Document:

ex10x1.htm

Exhibit 10.1

 

 

LIFELOC TECHNOLOGIES, INC.

STOCK OPTION PLAN

 

 

	
I. 

	
Purpose

The LIFELOC TECHNOLOGIES, INC. Stock Option Plan (the "Plan") provides for the grant of Stock Options, Stock Appreciation Rights and Supplemental Bonuses to Employees of Lifeloc Technologies, Inc. (the "Company"), and such of its subsidiaries (as defined in Section 424(f) of the Internal Revenue Code of 1986, as amended (the "Code")) as the Board of Directors of the Company (the "Board") shall from time to time designate ("Participating Subsidiaries"), in order to advance the interests of the Company and its Participating Subsidiaries through the motivation, attraction and retention of their respective Employees.

	
II. 

	
Incentive Stock Options and Non-Incentive Stock Options

The Stock Options granted under the Plan may be either:

(a)  Incentive Stock Options ("ISOs") which are intended to be "Incentive Stock Options" as that term is defined in Section 422 of the Code; or

(b)  Nonstatutory Stock Options ("NSOs") which are intended to be options that do not qualify as "Incentive Stock Options" under Section 422 of the Code.

All Stock Options shall be ISOs unless the Option Agreement clearly designates the Stock Options granted thereunder, or a specified portion thereof, as NSOs.  Subject to the other provisions of the Plan, a Participant may receive ISOs and NSOs at the same time, provided that the ISOs and NSOs are clearly designated as such.

Except as otherwise expressly provided herein, all of the provisions and requirements of the Plan relating to Stock Options shall apply to ISOs and NSOs.

	
III. 

	
Administration

3.1  Committee.  With respect to grants of Stock Options, Stock Appreciation Rights and Supplemental Bonuses to Employees other than officers and directors of the Company, the Plan shall be administered by a committee ("Committee") composed of at least two members of the Board of Directors.  With respect to grants of Stock Options, Stock Appreciation Rights and Supplemental Bonuses to officers and directors, the Plan shall be administered by the Board of Directors, if each director is a Disinterested Person, or by a committee of two or more directors, all of whom are Disinterested Persons.  Such committee may be the Committee if all of the members thereof are Disinterested Persons, or a special committee appointed by the Board of Directors composed of at least two Disinterested Persons.  The Committee or the Board, as the case may be, shall have full authority to administer the Plan, including authority to interpret and construe any provision of the Plan and any Stock Option, Stock Appreciation Right or Supplemental Bonus granted thereunder, and to adopt such rules and regulations for administering the Plan as it may deem necessary in order to comply with the requirements of the Code, in order that Stock Options that are intended to be ISOs will be classified as incentive stock options under the Code, or in order to conform to any regulation or to any change in any law or regulation applicable thereto.  The Committee or the Board may delegate any of its responsibilities under the Plan, other than its responsibility to grant Stock Options, to determine whether the Stock Appreciation Rights or Supplemental Bonuses, if any, payable to a Participant shall be paid in cash, in shares of Common Stock or a combination thereof, or to interpret and construe the Plan.  If the Board of Directors is composed entirely of Disinterested Persons, the Board of Directors may reserve to itself any of the authority granted to the Committee as set forth herein, and it may perform and discharge all of the functions and responsibilities of the Committee at any time that a duly constituted Committee is not appointed and serving.  All references in the Plan to the "Committee" shall be deemed to refer to the Board of Directors whenever the Board is discharging the powers and responsibilities of the Committee, and to any special committee appointed by the Board to administer particular aspects of the Plan.

3.2  Actions of the Committee.  All actions taken and all interpretations and determinations made by the Committee in good faith (including determinations of Fair Market Value) shall be final and binding upon all Participants, the Company and all other interested persons.  No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, and all members of the Committee shall, in addition to their rights as directors, be fully protected by the Company with respect to any such action, determination or interpretation.

	
IV. 

	
Definitions

4.1  "Stock Option".  A Stock Option is the right granted under the Plan to an Employee to purchase, at such time or times and at such price or prices ("Option Price") as are determined by the Committee, the number of shares of Common Stock determined by the Committee.

4.2  "Stock Appreciation Right".  A Stock Appreciation Right is the right to receive payment, in shares of Common Stock, cash or a combination of shares of Common Stock and cash, of the Redemption Value of a specified number of shares of Common Stock then purchasable under a Stock Option.

4.3  "Redemption Value".  The Redemption Value of shares of Common Stock purchasable under a Stock Option shall be the amount, if any, by which the Fair Market Value of one share of Common Stock on the date on which the Stock Option is exercised exceeds the Option Price for such share.

 

 

 

 

 

4.4  "Common Stock".  A share of Common Stock means a share of authorized but unissued or reacquired Common Stock (par value $ per share) of the Company.

4.5  "Fair Market Value".  If the Common Stock is not traded publicly, the Fair Market Value of a share of Common Stock on any date shall be determined, in good faith, by the Committee after such consultation with outside legal, accounting and other experts as the Committee may deem advisable, and the Committee shall maintain a written record of its method of determining such value.  If the Common Stock is traded publicly, the Fair Market Value of a share of Common Stock on any date shall be the average of the representative closing bid and asked prices, as quoted by the National Association of Securities Dealers through NASDAQ (its automated system for reporting quotes), for the date in question or, if the Common Stock is listed on the NASDAQ National Market System or is listed on a national stock exchange, the officially quoted closing price on NASDAQ or such exchange, as the case may be, on the date in question.

4.6  "Employee".  An Employee is an employee of the Company or any Participating Subsidiary.

4.7  "Participant".  A Participant is an Employee to whom a Stock Option, Stock Appreciation Right or Supplemental Bonus is granted.

4.8  "Disinterested Person."  A Disinterested Person is a director of the Company who, during the shorter of (a) the one year prior to service as an administrator of the Plan, or (b) the period between the date on which the Company's Common Stock is registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, (the "1934 Act") and the director's service as an administrator of the Plan, has not been granted or awarded equity securities pursuant to the Plan or any other plan of the Company or any of its affiliates except as may be permitted by Rule 16b-3(c)(2) under the 1934 Act or any successor to such rule.

4.9  "Supplemental Bonus".  A Supplemental Bonus is the right to receive payment, in shares of Common Stock, cash or a combination of shares of Common Stock and cash, of an amount determined under Section 7.7.

	
V. 

	
Eligibility and Participation

Grants of Stock Options, Stock Appreciation Rights and Supplemental Bonuses may be made to Employees of the Company or any Participating Subsidiary, including directors of the Company who are also Employees, but directors who are not Employees shall not be eligible to receive Stock Options, Stock Appreciation Rights or Supplemental Bonuses under the Plan.  The Committee shall from time to time determine the Employees to whom Stock Options shall be granted, the number of shares of Common Stock subject to each Stock Option to be granted to each such Employee, the Option Price of such Stock Options and other terms and provisions of such Stock Options, all as provided in the Plan.  The Option Price of any ISO shall be not less than the Fair Market Value of a share of Common Stock on the date on which the Stock Option is granted, but the Option Price of an NSO may be less than the Fair Market Value on the date the NSO is granted if the Committee so determines.  If an ISO is granted to an Employee who then owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company, the Option Price of such ISO shall be at least 110% of the Fair Market Value of the Common Stock subject to the ISO at the time such ISO is granted, and such ISO shall not be exercisable after five years after the date on which it was granted.  Each Stock Option shall be evidenced by a written agreement ("Option Agreement") containing such terms and provisions as the Committee may determine, subject to the provisions of the Plan.

	
VI. 

	
Shares of Common Stock Subject to the Plan

6.1  Maximum Number.  The maximum aggregate number of shares of Common Stock that may be made subject to Stock Options shall be 750,000 authorized but unissued shares.  The aggregate Fair Market Value (determined as of the time the ISO is granted) of the Common Stock as to which all ISOs granted to an Employee may first become exercisable in a particular calendar year may not exceed $100,000.  If any shares of Common Stock subject to Stock Options are not purchased or otherwise paid for before such Stock Options expire, such shares may again be made subject to Stock Options.

6.2  Capital Changes.  In the event any changes are made to the shares of Common Stock (whether by reason of merger, consolidation, reorganization, recapitalization, stock dividend in excess of ten percent (10%) at any single time, stock split, combination of shares, exchange of shares, change in corporate structure or otherwise), appropriate adjustments shall be made in:  (i) the number of shares of Common Stock theretofore made subject to Stock Options, and in the purchase price of said shares; and (ii) the aggregate number of shares which may be made subject to Stock Options.  If any of the foregoing adjustments shall result in a fractional share, the fraction shall be disregarded, and the Company shall have no obligation to make any cash or other payment with respect to such a fractional share.

	
VII. 

	
Exercise of Stock Options

7.1  Time of Exercise.  Subject to the provisions of the Plan, including without limitation Section 7.5, the Committee, in its discretion, shall determine the time when a Stock Option, or a portion of a Stock Option, shall become exercisable, and the time when a Stock Option, or a portion of a Stock Option, shall expire.  Such time or times shall be set forth in the Option Agreement evidencing such Stock Option.  An ISO shall expire, to the extent not exercised, no later than the tenth anniversary of the date on which it was granted, and an NSO shall expire, to the extent not exercised, no later than ten years after the date on which it was granted.  The Committee may accelerate the vesting of any Participant's Stock Option by giving written notice to the Participant.  Upon receipt of such notice, the Participant and the Company shall amend the Option Agreement to reflect the new vesting schedule.  The acceleration of the exercise period of a Stock Option shall not affect the expiration date of that Stock Option.

 

 

 

 

 

7.2  Exchange of Outstanding Stock.  The Committee, in its sole discretion, may permit a Participant to surrender to the Company shares of Common Stock previously acquired by the Participant as part or full payment for the exercise of a Stock Option.  Such surrendered shares shall be valued at their Fair Market Value on the date of exercise.

7.3  Use of Promissory Note; Exercise Loans.  The Committee may, in its sole discretion, impose terms and conditions, including conditions relating to the manner and timing of payments, on the exercise of Stock Options.  Such terms and conditions may include, but are not limited to, permitting a Participant to deliver to the Company his promissory note as full or partial payment for the exercise of a Stock Option; provided that, with respect to any promissory note given as payment or partial payment for the exercise of an ISO, all terms of such note shall be determined at the time a Stock Option is granted and set forth in the Option Agreement.  The Committee, in its sole discretion, may authorize the Company to make a loan to a Participant in connection with the exercise of Stock Options, or authorize the Company to arrange or guarantee loans to a Participant by a third party.

7.4  Stock Restriction Agreement.  The Committee may provide that shares of Common Stock issuable upon the exercise of a Stock Option shall, under certain conditions, be subject to restrictions whereby the Company has a right of first refusal with respect to such shares or a right or obligation to repurchase all or a portion of such shares, which restrictions may survive a Participant's term of employment with the Company.  The acceleration of time or times at which a Stock Option becomes exercisable may be conditioned upon the Participant's agreement to such restrictions.

7.5  Termination of Employment Before Exercise.  If a Participant's employment with the Company or a Participating Subsidiary shall terminate for any reason other than the Participant's disability, any Stock Option then held by the Participant, to the extent then exercisable under the applicable Option Agreement(s), shall remain exercisable after the termination of his employment for a period of 30 days (but, in the case of an ISO, in no event beyond ten years from the date of grant of the ISO).  If the Participant's employment is terminated because the Participant is disabled within the meaning of Section 22(e)(3) of the Code, any Stock Option then held by the Participant, to the extent then exercisable under the applicable Option Agreement(s), shall remain exercisable after the termination of his employment for a period of three months (but, in the case of an ISO, in no event beyond ten years from the date of grant of the ISO).  If the Stock Option is not exercised during the applicable period, it shall be deemed to have been forfeited and of no further force or effect.

7.6  Disposition of Forfeited Stock Options.  Any shares of Common Stock subject to Stock Options forfeited by a Participant shall not thereafter be eligible for purchase by the Participant but may be made subject to Stock Options granted to other Participants.

7.7  Grant of Supplemental Bonuses.  The Committee, either at the time of grant or at any time prior to exercise of any Stock Option or Stock Appreciation Right, may provide for a Supplemental Bonus from the Company or Participating Subsidiary in connection with a specified number of shares of Common Stock then purchasable, or which may become purchasable, under a Stock Option, or a specified number of Stock Appreciation Rights which may be or become exercisable.  Such Supplemental Bonus shall be payable upon the exercise of the Stock Option or Stock Appreciation Right with regard to which such Supplemental Bonus was granted.  A Supplemental Bonus shall not exceed the amount necessary to reimburse the Participant for the income tax liability incurred by him upon the exercise of the Stock Option or upon the exercise of such Stock Appreciation Right, calculated using the maximum combined federal and applicable state income tax rates then in effect and taking into account the tax liability arising from the Participant's receipt of the Supplemental Bonus.  The Committee may, in its discretion, elect to pay any part or all of the Supplemental Bonus in:  (i) cash; (ii) shares of Common Stock; or (iii) any combination of cash and shares of Common Stock.  The provisions of Section 8.3 shall apply to the giving of notice, the determination of the number of shares to be delivered, and the time for delivering shares.  In applying Section 8.3, the Supplemental Bonus shall be treated as if it were a Stock Appreciation Right that the Participant exercised on the day the Supplemental Bonus became payable.  Shares of Common Stock issued pursuant to this Section 7.7 shall not be deemed to have been issued upon the exercise of a Stock Option for purposes of the limitations imposed by Section 6.1 of the Plan.

	
VIII. 

	
Stock Appreciation Rights

8.1  Grant of Stock Appreciation Rights.  The Committee may, from time to time, grant Stock Appreciation Rights to a Participant with respect to not more than the number of shares of Common Stock which are, or may become, purchasable under any Stock Option held by the Participant.  The Committee may, in its sole discretion, specify the terms and conditions of such rights, including without limitation the time period or time periods during which such rights may be exercised and the date or dates upon which such rights shall expire and become void and unexercisable; provided, however, that in no event shall such rights expire and become void and unexercisable later than the time when the related Stock Option is exercised, expires or terminates.  Each Participant to whom Stock Appreciation Rights are granted shall be given written notice advising him of the grant of such rights and specifying the terms and conditions of the rights, which shall be subject to all the provisions of this Plan.

8.2  Exercise of Stock Appreciation Rights.  Subject to Section 8.3, and in lieu of purchasing shares of Common Stock upon the exercise of a Stock Option held by him, a Participant may elect to exercise the Stock Appreciation Rights, if any, he has been granted and receive payment of the Redemption Value of all, or any portion, of the number of shares of Common Stock subject to such Stock Option with respect to which he has been granted Stock Appreciation Rights; provided, however, that the Stock Appreciation Rights may be exercised only when the Fair Market Value of the Common Stock subject to such Stock Option exceeds the exercise price of the Stock Option.  A Participant shall exercise his Stock Appreciation Rights by delivering a written notice to the Committee specifying the number of shares with respect to which he exercises Stock Appreciation Rights and agreeing to surrender the rights to purchase an equivalent number of shares of Common Stock subject to his Stock Option.  If a Participant exercises Stock Appreciation Rights, payment of his Stock Appreciation Rights shall be made in accordance with Section 8.3 on or before the 90th day after the date of exercise of the Stock Appreciation Rights.

 

 

 

 

 

 

 

8.3  Form of Payment.  If a Participant elects to exercise Stock Appreciation Rights as provided in Section 8.2, the Committee may, in its absolute discretion, elect to pay any part or all of the Redemption Value of the shares with respect to which the Participant has exercised Stock Appreciation Rights in:  (i) cash; (ii) shares of Common Stock; or (iii) any combination of cash and shares of Common Stock.  The Committee's election pursuant to this Section 8.3 shall be made by giving written notice to the Participant within said 90-day period, which notice shall specify the portion which the Committee elects to pay in cash, shares of Common Stock or a combination thereof.  In the event any portion is to be paid in shares of Common Stock, the number of shares to be delivered shall be determined by dividing the amount which the Committee elects to pay in shares of Common Stock by the Fair Market Value of one share of Common Stock on the date of exercise of the Stock Appreciation Rights.  Any fractional share resulting from any such calculation shall be disregarded.  Said shares, together with any cash payable to the Participant, shall be delivered within said 90-day period.

	
IX. 

	
No Contract of Employment

Nothing in this Plan shall confer upon the Participant the right to continue in the employ of the Company, or any Participating Subsidiary, nor shall it interfere in any way with the right of the Company, or any such Participating Subsidiary, to discharge the Participant at any time for any reason whatsoever, with or without cause.  Nothing in this Article IX shall affect any rights or obligations of the Company or any Participant under any written contract of employment.

	
X. 

	
No Rights as a Stockholder

A Participant shall have no rights as a stockholder with respect to any shares of Common Stock subject to a Stock Option. Except as provided in Section 6.2, no adjustment shall be made in the number of shares of Common Stock issued to a Participant, or in any other rights of the Participant upon exercise of a Stock Option by reason of any dividend, distribution or other right granted to stockholders for which the record date is prior to the date of exercise of the Participant's Stock Option.

	
XI. 

	
Assignability

No Stock Option, Stock Appreciation Right or Supplemental Bonus right granted under this Plan, nor any other rights acquired by a Participant under this Plan, shall be assignable or transferable by a Participant, other than by will or the laws of descent and distribution or, in the case of an NSO, pursuant to a qualified domestic relations order as defined by the Code, Title I of the Employee Retirement Income Security Act, or the rules thereunder.  Notwithstanding the preceding sentence, the Committee may, in its sole discretion, permit the assignment or transfer of an NSO by a Participant other than an officer or director, and the exercise thereof by a person other than such Participant, on such terms and conditions as the Committee in its sole discretion may determine.  Any such terms shall be determined at the time the NSO is granted, and shall be set forth in the Option Agreement.  In the event of his death, the Stock Option or any Stock Appreciation Right or Supplemental Bonus right may be exercised by the Personal Representative of the Participant's estate or, if no Personal Representative has been appointed, by the successor or successors in interest determined under the Participant's will or under the applicable laws of descent and distribution.

	
XII. 

	
Merger or Liquidation of the Company

If the Company or its stockholders enter into an agreement to dispose of all, or substantially all, of the assets or outstanding capital stock of the Company by means of a sale or liquidation, or a merger or reorganization in which the Company is not the surviving corporation, all Stock Options outstanding under the Plan as of the day before the consummation of such sale, liquidation, merger or reorganization, to the extent not exercised, shall for all purposes under this Plan become exercisable in full as of such date even though the dates of exercise established pursuant to Section 7.1 have not yet occurred, unless the Board shall have prescribed other terms and conditions to the exercise of the Stock Option, or otherwise modified the Stock Options.

	
XIII. 

	
Amendment

The Board may from time to time alter, amend, suspend or discontinue the Plan, including, where applicable, any modifications or amendments as it shall deem advisable in order that ISOs will be classified as incentive stock options under the Code, or in order to conform to any regulation or to any change in any law or regulation applicable thereto; provided, however, that no such action shall adversely affect the rights and obligations with respect to Stock Options at any time outstanding under the Plan; and provided further that no such action shall, without the approval of the stockholders of the Company, (i) increase the maximum number of shares of Common Stock that may be made subject to Stock Options (unless necessary to effect the adjustments required by Section 6.2), (ii) materially increase the benefits accruing to Participants under the Plan, or (iii) materially modify the requirements as to eligibility for participation in the Plan.

	
XIV. 

	
Registration of Optioned Shares

The Stock Options shall not be exercisable unless the purchase of such optioned shares is pursuant to an applicable effective registration statement under the Securities Act of 1933, as amended (the "1933 Act"), or unless, in the opinion of counsel to the Company, the proposed purchase of such optioned shares would be exempt from the registration requirements of the 1933 Act and from the registration or qualification requirements of applicable state securities laws.

 

 

 

 

 

	
XV. 

	
Withholding Taxes

The Company or Participating Subsidiary may take such steps as it may deem necessary or appropriate for the withholding of any taxes which the Company or the Participating Subsidiary is required by any law or regulation or any governmental authority, whether federal, state or local, domestic or foreign, to withhold in connection with any Stock Option, Stock Appreciation Right or Supplemental Bonus, including, but not limited to, the withholding of all or any portion of any payment or the withholding of issuance of shares of Common Stock to be issued upon the exercise of any Stock Option or Stock Appreciation Right or upon payment of any Supplemental Bonus, until the Participant reimburses the Company or Participating Subsidiary for the amount the Company or Participating Subsidiary is required to withhold with respect to such taxes, or canceling any portion of such payment or issuance in an amount sufficient to reimburse itself for the amount it is required to so withhold.

	
XVI. 

	
Brokerage Arrangements

The Committee, in its discretion, may enter into arrangements with one or more banks, brokers or other financial institutions to facilitate the disposition of shares acquired upon exercise of Stock Options, Stock Appreciation Rights or Supplemental Bonuses, including, without limitation, arrangements for the simultaneous exercise of Stock Option, Stock Appreciation Rights or Supplemental Bonuses, and sale of the shares acquired upon such exercise.

	
XVII. 

	
Nonexclusivity of the Plan

Neither the adoption of the Plan by the Board nor the submission of the Plan to stockholders of the Company for approval shall be construed as creating any limitations on the power or authority of the Board to adopt such other or additional incentive or other compensation arrangements of whatever nature as the Board may deem necessary or desirable or preclude or limit the continuation of any other plan, practice or arrangement for the payment of compensation or fringe benefits to employees generally, or to any class or group of employees, which the Company or any Participating Subsidiary now has lawfully put into effect, including, without limitation, any retirement, pension, savings and stock purchase plan, insurance, death and disability benefits and executive short-term incentive plans.

	
XVIII. 

	
Effective Date

This Plan was adopted by the Board of Directors and became effective on March 4, 2002 and was approved by the Company's stockholders on                     .  No Stock Options shall be granted subsequent to ten years after the effective date of the Plan.  Stock Options outstanding subsequent to ten years after the effective date of the Plan shall continue to be governed by the provisions of the Plan.ex10x2.htm

Exhibit 10.2

 

OFFICE WAREHOUSE PREMISES LEASE

 

    THIS LEASE is dated for reference purposes only the 12th day of December, 2006, and is between Ward West Properties, LLC, having a place of business at 8471 Turnpike Drive, Suite 120, Westminster, Colorado 80031 (the "Landlord"), and LIFELOC TECHNOLOGIES, INC., having a place of business at the Premises and at 12441 W. 49th Ave., Unit 4, Wheat Ridge, Colorado 80033 (the "Tenant").

 

Definitions

 

 

	Section 1.1 -   	
 Building Location: 12441 W. 49th Avenue, Wheat Ridge, Colorado 80033

 

Total Building Square Feet: 22,325

 

Unit Number of Premises: Units 3 and 4

 

Number of Square Feet in Premises: 8,849

Unless expressly stated to the contrary, all references to square feet in this Lease

 

Shall refer to rentable square feet.

	 	 
	

Section 1.2 -

	

Lease Term: 60 Months (See early termination clause in Special Provisions section below)

Commencement: February 1, 2007 Expiration: January 31, 2012

	 	 
	Section 1.3 - 	

Base Rent: {Including Tenant's Expense Stop defined in Section 2.1)

	 	 
	Period   	Monthly Base Rent
	February 1, 2007 - January 31,2008	$7,423.00
	February 1, 2008 - January 31, 2009	$7,720.00
	February 1, 2009 - January 31, 2010	$8,029.00
	February 1, 2010 - January 31, 2011	$8,350.00
	February 1, 2011 - January 31, 2012	$8,684.00
	 	 
	Section 1.4 - 	Use of Premises: office/warehouse
	 	 
	Section 2.1 - 	

Tenant's Pro Rata Share ( of Building Operating Costs, payable as

Additional Rent): 39.64%

	 	 
	 	

Tenant's Expense Stop:

As Defined in Operating Costs: Any increase in Operating Costs above such actual costs for the year 2007.

	 	 
	Section 24.1 - 	

Brokerage: NONE.

No brokers for Tenant are involved in this lease transaction.

	 	 
	Section 25.1 -   	

Security Deposit: $4,241.97

	 	 
	Special Provisions:	

(a) Landlord, at Landlord's expense, agrees: 1) to install access two passageways between units 3 and 4 2) the demising wall within tenant's conference room shall be removed and walls and ceiling repaired to standard 3) Landlord shall re-carpet unit 4 throughout presently carpeted area using best efforts to match carpet presently in unit 3 4) subject to County approval Landlord shall use best efforts to construct a tenant monument sign fronting Ward Road. Tenant is otherwise taking the Premises "as is". Tenant may, at Tenant's sole cost and expense, modify the Premises in accordance with a space plan mutually agreeable to Tenant and Landlord.

 

 

 

 

1

  

  

  

 

 

	 	

(b) Tenant may, by an election in writing to be delivered to Landlord on or before July 31,2008 and any time thereafter, elect to terminate this lease no earlier than January 31, 2009 or on a month end no less than 180 days after such notice to terminate is then given to Landlord by Tenant. No termination fee shall be due if 180 advance notice per above is given.

 

(c) Tenant shall be given the opportunity but not the exclusive right to expand into adjacent space should such space become available. Rent shall be at market.

 

(d) Landlord and Tenant agree that upon signing this lease agreement that effective February 1, 2007 the prior lease and extension amendment between the parties hereto shall be null and void without any further effect.

 

WITNESSETH:

 

ARTICLE 1

DESCRIPTION- TERM- RENT- USE

 

Section 1.1           The Landlord, in consideration of the rents, covenants and agreements does lease unto the Tenant, and the Tenant does hereby take the space {the "premises") described on Exhibit A attached hereto in the building located at the place specified in the Definitions section of this Lease (the "Building"). So Jong as this Lease remains in effect and Tenant is not in default of any if its obligations under the Lease, Tenant shall have the license to non-exclusively use space in any parking area designated for use by tenants of the Building, subject to such parking control program as Landlord, in its sole discretion, may implement from time to time.

 

Section 1.2           The term of this Lease shall be as specified in the Definition section of this Lease (unless sooner terminated as herein provided).

 

Section 1.3           Tenant agrees and covenants to pay Landlord during the term of this Lease, at the place specified by Landlord, the Base Rent specified and Additional Rent without deduction or setoff. All amounts owing by Tenant to Landlord under this Lease, other than Base Rent, shall be Additional Rent, and upon Tenant's failure to timely pay, Landlord shall have the same remedies as for Tenant's failure to pay Base Rent. (Base Rent and Additional Rent may collectively be referred to as Rent). Base rent shall be paid in advance on the first day of each calendar month during the term of this Lease, except that the first month's rent shall be due and payable when Tenant executes this Lease. If the term does not commence on the first day of a month, Base Rent shall be prorated and paid on the date of such commencement. Interest at the rate of one and one half (1.5%) percent per month will be charged retroactive to the first day of the month for rents not paid by the fifth (5th) day of the month until all monies are paid.

 

Section 1.4           The Tenant agrees that it will use and occupy the Premise only for the purposes set forth in the Definitions section of this Lease.

 

ARTICLE II

OPERATING COSTS

 

Section 2.1           In addition to Base Rent, Tenant shall pay Tenant's Pro Rata share of Building Operating Costs in excess of Tenant's Expense Stop as defined in Section 2.1 (Definitions section of this Lease.) Building Operating Costs shall mean all expenses, costs and disbursements (in excess of Tenant's Expense Stop defined in the Definition section of this Lease) which Landlord shall pay or become obligated to pay because of, or in connection with, the maintenance, repair and operation of the Building, including, but not limited to: real estate taxes and assessments, use sales, or any other taxes (except income taxes) based on rents, personal property taxes on personal property used in the operation of the Building; Landlord's insurance; maintenance; janitorial services for any common areas of the Building; operating supplies; properly management; Building services; snow removal; landscaping; costs of rubbish removal for any common area of the Building; tools and equipment used for the daily operation of the Building; air conditioning, ventilation and heating; resurfacing and restriping of parking areas, repairs and replacement

 

 

 

2

  

  

  

of signage; and security reasonably incurred in the operation of the Building. Notwithstanding the foregoing, Building Costs shall not include monies spent for income tax, interest, depreciation, or expenditures of a capital nature (except to the extent that such expenditures are required due to a change in a law or are reasonably anticipated to cause a reduction in the cost of services, in such case, that part of the capital expense attributes to the (ease year under good accounting practices shall be included in the Building Operation Costs.)

 

Section 2.2           Landlord's reasonable best estimate as to the amount of Tenant's Pro-Rata Share of Building Operating Costs shall be payable monthly, together with the monthly installment of Base Rent and any other Additional Rent due and payable to Landlord. Within one hundred twenty(120) days after the beginning of each calendar year, commencing with the year immediately following the date of this Lease, Landlord shall give Tenant a statement of Landlord's reasonable estimate of Building Operating Costs for the calendar year just started ("Building Operating Costs Estimate"), which shall be based upon a determination of past and estimated future operating cost data, together with a statement setting forth the Building Operating Costs incurred by the Landlord during the calendar year ended ("Actual Cost Statement"). Landlord's failure to give the Building Operating Costs Estimate or Actual Cost Statement within said one hundred twenty (120) day period shall not release in any manner Tenant's obligations under this Lease, and Landlord may render said Estimate or Statement at any time thereafter. In the event that the date of this Lease is not January 1, then the Base Operating Costs and the Building Operating Costs shown in the first Actual Cost Statement shall both be multiplied by a fraction (the numerator of which is the number of days that this Lease was in effect during its first calendar year and the denominator of which is 365) to determine if Tenant owes Building Operating Costs for the first partial calendar year. The obligation of Tenant for its Pro Rata Share of Operating Expenses for the last partial calendar year of the Lease shall be similarly calculated. Landlord may revise the monthly operating cost payment provided for herein upward of downward to reflect more accurately the newly estimated Building Operating Costs, which revision shall be separately set forth in Landlord's Building Operating Costs Estimate. AH payments due at least thirty (30) days after Landlord gives Building Operating Costs Estimates or Actual Cost Statements shall be made at the monthly rate set forth therein. In addition, if the Actual Cost Statement reveals that Tenant made under payments or overpayments of Building Operating Costs during the calendar year just ended, Tenant shall pay Landlord the amount of any underpaying within thirty (30) days of Landlord's giving the Actual Cost Statement and any overpayment shall be credited against the next payments by Tenant of its Pro Rata Share of Operating Expenses coming due.

 

Section 2.3           The obligations of Tenant to pay Building Operating Costs and any other Additional Rent for the term or any extended term of this Lease, and to maintain and repair the Premises as required by this Lease, shall survive any termination or expiration of this Lease.

 

ARTICLE III

INSURANCE

Section 3.1           The Tenant, at its sole cost and expense, shall maintain for the mutual benefit of Landlord and Tenant general public liability insurance against claims for personal injury, death or property damage occurring upon, in or about the Premises or any elevators or escalators therein and on, in or about the adjoining streets and passageways if any, such insurance to afford protection to the limits of not less than the following amounts: two million dollars ($2,000,000.00) in respect of injury or death of a single person, two million dollars ($2,000,000.00) in respect of any one occurrence, and two million dollars ($2,000,000.00) in respect to property damage.

 

Section 3.2           All policies of insurance shall be in a form and substance satisfactory to the Landlord, shall be written with companies having a rating of not less than A- in Best's Guide, and shall provide that they shall not be cancelable on less than thirty (30) day's notice to the Landlord or holder of any mortgage. Certificates of insurance shall be furnished to the Landlord prior to Tenant's commencing occupancy and at least thirty (30) days prior to the expiration of any policy. Tenant's policies shall name Landlord and its designees as an additional insured. Nothing herein shall preclude Landlord from obtaining such insurance as it deems advisable with respect to the Building, and the cost thereof shall be included in the Operating Costs.

 

3

  

  

  

ARTICLE IV

LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS

 

Section 4.1           If there shall be an Event of Default under this Lease, the Landlord may, but shall not be obligated to, and without further notice or demand and without waiving or releasing the Tenant from any obligation of the Tenant under this Lease, make any payment or perform such other act to the extent the Landlord may deem desirable. All sums so paid by the Landlord and all expenses including reasonable attorneys' fees and costs, together with interest thereon at the rate of one and one half percent (1.5%) per month, shall be Additional Rent and be payable by Tenant to the Landlord on demand.

 

ARTICLE V

REPAIRS AND MAINTENANCE OF PREMISES-SURRENDER OF PREMISES-WASTE

 

Section 5.1           Except for obligations of Landlord expressly imposed upon it in this paragraph, Tenant covenants at the Tenant's sole expense to keep the Premises in a clean, orderly condition and free of debris, material and rubbish, and to maintain in good order and condition and to promptly repair the Premises including, but not limited to, light fixtures, ballasts, light bulbs, locks, ceilings, floors, walls, woodwork, counter tops, cabinets, paint, doors and glass. Unless maintenance or repair is required as the result of the conduct of tenant, its agents, representatives, employees or contractors, Landlord shall maintain the plumbing, plumbing fixtures, heating/air conditioning, hot water system, electrical system, mechanical system, Building equipment located in or serving the Premises, and structural elements of the Building and Premises. Landlord shall also be obligated at its expense to maintain and repair (or improve) the portions of the Building not occupied by Tenant in good order and condition. All costs incurred by Landlord in performing its obligations hereunder shall be included in Operating Costs.

 

Section 5.2           Tenant covenants that upon expiration or termination of this Lease for any reason whatsoever the Tenant will surrender the Premises to the Landlord together with ail improvements, alterations and replacement thereto in good order, condition and repair, expect for reasonable wear and tear, provided that if Landlord requests Tenant to remove any such improvements, alterations or replacements, the Tenant shall remove same and restore the Premises to their prior condition at Tenant's expense. Upon expiration or termination, Tenant shall remove, to Landlord satisfaction, all petroleum, hazardous wastes and substances generated or stored at the Premises by Tenant.

 

Section 5.3           Tenant covenants not to or suffer any waste, damage or injury to the Premises, or overloading of the Premises' floors.

 

Section 5.4           Notwithstanding any provision of this Lease to the contrary, Tenant shall be solely responsible for obtaining and paying the costs of janitorial services for the Premises, trash removal services concerning trash generated at the Premises, and all utilities and telephone services other than water. Landlord shall not be obligated to Tenant in any manner whatsoever if any of the utilities and other services to the Premises are disrupted, it being understood and agreed upon by the parties that Tenant shall obtain at its own expense such business interruption insurance as it deems advisable to protect it against all such risks. Nothing in this paragraph shall be constructed to permit Tenant to make any change or alteration to the Premises without complying with the provisions of Article VII of this Lease.

 

Section 5.5           Tenant acknowledges that it may be doing business with various business entities, which may deliver, or cause to be delivered, various materials to Tenant. Tenant covenants and agrees that it shall, without forty-five (45) days after occurrence, repair damages to foundation, roof, overhead doors, door jambs, entryways, and exterior walls of the Building where the Premises is located, which were caused by the act or omission of Tenant, Tenant's agents, employees, customers, invitees and suppliers, their agents, employees or delivery services.

 

Section 5.6           Prior to the expiration or termination of the Lease, Tenant shall remove stains or deposits of grease, oil, tar, paint, or any other material used by Tenant such as to restore the Premises to its original condition. Tenant shall not store any motor vehicles on, at, or in the Premises.

 

4

 

  

  

  

ARTICLE VI

COMPLIANCE WITH LAW AND INSURANCE REQUIREMENTS

 

Section 6.1           Tenant covenants, at the Tenant's sole expense, to comply with all laws, ordinances and requirements of governmental agencies, legislative bodies and courts of competent jurisdiction, of whatever kind and nature, whether now existing or hereafter enacted, amended or modified (including, but not limited to, any laws, ordinances and requirements as related to protection of the environment policy) which may be applicable to the Premises.

 

Section 6.2           Tenant shall not permit Premises to be used or operated in any manner such that the Premises may or do become contaminated by any hazardous substance or environmental pollutant in violation of any federal, state or local environmental statute or ordinance, including without limitation, violation of the Comprehensive Environmental Response, Compensation and Liability Act, as amended from time to time ("CERCLA").

 

Section 6.3          If the presence of hazardous substances on the Premises caused or permitted by tenant results in contamination of the Premises, or if contamination of the Premises by hazardous material otherwise occurs to the extent caused by any act or omission of Tenant, then Tenant shall indemnify, defend and hold Landlord harmless form any and all claims, judgments, damages, penalties, fines, costs, liabilities or losses (including, without limitation, diminution in value of the Premises, damages for the loss or restriction on use of rentable or usable space or of any amenity of the Premises, damages, arising from any adverse impact on marketing of space, and sums paid in settlement of claims, court costs, attorneys' fees. Consultant fees, investigation costs and expert fees) which arise during or after the Lease term as a result of such contamination or unacceptable condition in violation of any federal, state, or location environmental statutes or ordinances, including, but not limited to, violations of CERCLA. This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal, or restoration work required by any federal, state, or local governmental agency or political subdivision because of hazardous material present in the soil or ground water on or under the Premises. Without limiting the foregoing, if the presence of any hazardous material on the Premises caused or permitted by Tenant results in any contamination or unacceptable condition of the Premises, Tenant shall promptly take all actions, at its sole expense, as are necessary to return the Premises to the condition existing prior to the introduction of any such hazardous material to the Premises, provided that Landlord's approval of such actions shall first be obtained, which approval shall not be unreasonably withheld so long as such actions would not potentially have any material adverse effect on the Premises.

 

ARTICLE VII 

CHANGES AND ALTERATIONS BY TENANT

 

Section 7.1           Tenant shall not make any changes or alterations, structural or otherwise, to the Premises without the Landlord's prior written consent. Structural changes to the Premises may be disapproved by Landlord for any reason or for no reason in the sole and absolute discretion of Landlord. Landlord's consent to nonstructural changes or alterations shall not be unreasonably withheld, but Tenant acknowledges and agrees that among other reasons, Landlord may withhold its consent to such nonstructural changes or alterations if such changes or alterations would adversely affect any insurance policy. In addition, and among other things, Landlord may condition any such consent to Landlord obtaining adequate assurance from the Tenant that the costs of removing the changes or alterations prior to the expiration of the Lease are secured to Landlord's reasonable satisfaction, and that Landlord is protected against liens being filed against the Building.

 

Section 7.2           Subject to the provisions of Section 5.2, all repairs, improvements, fixtures, changes or alterations made or installed by the Tenant shall become the property of the Landlord immediately upon completion of installation without any payment by or consideration from the Landlord.

 

 

 

5

  

  

  

ARTICLE VIII

DAMAGE OR DESTRUCTION

 

Section 8.1           Tenant covenants and agrees that in case of damage to or destruction of the Premises by fire other casualty, Tenant shall promptly give written notice thereof to Landlord, and the Landlord, to the extent of any insurance proceeds actually received, shall repair and rebuild the same as nearly as possible to the condition the Premises were in immediately prior to such damage or destruction, except that Landlord shall not be required to rebuild, repair or replace any part of the partitions, fixtures, additions or other improvements which may have been placed in, on or about the Premises by Tenant over and above any Tenant finish provided at the inception of this Lease. Provided however, that in the event the damage or destruction is due to Tenant's act, omission or negligence, Tenant shall pay the cost of such repairing and rebuilding. Tenant may repair or rebuild at its expense to the extent not required to be done by Landlord under this paragraph, but subject to Tenant's complying with the provisions of Article VII.

 

Section 8.2          Rent shall abate proportionately on such part of the Premises as may have been rendered wholly untenantable until such time as such time as such part shall be fit for occupancy, after which time the full amount of Rent shall be payable. Tenant acknowledges that it may obtain business interruption insurance to insure itself in the event of damage or destruction, which insurance shall be the sole expense of Tenant.

 

Section 8.3          Notwithstanding Section 8.1, if the Premises or Building shall be substantially damaged (substantially is defined as thirty percent (30%) or more of the usable square feet in the Premises or in the Building) or destroyed by fire or otherwise, Landlord and Tenant shall have the option of terminating this Lease as of the date of such damage or destruction by giving Tenant as least thirty (30) days' written notice.

 

Section 8.4           Waiver of Subrogation. Tenant and Landlord each hereby release and relieve the other and waive their entire right of recovery against their for loss or damage arising out of or incident to the perils insured against which perils occur in, on or abut Premises, whether due to the negligence of Landlord or Tenant or their agents, employees, contractors and/or invitees. Tenant and Landlord shall, upon obtaining the policies of insurance required give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in this Lease.

 

ARTICLE IX

CONDEMNATION

 

Section 9.1           If the whole or any part of the Premises shall be taken under the power of eminent domain, or shall be sold by the Landlord under threat of condemnation proceedings (which shall be deemed to exist upon formal or informal notification from any condemning authority), then this Lease shall terminate as to the part so taken or sold on the day when Tenant is required to yield possession thereof. Landlord shall make such repairs and alterations as may be necessary in order to restore the part not taken or sold to useful condition, and Base Rent and Tenant's Pro Rata Share shall be abated as to the portions of the Premises so taken or sold. Provided however, that Landlord shall not be required to expend more on repair of the Premises than it receives on condemnation proceedings. If more than thirty percent (30%) of the Premises is so taken or sold so as to impair substantially the usefulness of the Premises, then Tenant shall have the option to terminate this Lease as of the date when Tenant is required to yield possession. All compensation awarded or paid for any such taking or sale shall belong to and be the property of the Landlord. In the event of any such taking, however, Tenant will have the right to that portion of any award specifically pertaining to Tenant's moving expenses and leasehold improvements owned by Tenant.

 

Section 9.2           Notwithstanding Section 9.1, if all or any portion of the Premises shall be taken or sold on any proceeding or upon threat of any proceeding, Landlord shall have the option of terminating this Lease upon at least thirty (30) days' written notice to Tenant.

 

 

6

  

  

  

ARTICLE X

CONDITIONS OF WORK FOR REPAIRS-ALTERATIONS

 

Section 10.1         All work for repairs as required by Section 5.1, compliance with laws, ordinances, regulations or requirements as required by Section 6.1, and for changes or alterations permitted be Section 7.1, shall be done in all cases subject to reasonable conditions which the Landlord may impose, and in a good and workmanlike manner.

 

ARTICLE XI

MECHANIC'S LIENS

 

Section 11.1         Tenant shall not suffer nor permit any mechanics' or other liens to be filed against the Building, the Premises, or against Tenant's leasehold interest in the Premises by reason of work, labor, services or materials supplied or claimed to have been supplied to the Tenant or anyone holding the Premises or any part thereof through or under the Tenant The Landlord shall have the right at all times to post any notice which the Landlord may deem to be necessary or advisable for the protection of the Landlord and the Building from mechanics' liens. If a mechanics' lien shall be filed against the Premises, Tenant shall discharge it within sixty (60) days after the filing date, except that if Tenant desires to contest such lien, it will comply with such statutory procedures as may be available to release the lien within sixty (60) days after filing date. If a final judgement establishing the validity or existence of a lien for any amount is entered, Tenant will pay and satisfy the same at once. If Tenant fails to pay and charge for which a mechanics' lien has been filed, or has not complied with such statutory procedures as may be available to release the lien, then, in addition to any other rights or remedies available, Landlord may, but shall not be obligated to, discharge the amount claimed to be due or cause the lien to be released in any other manner. Any amount paid by Landlord with respect thereto, and all attorneys' fees and costs of the Landlord, with interest at the rate of one and one half percent (1.5%) per month, shall upon demand be paid by the Tenant to the Landlord.

ARTICLE XII

LANDLORD'S RIGHT TO ENTER PREMISES

 

Section 12.1         Tenant agrees to permit the Landlord and its representatives, upon reasonable notice, to enter the Premises at all times during usual business hours or at any other time in case of emergency, to inspect the same and the Landlord may, but shall not be obligated to, make repairs deemed necessary or desirable by the Landlord and to perform any work in the premises deemed necessary by the Landlord to comply with any laws, ordinances, regulations or requirements of any governmental authority or the recommendations of any insurer. During the progress of any such work, the Landlord may keep and store upon the Premises all necessary materials, tools and equipment. The Landlord shall not in any event be liable for inconvenience, annoyance, disturbance, and loss of business or other damage to Tenant.

 

Section 12.2         Tenant agrees to permit the Landlord and its representatives, upon reasonable notice, to enter the Premises during usual business hours to exhibit the same for the purposes of sale, mortgage or lease. During the final six (6) months of the term of this Lease, or in the case of default, Landlord may display "For Sale" or "For Lease" signs.

 

ARTICLE X111

ASSIGNMENT AND SUBLETTING

 

Section 13.1         Tenant shall not, without Landlord's prior written consent, which will not be unreasonably withheld: (a) assign convey, mortgage, pledge, encumber or otherwise transfer (whether voluntarily or otherwise) this Lease or any interest under it (in the event Tenant is a corporation, any transfer, sale, pledge, or other disposition cumulatively of more than fifty (50%) of the corporate stock or voting securities of Tenant shall not be deemed as assignment); (b) allow any transfer thereof or any lien upon the Tenant's interest by operation of law; (c) sublet the Premises or any part thereof, or (d) permit the use of occupancy of the Premises or any part thereof by anyone other than the Tenant, if no event shall Landlord be held responsible for monetary damages for the withholding of consent. Notwithstanding any provision of this Lease on the contrary, Tenant shall not be released from any of its obligations hereunder as a result of any assignment or subletting, the acceptance of rent from any unapproved assignee or subtenant shall not constitute Landlord's consent to any such assignment or subletting, the consent to any

 

 

 

7

  

  

  

assignment or subletting shall not be deemed a consent to any subsequent assignment or subletting, and no option to renew or extend this Lease or any other option that nay be granted to Tenant in this Lease shall be exercisable by any assignee or subtenant, as Tenant agrees that all of such options to Tenant are personal to Tenant and may not be exercised by any other party. Landlord's consent to any assignment or subletting may be conditioned upon, among other things, the financial capabilities of the proposed assignee or subtenant. Under no circumstances shall Landlord be required to consent to the assignment or subletting to any party whose business Landlord determines is more likely to utilize hazardous substances or is more likely to adversely effect any insurance policy respecting the property.

 

Section 13.2         Tenant agrees to pay Landlord, on demand, reasonable fees incurred by Landlord in connection with any request by Tenant for Landlord to consent to any assignment or subletting by Tenant.

 

Section 13.3         If this Lease is assigned, or if the Premises or any part thereof by sublet to otherwise is occupied by anyone other than Tenant, Landlord may collect Rent from any such assignee, subtenant or occupant and apply net amount collected to the Rent herein reserved, but such assignment, subletting, occupancy or collection of Rent shall be deemed a waiver of any of Tenant's covenants contained in this Lease, or a release of Tenant from further performance of Tenant's covenants including, but not limited to, Tenant's covenants to pay Rent.

 

Section 13.4        Upon assignment, subletting or other occupancy of the Premises, Tenant shall pay to Landlord monthly as Additional Rent, the excess of consideration received or to be received during such month over Rental reserved for such month in this Lease which is applicable to such portion of the Premises so assigned, sublet or occupied.

 

Section 13.5        In the event Tenant, with Landlord's prior written consent, subleases to a third party, the subtenant shall be subject to and comply with all requirements of this Lease or Tenant shall remain liable on remaining provisions.

 

ARTICLE XIV

RIGHTS OF MORTGAGEE

 

Section 14.1         The rights of Tenant hereunder are and shall be, at the election of any mortgages, subject and subordinate to the lien of any deeds of trust, mortgages, the encumbrance of any leasehold financing, or the lien resulting form any other method of financing or refinancing, now or hereafter in force against the Building, and to all advances made or hereafter to be made upon the security thereof (the "Superior Instruments"). With respect to any Superior instrument filed of record after the execution of this Lease, Landlord will request in writing that the holder thereof give a nondisturbance agreement to the Tenant. Tenant acknowledges and agrees that any such nondisturbance agreement may be on a standard form utilized by the holder. Tenant shall be solely responsible for seeking to negotiate satisfactory terms of such nondisturbance agreement. However, if the holder refuses to propose any nondisturbance agreement or a proposed nondisturbance agreement contains terms and conditions not satisfactory to Tenant, such circumstances shall not constitute a default by Landlord under this Lease. Rather, Landlord's sole obligation with respect to any such nondisturbance agreement shall be to request the same in writing as described above.

 

ARTICLE XV

INDEMNIFICATION OF LANDLORD-NO REPRESENTATION BY LANDLORD

 

Section 15.1         Landlord shall not be liable to Tenant or to Tenant's employees, agents or visitors, or to any other person or entity, for any injury to person or damage to or loss of property in or about the Premises or the Building caused by the act, omission or negligence of Tenant, its employees, subtenants, licensees or concessionaires, or of any other person entering the Building under the express or implied invitation of Tenant, to arising out of the use of the Premises by Tenant and the conduct of its business therein, or arising out of any breach or default by Tenant in the performance of its obligations hereunder or resulting from any other cause except Landlord's negligence, and Tenant hereby agrees to indemnify Landlord and hold it harmless from any loss, expenses or claims arising out of such damage or injury.

 

 

 

8

  

  

  

Section 15.2        Landlord has made no representations in connection with the condition of thePremises, and Tenant's commencement of occupancy of the Premises shall constitute Tenant's agreement that the Premises are in good condition.

 

ARTICLE XVI

DEFAULT PROVISIONS-REMEDIES OF LANDLORD-WAIVER OF JURY TRAIL

 

	Section 16.1   	 	

The following events shall be deemed to be Events of Default by Tenant under this Lease:

	 	 	 
	 	 (a)	

Tenant shall fail to pay any installment of Base Rent or amount of Additional Rent when due.

	 	 	 
	 	 (2)	

Tenant shall (i) apply for or consent to the appointment of a receiver, trustee or liquidator of the Tenant or of all or a substantial part of its assets, (ii) becomes insolvent or admit in writing its inability to pay its debts as they come due, (iii) make a general assignment for the benefit of creditors, (iv) file a petition or answer seeking reorganization or arrangement with creditors or to take advantage of any insolvency law, or otherwise become the subject of any proceeding under any such law, or (v) make a transfer in fraud of creditors.

	 	 	 
	 	 (3)	

Tenant shall abandon or vacate for more than thirty (30) days any substantial portion of the Premises.

	 	 	 
	 	 (4)	

Tenant shall fail to comply with any term, provision or covenant of this Lease (other than the forgoing provisions of this Section 16.1) and shall not cure such failure within twenty (20) days after written notice thereof to Tenant.

	 	 	 
	 	 (5)	

Tenant shall fail to comply with the requirements of Section 11.1 of this Lease.

	 	 	 
	

Section 16.2

	 	

If an Event of Default occurs, then Landlord may either:

	 	 	 
	 	 (6) 	

Give Tenant written notice of Landlord's intention to terminate Tenant's right of possession under this Lease, in which event Landlord may proceed to recover possession of the Premises by any lawful means. The obligation of Tenant to pay and the right of Landlord to recover all Rent, including accrued rent and all future rent and other charges owed for what would have been the remaining the term of the Lease, together with the costs of collection, including attorneys' fees, shall survive termination of Tenant's right of possession.

	 	 	 
	 	 (b) 	

Unless required by law, without further notice, reenter and take possession of the Premises, or any part thereof, and repossess the same as landlord's former estate, and expel Tenant and those claiming through or under Tenant and remove the effects of either or both without being deemed guilty of any manner of trespass, without being deemed to have elected to terminate this Lease, and without prejudice to any remedies for arrears of Rent and preceding breaches of covenants. After reentering and repossessing the Premises without terminating this Lease, Landlord may, from time to time, without terminating this Lease, relet the Premises or any part thereof on behalf of Tenant for such term or terms and at such rent or rents, and upon such other terms and conditions as Landlord may deem advisable in its sole discretion (including concessions, free rent and payment of commissions), with the right to make alterations and repairs to the Premises.

	 	 	 

In the event Landlord does not elect to terminate this Lease, but on the contrary elects to take possession, then such repossession shall not relieve tenant of its obligations and liability under this Lease, all of which shall survive such repossession. In the event of such repossession, Tenant shall pay Landlord as Rent all Rent which would be payable hereunder if such repossession had not occurred, less the net proceed, if any, of any reletting of the Premises after deducting all of Landlord's expenses in connection with reletting, including, but not limited to, all repossession costs, brokerage commissions, legal expenses, expenses of

 

 

 

 

 

9

  

  

  

employees, costs of alterations, expenses of preparation for reletting, rental concessions and free rent Tenant shall pay such Rent to Landlord on the days on which the Rent would have been payable hereunder if possession had not been retaken.

 

Any damage or loss sustained by Landlord following Landlord's election to reenter and repossess the Premises without terminating this Lease may be recovered by Landlord, at such time and from time to time as Landlord determines.

 

In the event this Lease is terminated, Tenant shall in all events remain liable to Landlord for damages in an amount equal to the Rent and other sums which would have been owing by Tenant hereunder for the balance of the Term had this Lease not been terminated, plus all amounts incurred by Landlord in order to obtain possession of the Premises and relet the same, including attorney's fees, reletting expenses, alterations and repair costs, brokerage commissions, and all other like amounts. Landlord shall be entitled to collect such damages from Tenant monthly on the days on which the Rent and other amounts would have been payable hereunder if this Lease had not been terminated, and Landlord shall be entitled to receive the same from Tenant on each such day. Alternatively, at the option of Landlord, in the event this Lease is terminated, Landlord shall be entitled to recover forthwith against Tenant in addition to damages owing to Landlord for any period prior to the termination date, as damages for loss of the bargain and not as a penalty, an amount equal to the worth, at the time of award by the court having jurisdiction thereof, of the amount by which the unpaid Rend for the balance of the Term after the time of such award exceeds the amount of such Rental loss for the same period that Tenant proves could be reasonably avoided, plus all amounts incurred by Landlord in order to obtain possession of the Premises and relet the same, including attorneys' fees, reletting expenses, alterations and repair costs, brokerage commissions and all other like amounts.

 

All rights and remedies of Landlord under this Lease shall be cumulative and shall not be exclusive of any other rights and remedies provided to Landlord under applicable law.

 

Section 16.3         Landlord and Tenant hereby waive trial by jury in any action, proceeding or counterclaim brought by either party against the other on any matters arising out of or in connection with this Lease, the relationship of Landlord and Tenant thereunder, the Premises or Tenant's use or occupancy thereof. The terms "enter" or "entry" as used in this Lease are not restricted to their technical legal meaning. In the event of litigation under this Lease, the prevailing party shall be awarded its costs incurred therewith, including reasonable attorney's fees. Notwithstanding any provision of this Lease to the contrary, in no event shall Landlord be deemed to terminate this Lease unless Landlord expressly declares such termination in writing. Specifically, but not by way of limitation, Landlord's service of any paper under the applicable forcible entry and detainer statute shall not constitute a termination of the Lease unless Landlord expressly states therein that it Is terminating the Lease.

 

ARTICLE XVII

HOLDING OVER

 

Section 17.1         Tenant covenants that it shall vacate the Premises immediately upon the expiration or sooner termination of this Lease. If the Tenant retains possession of the Premises or any part thereof after the termination of the term, the Tenant shall pay the Landlord rent at 150% monthly rate specified in Section 1 for the time the Tenant thus remains in possession and, in addition thereto, shall pay the Landlord for all damages, consequential as well as direct, sustained by reason of the Tenant's retention of possession. The provisions of this Section do not exclude the Landlord's rights of re-entry or any other right hereunder, including without limitation, the right to refuse double the monthly rent and instead to remove Tenant through proceedings pursuant to Colorado statutes for holding over beyond the expiration of the term of this Lease.

 

ARTICLE XVIII

INVALIDITY OF PARTICULAR PROVISIONS

 

Section 18.1        If any covenant, agreement or condition of this Lease shall to any extent be invalid or unenforceable, the remainder of this Lease shall not be affected thereby. Each covenant, agreement or condition of this Lease shall be valid and enforceable to the fullest extent permitted by law.

 

 

 

10

  

  

  

ARTICLE XIX

NOTICES

 

Section 19.1         Notices, demands and requests which may or are required to be given by either party to the other shall be in writing and shall be deemed given when hand delivered, or one business day after delivery to an overnight delivery carrier that gives receipts for delivery, or two business days after being deposited with the United States Postal Service for delivery by United States Certified Mail, return receipt requested, postage prepaid, (a) if for the Tenant, addressed to the Tenant at the Premises or at such other place as the Tenant may from time to time designate by written notice to the Landlord, or (b) if for the Landlord, addressed to the Landlord at 8601 Turnpike Drive, Suite 201, Westminster, Colorado 80031, or at such other place as the Landlord may from time to time designate by written notice to the Tenant. "Business day" means Monday through Friday, excluding days on which national banks are closed in Colorado.

 

Section 19.2         Tenant shall promptly deliver to the Landlord, (i) copies of any documents received from the United States Environmental Protection Agency and/or any state, county or municipal environmental or health agency concerning the Tenant's operations upon the Premises; and (ii) copies of any documents submitted by the Tenant to the United States Environmental Protection Agency and/or any state, county or municipal environmental or health agency concerning its operations of the Premises.

ARTICLE XX

QUIET ENJOYMENT

 

Section 20.1         The Landlord covenants and agrees that the Tenant, upon paying the Base Rent and Additional Rent required under this Lease and performing the covenants, agreements and conditions of this Lease on the Tenant's part to be performed and fulfilled, shall lawfully and quietly hold, occupy and enjoy the premises during the term of this Lease, subject, however, to the provisions of this Lease.

 

ARTICLE XXI

LIMITATION OF LANDLORD'S LIABILITY

 

Section 21.1         The term "Landlord" as used in this Lease shall be limited to the owner or owners of the Landlord's interest in this Lease at the time in question, and in the event of any transfer or transfers of such interest, the Landlord herein named (and in case of any subsequent transfer, the then transferor) shall be automatically relieved from and after the date of such transfer of all liability on the part of Landlord contained in this Lease thereafter to be preformed, provided that any funds in the hands of such Landlord then transferor at the time of such transfer, including but not limited to the security deposit, in which the Tenant had and interest shall be turned over to the transferee and upon any such transfer, the Landlord shall be released from any liability for such funds. The transferee shall be deemed to have assumed, subject to the limitations of this Section, all of the covenants, agreements and conditions on this Lease contained to be preformed on the part of the Landlord, it being intended hereby that the covenants and agreements contained in this Lease on the part of the Landlord to be preformed shall be binding on the Landlord, its successors and assigns, only during and in respect of their respective periods of ownership. Notwithstanding any provisions of this Lease to the contrary, the liability of Landlord for Landlord's obligations under this Lease shall not exceed and shall be limited to Landlords interest in the Building and Tenant shall not look to any other property or assets of Landlord either to enforce Landlord's obligations under this Lease or to satisfy a judgment for Landlord's failure to perform such obligations. Neither the shareholder, directors, officers, partners, or any other individual's representatives of the Landlord or any individual owing an interest in the Landlord shall be liable for the performance of any obligation of Landlord under this Lease.

 

ARTICLE XXII

ESTOPPEL CERTIFICATE BY TENANT

 

Section 22.1         At any time and from time to tome upon not less than ten (10) days' prior request by the Landlord, Tenant agrees to execute, acknowledge and deliver to Landlord a statement on writing certifying (a) that this Lease is unmodified and in full force and effect or of there have been modifications, that the same is in full force and effect as modified and identifying the modifications, (b) the dates to which the Base Rent and Additional Rent have been paid, and (c) that the Landlord is not in default under any provisions of this Lease, or if Tenant claims a default by Landlord, then Tenant shall so state and specify

 

 

11

  

  

  

the claimed default. If Tenant fails to provide an estoppel certificate in a timely manner, then Tenant shall be deemed to have admitted all of the matters specified above as may be stated in an estoppel certificate prepared by Landlord on behalf of Tenant. It is intended that any such statement may be relied upon by any person proposing to acquire the Landlord's interest in this Lease or any prospective mortgagee of, or assignee of any mortgage upon, such interest.

 

ARTICLE XXIII

CUMULATIVE REMEDIES-NO WAIVER-NO ORAL CHANGE

 

Section 23.1         The specified remedies to which the Landlord may resort under the terms of this Lease are cumulative and are not intended to be exclusive of any other remedies or means of redress to which the Landlord may be entitles, either at law or in equity, in case of any Event or Default. The failure of the Landlord to insist in any one or more cases upon the strict performance or observance of any covenants, agreements or conditions of this Lease or to exercise any option herein contained shall be construed as a future waiver of such covenant, agreement, condition or option. A receipt by the Landlord of Rent with knowledge of the breach of any covenant, agreement or condition hereof shall not be deemed a wavier of such breach, and no waiver by the Landlord of any covenant, agreement or condition of this Lease shall be deemed to have been made unless expressed in writing and signed by the Landlord. In addition to the other remedies in this Lease, the Landlord shall be entitled to the restraint by injunction of the violation, or attempted or threatened violation, of any of the covenants, agreements or conditions of this Lease. No receipt of monies by Landlord from Tenant after the termination or cancellation of this Lease shall reinstate, continue or extend the term hereof, or affect any notice given to Tenant, or operate as a wavier of the right of Landlord to enforce the payment of Rent then due or thereafter falling due, or operate as a waiver of the right of Landlord to recover possession of the Premises by proper suit, action, proceedings or other remedy. It is agreed that after the service of notice to terminate or cancel this Lease, or after the commencement of suit, action or summary proceedings or of any other remedy, or after final order or judgment for the possession of the Premises, Landlord may demand, receive and collect any monies then due, or thereafter becoming due, without in any manner affecting such notice, proceeding, suit, action, order or judgment, and any and all such monies so collected shall be deemed to be payments on account for the use and occupancy of the Premises, or at the election of Landlord, on account of Tenant's liability hereunder. Acceptance of the keys of the Premises or any similar act by Landlord or any agent or employee of landlord shall not be deemed to be an acceptance of a surrender of the Premises unless Landlord has expressly consented on Writing.

 

Section 23.2        This Lease constitutes the entire agreement between the parties. This Lease shall not be amended or modified except in writing signed by the party against whom enforcement of the amendment or modification is sought.

 

ARTICLE XXIV

BROKERAGE

 

Section 24.1        Tenant represents and warrants that it has dealt with no broker, agent or other person concerning this transaction, and Tenant agrees to indemnify and hold Landlord harmless from and against any claims, (including attorneys' fees incurred by Landlord in defending such claims) by any other broker, agent or person claiming a commission or other form of compensation by virtue of having dealt with tenant with regard to this leasing transaction. The provisions if this Article shall survive the termination or expiration of this Lease.

 

ARTICLE XXV

SECURITY DEPOSIT

 

Section 25.1                                  Tenant has deposited with Landlord the sum specified in the Definition section of this Lease as security for the return of the Premises in good order and condition and the full performance of every provision of this Lease to be performed by Tenant. The security deposit shall not be applied to the payment of Rent, provided however, that if Tenant defaults with respect to any provision of this Lease, Landlord any use, apply or retain all or any part of this security deposit for the payment of any base Rent and Additional Rent in default, or for the payment of any other amount which Landlord may spend or become obligated to spend by reason of Tenant's default, or to compensate Landlord for any other less, cost or damage which Landlord may suffer by reason of Tenant's default. If any portion of said deposit is so used or applied, Tenant shall, within ten (10) days after written demand, deposit cash with Landlord in an

 

 

12

  

  

  

amount sufficient to restore the security deposit to its original amount. For full security deposit reimbursement the following conditions must be met:

 

	
1) 

	
All walls must be clean and free of holes.

 

	
2) 

	
Any overhead door must be free of any broken panels, cracked lumber or dented panels. The overhead door springs, rollers, tracks, motorized door operator, and all other items pertaining to the overhead door must also be in good working condition.

	
3) 

	
All floors must be clean and free of excessive dust, dirt, grease, oil and stains.

 

	
4) 

	
No ceiling tiles shall be missing or damaged.

 

	
5) 

	
All trash must be removed from both inside and outside of the Building.

 

	
6) 

	
All lights bulbs and ballast's must be working.

 

	
7) 

	
The Premises must otherwise be in good conditions, reasonable wear and tear excepted.

 

In the event tenant has complied with the above conditions, Landlord shall return the security deposit (without interest) to Tenant within sixty (60) days after either the termination or expiration of this Lease, or the surrender and acceptance by Landlord of the Premises. Notwithstanding the foregoing, Landlord may retain the security deposit for non-payment of Base Rent or Additional Rent, utility charges, costs incurred relating to abandonment of the Premises, repairs, work contracted for by the Tenant or any other charge due under this Lease by Tenant to Landlord.

 

ARTICLE XXVI

MISCELLANEOUS PROVISIONS

 

Section 26.1        Tenant shall not place on the outside of the Building any sign, advertisement, illumination or projection without Landlord's prior written consent. In multi-tenant buildings, Tenant shall pay for and comply with Landlord's uniform signage requirements.

 

Section 26.2        This Lease shall be constructed and enforced in accordance with the laws of the State of Colorado. Time is of the essence with respect to Tenant's performance of its obligations under this Lease.

 

Section 26.3         The parties hereto agree that the covenants and agreements herein contained shall bind and inure to the benefit of the Landlord, the Tenant, and their respective successors and assigns.

 

Section 26.4        If any of Tenant's checks fail to clear the bank, Landlord may demand all future Rent payments to be either in the form of cash, certified check, money order, wire transfer or cash equivalent funds. Additionally, Tenant shall pay a $150.00 return check fee for each check or other payment returned to Landlord unpaid.

 

Section 26.5        "Reasonable wear and tear" is hereby defined as that degree of wear and tear which would normally occur in the permitted use of the Premises, but notwithstanding the foregoing or any other provision of this Lease, it shall not include any physical damage to the floors, floor coverings, walls, or ceiling of the Premises, nor any damage caused thereto through operation of machinery, office equipment or other equipment or furniture used in the operation of Tenant's business. Additionally, if Tenant's use, by reason of fumes discharged or liquids used by Tenant, shoufd cause damage to the Premises, either interior or exterior, said damages shall not be deemed "reasonable wear and tear", and Tenant shall be liable for the complete restoration of the Premises to the condition existing at Tenant's Lease commencement. Damage which does not come within the scope of "reasonable wear and tear" shall include, but not be limited to damaged, rusting or corroded walls, floors, floor coverings, ceilings, doors, windows, metal bar joists, steel decks, or roof vents or stacks.

 

 

13

  

  

  

Section 26.6         Any form of smoking of any substance in the Premises and in any common

areas in the building in which the Premises is situate by Tenant, Tenant's employees, agents, customers, contractors and any other person or persons whatsoever in or about the Premises and common areas at the request, invitation, or sufferance of the Tenant, or any of the foregoing, is strictly prohibited.

 

In Witness Whereof, the Landlord and the Tenant have executed this Lease on the dates specified below.

 

 

	
  

 

WARD WEST PROPERTIES LLC     

	 	
 

 

LIFELOC TECHNOLOGIES, INC.   

 

 

	By: 	
//SIGNED//

	 	By:	
//SIGNED//

	 
	Title:	
Member/Mgr

	 	Officers Title:	
President

	 
	Date:	
12/12/06

	 	Date:	
12/12/06

	 

                                                                                  

 

 

 

 

                                                                                               

14

  

  

  

RULES AND REGULATIONS

 

	
1.

	
The sidewalks and driveways will not be obstructed by any of the Tenants or used by then for any purpose other than for the ingress and egress to and from their respective premises.

 

	
2.

	
All Tenants shall adhere to and obey ail such parking control measures as may be placed onto effect by the Landlord through the use of signs, identifying decals or other instructions.

 

	
3.

	
Any electric wiring that the Tenant desires to introduce into his premises must be connected as directed by the Landlord. No boring or cutting for wires will be allowed except with a specific consent of the Landlord. The location of telephones, electrical appliances, call boxes, intercoms and so forth shall be prescribed by the Landlord.

 

	
4.

	
The Tenant shall not change locks or install other locks on doors without the written consent of the Landlord. Tenant shall provide Landlord with two keys for each lock set so changed.

 

	
5.

	
The Tenant shall give prompt notice to the building of any accidents to or defects in plumbing, electrical fixtures or heating apparatus so that the same may be attended to properly.

 

	
6.

	
The Tenant shall not permit or suffer the demised premises to be occupied or used in a manner offensive or objectionable to the Landlord or other occupants of the building by reason of noise, odors, or vibrations or interfere in any way with other Tenants or those having business therein, nor shall any animals or birds be kept in or about the building.

 

	
7.

	
No cooking shall be done or permitted by Tenant on the demised premise nor shall offices of the building be used, nor any part thereof permitted to be used for lodging.

 

	
8.

	
Each Tenant upon the termination of the tenancy shall deliver to the Landlord all keys of the offices, rooms and toilet rooms, which shall have been furnished to the Tenant.

 

	
9.

	
Tenant shall see that doors of the premises are closed and securely locked before leaving the building and must observe strict care not to leave such doors and so forth open and exposed to the weather or other elements, and each Tenant shall exercise extraordinary care and caution that all water faucets or water apparatus are entirely shut off before Tenant of Tenant's employees leave the building, and that all electricity, gas and air conditioning shall likewise be carefully shut off, so as to prevent waste or damage, where controlled by Tenant.

 

	
10.

	
The Landlord reserves the right, at any time, to rescind any one or more of these rules and regulations as in the Landlord's judgment may from time to time be necessary for the safety, care, and cleanliness of the premises, and for the preservation of order therein.

 

	
  

	
ACCEPTED, this 12th of Dec., 2006

 

 

	
  

	
By:

 

	
  

	
  //SIGNED//    

	
  

	
Tenant

 

 

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}]]