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LEASE AGREEMENT

 

 

DATE.   The date of this lease, for  reference purposes only, is                                                                 .

 

1.                PARTIES.  This Lease is by and between                                                                                                   

                (the "Lessor"), and                                                                                                                                                     

(the "Lessee").   Lessee warrants that Lessee is acting for its own account in this transaction and is not  acting as an agent, trustee, executor, or in any other representative capacity whatsoever.

 

2.                PREMISES, PARKING AND COMMON AREAS.

                2.1                Premises.  Lessor leases to Lessee and Lessee leases from Lessor, upon all of the terms and conditions set forth in this Lease, the following described property (the "Leased Premises") situated in ___________ County, State of  ________________

                                approximately                                                       (                ) square feet of space in

                                                                                                                 (the "Development"), now located at

                                                                                                                                                                                                ,

herein referred to as the "Premises", as may be outlined on an Exhibit attached hereto, including rights to the Common Areas hereinafter specified but not including any rights to the roof of the Premises or to any Building in the Industrial Center.  The Premises are a portion of a building, herein referred to as the "Building".  The Premises, the Building, the Common Areas, the land upon the same are located, along with all other buildings and improvements thereon, are herein collectively referred to as the "Industrial Center".

                2.2                Vehicle Parking.  Lessee shall be entitled to                             vehicle parking spaces, unreserved and unassigned, on those portions of the Common Areas designated by Lessor for parking.  Lessee shall not use more parking spaces than said number.  Said parking spaces shall be used only for parking by vehicles no larger than full size passenger automobiles or pick-up trucks, herein called "Permitted Size Vehicles".  Vehicles other than Permitted Size Vehicles are herein referred to as "Oversized Vehicles".

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

                                2.2.2                If Lessee permits or allows any of the prohibited activities described in Paragraph 2.2 of the Lease, then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.

                                2.2.3                Lessor shall at all times provide the parking facilities required by applicable law and in no event shall the number of parking spaces that Lessee is entitled to Under Paragraph 2.2 be reduced.

                2.3                Common Areas - Definition.  The term "Common Areas" is defined as all areas and facilities outside the Premises and within the exterior boundary line of the Industrial Center that are provided and designated by the Lessor from time to time for the general non-exclusive use of Lessor, Lessee and of other lessees of the Industrial Center and their respective employees, suppliers, shippers, customers and invitees, including parking areas, loading and unloading areas, trash areas, roadway, sidewalks, walkways, parkways, driveways and landscaped areas

                2.4                Common Areas - Lessee's Rights.  Lessor hereby grants to Lessee, for the benefit of Lessee and its employees, suppliers, shippers, customers and invitees, during the term of this Lease, the non-exclusive right to use, in common with others entitled to such use, the Common Areas as they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor under the terms hereof or under the terms of any rules and regulations or restrictions governing the use of the Industrial Center.  Under no circumstances shall the right herein granted to use the Common Areas be deemed to include the right to store any property, temporarily or permanently, in the Common Areas.  Any such storage shall be permitted only by the prior written consent of Lessor or Lessor's designated agent, which consent may be revoked at any time.  In the event that any unauthorized storage shall occur then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove the property and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.

                2.5                Common Areas - Rules and Regulations.  Lessor or such other person(s) as Lessor may appoint shall have the exclusive control and management of the Common Areas and shall have the right, from time to time, to establish, modify, amend and enforce reasonable rules and regulations with respect thereto.  Lessee agrees to abide by and conform to all such rules and regulations, and to cause its employees, supplier, shippers, customers, and invitees to so abide and conform.  Lessor shall not be responsible to Lessee for the non-compliance with said rules and regulations by other lessees of the Industrial Center.

                2.6                Common Areas - Changes.  Lessor shall have the right, in Lessor's sole discretion, from time to time:

                                2.6.1                To make changes to the Common Areas, including, without limitation, changes in the location, size, shape and number of driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction, landscaped areas and walkways;

                                2.6.2                To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available;

                                2.6.3                To designate other land outside the boundaries of the Industrial Center to be part of the Common Areas;

                                2.6.4                To add additional buildings and improvements to the Common Areas

                                2.6.5                To use the Common Areas while engaged in making additional improvements, repairs or alterations to the Industrial Center or any portion thereof; and

                                2.6.6                To do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Industrial Center as Lessor may, in the exercise of sound business judgment, deem to be appropriate.

3.             TERM.

                3.1                Term.  The term of this Lease shall be for                                                  months commencing on                                                     ("Commencement Date") and ending on                                                               ("Termination Date") unless sooner terminated pursuant to any provision hereof.

                3.2                Delay in Possession.  Notwithstanding said Commencement Date, if for any reason Lessor cannot deliver possession of the Premises to Lessee on said date, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or the obligations of Lessee hereunder or extend the term hereof, but in such case, Lessee shall not be obligated to pay rent or perform any other obligation of Lessee under the terms of this Lease, except as may be otherwise provided in this Lease, until possession of the Premises is tendered to Lessee; provided, however, that if Lessor shall not have delivered possession of the Premises within four (4) months from said Commencement Date, Lessee may, at Lessee's option, by notice in writing to Lessor within ten (10) days thereafter, cancel this Lease, in which event the parties shall be discharged from all obligations hereunder; provided further, however, that if such written notice of Lessee is not received by Lessor within said ten (10) day period, Lessee's right to cancel this Lease hereunder shall terminate and be of no further force or effect.

                3.3                Early Possession.  If Lessee occupies the Premises prior to said Commencement Date, such occupancy shall be subject to all provisions of this Lease, such occupancy shall not advance the Termination Date, and Lessee shall pay rent for such period at the initial monthly rates set forth below.

4.             RENT.

                Base Rent.  Lessee shall pay to Lessor, as Base Rent for the Premises, without any offset or deduction, except as may be otherwise expressly provided in this Lease, on the                                         day of each month of the term hereof, monthly payments in advance of $                                                         plus applicable rental taxes (presently                    %)                                                           .  Lessee shall pay Lessor upon execution hereof $                                  as Base Rent for first month, including                 % Rental Tax.  Rent for any period during the Term hereof which is for less than one month shall be pro rata portion of the Base Rent.  Rent shall be payable in lawful money of the United States to Lessor at the address stated herein or to such other persons or at such other places as Lessor may designate in writing.

5.                SECURITY DEPOSIT.  Lessor shall deposit with Lessor upon execution hereof $                              as security for Lessee's faithful performance of Lessee's obligations hereunder.  If Lessee fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of the Lease, Lessor may use, apply or retain all or any portion of said deposit for the payment of any rent or other charge in default or for the payment of any other sum to which Lessor may become obligated by reason of Lessee's default of, to compensate Lessor for any loss or damage which Lessor may suffer thereby.  If Lessor so uses or applies all or any portion of said deposit, Lessee shall within ten (10) days after written demand therefor deposit cash with Lessor in an amount  sufficient  to restore said deposit to the full amount then required of Lessee.  If the monthly rent shall, from time to time, increase during the term of this Lease, Lessee shall, at time of such increase, deposit with Lessor additional money as a security deposit so that the total amount of the security deposit held by Lessor shall at all times bear the same proportion to the then current Base Rent as the initial security deposit bears to the initial Base Rent set forth in Paragraph 4.  Lessor shall not be required to keep said security deposit separate from its general accounts.  If Lessee performs all of Lessee's obligations hereunder, said deposit, or so much thereof as has not theretofore been applied by Lessor, less a $50.00 non-refundable cleaning fee (per suite), or a $200.00 non-refundable cleaning fee if an entire building is leased, shall be returned, without payment of interest or other increment for its use, to Lessee (or, at Lessor's option, to the last assignee, if any, of Lessee's interest hereunder) at the expiration of the term hereof, and after Lessee has vacated the Premises.  No trust relationship is created herein between Lessor and Lessee with respect to said Security D deposit.  If Lessor sells or otherwise transfers Lessor's rights or interests under this Lease, Lessor may deliver the security deposit to the transferee, whereupon Lessor shall be released from any further liability to Lessee with respect to the security deposit.

6.             USE.

                6.1                Use.  The Premises shall be used and occupied only for                                                                                                                                                                                                                                                  or any other use which is reasonably comparable and for no other purpose.

                6.2                Compliance with Law; Disturbance.  Lessee shall, at Lessee's expense, promptly comply with all applicable statutes, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements of any fire insurance underwriters or rating bureaus, now in effect or which may hereafter come into effect, whether or not they reflect a change in policy from that now existing, during the term or any part of the term hereof, relating in any manner to the Premises and the occupation and use by Lessee of the Premises and of the Common Areas.  Lessee shall not use nor permit the use of the Premises or the Common Areas in any manner that will tend to create waste or a nuisance or shall tend to disturb other occupants of the Industrial Center, whether visually, by smell, noise or other means.

                6.3                Condition of Premises. 

                                6.3.1                Lessor shall deliver the Premises to Lessee clean and free of debris on the Lease Commencement Date (unless Lessee is already in possession) and Lessor warrants to Lessee that the plumbing, lighting, air conditioning, heating and loading doors in the Premises shall be in good operating condition on the Lease C commencement Date.  In the event that it is determined that this warranty has been violated, then it shall be the obligation of Lessor, after receipt of written notice from Lessee setting forth with specificity the nature of the violation, to promptly, at Lessor's sole cost, rectify such violation.  Lessee's failure to give such written notice to Lessor within thirty (30) days after the Lease Commencement Date shall cause the conclusive presumption that Lessor has complied with all of Lessor's obligations hereunder.  The warranty contained in this paragraph 6.3.1 shall be of no force or effect if, prior to the date of this Lease, Lessee was an owner or occupant of the Premises.

                                6.3.2                Except as otherwise provided in this Lease, Lessee hereby accepts the Premises in their condition existing as of the Lease Commencement Date or the date that Lessee takes possession of the Premises, whichever is earlier, subject to all applicable zoning, municipal, county and state laws, ordinances and regulations governing and regulating the use of the Premises, and any covenants or restrictions of record, and accepts this Lease subject thereto and to all matters disclosed thereby and by any exhibits attached hereto.  Lessee acknowledges that neither Lessor nor Lessor's agent has made any representation or warranty as to the present or future suitability of the Premises for the conduct of Lessee's business.

                6.4                Hazardous Waste.

                                6.4.1                Lessee shall not produce, dispose, transport, treat or store on the Premises any hazardous waste or toxic substance which is subject to:

                                                (a)  regulation under the Arizona Hazardous Waste Management Act,

                                                                A.R.S. § 36-2821 et seq.;

                                                (b)  the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; or

                                                (c)  regulation under the Toxic Substance Control Act, 15 U.S.C. § 2601 et

                                                                seq.

                                  6.4.2                No activity may occur on the Premises which could have toxic results.

                                6.4.3                The Premises may not be used for the production, treatment, collection, storage, or disposal of any refuse, objectionable waste or any material:

                                                (a)  in any manner inconsistent  with the regulations issued by the Arizona

                                                                Department of Health Services, ACR R9-8-401, et seq.;

                                                (b)  so as to require a permit or approval from the Arizona Department of

                                                                Health Services, pursuant to ACR R9-8-401, et seq., or

                                                (c)  in a manner which would cause the County Department of Health

                                                                Services to inspect the Premises or issue orders pursuant to Chapter

                                                                II of the County Health Code.

                                6.4.4                Lessee hereby agrees to indemnify and hold harmless Lessor for its failure by reason of any breach of this covenant, including any and all costs, fees, penalties and any other liabilities incurred by Lessor resulting from such violation of this covenant.

7.                MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA SERVICES.

                7.1                Lessor's Obligations.  Subject to the provisions of Paragraphs 6 (Use), 7.2 (Lessee's Obligations) and 9 (Damage or Destruction) and except for damage caused by any negligent or intentional act or omission of Lessee, Lessee's agents, employees, or invitees, Lessor, at Lessor's expense, shall keep in good order, condition and repair the foundations, exterior walls and the exterior roof of the Premises.  Lessor shall not, however, be obligated to paint such exterior, nor shall Lessor be required to maintain the interior surface of exterior walls, windows, doors or plate glass.  Lessor shall have no obligation to make repairs under this Paragraph 7.1 until a reasonable time after receipt of written notice of the need of such repairs.  Lessee expressly waives the benefits of any statute now or hereafter in effect which would otherwise afford Lessee the right to make repairs at Lessor's expense, allow an offset against  rent, or to terminate this Lease because of Lessor's failure to keep the Premises in good order, condition and repair.

                7.2                Lessee's Obligations.

                                7.2.1                Subject to the provisions of Paragraphs 6 (Use), 7.1 (Lessor's Obligations), and 9 (Damage or Destruction), Lessee, at Lessee's expense, shall keep in good order, condition and repair the Premises and every part thereof (whether or not the damaged portion of the Premises or the means of repairing the same are reasonably or readily accessible to Lessee) including, without limiting the generality of the foregoing, all plumbing, heating, ventilating and air conditioning systems  (Lessee shall procure and maintain, at Lessee's expense, a ventilating and air conditioning system maintenance contract), electrical and lighting facilities and equipment within the Premises, fixtures, interior walls and interior surfaces of exterior walls, ceilings, windows, door, plate glass, and skylights located within the Premises.  Lessor reserves the right to procure and maintain the ventilating and air conditioning system maintenance contract and, if Lessor so elects, Lessee shall reimburse Lessor, upon demand, for the cost thereof.

                                7.2.2                If Lessee fails to perform Lessee's obligations under this Paragraph 7.2 or under any other paragraph of this Lease, Lessor may enter upon the Premises after ten (10) days prior written notice to Lessee (except in the case of emergency, in which no notice shall be required), perform such obligations on Lessee's behalf and put the Premises in good order, condition and repair, and the cost thereof together with interest thereon at eighteen percent (18%) per annum, which shall be due and payable as additional rent to Lessor together with Lessee's next Base Rent installment 

                                7.2.3                On the last day of the term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor in the same condition as received, ordinary wear and tear excepted, clean and free of debris.  Any damage or deterioration of the Premises shall not be deemed ordinary wear and tear if the same could have been prevented by good maintenance practices.  Lessee shall repair any damage to the Premises occasioned by the installation or removal of Lessee's trade fixtures, alterations, furnishings and equipment.  Notwithstanding anything to the contrary otherwise stated in this Lease, Lessee shall leave the air lines, power panels, electrical distribution systems, lighting fixtures, space heaters, air conditioning, plumbing and fencing on the Premises in good operating condition.

                7.3                Alterations and Additions. 

                                7.3.1                Lessee shall not, without Lessor's prior written consent, make any alterations, improvements, additions, or Utility Installations in, on or about the Premises, or the Industrial Center, except for nonstructural alterations to the Premises, exceeding $2,500.00 in cumulative costs, during the term of this Lease.  In any event, whether or not in excess of $2,500.00 in cumulative costs, Lessee shall make no change or alteration to the exterior of the Premises nor the exterior of the Building nor the Industrial Center without Lessor's prior written consent.  As used in this Paragraph 7.3, the term "Utility Installation" shall mean carpeting, window coverings, air lines, power panels, electrical distribution systems, lighting fixtures, space heaters, air conditioning, plumbing, and fencing.  Lessor may require that Lessee remove any or all of said alterations, improvements, additions or Utility Installations at the expiration of the term, and restore the Premises and the Industrial Center to their prior condition.  Lessor may require Lessee to provide Lessor, at Lessee's sole cost and expense, a lien and completion bond in an amount equal to one and one-half times the estimated cost of such improvements, to insure Lessor against any liability for mechanic's and materialmen's liens and to insure completion of the work.  Should Lessee make any alterations, improvements, additions or Utility Installations without the prior approval of Lessor, Lessor may, at any time during the term of this Lease, require the Lessee to remove any or all of the same.

                                7.3.2                Any alterations, improvements, additions or Utility Installations in or about the Premises or the Industrial Center that Lessee shall desire to make and which requires the consent of the Lessor shall be presented to Lessor in written form, with proposed detailed plans.  If Lessor shall give its consent, the consent shall be deemed conditioned upon Lessee acquiring a permit to do so from appropriate governmental agencies, the furnishing of a copy thereof to Lessor prior to the commencement of the work and the compliance by Lessee of all conditions of said permit in a prompt and expeditious manner.

                                7.3.3                Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use in the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises, or the Industrial Center, or any interest therein.  Lessee shall give Lessor not less than ten (10) days notice prior to the commencement of any  work in the Premises, and Lessor shall have the right to post notices of non-responsibility in or on the Premises or the Building as provided by law.  If Lessee shall, in good faith, contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense, defend itself and Lessor against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against the Lessor or the Premises or the Industrial Center, upon the condition that if Lessor shall require, Lessee shall furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to such contested lien claim or demand indemnifying Lessor against liability for the same and holding the Premises and the Industrial Center free from the effect of such lien or claim.  In addition, Lessor may require Lessee to pay Lessor's attorneys' fees and costs in participating in such action if Lessor shall decide it is in the Lessor's best interest to do so.

                                7.3.4                All alterations, improvements, additions and Utility Installations (whether or not such Utility Installations constitute trade fixtures of Lessee), which may be made on the Premises, shall be the property of Lessor and shall remain upon and be surrendered with the Premises at the expiration of the Lease term, unless Lessor requires their removal pursuant to paragraph 7.3.1.  Notwithstanding the provisions of  this paragraph 7.3.4, Lessee's machinery and equipment, other than that which is affixed to the Premises so that it cannot be removed without material damage to the Premises, and other than Utility Installations, shall remain the property of Lessee and may be removed by Lessee subject to the provisions of paragraph 7.2

                7.4                Utility Additions.  Lessor reserves the right to install new or additional utility facilities throughout the Building and the Common Areas for the benefit of Lessor or Lessee, or any other lessee of the Industrial Center, including, but not by way of limitation, such utilities as plumbing, electrical systems, security systems, communication systems, and fire protection and detection systems, so long as such installations do not unreasonably interfere with Lessee's use of the Premises.

8.                INSURANCE; INDEMNITY.

                8.1                Liability Insurance - Lessee.  Lessee shall, at Lessee's expense, obtain and keep in force during the term of this Lease a policy of Combined Single Limit Bodily Injury and Property Damage insurance insuring Lessee and Lessor (as additional insured) against any liability arising out of the use, occupancy or maintenance of the Premises and the Industrial Center.  Such insurance shall be in an amount not less than $1,000,000.00 per occurrence.  The policy shall insure performance by Lessee of the indemnity provisions of this Paragraph 8.  The limits of said insurance shall not, however, limit the liability of Lessee hereunder.

                8.2                Property Insurance.  Lessor shall obtain and keep in force during the term of this Lease a policy or policies of insurance covering loss or damage to the Premises, in the amount of the full replacement value thereof, providing protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk) and rental abatement insurance (in an amount equal to one year of rent payable by Lessee).  Lessee shall pay on a monthly basis, during the term hereof, in addition to rent, the amount of any increase in premiums for the insurance required under this Paragraph 8.2 over and above such premiums paid by Lessor during the first full year of the term of this Lease in which Lessor shall have maintained the insurance required under this Paragraph 8.2, whether such premium increase shall be the result of the nature of Lessee's occupancy, any act or omission of Lessee, requirements of the holder of a mortgage or deed of trust covering the Premises, or increased valuation of the Premises.  Lessee shall pay any such premium increases to Lessor within thirty (30) days after receipt by Lessee of a copy of the premium statement or other satisfactory evidence of the amount due.  If the insurance policies maintained hereunder cover other improvements in addition to the Premises, Lessor shall also deliver to Lessee a statement of the amount of such increase attributable to the Premises and showing in reasonable detail the manner in which such amount was computed.  If the term of this Lease shall not expire concurrently with the expiration of the period covered by such insurance, Lessee's liability for premium increases shall be prorated on an annual basis.  Lessee shall maintain and hereby acknowledges that Lessee shall possess the sole responsibility for obtaining property insurance providing protection against all perils including within the classification of fire, extended coverage, vandalism, malicious mischief and special extended perils, on any fixtures, equipment, tenant improvements including plate glass, owned by Lessor or other personal property of any nature in the premises; Lessor shall under no circumstances have any liability for such items.  The amount of full replacement value of  Tenant Improvements is now $                    .  If the Lessee fails to procure and maintain such insurance on any fixture or Tenant Improvement owned by Lessor, Lessor may  procure and maintain said insurance, but  at the expense of Lessee.  If such insurance coverage has a deductible clause, the deductible amount shall not exceed $5,000.00 per occurrence and Lessee shall be liable for such deductible amount.

                8.3                Insurance Policies.  Insurance required hereunder shall be in companies holding a "General Policyholders Rating" of at least B plus, or such other rating as may be required by a lender having a lien on the Premises, as set forth in the most current issue of "Best's Insurance Guide".  Lessee shall not do or permit to be done anything which shall invalidate the insurance policies carried by Lessor.  Lessee shall deliver to Lessor copies of liability insurance policies required under paragraph 8.1 or certificates evidencing the existence and amounts of such insurance within seven (7) days after the commencement date of this Lease.  No such policy shall be cancellable or subject  to reduction of coverage or other modification except after thirty (30) days prior written notice to Lessor.  Lessee shall, at least thirty (30) days prior to the expiration of such policies, furnish Lessor with renewals or "binders" thereof.  Lessor, Lessor's successors and assigns, and any nominee of Lessor holding any interest in the Premises, including, without limitation, the holder of any fee mortgage, shall be named as insureds under each policy of insurance maintained by Lessee.

                8.4                Waiver of Subrogation.  Lessee and Lessor each hereby release and relieve the other, and waive their entire right of recovery against the other for loss or damage arising out of incident to the perils insured against  which perils occur in or about the Premises, whether due to the negligence of Lessor or Lessee; or their agents, employees, contractors and/or invitees.  Lessee and Lessor 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, except acts of Lessee or Lessor arising out of gross negligence, willful or reckless misconduct.

                8.5                Indemnity.  Lessee shall indemnify and hold harmless Lessor from and against any and all claims arising from Lessee's use of the Industrial Center, or from the conduct of Lessee's business or from any activity, work or things done, permitted or suffered by Lessee in or about the Premises or elsewhere and shall further indemnify and hold harmless Lessor from and against any and all claims arising from any breach or default in the performance of any obligation of Lessee's part to be performed under the terms of this Lease, or arising from any act or omission of Lessee, or any of Lessee's agents, contractors, or employees, and from and against all costs, attorneys' fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon; and in case any action or proceeding be brought against Lessor by reason of any such claim, Lessee upon notice from Lessor shall defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense.  Lessee, as a material part of the consideration to Lessor, hereby assumes all risk of damage to property of Lessee or injury  to persons in, upon or about the Industrial Center arising from any cause and Lessee hereby waives all claims in respect thereof against Lessor.

                8.6                Exemption of Lessor from Liability.  Lessee hereby agrees that Lessor shall not be liable for injury to Lessee's business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of Lessee, Lessee's employees, invitees, customers, or any other person in or about the Premises or the Industrial Center, nor shall Lessor be liable for injury to the person of Lessee, Lessee's employees, agents or contractors, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixture, or from any other cause, whether said damage or injury results from conditions arising upon the Premises or upon other portions of the Industrial Center, or from other sources or places and regardless of whether the cause of such damage or injury or the means of repairing the same  are inaccessible to Lessee.  Lessor shall not be liable for any damages arising from any act or neglect of any other lessee, occupant or user of the Industrial Center, nor from the failure of Lessor to enforce the provisions of any other lease of the Industrial Center.

                8.7                Failure.  If Lessee fails to maintain any insurance required in this Lease, Lessee shall be liable for all losses and costs resulting from said failure.  Nothing herein shall be a waiver of any of Lessor's rights and remedies under any other article of this Lease or at law or equity.

                8.8                Earthquake; Flood.  Lessor, if required, may maintain with respect to the Building a policy of earthquake/volcanic action and flood and/or surface water insurance, including rental value insurance against abatement or loss of rent in the case of damage or loss covered under such earthquake/volcanic and flood and/or surface water insurance in an amount at least equal to the amount of rent payable by Lessee during the one (1) year next ensuing, as reasonably determined by Lessor.

9.                DAMAGE OR DESTRUCTION.

                9.1                Definitions. 

                                9.1.1                "Premises Partial Damage" shall mean if the Premises are damaged or destroyed to the extent that the cost of repair is less than fifty percent (50%) of the then replacement cost of the Premises.

                                9.1.2                "Premises Total Destruction" shall mean if the Premises are damaged or destroyed to the extent that the cost of repair if fifty percent (50%) or more of the then replacement cost of the Premises.

                                9.1.3                "Premises Building Partial Damage" shall mean if the Building of which the Premises are a part is damaged or destroyed to the extent that the cost of repair is less than fifty percent (50%) of the then replacement cost of the Building.

                                9.1.4                "Premises Building Total Destruction" shall mean if the Building of which the Premises are a part is damaged or destroyed to the extent that the cost of repair if fifty percent or more of the then replacement cost of the Building.

                                9.1.5                "Industrial Center Buildings" shall mean all of the buildings on the Industrial Center site.

                                9.1.6                "Industrial Center Buildings Total Destruction" shall mean if the Industrial Center buildings are damaged or destroyed to the extent that the cost of repair if fifty percent (50%) or more of the then replacement cost of the Industrial Center Buildings.

                                9.1.7                "Insured Loss" shall mean damage or destruction which was covered by an event required to be covered by the insurance described in Paragraph 8.  The fact that an Insured Loss has a deductible amount shall not make the loss an uninsured loss.

                                9.1.8                "Replacement Cost" shall mean the amount of money necessary to be spent in order to repair or rebuild the damaged area to the condition that existed immediately prior to the damage occurring excluding all improvements made by lessees.

                                9.1.9                "Tenant Improvements" shall mean those improvements installed wholly at Lessee's expense.

                                9.1.10                "Abandonment" shall mean failure to be open for business for a period of thirty  (30) days.

                9.2                Premises Partial Damage; Premises Building Partial Damage.

                                9.2.1                Insured Loss:  Subject to the provisions of Paragraphs 9.4 and 9.5, if at any time during the term of this Lease there is damage which is an Insured Loss and which falls into the classification of either Premises Partial Damage or Premises Building Partial Damage, then Lessor shall, at Lessor's expense, repair such damage to the Premises, but not Lessee's fixtures, equipment or Tenant Improvements, as soon as reasonably possible after receipt of insurance proceeds, and this Lease shall continue in full force and effect.

                                9.2.2                Uninsured Loss:  Subject to the provisions of Paragraphs 9.4 and 9.5, if at any time during the term of this Lease there is damage which is not an Insured Loss and which falls within the classification of Premises Partial Damage or Premises Building Partial Damage, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), which damage prevents Lessee from using the Premises, Lessor may, at Lessor's option, either (i) repair such damage as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) give written notice to Lessee within thirty (30) days after the date of the occurrence of such damage of Lessor's intention to cancel and terminate this Lease as of the date of the occurrence of such damage.  In the event Lessor elects to give such notice of Lessor's intention to cancel and terminate this Lease, Lessee shall have the right within ten (10) days after the receipt  of such notice to give written notice to Lessor of Lessee's intention to repair such damage at Lessee's expense, without reimbursement from Lessor, in which event this Lease shall continue in full force and effect, and Lessee shall proceed to make such repairs as soon as reasonably possible.  If Lessee does not give such notice within such ten (10) day  period this Lease shall be cancelled and terminated as of the date of the occurrence of such damage.

                9.3                Premises Total Destruction; Premises Building Total Destruction; Industrial Center Buildings Total Destruction.  Subject to the provisions of Paragraphs 9.4 and 9.5, if at any time during the term of this Lease there is damage, whether or not it is an Insured Loss and which falls into the classifications of either (i) Premises Total Destruction, or (ii) Premises Building Total Destruction, or (iii) Industrial Center Buildings Total Destruction,, then Lessor may at Lessor's option either (a) repair such damage or destruction, but not Lessee's fixtures, equipment or tenant improvements, as soon as reasonably possible after receipt of insurance proceeds, at Lessor's expense, and this Lease shall continue in full force and effect, or (b) give written notice to Lessee within thirty (30) days after the date of occurrence of such damage of Lessor's intention to cancel and terminate this Lease, in which case this Lease shall be cancelled and terminated as of the date of the occurrence of such damage.

                9.4                Damage Near End of Term. 

                                9.4.1                Subject to Paragraph 9.4.2, if at any time during the last twelve months of the term of this Lease there is substantial damage, whether or not an Insured Loss, which falls within the classification of Premises Partial Damage, Lessor may at Lessor's option cancel and terminate this Lease as of the date of occurrence of such damage by giving written notice to Lessee of Lessor's election to do so within thirty (30) days after the date of occurrence of such damage.

                                9.4.2                Notwithstanding Paragraph 9.4.1, in the event that Lessee has an option to extend or renew this Lease, and the time within which said option may be exercised has not yet expired, Lessee shall exercise such option, if it is to be exercised at all, no later than twenty (20) days after the occurrence of an Insured Loss falling within the classification of  Premises Partial Damage during the last twelve months of the term of this Lease.  If Lessee duly exercises such option during said twenty (20) day period, Lessor shall, at Lessor's expense, repair such damage, but not Lessee's fixtures, equipment or Tenant Improvements, as soon as reasonably possible and this Lease shall continue in full force and effect.  If Lessee fails to exercise such option during said twenty (20) day  period, then Lessor may at Lessor's option terminate and cancel this Lease as of the expiration of said twenty (20) day period by giving written notice to Lessee of Lessor's election to do so within ten (10) days after the expiration of said twenty (20) day period, notwithstanding any term or provision in the grant of option to the contrary.

                9.5                Abatement of Rent; Lessee's Remedies. 

                                9.5.1                In the event Lessor repairs or restores the Premises pursuant to the provisions of this Paragraph 9, the rent payable hereunder for the period during which such damage, repair or restoration continues shall be abated in proportion to the degree to which Lessee's use of the Premises is impaired.  Except for abatement of rent, if any, Lessee shall have no claim against Lessor for any damage suffered by reason of any such damage, destruction, repair or restoration.

                                9.5.2                If Lessor shall be obligated to repair or restore the Premises under the provisions of this Paragraph 9, and shall not commence such repair or restoration within ninety (90) days after such obligation shall accrue, Lessee may, at Lessee's option, cancel and terminate this Lease by giving Lessor written notice of Lessee's election to do so at any time prior to the commencement of such repair or restoration.  In such event, this Lease shall terminate as of the date of such notice.

                9.6                Termination - Advance Payments.  Upon termination of this Lease pursuant to this Paragraph 9, an equitable adjustment shall be made concerning advance rent and any advance payments made by Lessee to Lessor.  Lessor shall, in addition, return to Lessee so much of Lessee's security deposit as has not theretofore been applied by Lessor.

                9.7                Waiver.  Lessor and Lessee waive the provisions of A.R.S. § 33-343 which relate to termination of leases when leased property is destroyed and agree that such event shall be governed by the terms of this Lease.

10.           REAL PROPERTY TAXES.

                10.1                Payment of Tax Increase.  Lessor shall pay all real property taxes applicable to the Premises; provided, however, that Lessee shall pay, in addition to rent, the amount, if any, by which real property taxes applicable to the Premises increase over the fiscal tax years 19                .  Such payment shall be made by Lessee on a monthly basis as noted in Paragraph 44 after receipt of Lessor's written statement setting forth the amount of such increase and the reasonable computation thereof.  If the term of this Lease shall not expire concurrently with the expiration of the fiscal tax year, Lessee's liability for increased taxes for the last partial lease year shall be prorated on an annual basis.

                10.2                Definition of "Real Property Tax".  As used herein, the term "real property tax" shall include any form of real estate tax or assessment, general, special, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed on the Industrial Center or any portion thereof by any authority having the direct or indirect power to tax, including any city, county, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, as against any legal or equitable interest of Lessor in the Industrial Center or any portion thereof, as against Lessor's right to rent or other income therefrom, and as against Lessor's business of leasing the Industrial Center.

                10.3                Joint Assessment.  If the Industrial Center is not separately assessed, Lessee's share of the real property tax liability shall be an equitable proportion of the real property taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be determined by Lessor from the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably available.  Lessor's reasonable determination thereof, in good faith, shall be conclusive.

                10.4                Personal Property Taxes.

                                10.4.1                Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Lessee contained in the Premises or elsewhere.  When possible, Lessee shall cause said trade fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor.

                                10.4.2                If any of Lessee's said personal property shall be assessed with lessor's real property, Lessee shall pay to Lessor the taxes attributable to Lessee with ten (10) days after receipt of a written statement setting forth the taxes applicable to Lessee's property.

                10.5                Transaction Privilege Tax.  Lessee shall pay to Lessor, in addition to and along with the rental otherwise payable hereunder, any excise, transaction, sales or privilege tax now or hereafter imposed by any government or governmental agency upon Lessor and attributed to or measured by rent, property tax, security deposit, other charges or prorations payable by Lessee.

                10.6                Tax Consultant Fees.  Each year, at Lessor's election, Lessor may protest real property tax assessments.  In the event Lessor elects to protest a real property tax assessment, Lessor may utilize the services of a tax consultant to protest the real property tax assessment.  If, as a result of the protest, the real property taxes are lowered, and a tax consultant has been utilized in connection with the protest, Lessee acknowledges that a fee will be payable to the tax consultant.  Lessee agrees to pay, as additional rent during the Lease term, its pro rata share of all fees payable to tax consultants in the manner set forth in paragraph 44 of this Lease.

11.                UTILITIES.  Lessee shall pay for all gas, heat, light, power, water, telephone and other utilities and services supplied to the Premises, together with any taxes thereon.  If any such services are not separately metered to the Premises, Lessee shall pay at Lessor's option, either Lessee's share or a reasonable proportion to be determined by Lessor of all charges jointly metered with other premises in the Building or Industrial Center.

12.                ASSIGNMENT AND SUBLETTING.

                12.1                Lessor's Consent Required.  Lessee shall not voluntarily or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee's interest in the Lease or in the Premises without Lessor's prior written consent, which Lessor shall not unreasonably withhold.  Lessor shall respond to Lessee's request for consent hereunder in a timely manner and any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent shall be void and shall constitute a breach of this Lease without the need for notice to Lessee under Paragraph 13.1.

                12.2                Terms and Conditions of Assignment.  Regardless of Lessor's consent, no assignment shall release Lessee of Lessee's obligations hereunder or alter the primary liability of Lessee to pay the Base Rent and Lessee's share of expenses, and to perform all other obligations to be performed by Lessee hereunder.  Lessor may accept rent from any person other than Lessee pending approval or disapproval of such assignment.  Neither a delay in the approval or disapproval of such assignment nor the acceptance of rent shall constitute a waiver or estoppel of Lessor's right to exercise its remedies for the breach of any of the terms or conditions of this Paragraph 12 of this Lease.  Consent to one assignment shall not be deemed consent to any subsequent assignment.  In the event of default by any assignee of Lessee or any successor of Lessee, in the performance of any of the terms hereof, Lessor may proceed directly against Lessee without the necessity of exhausting remedies against said assignee.  Lessor may consent to subsequent assignments of this Lease or amendments or modifications to this Lease with assignees of Lessee without notifying Lessee, or any successor of Lessee, and without obtaining its or their consent thereto and such action shall not relieve Lessee of liability under this Lease.

                12.3                Attorneys' Fees.  In the event Lessee shall assign or sublet the Premises or request the consent of Lessor to any assignment or subletting or if Lessee shall request the consent of Lessor for any act Lessee proposes to do, then Lessee shall pay Lessor's reasonable attorneys' fees incurred in connection therewith, such attorneys' fees not to exceed $500.00 for each such request.

                12.4                Bonus Rental.  If Lessee receives rent or other consideration for any assignment or sublease in excess of the rent, or in case of the sublease of a portion of the Premises, in excess of such rent that is fairly allocable to such portion, as determined by Lessor, after appropriate adjustments to assure that all other payments required hereunder are appropriately taken into account, Lessee shall pay Lessor seventy-five percent (75%) of the difference between each such payment of rent or other consideration and the rent required hereunder.

                12.5                Release.  Whenever Lessor conveys any interest in the Premises, Lessor shall be automatically released from further performance of the covenants of this Lease, and from all further liabilities, obligations, costs, expenses, demands, causes of action, claims and judgments connected with this Lease.  The effective date of Lessor's release shall be the date the assignee executes an assumption of such assignment.  If requested, Lessee shall execute a form of release and such other documentation as may be required to further effect the provisions of this section.  This Lease and each of the Lease's covenants and conditions shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors, assignees and legal representatives, subject to the provisions hereof.  Any successor or assignee of Lessee who accepts an assignment of this Lease or enters into possession hereunder shall thereby be bound by the covenants and conditions hereof.  Nothing herein contained shall be deemed to give a right of assignment to Lessee without the prior written consent of Lessor.

13.                DEFAULT; REMEDIES.

                13.1                Default.  The occurrence of any one or more of the following events shall constitute a material default of this Lease by Lessee:

                                13.1.1                The vacating or abandonment of the Premises by Lessee;

                                13.1.2                The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where such failure shall continue for a period of five (5) days after written notice thereof from lessor to Lessee.  In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes, such Notice to Pay Rent or Quit shall also constitute the notice required by this subparagraph;

                                13.1.3                Except as otherwise provided in this Lease, the failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee, other than described in Paragraph 13.1.2 above, where such failure shall continue for a period of thirty (30) days after written notice thereof from Lessor to Lessee; provided, however, that if the nature of Lessee's noncompliance is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion.  To the extent permitted by law, such thirty (30) day notice shall constitute the sole and exclusive notice required to be given to Lessee under applicable Unlawful Detainer statutes;

                                13.1.4                (i) The making by Lessee of any general arrangement or general assignment for the benefit of creditors; (ii) Lessee becomes a "debtor" as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of petition filed against Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession is not restored to Lessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee's assets, unless by Lessor located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within thirty (30) days.  In the event that any provision of this Paragraph 13.1.4 is contrary to any applicable law, such provision shall be of no force or effect; or

                                13.1.5                The discovery by Lessor that any financial statement given to Lessor by Lessee, any assignee of Lessee, any subtenant of Lessee, any successor in interest of Lessee or any guarantor of Lessee's obligation hereunder, was false.

                13.2                Remedies.  In the event of any such default by Lessee, Lessor may at any time thereafter, with or without notice or demand and without limiting Lessor in the exercise of any right  or remedy  which Lessor may have by reason of such default:

                                13.2.1                The right to declare the term hereof ended and to re-enter and take possession of the premises and remove all persons therefrom, and Lessee shall have no further claim thereon or hereunder; or

                                13.2.2                The right without declaring this Lease ended to re-enter the Premises and occupy or lease the whole or any part thereof for and and account of Lessee and upon such terms and conditions and for such rent as Lessor may deem proper and to collect said rent and any other rent that may thereafter become payable and apply the same toward the amount due or thereafter to become due from Lessee and on account of such expense of such subletting and other damages sustained by Lessor; and should such rental be less than that herein agreed to be paid by Lessee, Lessee agrees to pay such deficiency to Lessor in advance on the first day of each month and to pay to the Lessor forthwith upon any such reletting the costs and expenses Lessor may incur by reason thereof and should such rental be more than that herein agreed to be paid by Lessee, Lessor shall hold said sums free to be applied to future damages; or

                                13.2.3                The right, even though it may have relet said Premises, to thereafter elect to terminate this Lease and all of the rights of Lessee in or to the Premises.

                                Should Lessor have relet the Premises under the provisions of subparagraph 13.2.2 above, it may execute any such lease in its own name, and the Lessee therein named shall be under no obligation whatsoever to see to the application by Lessor of any rent collected by Lessor from such Lessee, nor shall Lessee hereunder have any right or authority whatever to collect any rent from such Lessee.  Lessor shall not be deemed to have terminated this Lease or the liability of Lessee to pay rent thereafter to accrue or Lessee's such re-entry or by any action in unlawful detainer or otherwise to obtain possession of the Premises, unless Lessor shall have notified Lessee in writing that it has so elected to terminate this Lease.  Nothing herein contained shall be construed as obligating Lessor to relet the whole or part of the Premises.  In the event of any entry or taking possession of the Premises as aforesaid, Lessor shall have the right, but not the obligation, to remove therefrom all or any part of the personal property located therein and may place the same in storage at a public warehouse at the expense and risk of the owner or owners thereof.

                                In the event of Lessor's default and Lessor's retaking of possession of the Premises, whether this Lease is terminated by Lessor or not, Lessee agrees to pay to Lessor as an additional item of damages the cost of repairs, alterations, redecorating, leasing commissions and Lessor's other expenses incurred in reletting the Premises to a new Lessee.

                                Should Lessor elect to terminate this Lease under the provisions of subparagraphs 13.2.1 or 13.2.3 above, Lessor shall thereupon, without waiting for the end of the terms hereof, be entitled to recover from Lessee as damages the amount, if any, by which the aggregate of rental and other charges payable by Lessee for the balance of the term of this Lease, shall exceed the then reasonable rental value of the Premises for the remainder of the term of this Lease, in addition to recovering the rent then unpaid, if any.

                                Lessee agrees that Lessor shall have a landlord's lien on and against all personal property of Lessee from time to time situated on the Premises, which lien shall secure the payment of all rental and additional charges payable by Lessee to Lessor under the terms hereof.

                                13.2.4                All rights and remedies of Lessor herein enumerated shall be cumulative and none shall exclude any other right or remedy allowed.

                13.3                Late Charges.  Lessee hereby acknowledges that late payment by Lessee to Lessor of Base Rent, or other sums due hereunder, will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain.  Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed on Lessor by the terms of any mortgage or trust deed covering the Property.  Accordingly, if any installment of Base Rent, or any other sum due from Lessee shall not be received by Lessor or Lessor's designee within five (5) days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a late charge equal to ten percent (10%) of such overdue amount (base rent and/or other charges due to Lessor plus transaction privilege tax).  The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of late payment by Lessee.  Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's default with respect to such overdue amount, nor prevent Lessor from exercising any of the other rights and remedies granted hereunder.  In the event that a late charge is payable hereunder, whether or not collected, for three (3) consecutive installments of any of the aforesaid monetary obligations of Lessee, than Base Rent shall automatically become due and payable quarterly in advance, rather than monthly, notwithstanding Paragraph 4 or any other provision of this Lease to the contrary.  All delinquent payments and late charges should be paid by cashier's check or certified funds.

14.                CONDEMNATION.

                14.1                Condemnation.  If the Premises or any portion thereof of the Industrial Center are taken under the power of eminent domain, or sold under the threat of the exercise of said power (all of  which are herein called "Condemnation"), this Lease shall terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever first occurs.  If more than ten percent (10%) of the floor area of the Premises, or more than twenty-five percent (25%) of that portion of the Common Areas designated as parking for the Industrial Center is taken by Condemnation, Lessee may, at Lessee's option, to be exercised in writing only within ten (10) days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within ten (10) days after the condemning authority shall have taken possession), terminate this Lease as of the date the condemning authority takes such possession.  If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the rent shall be reduced in the proportion that the floor area of the Premises taken bears to the total floor area of the Premises.  No reduction of rent shall occur if the only area taken is that which does not have the Premises located thereon.  Any award for the taking of all or any part of the Premises under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of Lessor, whether such award shall be made as compensation or diminution in value of the leasehold or for the taking of the fee, or severance damages; provided, however, that Lessee shall be entitled to any award for loss of or damage to Lessee's trade fixtures and removable personal property.  In the event that this Lease is not terminated by reason of such Condemnation, Lessor shall, to the extent of severance damages received by lessor in connection with such condemnation, repair any damage to the Premises caused by such Condemnation except to the extent that Lessee has been reimbursed therefor by the condemning authority.  Lessee shall pay any amount in excess of such severance damages required to complete such repair.

                14.2                Temporary Condemnation.  In the event of a temporary Condemnation of the Premises, this Lease shall remain in effect and lessor shall receive any award made for such Condemnation.  If a temporary Condemnation remains in effect at the expiration or earlier termination of this Lease, Lessee shall pay Lessor the reasonable costs of performing any obligations required of Lessee by this Lease with respect to the surrender of the Premises and upon such payment Lessee shall be excused from such obligations.  If a temporary Condemnation is for a period which extends beyond the term of the Lease, this Lease shall terminate as of the date of occupancy by the condemning authority.  Lessor shall be entitled to the entire award paid for such Condemnation, except Lessee shall have the right to recovery from the condemning authority, but not from Lessor, such compensation as may be separately awarded to lessee in connection with costs in removing Lessee's merchandise, furniture, fixtures, leasehold improvements and equipment to a new location; and subject to the foregoing, Lessee waives any claim to any part of the award from Lessor or the condemning authority.  Upon any such temporary  Condemnation, rent shall be adjusted to the date of such occupancy.

15.                CORPORATE OR PARTNERSHIP LESSEE.

                15.1                If Lessee is a corporation, Lessee shall, if requested by Lessor, at the time of execution of this Lease, deliver to Lessor a certified resolution of its board of directors authorizing the execution of this Lease on behalf of Lessee.  If, at any time during the term of this Lease, any part or all of the corporate shares of Lessee shall be transferred by sale, assignment, bequest, inheritance, operation of law or other disposition, or new shares shall be issued, so as to result in a change in the present effective voting control of Lessee by the person or persons having such control as of the date of this Lease, Lessee shall promptly notify Lessor in writing of such change, and Lessor may terminate this Lease at any time within ninety (90) days after receipt of such notice by giving Lessee not less than thirty (30) days prior written notice of such termination.

                15.2                If lessee is a partnership, Lessee shall, at the time of execution of this Lease, if requested by Lessor, deliver to Lessor a copy of the partnership agreement, together with any amendments, establishing the partnership, designating all of the partners therein, evidencing the authority of the partnership to enter into this Lease, designating the person or persons authorized to execute this Lease on behalf of the partnership and indicating the persons having effective operating control of the partnership.  If, at any time during the term of this Lease, more than twenty-five percent (25%) of the general partnership interests in Lessee are transferred by sale, assignment, bequest, inheritance, operation of law or other disposition, or if new partners shall be admitted so as to result in a change in the effective operating control of Lessee by the person or persons having such control as of the date of this Lease, Lessee shall promptly notify Lessor in writing of such change, and Lessor may terminate this Lease within ninety (90) days after receipt of such notice by giving Lessee not less than thirty (30) days prior written notice of such termination.

16.                ESTOPPEL CERTIFICATE.

                16.1                Each party (as "responding party") shall at any time upon not less than ten (10) days prior written notice from the other party ("requesting party") execute, acknowledge and deliver to the requesting party a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) and the date to which the rent and other charges are paid in advance, if any; (ii) acknowledging that there are not, to the responding party's knowledge, any uncured defaults on the part of the Lessor specifying such defaults if any are claimed; and (iii) acknowledging the truth of other such statements as the requesting party may specify, concerning the Lease.  Any such statement may be conclusively relied upon by the requesting party or by any prospective purchaser or encumbrancer of the Premises or of the business of the requesting party.

                16.2                If Lessor desires to finance, refinance, or sell the Property, or any part thereof, Lessee hereby agrees to deliver to any lender or purchaser designated by Lessor such financial statements of Lessee as may be reasonably required by such lender or purchaser.  Such statements shall include the past three (3) years financial statements of Lessee.  All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purpose herein set forth.

                16.3                Lessee agrees to execute any documents required in subparagraph 16.1 and 16.2 and failure to do so within ten (10) days after written demand does hereby make, constitute and irrevocably appoint Lessor as Lessee's attorney in fact and in Lessee's name, place and stead, to do so.

17.                LESSOR'S LIABILITY.  The term "Lessor" as used herein shall mean only the owner or owners, at the time in question, of the fee title or a tenant's interest in a ground lease of the Industrial Center.  In the event of any transfer of such title or interest, Lessor herein named (and in case of any subsequent transfers, the grantor) shall be relieved from and after the date of such transfer of all liability as respects Lessor's obligations thereafter to be performed, provided that any funds in the hands of Lessor or the then grantor at the time of such transfer, in which Lessee has an interest, shall be delivered to the grantee.  The obligations contained in this this Lease to be performed by Lessor shall, subject as aforesaid, be binding on Lessor's successors and assigns, only during their respective periods of ownership.

18.                SEVERABILITY.   The invalidity of any provision of this Lease as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

19                INTEREST ON PAST-DUE OBLIGATIONS.  Except as expressly herein provided, any amount due to Lessor not paid when due shall bear interest at eighteen percent (18%) from the date due.  Payment of such interest shall not excuse or cure any default by Lessee under this Lease; provided, however, that interest shall not be payable on late charges incurred by Lessee nor on any amounts upon which late charges are paid by Lessee.

20.           TIME OF ESSENCE.  Time is of the essence with respect to the obligations to be performed under this Lease.

21.                ADDITIONAL RENT.  All monetary obligations of Lessee to Lessor under the terms of this Lease, including but not limited, Lessee's share of insurance, tax and common area maintenance expenses payable, shall be deemed to be rent.

22.                INCORPORATION OF PRIOR AGREEMENTS; REPRESENTATIONS.  This Lease contains all agreements of the parties with respect to any matter mentioned herein.  No prior or contemporaneous agreement or understanding pertaining to any such matter shall be effective.  This Lease may be modified in writing only, signed by the parties in interest at the time of the modification.  Except as otherwise stated in this Lease, Lessee hereby acknowledges that neither the real estate broker hereof nor any cooperating broker on this transaction nor the Lessor or any employee or agents of any such persons has made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of the Premises or the Property and Lessee acknowledges that Lessee assumes all responsibility regarding the Occupational Safety Health Act, the legal use and adaptability of the Premises and the compliance thereof with all applicable laws and regulations in effect during the terms of this Lease except as otherwise specifically stated in this Lease.

23.                NOTICES.  Wherever in this Lease it shall be required or permitted that Notice or demand be given or served by Lessor or Lessee to or on the other, such notice or demand shall be in writing and shall be deemed to be given or served at the time of mailing by certified or registered mail, postage prepaid, addressed to the address of the addressee specified herein.  Either party may, by notice to the other, specify a different address for notice purposes, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice purposes.  A copy of all notices required or permitted to be given to Lessor hereunder shall be concurrently transmitted to such party or parties at such address as Lessor may from time to time hereafter designate by notice to Lessee.

24.                WAIVERS.  No waiver by Lessor or any provision hereof shall be deemed a waiver of  any other provision hereof or of any subsequent breach by Lessee of the same or any other provision.  Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor's consent or approval of any subsequent act by Lessee.  The acceptance of rent hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular rent so accepted, regardless of Lessor's knowledge of such preceding breach at the time of acceptance of such rent.

25.                RECORDING.  Lessee shall, upon request of Lessor, execute, acknowledge and deliver to Lessor a "short form" Memorandum of (this) Lease for recording purposes.

26.                HOLDING OVER.  If Lessee, with Lessor's consent, remains in possession of the Premises or any part thereof after the expiration of the term hereof, such occupancy shall be a tenancy from month to month upon all the provisions of this Lease pertaining to the obligations of Lessee, but all Options, if any, granted under the terms of this Lease shall be deemed terminated and be of no further effect during said month to month tenancy.  The monthly rental amount to be paid in this Holding Over Period shall be determined by multiplying the Base Rent (the rent in effect immediately prior to such Holding Over) by one hundred fifty percent (150%) plus applicable Transaction Privilege Tax and shall be paid on the first day following the expiration of this Lease.

27.                CUMULATIVE REMEDIES.  No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

28.                COVENANTS AND CONDITIONS.  Each provision of this Lease performable by Lessee shall be deemed both a covenant and a condition.

29.                BINDING EFFECT; CHOICE OF LAW.  Subject to any provisions hereof restricting assignment or subletting by Lessee and subject to the provisions of Paragraph 17, this Lease shall bind the parties, their personal representatives, successors and assigns.  This Lease shall be governed by the laws of the State where the Industrial Center is located and any litigation concerning this Lease between the parties hereto shall be initiated in the county in which the Industrial Center is located.

30.                SUBORDINATION.

                30.1                This Lease and any Option granted hereby, at Lessor's option, shall be subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation or security now or hereafter placed upon the Industrial Center and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof.  Notwithstanding such subordination, Lessee's right to quiet possession of the Premises shall not be disturbed if Lessee is not in default and so long as Lessee shall pay the rent and observe and perform all of the provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms.  If any mortgagee, trustee, or ground lessor shall elect to have this Lease and any Options granted hereby prior to the lien of its mortgage, deed of trust or ground lease, and shall give written notice thereof to Lessee, this Lease and such Options shall be deemed prior to such mortgage, deed of trust or ground lease, whether this Lease or such Options are dated prior or subsequent to the date of said mortgage, deed of trust or ground lease or the date of recording thereof.  Lessee shall be required to execute said written subordination agreements that any mortgagee, trustee, or ground lessor shall so require.

                30.2                Attornment.  In the event any proceedings are brought for default under any ground or underlying lease or in the event of foreclosure or the exercise of the power of sale under any mortgage or deed of trust made by the Lessor covering the Premises, the Lessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Lessor under this Lease; provided said purchaser expressly agrees in writing to be bound by the terms of the Lease.

31.                ATTORNEYS' FEES. 

                31.1                If either party named herein brings an action to enforce the terms hereof, declare rights hereunder, or makes demand without bringing an action, the prevailing party in any action, on trial or appeal, shall be entitled to his reasonable attorneys' fees to be paid by the losing party as fixed by the court.

                31.2                If Lessor has to resort to using the services of an attorney to enforce any of the provisions of this Lease, including but not limited to collection of rent or other monies due Lessor from Lessee, Lessee shall reimburse Lessor immediately upon presentation of a copy of  an attorney's invoice for such services incurred.  Lessor need not bring action upon Lessee to enforce this provision 31.2.

32                LESSOR'S ACCESS.  Lessor and Lessor's agents shall have the right to enter the Premise at reasonable times for the purpose of inspecting the same, showing the same to prospective purchasers, lenders, or lessees, and making such alterations, repairs, improvements or additions to the Premises or to the building of which they are part as Lessor may deem necessary or desirable.  Lessor may at any time place on or about the Premises or the Building any ordinary "For Sale" signs and Lessor may at any time during the last one hundred twenty (120) days of the term hereof place on or about the Premises any ordinary "For Lease" signs.  All activities of Lessor pursuant to this paragraph shall be without abatement of rent, nor shall Lessor have any liability to Lessee for the same.

33.                AUCTIONS.  Lessee shall not conduct, nor permit to be conducted, wither voluntarily or involuntarily, any auction upon the Premises or the Common Areas without first having obtained Lessor's prior written consent.  Notwithstanding anything to the contrary in this Lease, Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to grant such consent.

34.                MERGER.  The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, or a termination by Lessor, shall not work a merger, and shall, at the option of Lessor, terminate all or any existing subtenancies or may, at the option of Lessor, operate as an assignment to Lessor of any or all of such subtenancies.

35.                CONSENTS.  Except for Paragraph 33 hereof, wherever in this Lease the consent of one party is required to an act of the other party, such consent shall not be unreasonably withheld or delayed.

36.                GUARANTOR.  In the event that there is a guarantor of this Lease, said guarantor shall have the same obligations as Lessee under this Lease.

37.           QUIET POSSESSION.  Upon Lessee paying the rent for the Premises and observing and performing all of the covenants, conditions and provisions on Lessee's part to be observed and performed hereunder, Lessee shall have quiet possession of the Premises for the entire term hereof subject to all of the provisions of this Lease.  The individuals executing this Lease on behalf of Lessor represent and warrant to Lessee that they are fully authorized and legally capable of executing this Lease on behalf of Lessor and that such execution is binding upon all parties holding an ownership interest in the Property.

38.                SECURITY MEASURES.  Lessee hereby acknowledges that Lessor shall have no obligation whatsoever to provide guard service or other security measures for the benefit of the Premises or the Industrial Center.  Lessee assumes all responsibility for the protection of Lessee, its agents, and invitees and the property of Lessee and of Lessee's agents and invitees from acts of third parties.

39.                EASEMENTS.  Lessor reserves to itself the rights, from time to time, to grant such easements, rights and dedications that Lessor deems necessary or desirable, and to cause the recordation of Parcel Maps and restrictions, so long as such easements, rights, dedications, Maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee.  Lessee shall sign any of the aforementioned documents upon request of Lessor and failure to do so shall constitute a material default of this Lease without the need for further notice to Lessee.

40.                PERFORMANCE UNDER PROTEST.  If at any time a dispute shall arise as to any amount or sum of money to be paid by one party to the other under the provisions hereof, the party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment, and there shall survive the right on the part of said party to institute suit for recovery of such sum.  If it shall be adjudged that there was no legal obligation on the part of said party to pay such sum or any part thereof, said party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this Lease.

41.                CONFLICT.  Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions, if any shall be controlled by the typewritten or handwritten provisions.

42.           OFFER.  Preparation of this Lease by Lessor or Lessor's agent and submission of same to Lessee shall not be deemed an offer or a reservation of or option for the Premises, to lease.  This Lease shall become binding upon Lessor and Lessee only when fully executed and delivered by Lessor and Lessee.

43.           INITIAL RENTAL PAYMENT.  In the vent Lessee tenders a check as its initial payment of rent, security deposit or other charges and any such check is returned to Lessor unpaid for any reason whatsoever, this Lease shall automatically terminate without notice and Lessee shall have no right to remain in possession of the Premises.  Lessor, in addition to all rights and remedies which it may have under this Lease and the law, may immediately lock the Premises without notice and prevent Lessee from reentering or removing any of his property located herein.

44.                MULTIPLE TENANT OR MULTIPLE COMPLEX BUILDING.  In the event that the Premises are part of a larger building or group of buildings, then Lessee agrees that it will abide by, keep and observe all reasonable rules and regulations which Lessor may make from time to time for the management, safety, care, and cleanliness of the building and grounds, the parking of vehicles and the preservation of good order therein as well as for the convenience of other occupants and tenants of the building.  Lessee agrees to pay, as additional rent during the Lease term, its pro rata share of Lessor's cost of operating, maintaining and repairing such portion of the Premises or such portion of the property of which the Premises are a part, which are common areas or used or shared by Lessee and other occupants thereof, including but not limited to all parking areas, roadways, walkways, truckways, stairways, roofing areas, loading docks, delivery areas, landscaped areas, maintenance areas and all other facilities provided for the convenience and use of Lessee, its agents, employees and customers.  Such costs shall include but not be limited to all costs for utilities, cleaning, garbage and refuse disposal, sweeping, landscaping, policing, wages, management fees not to exceed five percent (5%) of total monthly rental, supplies and small tools.  The proportionate share of the common area costs which Lessee is obligated to pay shall be based upon the ration that the floor area in the Premises bears to the total floor area in the building or group of buildings of which the Premises are a part.  At the beginning of each lease years, Lessor will supply Lessee with an estimate of the common area maintenance costs, including property taxes and insurance, which are payable by Lessee on a monthly basis, in addition to the rent provided for hereunder.  Landlord will provide Lessee with a statement for the actual common area costs, including property taxes and insurance at the end of each year.  Any costs paid by Lessee in excess of those actually incurred will be refunded by Lessor, and any expenses actually incurred by Lessor and not previously paid by Lessee shall be immediately due and payable.  The violation of any such rules and regulations or the failure to pay such pro rata share of costs, shall be deemed a material breach of this Lease by Lessee.

45.                OUTSIDE STORAGE; TRASH.  No storage will be allowed outside the building on the Premises or on any of the common areas.  This includes but is not limited to supplies, materials, goods, pallets, dunnage, equipment, vehicles and boats.  All trash must be placed in trash receptacles.  If Lessee creates more trash than is considered reasonable for the amount of the Premises leased, at the Lessor's request Lessee shall procure and pay for additional trash receptacle(s) and collection thereof.  A violation of this paragraph shall constitute an event of default by Lessee under Paragraph 13.1.

46.                OUTSIDE WORK.  No work by Lessee shall be permitted on sidewalks, roofs, streets, driveways, parking or landscaped areas surrounding the Premises.  This includes but is not limited to assembly, construction, mechanical work, painting, drying, layout, cleaning or repair of goods or materials.  A violation of this paragraph shall constitute an event of default by Lessee under Paragraph 13.1.

47.           SIGNS.  Within sixty (60) days after execution of this Lease, Lessee shall provide, at his sole costs and expense, a Lessee identification sign in conformance with Lessor's overall sign program.  Such sign shall only set forth Lessee's name, as written on this Lease, and logo.  Such sign is subject to lessor's written approval which shall not be unreasonably withheld.

48.                ACCORD AND SATISFACTION.  No payment by Lessee of a lesser amount than the rent nor any endorsement on any check or letter accompanying any check or payment as Rent shall be deemed an accord and satisfaction of full payment of rent, and Lessor may accept such payment without prejudice to Lessor's right to recover the balance of such Rent or to pursue other remedies.

49.                LIMITATION OF LESSOR'S LIABILITY.  The obligations of Lessor under this Lease are not personal obligations of the individual partners, directors, officers and shareholders of Lessor, and Lessee shall look solely to the Premises for satisfaction of any liability and shall not look to other assets of Lessor nor seek recourse against the assets of the individual partners, directors, officers and shareholders of Lessor.

50.                RELOCATION.  At any time after Lessee's execution of this Lease, Lessor shall have the right, upon providing Lessee thirty (30) days notice in writing, to provide Lessee with reasonably similar space elsewhere in the Building or Industrial Center of approximately the same size as the Premises and to move Lessee to said space.  In the event that Lessor shall exercise such right subsequent to actual occupancy of the Premises by Lessee, Lessor shall be responsible for moving Lessee and shall pay the cost of moving Lessee to such new space and all other reasonable expenses related to such relocation.  In the event Lessor moves Lessee to such new space, then this Lease and each and all of the terms and covenants and conditions hereof shall remain in full force and effect and thereupon be deemed applicable to such new space.  Should Lessee refuse to permit Lessor to move Lessee to such new space at the end of the thirty (30) day period, Lessor shall have the right to terminate this Lease by notice given to Lessee in writing within ten (10) days following the end of said thirty (30) day period, which termination shall be effective sixty (60) days after the date of the original notice of relocation by Lessor.

51.                LESSEE'S PROPORTIONATE SHARE.  Lessee's proportionate share of total rentable area in the Industrial Center is                                                 square feet divided by total Industrial Center square feet or                                         percent (                                %).

52.                ADDENDUM.  Attached hereto is an addendum or addenda containing paragraphs             through  which constitute a part of this Lease.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERMS AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO.  THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

LESSOR SUGGESTS THAT IF LESSEE IS UNCLEAR OR UNCERTAIN AS TO THE MEANING AND EFFECT OF ANY OF THE PROVISIONS OF THIS LEASE, LESSEE SHOULD SUBMIT THIS LEASE TO LESSEE'S ATTORNEY FOR CLARIFICATION.

The parties hereto have executed this Lease at the place and on the dates specified immediately adjacent to their respective signatures.

                                LESSOR                                                                  LESSEE

 

 

By:                                                                                                          By:                                                                                         

 

Its:                                                                                                          Its:                                                                                         

 

 

By:                                                                                                          By:                                                                                         

 

Its:                                                                                                          Its:                                                                                         

 

 

Executed on:                                                                                         Executed on:                                                                         

                                (Date)                      (Corporate Seal)                                      (Date)                     (Corporate Seal)

 

ADDRESS:                                                                                            ADDRESS:

 

                                                                                                                                                                                                               

 

                                                                                                                                                                                                               

 


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