**Exhibit10.10**

 
| LEASE OF                            |   |                                                            |
|-------------------------------------|--------|-----------------------------------------------------------------|
|                                |   |                                                            |
| COMMERCIAL SPACE STANDARD           |   |                                                            |
|                                |   |                                                            |
| Effective Date:                     |   | County and State where property is located I  Maricopa, Arizona |
|                                |   |                                                            |
| LESSOR (Name, Address and Zip Code) |   | LESSEE (Name, Address and Zip Code)                             |
|                                |   |                                                            |
| NO Partners                         |   | Sensory Science Corp.                                           |
| (an Arizona General Partnership)    |   | 7835 E. McClain Drive                                           |
| 7900 E. Greenway Road, Suite 201    |   | Scottsdale, AZ 85260                                            |

 

Scottsdale, AZ -85260

Attorney For Lessor

Attorney For Lessee

Subject Leased Premises (Address or Location of Building)

Description of Space (Square Feet and Location within building)

Suites 1 & 2 13,100 Sq. Pt.

Diagram of space is attached as an addendum

Subject Leased Premises (Legal Description of Building and Land inwhich space is located)

7863 E. McClain Road, Scottsdale, AZ 85260

Improvements to be made by Lessor (Describe in detail the construction,alteration, repairs or other improvements, if any, to be made by Lessor)

Plans and Specifications are attached as an addendum, Improvementsshall be completed by: Improvements to be made by Lessee (Describe in detailthe construction, alteration, repairs or other improvements, if any, to be madeby Lessee)

Plans and Specifications are attached as an addendum, Improvementsshall be completed by: Personal Property included with Lease (List all moveableproperty or property which shall be moved in and attached as fixtures forLessee)

A detailed list is attached as an addendum

 

 

PART ONE SPECIFIC PROVISIONS FOR LEASE OF COMMERCIAL SPACE, STANDARD

1.1 Consideration. For valuable consideration Lesser leases to Lesseespace in the leased premises, with improvements and personal property describedabove according to the terms hereinafter set forth, a copy of which Lesseeacknowledges receipt. 1.2 Term of Lease. This lease shall be in effect for a periodof 60 mo commencing at 12:00 noon on 11-1-99, and ending at 12:00 noon on10-30-04.

1.3 Rent for Standard Lease. Rent shall be paid monthly on or beforethe first day of each month beginning 11-1-99 Lessee shall pay the firstmonth’s rent in advance plus the last -0- months. The amount of rent shall becalculated as follows: U Base monthly rent of $   See Attached Section 7.1

Plus an:  Increases in the baserent calculated on; Increases in cost of fire insurance, $ Increases in realestate taxes or other taxes charged the Lesser as a result of the ownership ofthe building. Plus Sales or Transaction Tax charged by any governmental entityon the rental transaction.

Common maintenance costs as follows:

 

See Attached Section 7.1

Plus

 

Security Deposit of $

Plus

Late Payment penalty of each rent payment when the payment is made morethan 10 days after it is due.

 

1.4 Base Rent. The base rent, as prescribed in paragraph 1.3 (rent forstandard tease), may be increased by percentage rent, cost of living increases,increases in the cost of fire insurance paid by Lesser, increases in taxes onthe real property paid by the Lesser, taxes on the transaction of the rental,and

 

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common area maintenance charges, if any. The base rent for the termshall be the monthly base rent multiplied by the number of months in the termof this lease:

 

1.7 Fire and Casualty Insurance Escalation. If paragraph 1.3 (rent forstandard lease) provides for increases in rents based upon fire insuranceincreases, then this paragraph shall be applicable.  Should the use or operations of Lessee result in increased fireinsurance premiums, then the amount of these premium increases directlytraceable to the Lessee shall be added to the base rent.

 

1.8Tax on Assessment Escalation

If paragraph 1.3 provides for increase in base rent because of taxincreases, then this provision becomes applicable. Since the base rent ispredicated upon the real property taxes and property taxes or assessmentsagainst the building or real property, of which the leased premises are a part,increase from what additional rent which portion is equal to the proportionwhich the leased premises bear to the entire building. The additional rent rebuildingfrom the increased tax or assessments shall be retroactive to the date theincreased taxes or assessments first took effect.

 

1.10 Sales and Transaction Tax. If paragraph 1.3 (rent for standardlease) provides that Lessee shall pay the sales or transaction taxes, then thisparagraph is applicable. Lessee shall pay with each rent payment the amount ofany sales or transaction tax on the rental transaction. If any sales or similartax shall be levied or assessed by the United States of America, any state, county,city, town, district, or agency or instrumentality thereof, upon or againstLesser by reason of demand by Lesser, reimburse Lesser for the amount of anysuch taxes or assessments paid by Lesser.

 

1.11 Security Deposit.  Toinsure the Lessees prompt and full payment of the rent, and the faithful andtimely performance of all provisions of this ]case, and any extension orrenewal thereof, Lessee shall pay a security deposit as set forth in paragraph1.3. If any default shall be made in the performance of any of the covenants onthe part of Lessee herein contained with respect to any item or items of theleased premises, Lesser shall be entitled to that portion of the securitydeposit as is required to cover the default. Upon the expiration or earliertermination of this lease, or any extension or renewal thereof, provided Lesseehas paid all the rent herein called for and fully performed all of the otherprovisions of this lease on its part to be performed, Lesser will release toLessee the security deposit.

 

1.12 Place of Paying Rent. Lessee shall pay rent to the address ofLessor as designated on page one of this lease, or to any newer address ofwhich Lessor gives written notice to Lessee.

 

1.13 Utilities, Insurance and Other Expenses shall be allocated asfollows: Expense Description   Paid byLessor   Paid by Lessee

Comments or Qualifications

 
| PRORATED                                        |   |   |   |   |
|-------------------------------------------------|--------|--------|--------|--------|
| Water                                           |   |   |   | ý |
| In-Suite Plumbing                               |   |   |   | ý |
| Electricity                                     |   |   |   | ý |
| Fire and  Casually Insurance of Building        |   | ý |   | ý |
| Fire and Casualtv Insurance of lessees Property |   |   |   | ý |
| Personal Liability Insurance                    |   | \      |   | ý |
| Theft Insurance                                 |   | ý |   | ý |
| Trash Removal”                             |   |   |   | ý |
| PRORATED                                        |   |   |   |   |

 

*LIMITED TO NORMAL OFFICE WASTE. THE DUMPSTER 1S NOT TO BE USED FORDISPOSAL OF COMMERCIAL OR INDUSTRIAL WASTE.

 

1.14 Maximum Legal Interest. I any monics are owed under the terms ofthis lease, all o i c provision of the -lease notwithstanding, the partiesintend that the party owing sums to the other as the result of performancesunder the lease, shall incur as a penalty the maximum legal rate of interestthat is in effect at (lie time of the accrual of the charge. Interest thusimposed shall

 

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be charged also on any costs, legal fees, or any other obligationarising out of )[‘s lease. If the laws or the state which govern this leasehave no maximum legal interest limit, the rate shall be 12%.

 

1.15 Provisions of Fire and Casualty Insurance Policies For standardLease. Unless these obligations are changed by paragraph I.13, Lessor shallcontinually keep in force, during the term of this lease and during artyextension or renewal thereof, fire and extended coverage insurance in an amountof no less that 80% of the full insurable value of the building in which theleased premises are situated. Lessee-shall provide fire insurance protection anLessees stock in trade, furniture, fixtures and other property within theleased premises, in an amount equal to the full insurable value thereof andpromises that any insurance coverage in this regard will contain a waiver ofthe insurers right of subrogation against Lessor. 

Lessor and Lessee shall promptly deliver to one another die original ororiginals; or a true and exact copy, of any and all such polity or policies ofinsurance.

Lessee shall not carry any stock of goods or do or omit to do any actin or about the leased premises which will in any way impair or invalidate theobligation of any policy of insurance on or in reference to die ]cased premisesor the building in which the leased premises are situated. Lessee agrees to payupon demand, as additional rent, any increase in premiums for insurance thatmay he charged during the term of this lease on the amount of insurance to becarried by Lessor on ft leased premises or the building in which the ]casedpremises are situated, resulting from the business carried on in the leasedpremises by Lessee, whether or not Lessor has consented to same.

 

1.16 Waiver of Subrogation on Casualty Insurance. Lessor herebyreleases Lessee, to the extent of its insurance coverage, from any and a11liability for any loss or damage caused by fire or any of the extended coveragecasualties, notwithstanding such fire or other casualty shall be due to thefault or negligence of Lessee or its agents, provided, however, this releaseshall be in force and effect only with respect to loss or damage occurringduring such time as Lessors policies of fire and extended coverage insuranceshall contain a clause to the effect that this release shall not affect suchpolicies or the right of Lessor to recover thereunder. Lessor agrees that suchinsurance policies will include such clause as long as the same is includablewithout extra costs.

The parties shall use good faith efforts to have any and all fire,extended coverage, or any and all material damage insurance which may becarried endorsed with the following subrogation clause.  “This insurance shall not be invalid shouldthe insured waive in writing, prior to a loss, any and all right of thecoverage against any party for loss occurring to the property describedherein.”

Lessor and Lessee mutually agree that any right of subrogation affordedthe insurance carriers of their respective property . insurance policiesrelative to real or personal property situated in or on the leased promises iswaived; and the parties undertake to give their respective insurance carriersnotice of this waiver.

 

1. 17 Liability Insurance. Lessee shall, at its own cost and expense,during the term of this lease, procure and maintain in force policies ofliability insurance, with Lessor as an additional assured there under, insuringLessee to the amount of $500,000.00 against any loss or damage, or any claimthereof, resulting from injury to or the death of any one person, and to theamount of $500,000.00 against any loss or damage, or any claim thereof,resulting from the injury to or the death of any number of persons from any oneaccident, as the result of or by reason of the ownership by Lessor of theleased premises, parking lot, and adjacent areas owned by Lessor, and the useand occupancy thereof by Lessee; and to procure and maintain in full force andeffect, during the term herein specified, a policy or policies of insurance,with Lessor as an additional assured there under, in an amount not less than$500,000.00 insuring Lessor against any loss or damage or any claim thereofresulting from the damage to or destruction of any property belonging to anyperson or persons whomsoever, as a result or by reason of the ownership byLessor of the leased promises, parking lot or adjacent areas owned by Lessor,and the use and occupancy thereof by Lessee.

Lessee shall promptly deliver to Lessor the original or originals, or atrue and exact copy, of any and all such policy or policies of insurance.

All policies shall contain a written obligation of the insurer tonotify Lessor in writing at least ten days prior to any cancellation thereof.

 

1.18 Non-Liability of Lessor. Lessor shall not be liable for any damageoccasioned by failure to keep the premises in repair, and shall not be liablefor any damage done or occasioned by or from plumbing, gas,

 

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water, steam, or other pipes, tanks, washstand, water closet or wastepipe, in, above, upon or about the building or promises, nor for damageoccasioned by water, snow, or ice being upon or coming through the roof,skylight. trap-door, or otherwise, nor for any damage arising from the acts or neglectsof co-tenants or other occupants of the same building, or of any owners oroccupants of adjacent or contiguous property. 1.191ndemnification. Lessor shallnot be responsible or liable for any loss, theft, of damage to property orinjury to or death of Lessee or any person on or about the leased premises, andLessee agrees to indemnify and hold Lessor harmless there from unless it wascaused or resulted from the negligent or willful acts of Lessor. Lessee shallhold Lessor harmless during the term of this ]cast, and during any extension orrenewal thereof, from and against any and all claims suits, actions, demandsand judgments arising out of an event or events occurring after thecommencement of the primary term thereof when the proximate cause of suchinjury to person or damage to property was not the negligence of Lessor or thenegligence of an agent or employee of Lessor or of lessors successor. Lesseeagrees not to make any claim against Lessor, and it will hold Lessor harmlessthere from, for any loss or damage to any personal property belonging to Lesseeor any of its guests, customers, or occupants, or for any injuries to Lessee orany of its guests, customers, or occupants unless such loss or damage wascaused or resulted from the negligent or willful conduct of Lessor.

 

1.20 Renewal. Lessee shall have the right to renew for an additional 5years term upon 60 days written notice to Lessor upon: p Same Terms Differentterms as follows:

Per attached Section 7.2

 

1.21 Purchase Option. Lessee shall have the right to purchase theSubject Leased Premises upon the giving of days written notice for the totalpurchase price of $       , all inaccordance with the Real Property Purchase Contract, Receipt and EscrowInstructions which are attached.

 

1.22 Use by Lessee. The premises shall be used for a reasonable office,warehousing, commercial or industrial use which use is specifically describedas:

General Lab and Office Use

 

1.23 Tax on Property of Lessor Paid by Lessor. Lessor shall pay beforedelinquent all taxes and assessments levied and assessed upon or against theloosed premises during the term of this ]case, subject to paragraph 1.8, ifapplicable.

 

1.24 Tax on Property of Lessee. Lessee shall pay or cause to be paid,before delinquency, throughout the primary term of this lease and any renewalsor extensions thereof, all taxes on any and all personal property owned byLessee and situated upon the leased promises. In the event Lessee fails to paythe taxes levied upon or against its property as aforesaid when due andpayable, Lessor may pay the same on lessees behalf, and Lessee shall reimburseLessor for the same forthwith or Lessor may reimburse itself therefore out ofthe rental payable hereunder by lessee or Lessor may reimburse itself from thesecurity deposit. Lessee shall save and hold Lessor harmless on account of anyof these taxes. Lessee shall pay Lessor the maximum legal interest rate perannum or any monies that Lessor may advance on behalf of Lessee until theremonies are repaid.

 

1.25 Initial Construction and Repairs. Lessor shall cause the leasedpromises to be completed or repaired in accordance with any plans,specifications and agreements provided for on page one of this lease. Lessorwill not be obliged to construct or install at its expense any improvements orfacilities of any kind other than those called for on page one of this lease.Lessor agrees to commence and complete the construction of the building orimprovements with reasonable diligence. Should no plans, specifications or agreements for repair or constructionbe prescribed on page one of this lease, then Lessee has agreed to accept theleased promises as they arc al the time this lease is executed. Anyconstruction or repairs will comply with applicable building codes.

 

1.26 Additional Space. Lessor agrees that, in the event Lessee desiresto lease additional space from Lessor during the term of the lease, andprovided Lessee shall not be in default under the provisions of the lease, andprovided that Lessor shall have space available, Lessor shall provideadditional space upon the following terms and conditions:

 

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a. Space will be provided in the building to Lessee on a first right ofrefusal basis.

b. The terms of the lease for the additional spice shall be negotiatedbetween Lessor and lessee at die time die space is provided.

c. Lessor deliver written notice in writing to Lessee the availabilityof less than 30 days before the space is to be provided by Lessor, prior tospace being offered to the general market.

 

1.27 Reasonable Rules and Regulations.     Inthe interest of uniformity, to conform to such reasonable and non­discriminatoryrules and regulations in the use of the leased promises as may be establishedfrom time to time by Lessor for the general use of the premises and for theconvenience of all the Lessees of Lessor in the buildings, of which the leasedpremises are an integral part, Lessee agrees to abide by all rules andregulations of the building imposed by Lessor.

 

These regulations are imposed for the cleanliness, good appearance,proper maintenance. good order and reasonable use of the premises and thebuilding, and as may be necessary for the proper enjoyment of the building byall tenants and their clients, customers and employees.

The rules and regulations maybe changed from time to time on reasonablenotice to Lessee, Breach of building rules and regulations shall not be groundsfor termination of the lease unless Lessee continues to breach them after tendays written  notice by Lessor, and thenonly in the event such rules or regulations have been made for the above statedpurpose.

 

1.28. Common Areas and Parking. The term “Common Area” means the entirearea designed for common use or benefit within the outer property limits of thebuilding area, including, but not limited to, parking lots, landscaped andvacant areas, passages for trucks and automobiles, areaways, roads, walks,curbs, corridors, garden court and arcades, together with public facilitiessuch as washrooms, comfort rooms, lounges, drinking fountains, toilets, publicstairs, ramps, elevators, escalators, shelters, porches, bus stations andloading docks, with facilities appurtenant to each, if any such areas now existor may later exist on the real property of Lessor, but excluding any area whichthe Lessor may have designated as a restricted area.

Subject to reasonable rules and regulations to be promulgated byLessor, the public portions of the Common Area are hereby made available toLessee and its employees, agents, customers, and invitees for reasonable use incommon with other tenants, their employees, agents, customers, invitees andLessor for the purpose for which constructed.

Lessor hereby grants to Lessee and Lessee’s agents, employees andinvitees the right, during the term hereof, to use, in common with othersentitled to the use thereof, such truck way service corridors, service elevatorand loading docks subject to such reasonable regulations as Lessor shall makefrom time to time.

Lessee further agrees to receive and deliver goods and merchandise andto remove all garbage and refuse only by way of the truckway and loading docksdesignated by Lessor for lessor use.

Lessor may from time to time temporarily close portions of the CommonArea, erect private boundary marks or lake further appropriate action toprevent the acquisition of public rights and such action shall not be deemed aneviction or disturbance of lessees use of the [eased premises.

Lessee shall have, and is hereby granted, such possession and controlover all portion of the entire Common Area, whether at the front or rear of dieleased premises, as will authorize Lessee to exclude therefrom all persons whoare not customers or patrons of the Lessees of the building area. who are ormay be creating a nuisance or disturbance thereon, and in particular as willauthorize Lessee to maintain an action in trespass against such persons who arcnot patrons or customers and who are or may be picketing thereon

Subject to reasonable rules and regulations of the Lessor, Lessee andits employees agents, customers and invitees shall have the use of parkingareas specifically designated by Lessor for that purpose. Lessee agrees thatupon written notice from Lessor, it will, within five days, furnish to Lessorthe automobile license numbers assigned to Lessees vehicles and the vehicles ofall its officers, agents and employees.

Lessee agrees that it shall not at any time park or permit the parkingof its trucks or vehicles of others in truck passages or adjacent to loadingdocks so as to interfere in any way with the use thereof.

Lessee, in common with Lessor and the patrons and customers of Lesseeand Lessor and of other lessees of Lessor in the building area, their patronsand customers, shall have the right to use for parking

 

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purposes the parking areas adjacent to the building or buildingslocated on the real property hereinbefore described. Nothing herein containedshall be construed in such manner as to imply that any portion of that parkingarea is hereby leased unto that Lessee.

 

1.29 Repairs, Maintenance and Alterations by Lessor. Lessor shall beresponsible for structural repairs in general of the building, and Lessor shallfurther be specifically responsible for keeping in good repair the foundations,the outer walls, the roof, down spouts, and gutters and the plumbing, sewerageand central refrigerated air conditioning or heating systems of the building,except that Lessor shall not be responsible for the repair of any part of thebuilding in instances when such repair is necessitated by ordinary wear andtear or by negligence of Lessee, its sublessee assignees, or by invitees,clients, patrons, agents or employees of Lessee, its sublessee or assigns.

 

1.30. Maintenance of Heater, Cooler, Drinking Water and Locks. Lessee shallat its own expense be responsible for the installation, care, maintenance andreplacement of all refrigerated air conditions, coolers, and heating equipmentand parts thereof serving the leased premises whether or not such equipment islocated on the leased premises and whether such equipment was installed-byLessee or by Lessor.

If the leased premises arc served by a central refrigerated airconditioning or heating system, and only in such event, Lessor, at its ownexpense, shall be responsible for the care, maintenance and replacement of allequipment forming a part of that central system, regardless of the location ofsuch equipment. As used in this lease, “central refrigerated air conditioningor heating system” shall mean a refrigerated air conditioning or heating systemdesigned to serve three or more separate leasehold premises. Lessee shall beresponsible for locks and maintenance of locks and doors, light bulbs, ballastunits and all window treatments.

 

PART TWO

 

GENERAL PROVISIONS FOR COMMERCIAL LEASES

 

2.1 Quiet Possession. Lessor agrees that Lessee, on paying the rentalsand on performing all terms of this lease, shall and may peaceably and quietlyhave, hold and enjoy the leased promises during the term of this lease. Lesseeagrees that in the event of the inability of Lessor to deliver to Lesseepossession of the leased premises within 60 days of the commencement of the termas above specified, Lessor shall not be liable for any damage caused thereby,nor shall this lease be void or violable, but the term hereof shall be extendedfor a period of time equal to the delay in such delivery but Lessee shall notbe liable for rent until such time as Lessor offers to deliver possession ofthe leased premises to Lessee. By occupying the leased premises as a tenant, orinstalling fixtures, facilities, or equipment or performing finishing work,Lessee shall be deemed to have accepted the some and to have acknowledged thatthe premises arc in the condition required by this lease. In he event of anydispute, the certificate of lessor’s architect or contractor shall beconclusive that the leased premises are in the condition required by this leaseand are ready for occupancy.

 

2.2 Use of Premises. Lessee has examined and knows the condition of theleased premises, and has received the same in good order and repair, andagrees:

a. To use these premises for reasonable office, warehousing, commercialor industrial uses which do not materially damage the leased premises.

b. To surrender possession of these premises at the expiration of thislease without further notice to quit, is as good condition as reasonable andcareful use will permit.

c. To keep the premises in good condition and repair at its own expenseand not to commit or permit any waste or nuisance.

d. Not to use the leased premises for living quarters or residence.

c. Not to make any unlawful, immoral or improper use of the leasedpremises, or any use or occupancy thereof contrary to law or contrary to anydirection, rules, regulations, regulatory bodies, or officials havingjurisdiction thereof or which shall be injurious to any person or property.

 

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2.3 Damages to Interior or Structure. Lessee shall pay (a) for anyexpense, damage or repair occasioned by the stopping of waste pipes or overflowfrom bathtubs, closets, washbasins, basins or sinks, and (b) for any damage towindow panes, window shades, curtain rods, wallpaper, furnishings, or any otherdamage to the interior of the leased premises.

 

2.4 Repairs, Maintenance and Alterations by Lessee. The Lessee haspromised that the leased premises shall at all time be kept in good order.condition and repair by Lessee, at its own expense and in accordance with alllaws, directions, rules and regulations of regulator), bodies or officialshaving jurisdiction.

If Lessee refuses or neglects to commence repairs within 10 days afterreceipt of written demand from Lessor, or adequately to complete such repairswithout liability to Lessor for any loss or damage that may accrue to Lesseesstock or business by reason thereof, and if Lessor shall make such repairs,Lessee shall pay to Lessor, on demand, as additional rent, the costs thereofwith interest at the maximum legal rate from the date of commencement of thoserepairs.

Lessee shall make no changes, improvements, alterations, or additionsto the leased premises unless such changes, improvements, alterations, oradditions: (a) are first approved in writing by Lessor; (b) are not inviolation of restrictions placed thereon by the investor financing the constructionof the building; and D will not materially alter the character of such premisesand will not substantially lessen the value thereof. Lessor may notunreasonably withhold approval, and if there is a dispute as to reasonableness,it shall be determined by arbitration.

If structural alterations become necessary because of the applicationto the business carried on by Lessee of any law, ordinance, rule or regulationof any regulatory body, or because of any act or default on the part of Lessee,or because Lessee has overloaded any electrical or other facility, Lessee shallmake such structural alterations al its own cost and expense, after firstobtaining lessors written approval of plans and specifications and furnishingsuch indemnization against lions, costs, damages and expenses as Lessor mayreasonably require.

Lessee may place partitions and fixtures (including light fixtures) andmake improvements and other alterations in the interior of the leased premisesat its own expense. These improvements or alterations installed or made byLessee, other than those of a structural nature, shall remain the property ofthe Lessee provided, however, that prior to commencing any such work Lesseeshall first obtain the written consent of Lessor to the proposed work.

Lessor may require that such work be done by Lessor own employees orunder Lessors direction but al the expense of Lessee, and Lessor may, as acondition to consenting to such work, require that Lessee give security thatthe premises will be completed, free and clear of liens and in a mannersatisfactory to Lessor, and that the premises will be repaired by Lessee torestored by Lessee to its former condition at the termination of the ]case atLessees sole cost and expense.

 

2.5. Mechanics’ and Other Liens Imposed by Lessee. Lessee shall keepthe leased premises and the improvements thereon at all times during the termhereof free of mechanics’ and material men’s liens and other liens of likenature, other than liens created and claimed by reason of any work done by orat the instance of Lessor, and at a11 time shall fully protect and indemnify

Lessor against all such liens or claims and against all attorneys’ feesand other costs and expenses growing out of or incurred by reason or on accountof any such liens or claims. Should Lessee fail to fully discharge any suchlien or claim, Lessor, at its option, may pay the same of any part thereof, andLessor shall be the sole judge of the validity of such lien or claim.

All amounts so paid by Lessor, together with interest thereon at themaximum legal rate from the time of payment by Lessor until repayment byLessee, shall be paid by Lessee upon demand, and if not so paid, shall continueto bear interest at the aforesaid rate, interest payable monthly, as additionalrent.

 

2.6. No Signs Without Approval of Lessor. Any and all signs placed byor for Lessee on the exterior of the leased premises, or on the real propertyon which the leased premises are located, shall be so placed and allowed toremain in place only with the approval of Lessor in writing.

Nor shall Lessor, or its successor or tile owner of the leasedpremises, be charged with the costs of installing, maintaining, changing, orremoving such sign or signs. Lessor hall have the right to approve tile design,type, size. lettering and location of every sign to be erected in, upon orabout the leased premises.

 

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Any signs placed upon or about such leased premises shall, upon the endof the term of the lease or upon the earlier termination thereof, be removed byLessee, and Lessee shall repair any damage to the leased premises which shallbe occasioned thereto by reason of such removal.

 

2.7. No Exterior Paint Without Lessor Approval.  Lessee shall not decorate or paint theexterior of the leased premises, or any part thereof, except in the manner, andof a color, approved by Lessor.

 

2.8. Trash Control. Lessee shall provide and maintain sanitary andral-proof receptacles with covers at or about the leased premises in which toplace any and all refuse or trash, and to place this refuse and trash inreceptacles. Lessee shall make lessees own arrangements and pay for garbage andtrash pick-up service on or from the leased premises, and shall not permit thesame to accumulate and remain on the premises except during reasonableintervals between pick-up service.

 

2.9. Sidewalk Maintenance. All time, Lessee shall keep the sidewalks infront of the leased premises clean and in a sightly and sanitary condition, andnot exhibit or display any goods, wares or merchandise thereon.

 

2.10. Replacement of Class. Al Lessees own cost and expense, Lesseeshall replace all glass in, upon or about the leased premises that shall bebroken during tile term herein specified unless caused by Lessor, an agent oremployee of Lessor, or lessors successor.

 

2.11. Right of Re-Entry. Lessor shall have the right, by itself oragent or with others, to enter the premises at reasonable hours to examine orexhibit the premises, or to make such repairs and alterations as shall bedeemed necessary for the safety and preservation of the building, to inspectand examine, to post such notices as Lessor may, deem necessary to protectLessor against

loss from liens of laborers, matcrialmcn or others, and for the purposeof permitting or facilitating lessors performance of its obligations hereunderor for any other reasonable purpose which does not materially diminish lesseesenjoyment or use of the leased premises.

Lessee expressly waives any claim for damages, including loss ofbusiness, resulting from lessors entry, from the erecting of scaffolding orother structures to facilitate repairs, or from lessors other reasonableactivities for the purpose of altering, improving, or repairing the leasedpremises in conformity herewith.

Lessee agrees to permit Lessor, at any time within GO days prior to theexpiration of this lease, to place upon or in tile window of the leasedpremises any usual or ordinary   or similar sign and to allow prospectivetenants, applicants or agents of Lessor to enter and examine the leasedpremises during the last 60 days of the term hereof, and to permit Lessor orlessors agents, at any time during the term hereof to conduct prospectivepurchasers through the leased premises during reasonable business hours.

 

2.12 Assignment or Sub-Letting. No assignment, sublease or sale of thislease or any interest therein may be made by Lessee without the written consentof Lessor having first been obtained thereto, which consent Lessor shall grantunless Lessor has a valid reason, which can be substantiated. If there is adispute as to whether Lessor has a valid reason for withholding consent, itshall be determined by arbitration.

Any attempted assignment, sublease or sale of this lease or anyinterest therein shall be null and void and have no effect unless such consentshall have been obtained. Any assignment by operation of law shall be subjectto the same conditions and restrictions as an assignment by Lessee. If suchconsent is given by Lessor, any and all sub-lessees shall be responsible tenants,and Lessee shall not be relieved of any liability hereunder by Lesseesassignment, vacation or subletting thereof.

It is agreed that one of the conditions moving Lessor to make thislease is the personal confidence reposed by it in Lessee, combined with thebelief that Lessee will be a tenant and occupant satisfactory la Lessor.

Nothing herein shall prevent the Lessor from assigning its interestunder this lease, provided, however, that any assignee shall be subject to thesame obligations and duties as the original Lessor.

 

2.13. Right of Lessor to Pay Obligations of Lessee to Others. If Lesseeshall fail or refuse to pay any sums due to be paid by it under the provisionsof this lease, or fail or refuse to maintain the leased

 

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premises or any part thereof as herein provided, then, and in suchevent, Lessor, after 10 days’ notice in writing by Lessor to Lessee, shall havethe right to pay any such stun or sums due to be paid by Lessee and to do andperform any work necessary to the proper maintenance of (he leased premises;and the amount of such sum or sums paid by Lessor for the account of Lessee andthe cost of any such work, together with interest thereon at the maximum legalrate from the date of payment thereof by Lessor until the repayment thereof toLessor by Lessee, shall forthwith be paid by Lessee upon demand in writing.

The payment by Lessor of any such sum or sums or the performance bylessor of any such work shall be prima facie evidence of the necessitytherefore.

 

2.14. Surrender and Return of Leased Premises.  On the last day of the term hereby createdor on the sooner termination thereof, Lessee shall peaceable surrender theleased premises in good order, condition and repair, Broom clean - fire andother unavoidable casualty, reasonable wear and tear only excepted. On orbefore the last day of the term hereby created or on the sooner terminationthereof, Lessee shall, at its expense, remove its trade fixtures, signs andcarpeting from the leased premises and any property not removed shall be deemedabandoned. All alterations, additions, improvements and fixtures (other thanlessees trade fixtures, signs and carpeting) which shall have been made orinstalled by either Lessor or Lessee upon the leased premises and all hardsurface bonded or adhesively affixed flooring shall, without charge, remainupon and be surrendered with the leased premises as a part thereof, Withoutdisturbance, molestation or injury.

[f the leased premises be not surrendered on the last day of the termhereby created or on the sooner termination thereof, Lessee shall indemnifyLessor against loss or liability resulting from delay by Lessee in sosurrendering the premises, including, without limitation, claims made by anysucceeding tenant founded on such delay. Lessee shall promptly surrender allkeys for the leased premises, at the lace then fixed for payment of rent andshall inform Lessor of combinations on any locks and safes on the leasedpremises.

 

2.15. Event of Default. Each of the following shall be deemed an Eventof Default: a. Default in the payment of rent or other payments hereunder

b. If Lessee shall default in the performance or observance of anycovenant or condition of this lease by the Lessee to be performed or observed,or if Lessee shall fail to make reasonable efforts in the light of thesurrounding circumstances to keep substantially all the premises occupied andopen for business following the expiration of the period or 30 days givingnotice of such default or defaults or failure to Lessen by Lessor

c. Abandonment of the premises.

d. The filing or execution or occurrence or-.

(1) A petition in bankruptcy by or against Lessee.

(2) A petition or answer seeking a reorganization, arrangement,composition, readjustment, liquidation, dissolution or other relief of the sameor different kind under any provision of the Bankruptcy Act.

(3) Adjudication of Lessee as a bankrupt or insolvent; or insolvency inthe bankruptcy equity sense. (4) An assignment for the benefit of creditorswhether by trust, mortgage, or otherwise.

(5) A petition or other proceeding by or against Lessee for, or theappointment of, a trustee, receiver, guardian, conservator or liquidator ofLessee with respect to all or substantially all its property.

(G) A petition or other proceeding by or against Lessee for itsdissolution or liquidation, or the taking of possession of the property of theLessee by any governmental authority in connection with dissolution orliquidation.

(7) The taking by any person of the leasehold created hereby or anypart hereof upon execution, attachment, or other process of law or equity.

 

2.16. Fair Notice of Default. The parties are desirous of giving oneanother fair notice of any default before sanctions arc imposed. In the eventof an act of default with respect to any provision of this lease, neither partycan institute legal action with respect to such default without first complyingwith the following conditions:

a. Notice of such event of default must be in writing and mailed to theother party by U.S. Certified Mail, return receipt requested;

 

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b. Such written notice shall set forth the nature of the allegeddefault in the performance of the terms of this lease and shall designate thespecific paragraph(s) therein which relate to the alleged act of default;

c. Such notice shall also contain a reasonably understandabledescription of the action to be taken or performed by the other party in orderto cure the alleged default and the date by which the default must be remedied,which date can be not less than ten business days from the date of mailing thenotice of default.

 

2..17 Termination. Upon occurrence of any Event of Default, and afterproper notice of default has been given, Lessor may, at its option, in additionto any other remedy or right given hereunder or by law:

a. Give notice to Lessee that this lease shall terminate upon the datespecified in the notice, which date shall not be earlier than five days afterthe giving of such notice; or,

b. Immediately after ten days notice of default, and without furthernotice or demand, enter upon the leased premises or any part thereof, in thename of the whole, and upon the date specified in such notice, or any othernotice pursuant to law, or upon such entry, this lease and the term thereofshall terminate.

 

2.18. Repossession. Upon termination of this lease as hereinaboveprovided, or pursuant to statute, or by summary proceedings or otherwise, theLessor may enter forthwith, without further demand or notice upon any part ofthe premises, in the name of the whole, if he has not theretofore done so, andresume possession either by summary proceedings, or by action at law or inequity, or by force or otherwise, as Lessor may determine, without being liablein trespass or for any damages. In no event shall such re-entry or resumptionof possession or reletting as hereafter provided be deemed to be acceptance orsurrender of this lease or a waiver of the rights or remedies of Lessorhereunder

 

2.19. Court Action, Attorneys’ Fees and Casts. If, upon failure ofeither party to comply with any of the covenants, conditions, rules orregulations of and in this lease, suit or arbitration should be brought fordamages on account thereof, or to enforce the payment of rent hereinstipulated, or to recover possession of the premises, or to enforce anyprovision hereof, the losing party agrees to pay to the prevailing partyreasonable costs and expenses incurred in prosecuting these suits orarbitration, as determined by the court or arbitrator, including attorneys’ feesand the value of time lost by the prevailing party or any of its employees inpreparing for or participating in any arbitration or litigation in connectiontherewith. Interest shall accrue on that award at the maximum legal rate on allmonetary amounts awarded for principal, interest, attorneys fees, costs and allother amounts, from the date of that award until paid.

 

2.20. Default by Lessor, In the event of any default by Lessor, Lessee,before exercising any rights that it may have at law to cancel this lease, mustfirst send notice by registered or certified mail to Lessor, and shall haveoffered Lessor thirty (30) days in which to correct and cure the default orcommence a good faith effort to cure such default.

 

2.21. Re-letting after Termination. Upon termination of this lease inany manner above provided, Lessor shall use reasonable efforts to re-let thepremises.

Lessor shall be deemed to use reasonable efforts if it lease the wholeor any part of the premises, separately or with other premises, for any periodequal to or less than or extending beyond the remainder of the original term,for any sum or to any lessee or for any use it deems reasonably satisfactory orappropriate.

 

2.22. Damages. Upon termination of this lease in any manner above provided,or by summary proceedings or otherwise, Lessee shall pay to Lessor forthwithwithout demand or notice the sum of the following:

a. All rent, additional rent and other payments accrued to the date ofsuch termination and a proportionate part of the rent otherwise payable for themonth in which such termination occurs.

b. The costs of making all repairs, alterations and improvementsrequired to be made by Lessor hereunder and of performing all covenants ofLessee relating to the condition of the premises during the term and uponexpiration or sooner termination of this lease, such costs to be deemed primafacie to be

 

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the costs estimated by a reputable architect or contractor selected byLessor or the amounts actually expended or incurred thereafter by Lessor.

c. The attorneys’ fees and other costs detailed in paragraph 2.19(Court Action, Attorneys’ Fees and Costs).

d. An amount equal to “Liquidation damages” or “indemnity payments”whichever is larger, determined and payable as set forth below:

(1) “Liquidation damages” means an amount equal to the excess of therent, addilional rent and other payments reserved in this lease for the portionof the term remaining after termination of the lease (hereinafter referred toas the “unexpired term”) over the then fair and reasonable rental value of thepremises for such period of the term.

(2) “Indemnity payments” means all the rent, additional rent and otherpayments reserved under this lease which would have become due and owing thereunder from time to time during the unexpired term, less, to the extent notpreviously deducted or credited, the rent, additional rent and other paymentsactually collected and allocable to the promises or to the portions thereof

re-lei by Lessor, and plus, to the extent not previously charged, thecosts and expenses, including but not limited to reasonable attorneys’ andbroker’s fees and expenses, paid or incurred by Lessor in connection with:

(a) Obtaining possession of the premises.

(b) Removal and storage of lessees or other occupants property. (c)Care, maintenance and repair of the premises while vacant.

(d) Re-Ietting the whole or any part of the premises (which re-Iettingmay be for a period or periods of time less than the unexpired term hereof orextending beyond the term hereof.)

(c) Repairing, altering, renovating, partitioning, enlarging,remodeling or otherwise putting the premises, either separately or as part oflarger premises, into condition acceptable to, and reasonably necessary toobtain new tenants.

Such costs and expenses shall be deemed prima facie to be the amountstherefor invoiced to Lessor or actually expended or incurred therefore byLessor.

Lessee shall, without prior demand or notice, made indemnity paymentsmonthly on arrears with respect to such portion thereof as includes rent (asdistinguished from additional rent and other payments) and upon the respectivedates provided therefore in the lease with respect to additional rent and otherpayments. Lessor may sue for all such indemnity payments as they accrue

without waiting until the date fixed in the lease as the expirationdate thereof. Any action or proceeding to recover liquidated damages shall notbe a waiver of lessors right to recover indemnity payments and vice versa, butin any action or proceeding to recover indemnity payments to the extent thatthey include rent (as distinguished from additional rent and other payments),brought contemporaneously with or after an action or proceeding to recoverliquidated damages which has not been discontinued, there shall be deductedfrom the claim for indemnity payments (to the extent not previously deducted orcredited) such portion of the liquidated damages as is in the same proportionto such liquidated damages as the portion of the unexpired term from whichmonthly indemnity payments have accrued bears to the unexpired term.

 

2.23. Operating Costs. All operating expenses of Lessee or whatevernature, are the sole obligation of Lessee.

 

2.24. Landlord’s Lien. Upon the termination of this lease in any of themanners herein provided, or upon default by Lessee under any of the provisionshereof, Lessor may enter the leased premises and remove any and all personalproperty of Lessee and may retain possession of such personal property untilall charges of any kind, including rent, storage or damages, shall be paid infull.

 

2.25. Abandonment. If Lessee shall be in default in the payment of therental and shall vacate or abandon the premises or any part hereof (an absenceof Lessee therefrom for a period of five days after such default shall beconsidered such an abandonment thereof), Lessor may, if it so elects, re-enterthe leased premises and remove the contents and take possession of the leasedpremises and re-let the some or any part thereof, at such rental and upon suchterms and conditions as it may deem proper and apply the proceeds thereof, lessthe expenses, including the usual agents commission so incurred, upon theamount due from Lessor hereunder and Lessee shall be liable for any deficiency.

 

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If Lessor shall take possession of the premises and relet the same,such reletting shall not operate as a termination of this lease unless Lessorso elects, such election to be evidenced by written notice to Lessee; nor shallsuch action by Lessor operate as a waiver of any other rights or remedies ofLessor hereunder.

 

2.26 Holdover. If Lessee shall holdover after the expiration of theterm hereof, with the consent of Lessor, express or implied, such tenancy shallbe from month to month only, and not a renewal hereof and Lessee agrees to payrent and all other charges as hereinabove provided, and also to comply with allcovenants of this lease for the time Lessee holds over. If lessee shall holdover without the consent of Lessor, express or implied, then Lessee shall beconstrued to be a tenant at sufferance at double the rent herein provided,prorated by the day until possession is returned to Lessor. If Lessee shallhold over with the consent of Lessor, Lessee shall be entitled to possessionuntil Lessor has given Lessee 30 days notice that such month to month tenancyshall be terminated; otherwise, notice is only required as hereinafter providedas notice of default.

 

2.27 Destruction of Leased Premises. If the leased premises shall, atany time during the term herein specified, be damaged or destroyed by fire orother unavoidable casualty to the extent that the leased premises shall beunfit for occupancy and use by Lessee, and to the extent that the same cannotbe rebuilt or resorted by Lessor within 120 days thereafter, then and in such

event, either Lessor or Lessee may, at their respective option,terminate this lease by notice in writing to the other of them given within tendays after such damage or destruction provided, however, if the leased premisescan be rebuilt or restored within 120 days, Lessor shall, at its own cost andexpense and with due diligence, rebuild and restore the leased premises, and ajust and proportionate part only of the rentals hereby reserved shall be forcedto lease other premises, such amount paid for the other premises shall bededucted from the amount owed to Lessor, provided that such deduction shall notexceed the amount owed Lessor.

If Lessor shall rebuild or restore the leased premises, then and insuch event, the full amount of the insurance payable under policies of fireinsurance shall be paid to Lessor for use int he rebuilding and restoration ofthe leased premises.

 

2.28. Removal of Trade Fixtures. Lessee shall have the right, upon theexpiration of the term of this lease, or at any time during such term if Lesseeshall not be in default, to remove from the leased premises all fixtures andequipment placed thereon by Lessee, even though permanently affixed to theleased premises, provided, however, that Lessee, in effecting removal, shallrestore the-leased premises to a good, safe, sound, orderly and sightlycondition.

 

2.29. Eminent Domain. If the leased premises or any part thereof shallbe taken by eminent domain, which taking shall render the remainder of the leasedpremises unsuitable for occupancy and use by Lessee for the purpose intended byLesser, then and in such event, the full current amount payable to the date oftaking, or the prorated amount of that months rent to the date of taking, shallbe paid to Lessor, and this lease shall terminate as of the date of taking.

If only a part of the leased premises shall be taken by eminent domain,and such taking shall not unduly interfere with the occupancy and use of theleased promises for the purpose intended by Lessee, then and in such event. thefull amount payable for and upon such taking shall be paid to Lessor, and fromand after the date of such taking, only a just and proportionate part of therentals for the leased premises hereby reserved shall be paid by Lessee.

Lessee shall have the right to claim and recover from the condemningauthority, but not from Lessor, such compensation as may be separately awardedor recoverable by Lessee in lessees own right on account of any and all damageto Lessees leasehold interest, to lessees business by reason of thecondemnation, and for or on account of any cost or loss to which Lessee mightbe put in removing Lessees merchandise, furniture, fixtures, leaseholdimprovements and equipment.

 

2.30 Subordination. If Lessor shall desire at any time, and from timeto time to secure a loan or loans upon the security of the real properly andthe improvements thereon, including the leased premises, then and in suchevent, Lessee hereby agrees to make and enter into a subordination agreement oragreements with any responsible lending agency that Lessor shall designate,

 

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wherein and whereby lessees rights, titles and interests in and to thereal property and the improvements are subordinated to the lien of any mortgageor mortgages to be made, executed and delivered by Lessor as security for thatloan or loans; provided, however, that the subordination shall be upon thefollowing conditions:

a. The execution of the subordination agreement or agreements by Lessorshall impose no personal liability whatsoever upon Lessee.

b. Any such mortgage -or mortgages shall provide that the mortgageeshall agree to give to Lessee all notices required to be given to Lessor asmortgagor under the terms and conditions of those mortgages, or any loanagreement or agreements, or under the laws of the state where the leasedpremises are situated.

c. The mortgage or mortgages shall further provide that in the event ofany default on the part of Lessor under the terms and conditions thereof or theobligation secured, Lessee may, at its own election, cure such default, and anyamount expended by Lessee in so doing shall be paid by Lessor to Lessee, withinterest thereon at the maximum legal rate per annum from the time or times anyexpenditure or expenditures for such purpose were made, upon demand by Lesseetherefor.

d. Lessor shall indemnify and hold harmless the Lessee of and from anyand all liability, cost or expense to which Lessee may be put by reason of thefailure of Lessor to keep and perform any of the covenants and agreements setforth and contained in such mortgage or mortgages and the obligations therebysecured.

 

2.31. Sale by Lessor. In the event of a sale or conveyance by Lessor ofall or part of the leased premises, the same shall operate to release Lessorfrom any future liability upon any of the covenants or conditions, express orimplied, herein contained in favor of Lessee, and in such event Lessee agreesto look solely to the responsibility of the successor in interest of Lessor inand to this lease. This lease shall not be affected by any such sale, andLessee agrees to the purchaser or assignee.

 

2.32. Applicable Law. This lease shall be subject to and governed bythe laws of the state where the leased premises are situated, regardless of thefact that one or more of the parties now is or may become a resident of adifferent state.

 

2.33. Assignment of Personal Property Warranties. Lessor hereby assignsto Lessee any and all rights it has under any manufacturers’ or dealers’warranties covering the personal property and fixtures leased herein.

 

2.34. Prorations. If any probations are required to be made under theterms of this lease, the prorations shall be made as of the first day of thelease term.

 

PART THREE GENERAL LEASE PROVISIONS

 

3.1 Arbitration. At the option of either party, disputes may be settledby arbitration. The manner of arbitration shall be as follows:

The parties adopt by reference the provisions of the “UniformArbitration Act” and agree that, should any bona fide disputes arise out ofthis agreement or out of the agreed performances of the parties pursuantthereto, the parties may elect to arbitrate that dispute by the Lessor andLessee selecting and agreeing upon a disinterested attorney to serve asarbitrator.

Should one of the parties or his attorney refuse or delay the selectionof an arbitrator for more than ten days after the mailing of written notice,mailed to its last known address, stating a desire to arbitrate, then the partydesiring arbitration may petition the court or a court commissioner ex. parteto have an arbitrator selected, and the costs and reasonable attorneys fees forthis shall be charged against the delinquent party in the arbitration award.

The parties shall share the costs of the arbitrator’s services, complywith his arbitration procedures, and abide by his award within ten days afterreceiving a copy of his decision.

If for some reason, the parties cannot agree on a disinterestedattorney, then the parties shall each select one attorney apiece, and these twoattorneys shall select a disinterested attorney.

The arbitrator shall assess the fees of the arbitrator against thelosing party based upon the prevailing hourly rates and out-of-pocket expenses.

 

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After the award by the arbitrator, should the losing party take thematter to court, then the arbitrator shall set an amount as reasonableattorneys? fees and costs of the contemplated court proceedings for the losingparty to pay to the other party as a prerequisite to the filing of a court actionby the losing part.

Should it be necessary for either party to seek the assistance of acourt to enforce the arbitration award, then, in that event, the losing partyshall pay to the winning party an amount which is determined by the court forthe court costs, reasonable attorneys’ fees, and the time lost to the winningparty for his or his agents having to prepare for and appear in a court action.

 

3.2. Corporate Lessee. If Lessee is a corporation, then if, at any timeduring the term of this lease, any part or all the corporate shares shall betransferred by sale, assignment, bequest, inheritance, operation of law orother disposition, so as to result in a change in the present control of thecorporation by the person or persons now owning a majority or the corporateshares, Lessor may terminate this lease and the demised term at any time aftersuch change in control by giving lessee GO days prior written notice of suchtermination.

 

3.3. Corporate Authority. If Lessee is a corporation, each person executingthis lease represents and warrants that he is duly authorized to execute anddeliver this lease on behalf of the corporation. Those persons furtherrepresent that the terms of this lease are binding upon the corporation. Thecorporation shall deliver to Lessor a certified copy of its Board of Directorsresolution ratifying or authorizing the execution of this lease within thirty(30) days after its execution.

 

3.4. Nature of Relationship Between Parties. The sole relationshipbetween the parties created by this agreement is that of Lessor and Lessee.Nothing contained in this lease shall be deemed, held, or construed as creatinga joint venture or partnership between the parties.

 

3.5. Notices. Copies of all notices and communications concerning thislease shall be mailed to the parties at the addresses written on page one ofthis lease, and any change or address shall be communicated to the other partyin writing. Any documents which may adversely affect the rib-his of any partyto this lease shall be dispatched by certified mail, return receipt requested.For all documents mailed to persons in the continental United States, the timeperiod on all notices shall begin running on the day following the date thatthe document is postmarked. For documents mailed to persons outside thecontinental United States, the time period begins to run on the date that thedocument is received by the other party.

 

3.6. Waiver and Consent. lessors consent to or waiver of any of theterms or conditions of the lease on any one occasion shall not be deemed awaiver or consent with regard to any such term or condition for any otheroccasion or to any other act or conduct. The waiver by Lessor of any breach ofany term, covenant or condition herein contained shall not be deemed to be awaiver of any subsequent breach of the same or any other term, covenant orcondition.

Whenever under this lease provision is made for Lessee to secure thewritten consent or approval by Lessor, such consent or approval shall be inwriting and shall not be unreasonably withheld.

No covenant, term or condition of this lease shall be waived except bywritten consent of the Lessor and the forbearance by Lessor in any regardwhatsoever shall not constitute a waiver or the covenant, term or condition tobe performed

 

3.7. Provisions of Lease. Each term and each provision of this lease tobe performed by Lessee shall be construed to be both a covenant and acondition.

 

PART FOUR CONSTRUCTION AND INTERPRETATION

4.1. Entire Agreement. The terms of this document constitute the entireagreement between the parties, and the parties represent that there are nocollateral agreements or side agreements not otherwise provided for within theterms of this agreement

 

4.2. Interpretation.  Wheneverany word is used in this agreement is the masculine gender, it shall also beconstrued as being used in the feminine and neuter genders, and singular usageshall include the plural and vice versa, all as the context shall require.

 

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4.3. Partial Invalidity.      If anyprovision of the contract is held to be invalid or unenforceable all theremaining provisions shall nevertheless continue in full force and effect.

4.4. Marginal Headings. The marginal and topical headings of theparagraphs of this agreement tire for convenience only and are not to beconsidered a part of this agreement or used in determining its content. orcontext.

 

4.5. Modification. Any modification or amendment of this agreementshall be in writing and shall be executed by all parties.

 

4.6. Succession of Benefits. The provisions of this agreement shallinure to the benefit of and be binding upon the parties thereto, their heirs,executors, administrators and permitted assignees

 

4.7. Time. Time is of the essence in this agreement for each and everyterm, condition, covenant and provision.

 

PART FIVE EXECUTION. ACCEPTANCE AND ACKNOWLEDGMENT

5. I. Effective Date. This legal instrument has been executed by theparties intending that it be effective on the effective date set forth on thecaption page. The panics recognize that they effectuated a meeting of the mindsamong themselves on that effective date and intended that this instrument takeeffect on that date even though because of the exigencies of the modem world,the mechanics of drafting, the convenience of the panics, and the economy oftravel, it may have been necessary to actually sign and notarize the documentsat a later time.

 

5.2. Effective Place of Execution. The panics intend that the place ofexecution be that county and state that is set forth in the caption of thisinstrument. The effective place of execution is the place that the partiesintend this instrument to have been executed incorporating all laws, forpurposes of conflicts of laws, which apply to that effective place of execution.The parties recognize that, due to the exigencies of the modem world, themechanics of drafting, the convenience of the parties, and the economy oftravel, this instrument may be executed by one or all the parties al some othergeographic place and possibly at multiple places. However, in spite of this,they intend that it be deemed executed at the effective place of execution.

 

5.3. Interlineations and Initials. The parties recognize that becauseof the exigencies of die modem world, the mechanics of drafting, theconvenience of the parties, and the economy of costs, they may have in theirown handwriting made minor changes in this instrument. These minor changes havebeen initialed by all parties, if any changes have been made, fore and aft ofthe change on all originals to prevent any extension or alteration of thatchange by any of the parties or others. Unless otherwise indicated by theplacement of a date beside the change, these changes were intended by theparties to have occurred as of the effective date of this instrument. Anyinterlineated changes made by the parties after the effective date of thisinstrument shall be initialed by all parties, dated, and have the date itselfinitialed fore and aft by all parties to this instrument.

 

5.4. Execution. All parties named in the caption as parties shall signbelow and at least one of the parties shall initial all pages of all originalcopies of this instrument. Furthermore. all documents such as schedules,exhibits and like documents which are expressly incorporated herein shall beinitialed by all parties and either exchanged or attached to the originalswhich are given

to any party named on the caption page of this instrument. It is theintent of the parties that all pages be initialed on all originals that areexchanged in order that no substituted pages or misunderstanding shall everbecome possible to create problems in satisfying the intended objectives ofthis instrument.

 

5.5. Acknowledgment. The notary publics who have acknowledged thesignatures of the various parties as designated in the acknowledgments hereofcertify that this instrument was acknowledged by the signing party before thenotary on the date of the notarization. If the instrument was subscribed by anyof the panics in a representative capacity, then the notary ascertained thatthe signing party signed for the principal named by that party and in thecapacity in which that party indicated he signed.

 

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Additional numbered provisions are attached as an addendum

NO Partners          Sensory ScienceCorp.

 
| /s/ Robert Newstead Partner       |   |
|-----------------------------------|--------|
| LESSOR                            |
| STATE OF ARIZONA                  |
| Acknowledgment COUNTY OF MARICOPA |
|                              |
| /s/ Doug McClain                  |   |
| Signature LESSEE                  |
|                                   |        |  |

On this date, before me, a Notary Public, personally appeared known tome or satisfactorily proven to be the person whose name is subscribed to thisinstrument and acknowledged that he executed the same. If this person’s name issubscribed in a representative capacity, it is for the principal named end inthe capacity indicated.

Date of Acknowledgment

Signature of Notary Public

My Commission Expires:

 

STATE OF ARIZONA

Acknowledgment COUNTY OF MARICOPA)

On this date, before me, a Notary Public, personally appeared known tome or satisfactorily proven to be the person whose name is subscribed to thisinstrument and acknowledged that he executed the same. If this person’s name issubscribed in a representative capacity, it is for the principal named and inthe capacity indicated.

Date of Acknowledgment

Signature of Notary Public

My Commission Expires:

 

This instrument was recorded at the request of

STATE OFARIZONA          }            CERTIFICATE, OF

COUNTY OF MARICOPA}               RECORDATION

I certify that this instrument was recorded on the date, at the time.in the docket, beginning with the page number, and with the fee number stampedin the top apace of this instrument. If the instrument is of multiple pages.the docket and page set forth represent the first page of that instrument andthat instrument extends through Docket   Page

The recording official is directed to return this instrument or e copythereof to the above person,

County Recorder    Deputy

 

PART SEVEN

Rental and CAM Rates (Initial Term)

 
| **Section 7.1  Rent** |   | **CAM** |   | **Total +  Tax** |   |
|-----------------------|--------|---------|--------|------------------|--------|
|                  |   |    |   |             |   |
| Year 1  $9,956.00/Mo  |   | $       | 262.00 | /Mo              | $      | 10,218 00 | /M |
| Year 2 $10  255.00/Mo |   | $       | 270.00 | /IMo             | $      | 10,525.00 |   |
| Year 3 $10,562.00/IMo |   | $       | 278.00 | /Mo              | $      | 10,840.00 |   |
| Year 4 $10,879.00/Mo  |   | $       | 286.00 | /Mo              | $      | 11,165.00 |   |
| Year 5 $11,206.00/Mo  |   | $       | 295.00 | /Mo              | $      | 11,501.00 |   |

 

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Rental and CAM Rates (Optional 5 Year Lease Extension)

 
| **Section 7.2** |   | **Rent** |      | **CAM** |   | **Total f+  Tax** |   |
|-----------------|--------|----------|-----------|---------|--------|-------------------|--------|
|            |   |     |      |    |   |              |   |
| Year 6          |   | $        | 11,542.00 | /Mo     | $      | 304.00            | IMo    | $ | 11,846.00 |   |
| Year 7          |   | $        | 11,888.00 | /Mo     | $      | 313.00            | Mo     | $ | 12,201.00 |   |
| Year 8          |   | $        | 12,245.00 | /IMa    | $      | 322.00            | /Mo    | $ | 12,567.00 |   |
| Year 9          |   | $        | 12,612.00 | /Mo     | $      | 332.00            | /IMo   | $ | 12,944.00 |   |
| Year 10         |   | $        | 12,990.00 | /Mo     | $      | 342.00            | /Mo    | $ | 13,332.00 |   |

 

Section 1.8 (Continued):

Notwithstanding any other provisions in Section 1.8, the increase inproperty tax reflecting the improvements to the building made by the Lessee andLessor under the terms of this agreement will not be passed on to the Lessee.Any normal tax increases before or after the reassessment of the building willbe passed on to the Lessee on a prorated basis.

 

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When recorded return to: SNELL & WTLMER One Arizona Center Phoenix,Arizona 850(}4 Attn: Sam Cowley, Esq.

FIRST AMENDME NT TO LEASE OF COMMERCIAL SPACE STANDARD

THIS FIRST AMENDMENT TO LEASE of Commercial SPACE STANDARD

(the “amendment” is executed as of this 10 day of by and between NOPartners, an Arizona general partnership (“Lessor”) and Sensory Science Corporation,a Delaware corporation (“Lessee”).

RECITALS

A.            Lessor and Lesseepreviously entered into that certain Lease of Commercial Space, Standard datedNovember l, 1999 (the “Lease”) with respect to the premises further describedin the Lease (the “Premises”).

B.            Lessor desires tolease to Lessee and Lessee desires to lease from Lessor ten (10) additionalparking spaces as shown an. Exhibit A (the “Parking hereof

C.            Lessor and Lesseenow desire to amend the Lease in accordance with the terms

NOW, THEREFORE, for good and valuable consideration, the receipt andsufficiency of which is hereby acknowledged, the parties agree as follows:

l .             Page 1 of theLease is amended to provide that in addition to Suites 1 & 2 of 7863 EastMcClain Road,, the Premises shall include the Parking Area depicted on ExhibitA.

 

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2.             Section 1.28 of theLease is amended to provide that in addition to the parking areas specificallydesignated by Lessor for use by Lessee, Lessee shall be entitled to use theParking Area.

3.             The last sentenceof Section 1.28 of the Lease shall not apply to the Parking Area.

4.             Except as providedin this Amendment, capitalized terms shall have the meaning set forth in theLease.

5.             Except as amendedhereby, the Lease shall remain in full force and effect.

6.             This Amendment maybe executed in any number of counterparties, each of which shall be anoriginal, but all of which shall constitute one instrument.

1N WITNESS whereof OF, this Amendment is executed as of the first dayand year written above.

LESSOR:

NO PARTNERS, ail Arizona general partnership

 

LESSEE:

SENSORY SCIENCE CORPORATION, a Delaware corporation

 

ACCEPTED AND APPROVED.,

CITY OF SCOTTSOALE, an Arizona municipality

By: Its;

 

STATE OF ARIZONA

) ss. County of Maricopa    )

foregoing instrument was acknowledged before me this 10thday of April, 2000. of. NO Partners, an Arizona general partnership behalf ofthe partner ship.

 

My Commission Expires

 

STATE OF ARIZONA

County of Maricopa

The foregoing instrument was acknowledged before me this 17thday of April, 2000 by Down Lodrozny, the VP of Sensory Science Corporation, aDelaware corporation, on behalf o the corporation.

 
| /s/ Betty Culton       |   |
|------------------------|--------|
| Notary public          |
| My Commission Expires; |

 

 

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