exv10w25





Exhibit 10.25




OFFICE LEASE AGREEMENT




 






ANCONA OFFICE CENTRE




 






LEASE AGREEMENT




EXHIBITS:

Premises (A)

Rules and Regulations (B)

Parking Rules and Regulations (C)

Work Letter (D)

Space Plan (E)




ADDENDUM




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OFFICE LEASE AGREEMENT



THIS OFFICE LEASE AGREEMENT, dated November 15, 2005 is made and entered into by E & V Investments
LLC, an Arizona Limited Liability Company, (the “Landlord”) and Global Water Management, LLC (the
“Tenant”). In consideration of the mutual promises and representations set forth in this Lease,
Landlord and Tenant agree as follows:




ARTICLE 1. SUMMARY AND DEFINITION OF CERTAIN LEASE PROVISIONS AND EXHIBITS





	1.1	 	The following terms and provisions of this Lease, as modified by other terms and provisions
hereof, are included in this Section 1.1 for summary and definitional purposes only.
If there is any conflict or inconsistency between any term or provision in this Section
1.1 and any other term or provision of this Lease, the other term or provision of this
Lease shall control:





	 	 	 	 	 
	 

	 	(a) Landlord:
	 	E & V Investments, LLC
	 
	 	 	 	 
	 

	 	(b) Address of Landlord for Notices:
	 	Los Arcos Realty & Management
	 

	 	 	 	Attn: Linda Maughan 
14415
N. 73rd Street, #100
	 

	 	 	 	Scottsdale, Arizona 85260
	 

	 	 	 	(480) 443-8287
	 
	 	 	 	 
	 

	 	(c) Tenant:
	 	Global Water Management, LLC
	 
	 	 	 	 
	 

	 	(d) Address of Tenant for Notices:
	 	21410 North 19th Avenue, Suite #201
	 

	 	 	 	Phoenix, Arizona 85027







	 	(e)	 	Lease Term: April 1, 2006 through November 30, 2011 as further defined in
Article 3.
	 
	 	(f)	 	Building: The office building known as ANCONA OFFICE CENTRE, located at
21410 North 19th Avenue, Phoenix, Arizona 85027 (the “Building”).
	 
	 	(g)	 	Premises: Suite 201 on the second floor of the Building, as shown on
Exhibit A,
consisting of approximately 20,574 Rentable Square Feet.
	 
	 	(h)	 	Minimum Monthly Rent: Upon execution hereof, Tenant shall remit to Landlord
rent in the amount of $19,288.13 plus applicable rental tax of $462.92 (currently 2.4%)
for the period April 1, 2006 through April 30, 2006. Thereafter, rent shall be as follows:
$19,288.13 ($11.25 psf) plus applicable sales tax for each full calendar month commencing
on May 1, 2006 through April 30, 2007; $39,433.50 ($23.00 psf) plus applicable sales tax
for each full calendar month commencing on May 1, 2007 through April 30, 2008; $40,290.75
($23.50 psf) plus applicable sales tax for each full calendar month commencing on May 1,
2008 through April 30, 2009; $41,148.00 ($24.00 psf) plus applicable sales tax for each
full calendar month commencing on May 1, 2009 through April 30, 2010; $42,005.25 ($24.50
psf) plus applicable sales tax for each full calendar month commencing on May 1, 2010
through November 30, 2011;




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	 	(i)	 	Tenant’s Base Share: (see Article 5).
	 
	 	(j)	 	Expense Stop: Based on actual expenses in 2006 grossed up to 95% occupancy.
	 
	 	(k)	 	Security Deposit: A Security Deposit of $42,005.25 is required at
the time the Lease is signed by Tenant unless waived by Landlord upon review of
Tenant Financial
Information.
	 
	 	(l)	 	Parking: Nineteen (19) covered reserved spaces included at no extra
charge for the initial Lease Term. An additional Seventy-two (72) uncovered and
unreserved parking spaces shall be provided for Tenant.
	 
	 	(m)	 	Building Hours: 7:00 am to 6:00 p.m. Monday through Friday; 7:00 am to 12:00 p.m.
Saturday. Closed Sundays and all legal holidays. Tenant shall have twenty-four (24)
hour, seven (7) day a week access to the Premises.






	 	1.2	 	The following exhibits (the “Exhibits”) and addenda are attached hereto and
incorporated herein by this reference:





	 	 	 	 	 
	 

	 	Exhibit A
	 	Premises
	 

	 	Exhibit B
	 	Building Rules and Regulations
	 

	 	Exhibit C
	 	Parking Rules and Regulations
	 

	 	Exhibit D
	 	Work Letter
	 

	 	Exhibit E
	 	Space Plan







	 	 	 	Addendum to Office Lease Agreement (the “Addendum”), dated of even date herewith. The Office
Lease Agreement, the Addendum, and the Exhibits are collectively referred to herein as the
“Lease.”





ARTICLE 2. PREMISES/RIGHT TO USE COMMON AREAS





	 	2.1	 	Landlord leases to Tenant and Tenant leases from Landlord the Premises, for and subject
to the
terms and provisions set forth in this Lease. This Lease is subject to all liens,
encumbrances,
parking and access easements, restrictions, covenants, and all other matters of record, the
Rules
and Regulations described in Article 14 and the Parking Rules and Regulations
described in
Article 6. Tenant and Tenant’s agents, contractors, customers, directors, employees,
invitees,
officers, and patrons (collectively, the “Tenant’s Permittees”) have a non-exclusive
privilege
and license, during the Lease Term, to use the non-restricted Common Areas in common with
all other authorized users thereof.
	 
	 	2.2	 	For purposes of this Lease, the following terms have the definitions set forth below:






	 	(a)	 	“Automobile Parking Areas” means all areas designated for automobile parking
upon the Land. Automobile Parking Areas are Common Areas, but certain parking areas
are restricted. (See Parking Rules & Regulations).
	 
	 	(b)	 	“Common Areas” means those areas within the Building and Land not leased to any
tenant
and which are intended by Landlord to be available for the use, benefit, and enjoyment of
all
occupants of the Building.
	 
	 	(c)	 	“Interior Common Facilities” means lobbies, corridors, hallways, elevator
foyers, restrooms,
mail rooms, mechanical and electrical rooms, janitor closets, and other similar
facilities used





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	 	 	 	by tenants or for the benefit of tenants on a non-exclusive basis. Access to certain
Interior Common Facilities is restricted.
	 
	 	(d)	 	“Land,” means the parcel of land containing the Building;
	 
	 	(e)	 	“Load Factor” means the quotient of the Rentable Square Footage of the Building
divided by
the aggregate Usable Square Footage of all premises and occuppiable space in the
Building,
and is subject to change from time to time.
	 
	 	(f)	 	“Rentable Square Footage” means (1) with respect to the Building, the sum of the total
area of all floors in the Building (including Interior Common Facilities but excluding
stairs,
elevator shafts, vertical shafts, parking areas and exterior balconies), computed by
measuring
to the exterior surface of permanent outside walls; and (2) with respect to the Premises,
the
Usable Square Footage of the Premises multiplied by the Load Factor.
	 
	 	(g)	 	“Usable Square Footage” means the area of the Premises (or other space
occupiable by
tenants as the case may be) computed by measuring to the exterior surface of permanent
outside walls, to the midpoint of corridor and demising walls and to the Tenant side of
permanent interior walls and Interior Common Facilities walls (other than corridor
walls).





ARTICLE
3. TERM





The term of this Lease shall be Sixty Seven (67) months, plus the remainder of any partial
calendar month in which the Lease Term commences, commencing on April 1, 2006, the
Commencement Date, and expiring November 30, 2011.




3,1 Delay in Possession: Landlord agrees to use its best reasonable efforts to deliver
possession of the Premises to Tenant by the Commencement Date. If, despite said efforts,
Landlord is unable to deliver possession by such date, Landlord shall not be subject to
liability thereof, nor shall such failure affect the validity of this Lease. Tenant shall
not, however, be obligated to pay Rent or perform its other obligations until Landlord
delivers possession of the Premises and, any period of rent abatement that Tenant would
otherwise have enjoyed shall run from the date of delivery of possession and continue for a
period equal to what Tenant would otherwise have enjoyed under the terms hereof, less any
days of delay caused by the acts or omissions of Tenant.




If possession is not delivered within 90 days after the Commencement Date, as the same may
be extended by any Work Letter executed by the Parties, Tenant may, at its option, by notice
in writing within 10 days after the end of such 90 day period, cancel this Lease, in which
event the Parties shall be discharged from all obligations hereunder. If such written notice
is not received by Landlord within said 10 day period, Tenant’s right to cancel shall
terminate.




If possession of the Premises is not delivered within 150 days after the Commencement Date,
this Lease shall terminate unless other agreements are reached between Tenant and Landlord,
in writing.




3.2 Early Possession If the Tenant occupies the Premises prior to the commencement date of the
lease term, all the provisions of this lease shall govern the Tenant’s occupancy. Tenant shall
pay to
Landlord no rent for such occupancy, but occupancy prior to the commencement date of the
lease term shall not change the termination date of the lease term.



ARTICLE 4. MINIMUM MONTHLY RENT





Tenant shall pay to Landlord, without deduction, setoff, prior notice, or demand, the
Minimum Monthly Rent, payable in advance on the first day of each calendar month during the
Lease Term. If the Lease Term commences on a date other than the first day of a calendar
month, the



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Minimum Monthly Rent for that month shall be prorated on a per diem basis and be paid to
Landlord on or before the Commencement Date.



ARTICLE 5. ADDITIONAL RENT/EXPENSE STOP





Tenant shall pay as additional rent each year the amount, if any, by which the Tenant’s Share of
Operating Costs during each Operating Year of the Lease Term exceeds the Base Share. For
purposes of this lease, “Base Share” means an amount equal to the product of the Rentable
Square Footage of the Premises multiplied by the Expense Stop. If the Lease Term begins or
ends anytime other than the first or last day of an Operating Year, Operating Costs and the
Tenant’s Share thereof shall be prorated. Prior to the end of each Operating Year, Landlord
shall
provide Tenant with a written statement of Landlord’s estimate of Operating Costs and Tenant’s
Estimated Share for the next succeeding Operating Year which shall be subject to Tenant’s
reasonable review and approval, which shall not
be unreasonable withheld.
No line item on
Landlord’s estimate of controllable Operating Costs shall be exceeded by more than 5% during
the year for which the estimate has been provided without the Tenant’s prior written consent. If
the Estimated Share exceeds the Tenant’s Base Share, Tenant shall pay Landlord, concurrently
with each payment of the Minimum Monthly Rent for the next Operating Year, an amount equal to
one-twelfth (1/12) of the amount by which the Estimated Share exceeds the Base Share. Landlord
may, at any time, revise the Estimated Share and adjust the required monthly payment
accordingly. Within ninety (90) days after the end of each Operating Year, Landlord shall
provide Tenant with a statement showing Tenant’s Share of the actual Operating Costs for the
preceding Operating Year (the Actual Share). If the Actual Share exceeds the Estimated Share
paid by Tenant during that Operating Year, Tenant shall pay the excess at the time the next
succeeding payment of Minimum Monthly Rent is payable (or within ten (10) days if the lease
term has expired or been terminated. If the Actual Share is less than the Estimated Share paid
by Tenant, Landlord shall apply such excess to payments next falling due under this Article (or
refund the same to Tenant or credit amounts due from Tenant if the Lease Term has expired or
been terminated). In the event the Building is not fully occupied during any Operating Year, an
adjustment shall be made by Landlord in calculating the Operating Costs for such Operating Year
so that the Operating Costs shall be adjusted to the amount that would have been incurred had
the Building been fully occupied during such Operating Year. For purposes of this Lease (a)
“Operating Costs” means and includes all costs of management, maintenance, and operation of the
Project, including but not limited to the costs of cleaning, repairs, utilities, air
conditioning, heating, plumbing, elevator, parking, landscaping, insurance, property taxes and
special assessments, and all other costs which can properly be considered operating expenses
but excluding costs of property additions, alterations for tenants, leasing commissions,
advertising, depreciation, interest, income taxes and administrative costs not specifically
incurred in the management, maintenance and operation of the Project; and (b) “Operating Year”
means a year beginning January 1 and ending December 31.




Tenants with leases expiring or terminating prior to the end of the Operating Year shall be
responsible for their portion of Operating Costs above Tenant’s Base Share based on Landlord’s
estimate of Operating Costs.



ARTICLE 6. PARKING





Nothing contained herein shall be deemed to create liability upon Landlord for any damage to
motor vehicles of Tenant’s Permittees, or from loss of property from within such motor vehicles
while parked in the Automobile Parking Areas. Landlord has the right to establish and to
enforce against all users of the Automobile Parking Areas, reasonable rules and regulations
(the “Parking Rules and Regulations). Landlord shall assign and identify Reserved Parking
Spaces. Landlord will not police nor be responsible for any vehicle parked in Tenant’s reserved
parking space.




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ARTICLE 7. RENT TAX AND PERSONAL PROPERTY TAXES





Tenant shall pay to Landlord, in addition to, and simultaneously with, any other amounts
payable to Landlord under this Lease, a sum equal to the aggregate of any municipal, county,
state, or federal excise, sales, use, or transaction privilege taxes now or hereafter legally
levied or imposed against, or on account of, any amounts payable under this Lease by Tenant or
the receipt thereof by Landlord. Tenant shall pay, prior to delinquency, all taxes levied upon
fixtures, furnishings, equipment, and personal property placed on the Premises by Tenant.



ARTICLE 8. PAYMENT OF RENT/LATE CHARGES





Tenant shall pay the rent and all other charges specified in this Lease to Landlord at the
address set forth on Section 1.1(b) of this Lease, or to another person and at another address
as Landlord from time to time designates in writing. Minimum Monthly Rent, additional rent, or
other charges payable by Tenant to Landlord under the terms of this Lease not received within
five (5) days after the due date (the “Delinquency Date”) thereof shall automatically (and
without notice) incur a late charge of one percent (1%) per day of the delinquent amount until
paid in full. (Checks returned by the bank as not honored are considered delinquent from date
payment is due to Landlord). An NSF (non-sufficient funds) fee shall be charged at the rate of
$25.00 per check.



ARTICLE 9. SECURITY DEPOSIT





Tenant shall, upon execution of this Lease, deposit with Landlord the Security Deposit, as
security for the performance of terms and provisions of this Lease by Tenant. If TENANT fails
to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision
of this Lease, LANDLORD may use, apply or retain all or any portion of the security deposit for
the payment of any rent or other charge in default or for the payment of any other sum to which
LANDLORD may become obligated by reason of TENANT’S default, or to compensate LANDLORD for any
loss or damage which LANDLORD may suffer thereby. If LANDLORD so uses or applies all or any
portion of the security deposit, TENANT shall within ten (10) days after written demand
therefor deposit cash with LANDLORD in an amount sufficient to restore the security deposit to
the full amount stated above and Tenant’s failure to do so shall be a material breach of this
Lease. LANDLORD shall not be required to keep the security deposit separate from its general
accounts. If TENANT performs all of Tenant’s obligations hereunder, the security deposit, or so
much thereof as has not previously been applied by LANDLORD, shall be returned, without payment
of interest or other increment for its use, to TENANT (or, at Landlord’s option, to the last
assignee, if any, of Tenant’s interest hereunder) within thirty (30) days of the expiration of
the term hereof.



ARTICLE 10. CONSTRUCTION OF THE PREMISES





If the Premises have not yet been constructed at the time this lease is executed, Landlord
shall, at its sole cost, provide leasehold improvements using Building Standard materials as
evidenced on Exhibit ‘A” attached herein, in accordance with plans and specifications prepared
by Landlord’s architect and approved by Tenant. Prior to the Commencement Date, any work
performed by Tenant or any fixtures or personal property moved onto the Premises shall be at
Tenant’s own risk and neither Landlord nor Landlord’s agents or contractors shall be
responsible to Tenant for damage or destruction of Tenant’s property.



ARTICLE 11. ALTERATIONS





After completion of Landlord’s construction obligations under Article 10, Tenant shall
not make or cause to be made any further additions to, or alterations of, the Premises or any
part thereof without the prior written consent of Landlord, which consent shall not be
unreasonably withheld.




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ARTICLE 12. PERSONAL PROPERTY/SURRENDER OF PREMISES





All personal property located in the Premises shall remain the property of Tenant and may be
removed by Tenant not later than the Expiration Date or the earlier termination of the Lease
Term. Tenant shall promptly repair, at its own expense, any damage resulting from such
removal. All cabinetry, built-in appliances, wall coverings, floor coverings, window
coverings, electrical fixtures, plumbing fixtures, conduits, lighting, and other special
fixtures that may be installed in or attached to the Premises by Tenant shall, at the
termination of this Lease be the property of Landlord. At the Expiration Date or upon the
earlier termination of the Lease Term, Tenant shall surrender the Premises in good
condition; reasonable wear and tear accepted, and shall deliver all keys to Landlord.



ARTICLE 13. LIENS





Tenant shall keep the Premises, Building, and the Land free from any liens arising out of
work performed, material furnished, or obligations incurred due to the actions of Tenant or
Tenant’s Permittees or the failure of Tenant to comply with any law. In the event any such
lien does attach against the Premises, Building, or Land, and Tenant does not discharge the
lien or post bond (which under law would prevent foreclosure or execution under the lien)
within ten (10) days after demand by Landlord, such event shall be a default by Tenant under
this Lease and, in addition to Landlord’s other rights and remedies, Landlord may take any
action necessary to discharge the lien.



ARTICLE 14. USE OF PREMISES/RULES AND REGULATIONS



Without the prior approval of Landlord, Tenant shall not use the Premises for any use other than
for general business office purposes and Tenant agrees that it will use the Premises in such manner
as to not interfere with or infringe on the rights of other tenants in the Building. Tenant agrees
to comply with all applicable laws, ordinances and regulations in connection with its use of the
Premises, agrees to keep the Premises in a clean and sanitary condition, and agrees not to perform
any act in the Building which would increase any insurance premiums related to the Building or
would cause the cancellation of any insurance policies related to the Building.



By entry hereunder Tenant accepts the Premises as is, being in good and sanitary order, condition
and repair, subject to all applicable zoning, municipal, county and state laws, ordinances, and
regulations governing and regulating the use of the leased premises, and accepts this Lease subject
thereto and to all matters disclosed thereby and by any exhibits attached hereto. Tenant
acknowledges that neither Landlord nor Landlord’s agent has made any representation or warranty as
to the suitability of the leased premises for the conduct of Tenant’s business.



Tenant agrees to abide by all rules and regulations of the building imposed by the Landlord, a copy
of which is attached hereto and made a part hereof. These regulations are imposed for the
cleanliness, good appearance, proper maintenance, good order and reasonable use of the Leased
premises and the building, and as may be necessary for the proper enjoyment of the building by all
tenants and their clients, customers and employees. The rules and regulations may be reasonably
changed from time to time on reasonable notice to Tenant.



Tenant shall not use, generate, manufacture, store, or dispose of, in, under, or about the
Premises, the Building, the Land, or the Project or transport to or from the Premises, the
Building, the Land, or the Project, any Hazardous Materials. For purposes of this Lease, “Hazardous
Materials” includes, but is not limited to: (i)





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flammable, explosive, or radioactive materials, hazardous wastes, toxic substances, or related
materials; (ii) all substances defined as “hazardous substances,” “hazardous materials,” “toxic
substances,” or “hazardous chemical substances or mixtures” in the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601, et seq., as amended
by Superfund Amendments and Re-authorization Act of 1986; the Hazardous Materials Transportation
Act, 49 U.S.C. § 1901, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et
seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601, et
seq.; (iii) those substances listed in
the United States Department of Transportation Table (49 CFR 172.10 and amendments thereto) or by
the Environmental Protection Agency (or any successor agent) as hazardous substances (40 CFR Part
302 and amendments thereto); (iv) any material, waste, or substance which is (A) petroleum, (B)
asbestos, (C) polychlorinated biphenyl’s, (D) designated as a “hazardous substance” pursuant to §
311 of the Clean Water Act, 33 U.S.C. S 1251 et seq. (33 U.S.C. § 1321) or listed pursuant
to the Clean Water Act (33 U.S.C. § 1317); (E) flammable explosives; or (F) radioactive materials;
and (v) all substances defined as “hazardous wastes” in Arizona Revised Statutes § 36-3501 (16).



Notwithstanding the foregoing, Tenant may use and store reasonable amounts of substances normally
associated with general office duties (such as copier toner, cleaning supplies, glue and other
materials) which are specifically approved in advance by Landlord




ARTICLE 15. RIGHTS RESERVED BY LANDLORD





In addition to all other rights, Landlord has the following rights, exercisable without
notice to Tenant and without effecting an eviction, constructive or actual, and without
giving right to any claim for set off or abatement of rent: (a) to decorate and to make
repairs, alterations, additions, changes, or improvements in and about the Building during
Building Hours (b) to approve the weight, size, and location of heavy objects in and about
the Premises and the Building, and to require all such items to be moved into and out of the
Building and Premises in such manner as Landlord shall direct in writing; (c); (d) to take
all such reasonable measures for the security of the Building and its occupants; (e) and (f)
to temporarily block off parking spaces for maintenance or construction purposes.



ARTICLE 16. QUIET ENJOYMENT





Landlord agrees that, provided a default by Tenant has not occurred, Landlord will do
nothing that will prevent Tenant from quietly enjoying and occupying the Premises during the
Lease Term. Tenant agrees this Lease is subordinate to the Rules and Regulations described
in Article 14, and the Parking Rules and Regulations described in Article 6.




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ARTICLE 17. MAINTENANCE AND REPAIR





Landlord shall maintain the Premises and Building in good condition and repair, reasonable wear
and tear excepted. Tenant waives all rights to make repairs at the expense of Landlord unless
Landlord fails to commence repairs within 5 business days of Tenant’s request for repair (or 1
business day if immediate repair is necessary for Tenant’s un-interrupted occupancy of the
Premises). If Landlord would be required to perform any maintenance or make any repairs because
of: (a) post-Commencement Date modifications to the roof, walls, foundation, and floor of the
Building from that set forth in Landlord’s plans and specifications which are required by
Tenant’s design for improvements, alterations and additions; (b) installation of Tenant’s
improvements, fixtures, or equipment; (c) a negligent or wrongful act of Tenant or Tenant’s
Permittees; or, (d) Tenant’s failure to perform any of Tenant’s obligations under this Lease,
Landlord may perform the maintenance or repairs and Tenant shall pay Landlord the cost thereof.
Tenant agrees to: (a) Pay Landlord’s cost of maintenance and repair, including additional
janitorial costs of any Non-Building Standard Improvements and Non-Building Standard materials
and finishes and (b) Repair or replace all ceiling and wall finishes (including painting) and
floor or window coverings which require repair or replacement during the Lease Term, at
Tenant’s sole cost. Notwithstanding anything in this Lease to the contrary, to the extent the
terms and provisions of Article 22 conflict with, or are inconsistent with, the terms
and provisions of this Article 17, the terms and provisions of Article 22 shall
control. Tenant shall take all reasonable precautions to insure that the Premises are not
subjected to excessive wear and tear, i.e. chair pads should be utilized by Tenant to protect
carpeting. Tenant shall be responsible for touch-up painting in the Premises throughout the
Lease term.



ARTICLE 18. UTILITIES AND JANITORIAL SERVICES





Landlord agrees to furnish to the Premises during normal Building Hours as defined in Article
1.1 (m), (the “Building Hours”), and subject to the Rules and Regulations, electricity suitable
for the intended use of the Premises, heat and air conditioning required in Landlord’s judgment
for normal use and occupation of the Premises, and janitorial services (consistent with a Class
A office building) or the Premises and Common Areas. Landlord further agrees to furnish hot and cold
water to those areas provided for general use of all tenants in the Building. Landlord will use
diligent efforts to provide continuous elevator service for the Building. If Tenant shall
require electric current, water, heating, cooling, or air which will result in excess
consumption of such utilities or services, Tenant shall first obtain the written consent of
Landlord to the use thereof. If, in Landlord’s reasonable discretion, Tenant consumes any
utilities or services in excess of the normal consumption of such utilities and services for
general office use, Tenant agrees to pay Landlord for the cost of such excess consumption of
utilities or services, currently at the rate of $.0026 per square foot, per hour, upon receipt
of a statement of such costs from Landlord at the same time as payment of the Minimum Monthly
Rent is made. Landlord may install separate electrical meters to, at Tenant’s expense, to
measure excess consumption or establish another basis for determining the amount of excess
consumption of electrical current. Further, Landlord has installed electronic HVAC over-time
hour meters for Tenant’s convenience. These meters shall be used, in part, by Landlord to
determine Tenant’s excess HVAC consumption for purposes of billing Tenant for such excess
charges. Landlord shall not be liable for damages nor shall rent or other charges abate in the
event of any failure or interruption of any utility or service supplied to the Premises or
Building by a regulated utility or municipality, or any failure of a Building system supplying
any such service to the Premises (provided Landlord uses diligent efforts to repair or restore
the same) and no such failure or interruption shall entitle Tenant to abate rent or terminate
this Lease. Overtime HVAC charges shall be billed to Tenant at the rate of $.0026 per hour, per
square foot.



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ARTICLE 19. ENTRY AND INSPECTION





Landlord shall have the right to enter into the Premises at reasonable times for the purpose
of inspecting the Premises and reserves the right, during the last three months of the term
of the Lease, to show the Premises with reasonable prior notice at reasonable times to
prospective tenants. Landlord shall be permitted to take any action under this Article
without causing any abatement of rent or liability to Tenant for any loss of occupation or
quiet enjoyment of the Premises, nor shall such action by Landlord be deemed an actual or
constructive eviction.



ARTICLE 20. ACCEPTANCE OF THE PREMISES/LIABILITY INSURANCE





	 	20.1	 	All personal property and fixtures belonging to Tenant shall be placed and remain on
the Premises at Tenant’s sole risk. Upon taking possession of the Premises and thereafter
during the Lease Term, the Tenant shall, at Tenant’s sole cost and expense, maintain
insurance coverage with limits not less than the following: (a) Worker’s Compensation
Insurance, minimum limit as defined by applicable laws; (b) Employer’s Liability Insurance,
minimum limit $1,000,000; (c) Commercial General Liability Insurance, Bodily
Injury/Property, Damage Insurance (including the following coverages: Premises/Operations,
Independent Contractors, Broad Form Contractual in support of the indemnification
obligations of Tenant under this Lease, and Bodily and Personal Injury Liability), minimum
combined single limit $1,000,000; (d) Automobile Liability Insurance, minimum limit
$1,000,000. All such policies shall include a waiver of subrogation in favor of Landlord
and shall name Landlord and Management Company and such other party or parties as Landlord
may require as additional insured. Tenant’s insurance shall be primary, with any insurance
maintained by Landlord to be considered excess. Tenant’s insurance shall be maintained with
an insurance company qualified to do business in the State of Arizona and having a current
A.M. Best manual rating of at least A-X or better. Before entry into the Premises and
before expiration of any policy, evidence of these coverage’s represented by Certificates
of Insurance issued by the insurance carrier must be furnished to Landlord. Certificates of
Insurance should specify the additional insured status, the waiver of subrogation, and that
such insurance is primary, and any insurance by Landlord is excess. The Certificate of
Insurance shall state that Landlord will be notified in writing thirty (30) days before
cancellation, material change, or renewal of insurance.
	 
	 	20.2	 	During the entire Lease Term, Landlord agrees to maintain public liability insurance in
such forms and amounts as Landlord shall determine but in no event less than that required
to be carried
by Tenant.





ARTICLE 21. CASUALTY INSURANCE





	 	21.1	 	Tenant shall maintain fire and extended coverage insurance (full replacement value)
with a business interruption and extra expense endorsements, on personal property and trade
fixtures owned or used by Tenant.
	 
	 	21.2	 	Landlord shall maintain fire and full extended coverage
insurance (“all risk”) including necessary endorsements throughout the Lease Term on the Building (excluding Tenant’s trade
fixtures and personal property). At Landlord’s option, the policy of insurance may include
a business interruption insurance endorsement for loss of rents. The cost of the insurance
obtained under this Section 21.2 shall be an Operating Cost under Article 5
of this Lease.




10









 











ARTICLE 22. DAMAGE AND DESTRUCTION OF PREMISES





In the event of fire or other casualty damage to the Premises during the Lease Term which
requires repairs to the Premises, Landlord shall commence to make said repairs within ninety
(90) days after written notice by Tenant of the necessity therefore and diligently proceed
therewith to completion. The Minimum Monthly Rent shall be proportionately reduced while such
repairs are being made, based upon the extent to which the making of such repairs shall
interfere with the business carried on by Tenant in the Premises. Landlord shall have no
obligation to repair, restore, or replace Tenant’s trade fixtures or personal property and
Tenant shall be solely responsible therefore. Notwithstanding the above, if (a) during the last
year of the Lease Term the Premises or the Building is damaged as a result of fire or any other
insured casualty, or (b) the Premises are damaged to the extent of twenty-five percent (25%) or
more of the replacement value of the Premises, or (c) the Premises or the Building is damaged or
destroyed as a result of a casualty not insured against, or (d) the Building shall be damaged or
destroyed by fire or other cause to the extent of twenty percent (20%) or more of the Building’s
replacement value, then Landlord or Tenant shall have the right, to be exercised by notice in
writing to Tenant given within ninety (90) days after said occurrence, to terminate this Lease.
The provisions of this Article shall supersede the obligations of Landlord to make repairs under
Article 17 of the Lease. Notwithstanding the provisions of this Article 22, if
the Premises or any other portion of the Building are damaged by fire or other casualty
resulting from the negligent act or omission or willful misconduct of Tenant or Tenant’s
Permittees, Minimum Monthly Rent shall not be reduced during the repair of the damage, and
Tenant shall be liable to Landlord for the cost and expense of the repair and restoration of the
Premises or the Building caused thereby to the extent that cost and expense is not covered by
insurance proceeds.



ARTICLE 23. EMINENT DOMAIN





In the event any portion of the Premises is taken from Tenant under eminent domain proceedings,
Tenant shall have no right, title or interest in any award made for such taking, except for any
separate award for fixtures and improvements installed by Tenant.



ARTICLE 24. ASSIGNMENT AND SUBLETTING





Tenant agrees not to assign this Lease, and shall not sublet the Premises without Landlord’s
prior written consent, which consent shall not be unreasonably withheld as long as the use and
density does not change. Any assignment or subletting hereunder shall not release or discharge
Tenant of or from any liability under this Lease, and Tenant shall continue to be fully liable
there under. Consent by Landlord to one assignment, subletting, occupation, or use by another
person shall not be deemed to be consent to any subsequent assignment, subletting, occupation,
or use by another person. If Tenant is a corporation, an unincorporated association or a
partnership, unless listed on a national stock exchange, the transfer, assignment or
hypothecation of any stock or interest in such corporation, association or partnership in the
aggregate in excess of fifty percent (50%) shall be deemed an assignment of this Lease. Tenant
agrees to immediately notify Landlord of any change in its ownership.



ARTICLE 25. SALE OF PREMISES BY LANDLORD





In the event of any sale of the Building or the property upon which the Building is located or
any assignment of this Lease by Landlord (or a successor in title), the assignee or purchaser
assumes the obligations of Landlord herein in writing, Landlord (or such successor) shall
automatically be entirely freed and relieved of all liability under any and all of Landlord’s
covenants and obligations contained in this Lease or arising out of any act, occurrence, or



11









 






omission occurring after such sale or assignment; and the assignee or purchaser shall be
deemed, without any further agreement between the parties, to have assumed and agreed to carry
out any and all of the covenants and obligations of Landlord under this Lease, and shall be
substituted as Landlord for all purposes from and after the sale or assignment.



ARTICLE 26. SUBORDINATION/ATTORNMENT/MODIFICATION/ASSIGNMENT





Tenant’s interest under this Lease is subordinate to all terms of and all liens and interests
arising under any ground lease, deed of trust, or
mortgage now or hereafter placed on the Landlord’s interest in the Premises, the Building, or
the Land. Tenant consents to an assignment of
Landlord’s interest in this Lease to Landlord’s lender as required under such financing. If the
Premises or the Building is sold as a result of a
default under the mortgage, or pursuant to a transfer in lieu of foreclosure, Tenant shall, at
the mortgagee’s, purchaser’s or ground Landlord’s sole election, attorn to the mortgagee or
purchaser. This Article is self-operative. However, Tenant agrees to execute and deliver, if
Landlord, any deed of trust holder, mortgagee, or purchaser should so request, such further
instruments necessary to subordinate this Lease to a lien of any mortgage or deed of trust, to
acknowledge the consent to assignment and to affirm the ATTORNMENT provisions set forth herein.
Tenant shall provide to Landlord, upon Landlord’s request, Tenant’s most recent Balance Sheet
and Fiscal Year End Income Statement. Any successor Landlord shall,
upon such attornment
by Tenant, recognize and honor Tenant’s rights hereunder which recognition shall be
self-operative upon Tenant so attorning or agreeing to so attorn.



ARTICLE 27. LANDLORD’S DEFAULT AND RIGHT TO CURE





In the event of default hereunder by Landlord, Tenant agrees, before exercising any right or
remedy available to it, to give Landlord written notice of the claimed default. For the thirty
(30) days following such notice (or such longer period of time as may be reasonably required to
cure a matter which, due to its nature, cannot reasonably be remedied within thirty (30) days
or such  shorter period of time in Tenant’s right to occupy the Premises is impaired as a result of such
default), Landlord shall have the right to cure the default involved.



ARTICLE 28. ESTOPPEL CERTIFICATES





Tenant agrees at any time and from time to time upon request by Landlord, to execute,
acknowledge, and deliver to Landlord, within ten (10) calendar days after demand by Landlord, a
statement in writing certifying (a) that this Lease is unmodified and in full force and effect
(or if there have been modifications, that the same is in full force and effect as modified and
stating such modifications), (b) the dates to which the Minimum Monthly Rent and other rent and
charges have been paid in advance, if any, (c) Tenant’s acceptance and possession of the
Premises, (d) the commencement of the Lease Term, (e) the rent provided under the Lease, (f)
that Landlord is not in default under this Lease (or if Tenant claims such default, the nature
thereof), (g) that Tenant claims no offsets against the rent, and (h) such other information as
may be requested with respect to the provisions of this Lease or the tenancy created by this
Lease. Tenant’s failure to deliver such statement within such time shall be conclusive upon
Tenant (i) that this Lease is in full force and effect, without modification except as may be
represented by Landlord, (ii) that there are no uncured defaults in Landlord’s performance, and
(iii) that not more than one month’s rent has been paid in advance.



12









 





ARTICLE 29. TENANT’S DEFAULT AND LANDLORD’S REMEDIES





In the event Tenant fails to keep and perform any of the terms or conditions of this Lease,
including the Rules and Regulations and the Parking Rules and Regulations, and such failure
continues for ten (10) days after written notice of default from Landlord or in the event
Tenant fails to pay any rental due hereunder (and such failure
continues for ten (10) days after written
notice of default from Landlord), time being of the
essence, Landlord may resort to any and all legal remedies or combination of remedies which
Landlord may desire to assert including but not limited to one or more of the following: (1)
lock the doors to the Premises and exclude Tenant there from, (2) retain or take possession of
any property on the Premises pursuant to Landlord’s lien, (3) enter the Premises and remove
all persons and property there from, (4) declare the Lease canceled and terminated, (5) sue
for the rent due and to become due under the Lease, and for any damages sustained by Landlord
and (6) continue the Lease in effect and relet the Premises on such terms and conditions as
Landlord may deem advisable with Tenant remaining liable for the monthly rent plus the
reasonable cost of obtaining possession of the Premises and of reletting the Premises, and of
any repairs and alterations necessary to prepare the Premises for reletting, less the rentals
received from such reletting, if any. No action of Landlord shall be construed as an election
to terminate the Lease unless written notice of such intention is given to Tenant. Tenant
agrees to pay as additional rental all attorneys’ fees and other costs and expenses incurred
by Landlord is enforcing any of Tenant’s obligations under this Lease.



ARTICLE 30. TENANT’S RECOURSE





Anything in this Lease to the contrary notwithstanding, Tenant agrees to look solely to the
estate and property of Landlord in the Land and the Building, subject to prior rights of any
ground lessor, mortgagee, or deed of trust of the Land and Building or any part thereof, for
the collection of any judgment requiring the payment of money by Landlord in the event of any
default by Landlord under this Lease. Tenant agrees that it is prohibited from using any other
procedures for the satisfaction of Tenants’ remedies. Neither Landlord nor any of its
respective officers, directors, employees, heirs, successors, or assigns, shall have any
personal liability of any kind or nature, directly or indirectly, under or in connection with
this Lease.



ARTICLE 31. HOLDING OVER





Subject to prior written consent by Landlord, if Tenant holds over after the Expiration Date,
or any extension thereof, Tenant shall be a tenant at sufferance, the Minimum Monthly Rent
shall be increased to 150% of the then current lease rate at the Building or the Tenant’s
lease rate at the time the Lease expired, whichever is higher, plus any amounts due under
Article 5, which shall be payable in advance on the first day of such holdover period
and on the first day of each month thereafter. Tenant will be considered to be on a
month-to-month basis during any holdover period.



ARTICLE 32. GENERAL PROVISIONS





	 	32.1	 	This Lease is construed in accordance with the laws of the State of Arizona.
	 
	 	32.2	 	If Tenant is composed of more than one person or entity, then the obligations
of such entities or parties are joint and several.
	 
	 	32.3	 	If any term, condition, covenant, or provision of this Lease is held by a court
of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the
terms,




13









 






	 	 	 	conditions, covenants, and provisions hereof shall remain in full force and effect
and shall in no way be affected, impaired, or invalidated.
	 
	 	32.4	 	The various headings and numbers herein and the grouping of the provisions of this Lease into
separate articles and sections are for the purpose of convenience only and are not be
considered a part hereof.
	 
	 	32.5	 	Time is of the essence of this Lease.
	 
	 	32.6	 	In the event either party initiates legal proceedings or retains an attorney to enforce any
right or obligation under this Lease or to obtain relief for the breach of any covenant
hereof, the party ultimately prevailing in such proceedings or the non-defaulting party shall
be entitled to recover all costs and reasonable attorneys’ fees.
	 
	 	32.7	 	This Lease, and any Exhibit or Addendum attached hereto,
sets forth all the terms,
conditions, covenants, provisions, promises, agreements, and undertakings, either oral or
written, between the Landlord and Tenant. No subsequent alteration, amendment, change, or
addition to this Lease is binding upon Landlord or Tenant unless reduced to writing and signed
by both parties.
	 
	 	32.8	 	Subject to Article 24, the covenants herein contained shall apply to and bind the
heirs, successors, executors, personal representatives, legal representatives, administrators,
and assigns of all the parties hereto.
	 
	 	32.9	 	No term, condition, covenant, or provision of this Lease shall be waived except by written
waiver of Landlord, and the forbearance or indulgence by Landlord in any regard whatsoever
shall not constitute a waiver of the term, condition, covenant, or provision to be performed
by Tenant to which the same shall apply, and until complete performance by Tenant of such
term, condition, covenant, or provision, Landlord shall be entitled to invoke any remedy
available under this Lease or by law despite such forbearance or indulgence. The waiver by
Landlord of any breach or term, condition, covenant, or provision hereof shall apply to and be
limited to the specific instance involved and shall not be deemed to apply to any other
instance or to any subsequent breach of the same or any other term, condition, covenant, or
provision hereof. Acceptance of rent by Landlord during a period in which Tenant is in default
in any respect other than payment of rent shall not be deemed a waiver of the other default.
Any payment made in arrears shall be credited to the oldest amount outstanding and no contrary
application will waive this right.
	 
	 	32.10	 	The use of a singular term in this Lease shall include the plural and the use of
the masculine, feminine, or neuter genders shall include all others.
	 
	 	32.11	 	Landlord’s submission of a copy of this Lease form to any person, including Tenant,
shall not be deemed to be an offer to lease or the creation of a lease unless and until this
Lease has been fully signed and delivered by Landlord.
	 
	 	32.12	 	Every term, condition, covenant, and provision of this Lease, having been negotiated in
detail and at arm’s length by both parties, shall be construed simply according to its fair
meaning and not strictly for or against Landlord or Tenant.






14












 






	 	32.13	 	If the time for the performance of any obligation under this Lease expires on a
Saturday, Sunday, or legal holiday, the time for performance shall be extended to the next
succeeding day which is not a Saturday, Sunday, or legal holiday.
	 
	 	32.14	 	If requested by Landlord, Tenant shall execute written documentation with signatures
acknowledged by a notary public, to evidence when and if Landlord or Tenant has met certain
obligations under this Lease.





ARTICLE 33. NOTICES





Wherever in this Lease it is required or permitted that notice or demand be given or served
by either party to or on the other, such notice or demand shall be in writing and shall be
given or served and shall not be deemed to have been duly given or served unless (a) in
writing; (b) either (1) delivered personally, (2) deposited with the United States Postal
Service, as registered or certified mail, return receipt requested, bearing adequate
postage, or (3) sent by overnight express courier (including, without limitation, Federal
Express, DHL Worldwide Express, Airborne Express, United States Postal Service Express Mail)
with a request that the addressee sign a receipt evidencing delivery; and (c) addressed to
the party at its address in Section 1.1. Either party may change such address by
written notice to the other. Service of any notice or demand shall be deemed completed
forty-eight (48) hours after deposit thereof, if deposited with the United States Postal
Service, or upon receipt if delivered by overnight courier or in person.



ARTICLE 34. BROKER’S COMMISSIONS





Tenant represents and warrants that there are no claims for brokerage commissions or
finder’s fees in connection with this Lease (excepting commissions or fees approved or
authorized in writing by Landlord).



ARTICLE 35. INDEMNIFICATION/WAIVER OF SUBROGATION





	 	35.1	 	Tenant and Landlord shall indemnify, defend, and hold the other and any lender of
Landlord harmless against all Claims (as defined below) and costs
incurred by the other arising
from: (a) in the case of the indemnity in favor of Landlord, any act or omission of Tenant or
Tenant’s Permittees which results in personal injury, loss of life, or property damage
sustained in and about the Premises, the Building, or the Land and in
case of indemnity in
favor of Tenant, any act or omission by Landlord or its agents which
results in the personal injury, loss of life or
property damage to Tenant or Tenant’s Permittees; (b) attachment or discharge of a lien upon the
Premises, the Building, or the Land due to an alleged failure to pay by Tenant; (c) Tenant’s and Tenant’s
Permittees’ use, generation, storage, release, threatened release, discharge, disposal, or
presence of Hazardous Materials on, under, or about the Premises, the Building, or the
Land; (d) any default of Tenant or Landlord under this Lease; and (e) any claims for
brokerage commissions or finder’s fees in connection with this Lease (excepting commissions
or fees authorized in writing by Landlord). As used in this Lease, “Claims” means any
claim, suit, proceeding, action, cause of action, responsibility, demand, judgment and
execution, and attorneys’ fees and costs related thereto or arising there from.
	 
	 	35.2	 	Tenant and Landlord hereby releases, discharges, and waives any right of recovery from the
other and the others agents, directors, officers, and employees, and Landlord and Tenant hereby releases,
discharges, and waives any right of recovery from the other and the
others Permittees, from all Claims,
liabilities, losses, damages, expenses, or attorneys’ fees and costs incurred arising from or
caused by any peril required to be covered by insurance obtained by Landlord or Tenant under
this Lease, or covered by insurance in connection with (a) property on the




15









 












	 	 	 	Premises, the Building, or the Land; (b) activities conducted on the Premises, the Building, or
the Land; and (c) obligations to indemnify under this Lease, regardless of the cause of the
damage or loss. Landlord and Tenant shall give their respective insurance carriers notice of
these waivers and shall secure an endorsement from each carrier to the effect that the waivers
given in this Article 35 shall not adversely affect or impair the policies of insurance
or prejudice the right of the named insured on the policy to recover there under. These waivers
apply only to the extent such Claims, liabilities, losses, damages, expenses, or attorneys’ fees
are covered by insurance required pursuant to this Lease.
	 
	 	35.3	 	Notwithstanding anything in this Lease to the contrary, Landlord
shall not be responsible or liable to Tenant for any Claims for loss or
damage caused by the acts or omissions of any persons occupying any space
elsewhere in the Building unless such Claims  arise from the gross
negligence of Landlord or Landlord’s
breach of this Lease.





     IN WITNESS WHEREOF, the parties have duly executed this Lease as of the day and year
noted below.



	 	 	 	 	 	 	 	 	 	 	 
	Landlord	 	 	 	Tenant	 	 
	Agreed to and accepted this 29 day
of Nov., 2005.	 	 	 	Agreed to and accepted
this 29th day of November, 2005.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Vito Ancona
 

	 	 
	 	By:
	 	/s/ Trevor T. Hill
 

	 	 
	Name:

	 	Vito Ancona
	 	 	 	Name:
	 	Trevor T. Hill	 	 
	Title:

	 	Managing Member
	 	 	 	Title
	 	President and C.E.O.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name

	 	 	 	 	 	Name	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Printed:

	 	 	 	 	 	Printed:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 





	 	 	 
	Telephone: ( 623 ) 587-1888

	 	Telephone: (623) 580-9600
	Facsimile: ( 623 ) 587- 1870

	 	Facsimile: (623) 580-9659
	Federal Tax ID No: 86-0811344

	 	Federal Tax ID No: 20-0303634
	E-mail: lyn@tripaper.com

	 	E-mail: Trevor.Hill@gwresources.com






Management Contact




Los Arcos Realty & Management

Lind Smith Maughan, CPM

14415 N. 73rd Street #100

Scottsdale, Arizona 85260

Ph: 480-443-8287

Fax: 480-443-8385




16









 










 









 








Rules and Regulations

Exhibit “B”




 






ANCONA OFFICE CENTRE




 







	1.	 	Tenant shall not suffer or permit obstruction of any Common Areas, including driveways,
walkways or stairways






	2.	 	Landlord reserves the right to refuse access to any persons Landlord in good faith judges to
be a threat to the safety and reputation of the Building and its occupants.






	3.	 	Tenant shall not make or permit any noise or orders that annoy or interfere with other
tenants or persons having business within the Building.






	4.	 	Tenant shall not keep animals or birds within the Building, and shall not bring bicycles,
motorcycles or other vehicles into areas not designated as authorized for same.






	5.	 	Tenant shall not make, suffer or permit litter except in appropriate receptacles for that
purpose.
	 
	6.	 	Tenant shall not alter any lock or install new or additional locks or bolts.






	7.	 	Tenant shall be responsible for the inappropriate use of any toilet rooms, plumbing or other
utilities. No foreign substances of any kind are to be inserted therein.






	8.	 	Tenant shall not deface the walls, partitions or other surfaces of the Premises or Building.






	9.	 	Tenant shall not suffer or permit anything in or around the Premises or the Building
that causes excessive vibration or floor loading in any part of the Building.






	10.	 	Furniture, significant freight and equipment shall be moved into or out of the Building only
with the Landlord’s knowledge and consent, and subject to such reasonable limitations,
techniques and timing, as may be designated by Landlord. Tenant shall be responsible for any
damage to the Office Building arising from any such activity.






	11.	 	Tenant shall not employ any service or contractor for services of work to be performed
in the Building, except as approved by Landlord.






	12.	 	Landlord reserves the right to close and lock the Building on Sundays and Building Holidays,
on Saturdays starting at noon, and on other days between the hours of 6:00 P.M. and 7:00 A.M.
of the following day. Tenant shall have twenty-four (24) hour, seven (7) day a week access to
the Premises. If Tenant uses the Premises during such periods, Tenant shall be responsible for
securely locking any doors it may have opened for entry.






	13.	 	Tenant shall return all keys at the termination of its tenancy and shall be responsible for
the cost of replacing any keys that are lost.






	14.	 	No window coverings, shades or awnings shall be installed or
used by Tenant.






	15.	 	No tenant, employee or invitee shall go upon the roof of the building.






	16.	 	Tenant shall not suffer or permit smoking or carrying of lighted cigars or cigarettes within
the Building at anytime and shall limit such to areas as reasonably designated by Landlord or
applicable governmental agencies.






	17.	 	Tenant shall not use any method of heating or air conditioning other than as provided by
Landlord.






	18.	 	Tenant shall not install, maintain or operate and vending machines upon the premises
without Landlord’s written consent.






	19.	 	The Premises shall not be used for lodging, manufacturing, and cooking or food preparation.






	20.	 	Tenant shall comply with all safety, fire protection and evacuation regulations
established by Landlord or any applicable governmental agency.




 









 












	21.	 	Landlord reserves the right to waive any one of these rules and regulations, and/or as to any
particular Tenant, and any such waiver shall not constitute a waiver of any other rule or
regulation or any subsequent application thereof to such Tenant.






	22.	 	Tenant assumes all risks from theft or vandalism and agrees to keep its Premises locked as
may be required.






	23.	 	Landlord reserves the right to make such other reasonable rules and regulations as it may
from time to time deem necessary for the appropriate operation and safety of the Building
Project and its occupants. Tenant agrees to abide by these and such rules and regulations.





	 	 	 	 	 
	Tenant Initial

	 	/s/ Trevor T. Hill
 

	 	 
	 
	 	 	 	 
	Landlord Initial

	 	/s/ [ILLEGIBLE]
 
	 	 






 









 






Parking Rules and Regulations

Exhibit “C”




 






ANCONA OFFICE CENTRE

 







	1.	 	Parking shall be used only for parking by vehicles no longer than full size, passenger
automobiles herein called “Permitted Size Vehicles.” Vehicles other than Permitted Size
Vehicles are herein referred to as “Oversized Vehicles.”






	2.	 	Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or
Tenant’s employees, suppliers, shippers, customers, or invitees to be loaded, unloaded, or
parked in areas other than those designated by Landlord for such activities.






	3.	 	Users of the parking area will obey all posted signs and park only in the areas designated
for vehicle parking.






	4.	 	Unless otherwise instructed, every person using the parking area is required to park and lock
their own vehicle. Landlord shall not be responsible for any damage to vehicles, injury to
persons or loss of property, all of which risks are assumed by the party using the parking
area.






	5.	 	The maintenance, washing, waxing or cleaning of vehicles within the parking area or common
areas is prohibited.






	6.	 	Tenant shall be responsible for seeing that all of its employees, agents or invitees comply
with the applicable rules and regulations, laws and agreements.






	7.	 	Landlord reserves the right to modify these rules and/or adopt such other rules and
regulations as it may deem necessary to safely operate the parking area.






	8.	 	Such parking use as herein provided is intended merely as a license only and no bailment is
intended or shall be created hereby.





	 	 	 	 	 
	Tenant Initial

	 	/s/ Trevor T. Hill
 

	 	 
	 
	 	 	 	 
	Landlord Initial

	 	/s/ [ILLEGIBLE]
 
	 	 







 












 





WORK LETTER

Exhibit “D”



By and between: E&V Investments (Landlord) and Global Water Management, LLC (Tenant)



The Premises shall be constructed in accordance with Landlord’s Standard Improvements, as
established in the Spec suites already constructed on the first floor of the Building, north end.
While materials may be different, they shall be of the same quality and as generally described
herein.




Preparation of Plans and Specifications




     Concurrent with the execution of this Lease, Tenant has approved a space plane for the
Premises and Landlord has authorized the creation of construction drawings necessary to obtain a
building permit.



Completion




     Landlord shall obtain a building permit to construct the Improvements as soon as possible.



     Landlord shall complete the construction of the Improvements as soon as reasonably possible
after the obtaining of necessary building permits.



     The term “Completion”, as used in this Work Letter, is hereby defined to mean the date the
building department of the municipality having jurisdiction of the Premises shall have made a final
inspection of the Improvements and authorized a final release of restrictions on the use of public
utilities in connection therewith and the same are in a broom-clean condition.



     Landlord shall use its best efforts to achieve Completion of the Improvements on or before
the Commencement Date set forth in the Lease.



     In the event that the Improvements or any portion thereof have not reached Completion by the
Commencement Date, the Lease shall not be invalid, but rather Landlord shall complete the same as
soon thereafter as is possible and Landlord shall not be liable to Tenant for damages in any
respect whatsoever.



     If Landlord shall be delayed at any time in the progress of the construction of the
Improvements or any portion thereof by extra work, changes in construction ordered by Tenant, or
by strikes, lockouts, fire, delay in transportation, unavoidable casualties, rain or weather
conditions, governmental procedures or delay, or by any other cause beyond Landlord’s control,
then the Commencement Date established in the Lease shall be extended by the period of such delay.



Term




     Upon Completion of Improvements as defined in paragraph 16.3 above, Landlord and Tenant shall
execute an amendment to the Lease setting forth the date that Landlord delivered possession of the
Premises to Tenant as the Commencement Date of the Lease.



Work Done By Tenant




     Any work done by Tenant shall be done only with Landlord’s prior written consent and in
conformity with a valid building permit and all applicable rules, regulations, laws and
ordinances, and be done in a good and workmanlike manner of good and sufficient materials. All
work shall be done only with union labor and only by contractors approved by Landlord, it being
understood that all plumbing, mechanical, electrical wiring and ceiling work are to be done only
by contractors designated by Landlord.



Taking of Possession of Premises




     Landlord shall notify Tenant of the estimated Completion date at least 10 days before said
date. Tenant shall thereafter have the right to enter the Premises to commence construction of any
Improvements Tenant is to construct and to equip and fixturize the Premises, as long as such entry
does not interfere with Landlord’s work. Any entry by Tenant of the Premises under this paragraph
shall be under all of the terms and provisions of the Lease to which this Work Letter is attached.



Acceptance of Premises




     Tenant shall notify Landlord in writing of any items that Tenant deems incomplete or
incorrect in order for the Premises to be acceptable to Tenant within 10 days following the date
that Landlord delivered the Premises to Tenant. Tenant shall be deemed to have accepted the
Premises and approved construction if Tenant does not deliver such a list to Landlord within said
number of days.



	 	 	 	 	 
	Tenant Initial
	 	Trevor T. Hill	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Landlord Initial
	 	[ILLEGIBLE] 	 	 
	 

	 	 

	 	 






 









 






ANCONA OFFICE CENTER




Proposed Tenant Improvement Allowance Schedule

July, 2005



The tenant improvement schedule is what is provided in a typical tenant buildout. The following
items and allowances are referred to as building standard.




	 	 	 
	Item	 	Product Description
	 
	Tenant Partitioning

	 	3 5/8", 25 GA, metal studs at
24" o.c. with one layer
5/8" gypsum wallboard both sides. Partitions to extend
from floor to underside of ceiling grid with smooth
finish and eggshell paint. 4" scheduled base both
sides.
	 
	 	 
	Demising and
Corridor
Partitioning

	 	One hour fire rated partition with
5/8" gypsum
wallboard attached to both sides of 3-5/8", 20 GA.
metal studs at 24" o.c. to extend to underside of
floor deck and be painted with smooth finish and
eggshell paint. 4" scheduled base on both sides.
Partition will include 3-5/8" sound insulation batts.
	 
	 	 
	Tenant Entry Doors

	 	Recessed 3'-0" x 8'-0" x 1'-3/4"
solid core plain sliced
maple door. Entry doors to have 18" x 8'-0" x 1/4"
clear tempered sidelite. Door and sidelite to have
Aluminum frame.
	 
	 	 
	Tenant Interior Doors

	 	3'-0" x 8'-0" x 1'-3/4"
solid core plain sliced maple
doors in an Aluminum frame.
	 
	 	 
	Tenant
Entrance
Hardware

	 	Full mortise lever Schlage “L” series lockset with
1-1/2" pair hinges, one closure, one wall stop and
ball bearing butts. Hardware to be mortise.
	 
	 	 
	Tenant Interior
Hardware

	 	Lever passage set, Schlage “AL” series 1-1/2"
pair hinges. One wall stop; three silencers by Sargent.
Finish to be US26D.
	 
	 	 
	Acoustical Ceiling

	 	Suspended white 2' x 2' Armstrong “Cirrus”
ceiling tile in 15/16" grid. Ceiling height in all Tenant areas and
corridors to be 9'-0". Scribe cut tile at partitions.
	 
	 	 
	Tenant Light Fixtures

	 	2' x 4' recessed parabolic fluorescent return air
handling, 3-tube, 18-cell fixture, “Paramax” type by
Lithonia.
	 
	 	 
	Light Switches

	 	Single pole switch with white coverplate and toggle.
	 
	 	 
	Telephone / Data
Outlet

	 	Building standard rough-in box. Tenant will coordinate
with their respective communications equipment company
for detailed requirements for inclusion into
construction plans and schedule.
	 
	 	 
	Electrical
Convenience Outlet

	 	Duplex wall outlet with white coverplate and plugs.
	 
	 	 
	Exit Lights

	 	Stencil faced fixture (black).
	 
	 	 
	Heating,
Ventilating, Air
Conditioning (HVAC)

	 	Duct work as required at a rate of 1 ton per 250 USF,
with 2x2 diffusers and thermostat control in tenant
areas. Any special requirements may result in
additional cost to Tenant.






 









 





Proposed Tenant Improvement Allowance Schedule

Page 2




	 	 	 
	Item	 	Product Description
	Floor Coverings

	 	Building standard carpet. Direct glue installation. Durkan
‘Groovin’ or Masland ‘Energy-Zone’. Vinyl Composition Tile — Use
4" high coved rubber base at all areas utilizing VCT flooring.
	 
	 	 
	Window Coverings

	 	1" metal blinds. No substitutions or deletions will be allowed.
	 
	 	 
	Fire Protection
Sprinkler System

	 	White semi-recessed sprinkler heads at tenant areas. Concealed at
common areas.
	 
	 	 
	Signage

	 	Building standard Tenant identification and suite number sign
shall be provided.
	 
	 	 
	Telephone 

Mounting
Board

	 	4' x 4' plywood mounting board painted to match wall.
	 
	 	 
	Dedicated

Electrical Outlet

	 	110 volt dedicated circuit.





The preceding building standard items of work shall be provided by Landlord as a condition of the
lease. Any items of work or quantity of work in excess of that stated above shall be at the
Tenant’s expense as well as the necessary architectural fees, permits, Contractor’s overhead and
profit required to execute the excess work.





 









 












 









 





ADDENDUM




ANCONA OFFICE CENTRE



This addendum is attached to and a part of that Lease dated November 15, 2005, between E&V
Investments, L.L.C. (Landlord) and Global Water Management, LLC (Tenant) for the building known as
Ancona Office Centre located at 21410 North 19th Avenue, and the Premises known as Suite
# 201, in Phoenix, Arizona.



Addendum Paragraph #1/Tenant Improvements: Landlord, at their sole cost and expense, shall
construct Tenant Improvements within the Premises on a “building standard” basis, pursuant to the
attached space plan and work letter. The budget for these improvements is $39.00 per usable square
foot ($713,232.00). Should the actual cost of these improvements exceed this budget, due to
upgrades above “building standard” made at Tenant’s request, such excess amount shall be paid in
full by Tenant prior to taking possession of the Premises.



Tenant has requested a card key security access system to their front and rear entrances. Landlord
shall be responsible for any portion of the cost of this system which is greater than the budget.



Addendum Paragraph #2/ Monument Signage: At Tenant’s sole cost and expense, Tenant may place their
name on the Building’s Monument Sign located on 19th Avenue in accordance with the
Building’s sign criteria and any applicable governing codes.




 











 




Addendum Paragraph #3/Renewal Option: Tenant shall possess an Option to Renew this Lease for
a period of five (5) years. In order to exercise this option, Tenant must be in compliance
with the terms herein and provide written notice to Landlord of their intent to renew Nine
(9) months prior to expiration of the initial Lease Term. The minimum monthly rental
schedule during this option period shall be as follow:




	 	 	 	 	 
	 	 	Rental Rate/Square Foot
	Period	 	(plus applicable rental tax)
	December 1, 2011 to November 30, 2012
	 	$	25.00	 
	December 1, 2012 to November 30, 2013
	 	$	25.50	 
	December 1, 2013 to November 30, 2014
	 	$	26.00	 
	December 1, 2014 to November 30, 2015
	 	$	26.50	 
	December 1, 2015 to November 30, 2016
	 	$	27.00	 





Addendum Paragraph #4/Early Possession: Notwithstanding anything to the contrary contained
within the Lease or this Addendum, Tenant shall be provided possession of the Premises upon
completion of Tenant Improvements and receipt of the Certificate of Occupancy prior to the
Commencement Date, free of all rent. All other terms and conditions of the Lease shall
apply.



Addendum Paragraph #5/ Receiver: Subject to Landlord’s review, Tenant shall be allowed to
install, at Tenant’s sole cost and expense, one (1) receiver for Tenant’s wireless data
system on the building roof. Such installation shall be done in accordance with any
municipal codes and in a manner so as not to void the roof warranty in any way.




	 	 	 	 	 	 	 	 	 	 	 
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