liability company |                   | a Delaware corporation       |
|                                  |                   |                         |
| By:                                   | TA Richmond LLC,       |                         |           |
|                                  | Its Member             |                         |           |
|                                  |                   |                         | By:            | /s/ Dennis R. Jolicoeur |
|                                  | By:                    | TA/VRS Manager  LLC,         |           | Name:                   | Dennis R. Jolicoeur |
|                                  |                   | Its Manager                  |           | Title:                  | CFO |
|                                  |                   |                         |           |                    |
|                                  |                   | By:                          | TA Realty LLC, |                    |   |
|                                  |                   |                         | Its Manager    |                    |   |
|                                  |                   |                         |           |                    |
| By:                                   | /s/ James P.  Raisides |                         |           | By:                     | /s/ Steven S. Spitz |
| Name:                                 | James P.  Raisides     |                         |           | Name:                   | Steven S. Spitz |
| Title:                                | Sr. Vice  President    |                         |           | Title:                  | General Counsel |
|                                  |                   |                         |
|                                  |                   |                         |
| Address:                              |                   | Address:                     |
|                                  |                   |                         |
| c/o TA  Associates Realty             |                   | 21411 Prairie Street         |
| 1301 Dove  Street, Suite 860          |                   | Chatsworth, California 91311 |
| Newport Beach,  California 92660-2440 |                   | Attention: General Counsel   |
|                                  |                   |                         |
| Telephone: (949)  852-2030            |                   | Telephone: (818) 739-6000    |
| Facsimile: (949)  852-2031            |                   | Facsimile: (818) 739-6032    |
|                                  |                   |                         |
| With a Copy to:                       |                   |                         |
|                                  |                   |                         |
| c/o TA  Associates Realty             |                   |                         |
| 28 State Street,  10th Floor          |                   |                         |
| Boston,  Massachusetts 02109          |                   |                         |
|                                  |                   |                         |
| Telephone: (617)  476-2700            |                   |                         |
| Facsimile: (617)  476-2799            |                   |                         |
|                                       |                        |                              |                |                         |  |  |  |  |  |  |  |  |  |  |  |  |

 

25

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EXHIBIT 3

Form of HazMatCertificate

General Information
| Name of Responding Company: |   |
|-----------------------------|--------|
|                        |   |   |   |
| Mailing Address:            |   |
|                        |   |   |   |
| Signature:                  |   |
|                        |   |   |   |
| Title:                      |   |   | Phone: |   |
|                        |   |   |   |
| Date:                       |   |   | Age of Facility: |   |   | Length of Occupancy: |   |
|                             |        |  |  |  |  |  |  |  |  |  |  |  |

 

Major productsmanufactured and/or activities conducted on the property:
| Type of Business  Activity(ies):   | Hazardous Materials Activities: |
|------------------------------------|---------------------------------|
| (check all that apply)             | (check all that apply)          |
|                               |                            |
| o  machine shop                    | o  degreasing                   |
| o  light assembly                  | o  chemical/etching/milling     |
| o  research and development        | o  wastewater treatment         |
| o  product service or repair       | o  painting                     |
| o  photo processing                | o  striping                     |
| o  automotive service and repair   | o  cleaning                     |
| o  manufacturing                   | o  printing                     |
| o  warehouse                       | o  analytical lab               |
| o  integrated/printed circuit      | o  plating                      |
| o  chemical/pharmaceutical product | o  chemical/missing/synthesis   |
|                               | o  silkscreen                   |
|                               | o  lathe/mill machining         |
|                               | o  deionizer water product      |
|                               | o  photo masking                |
|                               | o  wave solder                  |
|                               | o  metal finishing              |

 

HAZARDOUS MATERIALS/WASTEHANDLING AND STORAGE

A.                                   Arehazardous materials handled on any of your shipping and receiving docks incontainer quantities greater than one gallon?              o Yes oNo

B.                                     IfHazardous materials or waste are stored on the premises, please check off the natureof the storage and type(s) of materials below:
| Types of Storage  Container         | Type of Hazardous Materials and/or Waste Stored |
|-------------------------------------|-------------------------------------------------|
| (list above-ground storage only)    |                                            |
|                                |                                            |
| o  1 gallon or 3 liter bottles/cans | o  acid                                         |
| o  5 to 30 gallon carboys           | o  phenol                                       |
| o  55 gallon drums                  | o  caustic/alkaline cleaner                     |
| o  tanks                            | o  cyanide                                      |
|                                | o  photo resist stripper                        |
|                                | o  paint                                        |
|                                | o  flammable solvent                            |
|                                | o  gasoline/diesel fuel                         |
|                                | o  nonflammable/chlorinated solvent             |
|                                | o  oil/cutting fluid                            |

 

C.                                     Doyou accumulate hazardous waste onsite?          o Yes oNo

If yes, how is it beinghandled?
| o on-site treatment or recovery |
|--------------------------------------|
| o  discharged to sewer               |   |
| o  hauled offsite                    | If hauled offsite, by whom |   |
| o  incineration                      |   |

 

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D.                                    Indicateyour hazardous waste storage status with Department of Health Services:

o generator

o interim statusfacility

o permitted TSDF

o none of the above

WASTEWATERTREATMENT/DISCHARGE

A.                                   Doyou discharge industrial wastewater to:

o sewer

o storm drain

o surface water

o no industrialdischarge

 

B.                                     Isyour industrial wastewater treated before discharge?              o Yes oNo

If yes, what type oftreatment is being conducted?

o neutralization

o metal hydroxideformation

o closed-looptreatment

o cyanidedestruct

o HF treatment

o other

SUBSURFACE CONTAINMENT OFHAZARDOUS MATERIALS/WASTES

A.                                   Areburied tanks/sumps being used for any of the following:

o hazardous wastestorage

o chemicalstorage

o gasoline/dieselfuel storage

o waste treatment

o wastewaterneutralization

o industrialwastewater treatment

o none of the above

B.                                     Ifburied tanks are located onsite, indicate their construction:

o steel              ofiberglass                 oconcrete

o inside open vault             odouble walled

C.                                 Are hazardous materialsor untreated industrial wastewater transported via buried piping to tanks,process areas or treatment areas? o Yes oNo

D.                                Do you have wet floors inyour process areas?          o Yes oNo

If yes, name processes:                                                                         

E.                                      Areabandoned underground tanks or sumps located on the property?            oYes o No

HAZARDOUS MATERIALSSPILLS

A.                                   Havehazardous materials ever spilled to:

o the sewer

o the storm drain

o onto theproperty

o no spills have occurred

B.                                     Haveyou experienced any leaking underground tanks or sumps?             oYes o No

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C.                                     Ifspills have occurred, were they reported?            oYes o No

Check which thegovernment agencies that you contacted regarding the spill(s):

o Department ofHealth Services

o Department ofFish and Game

o EnvironmentalProtection Agency

o Regional WaterQuality Control Board

o Fire Department

D.                                    Haveyou been contacted by a government agency regarding soil or groundwatercontamination on your site?

o Yes oNo

Do you have exploratorywells onsite? o Yes oNo

If yes, indicate thefollowing:

Number of wells:                          Approximatedepth of wells:                      Welldiameters:                     

PLEASE ATTACHENVIRONMENTAL REGULATORY PERMITS, AGENCY REPORTS THAT APPLY TO YOUR OPERATIONAND HAZARDOUS WASTE MANIFESTS.

Check off those enclosed:

o HazardousMaterials Inventory Statement, HMIS

o HazardousMaterials Management Plan, HMMP

o Department ofHealth Services, Generatory Inspection Report

o UndergroundTank Registrations

o IndustrialWastewater Discharge Permit

oHazardous Waste Manifest

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