exv10w13






Exhibit 10.13




LEASE



THIS LEASE made and entered into this 25th day of Oct., 2004, by and between J. P.
H. Development Corp. (hereinafter “Landlord”) and Xstream Systems (hereinafter “Tenant”).




 W I T N E S S E T H



In consideration of the mutual covenants and agreement herein contained, it is agreed by and
between Landlord and Tenant as follows:




     1. Demised Premises; Term:


Landlord hereby leases to Tenant the premises in Indian River County, Florida, described as




	 	 	 
	Address:

	 	3873 39TH Square, Vero Beach, FL 32960
	 

	 	2,400 SF, Bay 14, Gateway Industrial Center





For the term of five (5) years, beginning at 12:01 a.m. on the first (1st) day of
November 2004, and ending at 11:59 p.m. on the 31th day of October 2009. Lessee, at
Lessee’s option, shall have the right to renew this Lease for a five-year term under the same terms
and conditions herein stated.




     2. Minimum Rent:


Tenant shall pay to Landlord for the term of this lease a minimum annual rent of $19,020.00,
payable monthly in advance in the amount of $1,585.00, plus applicable sales tax at seven percent
(7%) in the amount of $110.95, due on the first day of each month (“Rent Day”) during the term of
this Lease. The sum of $3,391.90, representing the first and last months rent, plus applicable
sales tax, is due on the first (1st) day of October 2004.




     3. Use:


Tenant will use the leased property only for Commercial/Industrial/Administrative, and will make no
unlawful, improper, or offensive use of the lease property. Tenant agrees to conduct its business
in a proper and ordinary manner and will not do or suffer anything to be done to the detriment of
said premises nor permit or suffer of any waste, reasonable wear and tear accepted, nor permit said
premises or the common area to be used for any illegal, vicious or immoral purposes.




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     4. Additional Rent:


Landlord and Tenant mutually agree that the rental rate will increase during the third through
fifth year of the initial lease period as follows:




	 	 	 	 	 
	November 1, 2005 to
October 31, 2006:

	 	Rental Rate:
	 	$ 1,625 month + sales tax
	November 1, 2006 to
October 31, 2007

	 	Rental Rate:
	 	$ 1,665 month + sales tax
	November 1, 2007 to
October 31, 2008

	 	Rental Rate:
	 	$ 1,710 month + sales tax
	November 1, 2008 to
October 31, 2009

	 	Rental Rate:
	 	$ 1,750 month + sales tax






     5. Late Payments:




	 	A.	 	If the monthly rent payment is not received on or before the
tenth (10th) day of the month for which the rent is due, there
will be a late charge of five percent (5%) of the amount of rent
due. If a rent check is received and it is returned because of
insufficient funds, there will be a charge of five percent (5%) of
the amount of rent due plus any costs charged by the bank for
the return of the check.
	 
	 	B.	 	If any rent, late charges, or other sums payable by Tenant to
Landlord under the Lease are not paid within ten (10) days after
the same are due, they will bear interest at a premium rate of
fifteen percent (15%), which interest will be due and payable as
additional rent on or before the next Rent Day and will accrue
from the date such sums are payable under the provisions of
this Lease until actually paid by Tenant.





     6. Indemnity and Liability Insurance:


Lessee agrees to and does hereby indemnify and save Lessor harmless against any and all claims,
demands, damages, costs and expenses, including reasonable attorneys’ fees for the defense thereof,
arising from the conduct or management of the business conducted by Lessee in the demised premises,
or from any breach or default on the part of Lessee in the performance of any covenant or agreement
on the part of Lessee to be performed, pursuant to the terms of this Lease, or from any act or
negligence of Lessee, its agents, contractors, servants and employees, in or about the demise
premises, the sidewalks adjoining same and the other areas of the complex used by Lessee in common
with others, unless caused by or due to the act, omission, fault, negligence or misconduct of
landlord or its agents, servants or employees. In the event any action or proceeding is brought
against Lessor by reason of any such claim, Lessee covenants to defend such action or proceeding by
counsel reasonably satisfactory to Lessor. Lessee will, during the term of this





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lease, at its own cost and expense, maintain and provide general liability insurance for the
benefit and protection of Lessor and Lessee (said policy to name Lessor as an additional insured),
in an amount not less than $1,000,000.00 for bodily injury and property damage, and $50,000.00 for
fire damage legal liability. Policy should also include a provision for $5,000.00 of medical
payment per person arising out of any one accident or occurrence. Said policy shall cover the
demised premises, the side walks adjoining same and the other areas
of the complex used by Lessee.
The public liability policy or a certificate thereof shall be delivered to Lessor at the
commencement of the term, together with proof of payment of premium and renewals thereof not less
than twenty (20) days before its expiration date. Said policy and/or certificate shall contain an
undertaking by the insurer to give Lessor not less and thirty (30) days written notice of any
cancellation or change in scope or amount of coverage of such policy. If Lessee fails to comply
with this requirement, Lessor may obtain such insurance and keep same in effect and Lessee shall
pay Lessor the cost thereof upon demand as additional rent.



The Lessee shall be responsible for maintaining plate glass insurance and provide a copy of said
insurance to the Lessor at the time of occupancy. If the Lessee fails to maintain said insurance,
the Lessor shall have the right to obtain said insurance and charge the Lessee for said premium.




     7. Common Areas and Common Area Maintenance:




	 	A.1.	 	 Landlord shall be responsible only for major repairs that may be
required to the roof of the building and exterior painting if required. Landlord to
provide lawn maintenance, landscaping and maintenance of the parking lot area.
	 
	 	2.	 	Tenant shall be responsible for repairs to the air-conditioning and
heating system up to Five Hundred ($500.00) Dollars in cost. Tenant to provide
janitorial service during the Lease period.






B. Tenant shall at all times keep the leased premises and all partitions,
doors, fixtures, equipment and appurtenances thereof (including lighting,
heating and plumbing fixtures) in good order and condition, except for
structural portions of the premises, which shall be maintained by Landlord.
If Landlord is required to make repairs to structural portions by reason of
Tenant’s negligent acts of omission to act, Landlord may add the cost of
such repairs to the rent, which shall thereafter become due.




C. If tenant refuses or neglects to repair property as required hereunder
and to the reasonable satisfaction of Landlord as soon as reasonably possible



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after written demand, Landlord may make such repairs without liability to Tenant’s
merchandise, fixtures, or other property or to Tenant’s business by reason thereof, and
Tenant shall pay Landlord’s costs for making such repairs plus twenty (20%) percent for
overhead, upon presentation of bill therefore, as additional rent.




D. Utilities: Tenant shall be responsible for all utility costs applicable to its
portion of the building.



     8. Damage by Fire or Other Casualty:


If the leased premises is damaged by fire or other casualty to the extent of twenty (20%) percent
or more, the Landlord shall have the option to rebuild and repair the leased premises or to
terminate this Lease; if damaged to a lesser extent, the Landlord will rebuild and repair. Landlord
must give written notice within forty-five (45) days of its intent. In the event of damage by fire
or other casualty, the rent payable under this Lease shall abate in proportion to the portion of
this Lease, until the premises are rebuilt or repaired (or until the Lease is terminated, if
terminated in accordance with this paragraph).




     9. Damage to Tenant’s Property:


All personal property placed in the leased premises shall be at the risk of the Tenant or owner
thereof, and the Tenant assumes all risks of any damage to Tenant’s property that may occur by
reason of water or the bursting or leaking of any pipes or waste water about said premises or from
any active negligence of any co-tenant or occupants of the building, or of any other persona, or
fire, or hurricane or other act of God, or from any cause whatsoever, unless caused by or due to
the act, omission, fault, negligence or misconduct of Landlord or its agents, servants, or
employees.




     10. Remedies for Failure to Pay Rent:


If any rent required by this Lease shall not be paid when due, Landlord shall have the option after
five (5) days written notice to:





A. Terminate this Lease, resume possession of the property for his own
account and recover immediately from the Tenant the difference between the
total rent specified for the full term of this Lease and the total amount of rent
already paid by Tenant; or




B. Resume possession and re-lease or rent the property for the remainder
of the term for the account of the Tenant, and recover from Tenant, at the



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end of the term or at the time each payment of rent comes due under the Lease as the
Landlord may choose the difference between the rent specified in the Lease and the rent
received on the re-leasing or renting.


In any event, Landlord shall also recover all expenses incurred by reason of the breach, including
a reasonable attorney’s fees.




     11. Remedies for Breach of Agreement:


If either the Landlord or the Tenant shall fail to perform, or shall breach any agreement of this
Lease other than non-payment of rent, and such failure or breach continues for thirty (30) days
after written notice to the party in default, the party giving notice may institute action in a
court of competent jurisdiction to terminate this Lease or to compel performance of the agreement,
and the prevailing party to that litigation shall be paid by the losing party all expenses of such
litigation, including reasonable attorney’s fees and court costs.




     12. Access By Landlord:


The Landlord may enter, inspect and make such repairs to the leased property, as the Landlord deems
necessary at all reasonable times.




     13. Assignment or Subleasing:




A. No Assignment of this Lease or sublease of any part of the leased
property by the Tenant or any Assignee or Sublessee shall be valid without
written consent of the Landlord, and such consent shall be in the sole
discretion of the Landlord. No assignment or sublease shall relieve the
Assignor or Sublessor of any obligation under this Lease.




B. The Landlord shall have the right, at any time, to assign this Lease as
collateral security for any mortgage for any indebtedness of the Landlord
whatsoever, or to sell the leased premises.



     14. Notice, Address:


All rent payable and notice given under this Lease to the Landlord shall be paid and given to
J.P.H. Development Corp., 3880 39th Square, Vero Beach, Florida 32960 or such other
place as the Landlord shall specify in writing. All notices given under the Lease to the Tenant or
any Assignee or Sublessee shall be given at the Leased premises. Any notice property mailed by
registered mail, postage and fee prepaid, shall be deemed delivered 48 hours after mailed, whether
received or not.





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     15. Termination:




A. At the termination of this Lease, by lapse or time as otherwise
provided herein, Tenant shall yield up immediate possession to the
Landlord, and failing to do so, shall pay as liquidated damages for the whole
time such possession is withheld, a sum equal to double the pro rata rent per
day; however, the provisions of this clause shall not be held as a waiver by
the Landlord of any right of re-entry as otherwise set forth herein; nor shall
the receipt of said rent, or any part thereof, or any other act in apparent
affirmance of the tenancy, operate as a waiver of the right to enforce the
provisions of this paragraph.




B. The Landlord shall have the right and option to terminate this Lease,
said termination to be effective immediately upon Landlord’s exercise of
such option, in the event of any of the following: Tenant is adjudicated a
bankrupt or insolvent, or takes the benefit of a reorganization against
creditors’ action; or Tenant’s leasehold interest is levied upon; or a receive is
appointed for Tenant; or Tenant fails to take possession of the premises
within ninety (90) days after notice of the Landlord that the premises is
ready for occupancy; or Tenant fails to open for business for any continuous
sixty (60) day period during the term of this Lease.



     16. Alteration and Improvement; Condition At Termination:




A. No alterations or improvements shall be made to the premises except
with the consent of the Landlord. Tenant shall cause no alterations or
improvements that would subject the Landlord’s interest to any mechanic’s
lien or claim of lien. In the event that any lien is filed against the property
for any work, labor or services provided to the premises at the request of the
Tenant, then the Tenant covenants and agrees to immediately bond or
discharge the said lien and to fully indemnify and hold the Landlord
harmless of any costs, fees, loss and charges, including attorney’s fees and
court costs, which may arise by reason of such lien or claim of lien.




B. The Tenant shall return the property to the Landlord in as good
condition as when first occupied, reasonable wear and tear accepted.



     17. Offset Statement, Subordination and Non-Disturbance:




A. Offset Statement: Within ten (10) days after request therefore by Landlord, or in the
event of any sale, assignment or hypothecation of the leased premises and/or the land
thereunder by Landlord, Tenant shall



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provide an estoppel letter or statement. Tenant further agrees to deliver in recordable form a
certificate to any proposed mortgage or purchaser, or to the Landlord, certifying (if such be
the case) that this Lease is in full force and effect and that there are no defenses or offsets
thereto, or stating those claimed by Tenant.




B. Subordination: Tenant agrees that its interest in the leasehold
premises is subordinate to the lien of any mortgage or mortgages, future
advances thereunder, or the lien resulting from any other method of
financing or refinancing, now or hereafter in force against the land and/or
buildings of which the leased premises are a part, and to all advances made
or hereafter to be made upon in the security thereof. Tenant further agrees
that it will, promptly and without charge, execute any documents required by
the Landlord or its mortgages to evidence this subordination.




C. Subordination: In the event any proceedings are brought for the
foreclosure of, or in any event of exercise of the power of sale under, any
mortgage covering the premises or in the event a deed is given in lieu of
foreclosure of any such mortgage, Tenant shall attorn to the purchaser, or
grantee in Lieu of foreclosure, upon any such foreclosure or sale and
recognize such purchaser, or grantee in lieu of foreclosure, as the Landlord
under this Lease. Provided, however, that if this Lease is in full force and
effect, the right to possession of Tenant to the Premises and Tenant’s right
arising out of this Lease shall not be affected or disturbed by the rights of the
mortgage in the exercise of any rights under the mortgage or note secured
thereby, nor shall Tenant be named as a party defendant to any foreclosure
to the lien of the mortgage. In the event that the mortgagee, or any person,
acquires title to the premises pursuant to the exercise of any remedy
provided for in the mortgage, this Lease shall not be terminated or affected
by said foreclosure or sale, or any such proceeding, and the mortgagee shall
agree that any sale of the premises pursuant to the exercise of any rights and
remedies under the mortgage, or otherwise, shall be made subject to this
Lease and the rights of Tenant hereunder.




D. Attorney-In-Fact: The Tenant, upon request of any party in interest,
shall execute promptly such instruments or certificates to carry out the intent
of Sections B. and C. above as shall be requested by Landlord. If fifteen
(15) days after the date of a written request by Landlord to execute the same,
Tenant shall unduly withhold his signature, Tenant will be deemed in default
and Landlord may pursue all remedies under this Lease.



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     18. Attorney’s Fees, Costs, Venue:


In any litigation arising out of this Lease, venue shall be in Indian River County, Florida, and
the prevailing party shall be entitled to recover reasonable attorney’s fees and costs.




     19. Time:


It is understood and agreed that time is of the essence of this Lease and of all the terms,
conditions and provisions contained herein.




     20. Condemnation:


If any part of the leased premises shall be taken by eminent domain, and a part remains which is
susceptible of occupation hereunder for the purpose described herein, as to the part taken, the
Lease shall terminate as of the date title shall vest in the condemnor, and the rent payable
hereunder shall be adjusted so the Tenant shall be required to pay for the remainder of the term
only such portion of such rent as the number of square feet of the part remaining after the
condemnation bears to the number of square feet in the entire leased premises at the date of
condemnation. All compensation awarded upon such condemnation or taking shall go to the Landlord,
including any right to compensation or damages to which the Tenant may be entitled during the term
hereof by reason of the condemnation of all, or a part, of the leased premises. If the remainder of
the premises after condemnation is not suitable for the use described herein, the Lease shall be
terminated as of the date title vests in the condemnor. In any event, Landlord shall have the
option to terminate this Lease as of the date title to all or any part of the premises vests in the
condemnor.




     21. Broker’s Commission:


Landlord will be responsible for the payment of any brokerage fees due as a result of this lease
agreement.




     22. Signs


All exterior signs must have prior written approval of the Landlord and no unsightly signs shall be
erected or permitted to remain on the exterior of the leased premises or on either side of the
windows or doors of the leased premises.




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     23. Rights Cumulative:


The rights of the Landlord under the foregoing shall be cumulative, and failure on the part of
the Landlord to exercise promptly any rights given hereunder shall not operate to forfeit any
of the said term.




     24. Radon Gas:


Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in
sufficient quantities, may present health risk to persons who are exposed to it over time. Levels
of radon that exceed Federal and State Guidelines have been found in buildings in Florida.
Additional information regarding radon and radon testing may be obtained from the Indian River
County Public Health unit.




     25. Security Deposit:


The Tenant agrees to pay a security deposit of $1,585.00 upon execution of this Lease.




     26. Entire Agreement:


This instrument contains the entire and only agreement between the parties concerning the demised
premises and no prior or oral or written statements or representations not contained in this
instrument shall have any force or effect. This Lessee shall not be modified in any way except in
a writing executed by Landlord and Tenant, and no oral agreement or representations for rent
shall be deemed to constitute a Lease other than this Agreement.




	 	 	 
	WITNESSES:

	 	J. P. H. DEVELOPMENT CORP.
	 
	 	 
	/s/ W. L. Becker

	 	/s/ J. P. Hill
	 

	 	 
	 

	 	J. P. Hill, President
	/s/ Jane
E Moree
	 	 
	 
	 	 
	 
	 	 
	 

	 	XSTREME SYSTEMS
	 
	 	 
	/s/ W. L. Becker

	 	/s/ Roger T. Sobkowiak
	 

	 	 
	 

	 	Roger T. Sobkowiak, COO
	/s/ Jane
E Moree
	 	 
	 
	 	 






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