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Exhibit 10.4
LEASE
THIS
LEASE made this 29th day of June, 2007 by and between WALES
REALTY, LLC, a Connecticut Limited Liability Company with a
principal place of business located at 275 New State Road, in
the Town of Manchester County of Hartford, State of
Connecticut, (hereinafter referred to a "Landlord"), and
VeruTEK TECHNOLOGIES, INC. a Connecticut corporation with a
place of business located at 65 West Dudley Town Road, in the
Town of Bloomfield, County of Hartford, State of Connecticut
(hereinafter referred to as "Tenant");
WITNESS ETH:
1.
Lease of Premises - For and in consideration of the rents
herein reserved, and the covenants and conditions herein contained,
the Landlord hereby leases to the Tenant and the Tenant hereby
hires from the Landlord, that certain tract of land situated in
Bloomfield, Connecticut (hereinafter, "Land") consisting of
approximately 2.0 acres, as further described in Exhibit A which is
attached hereto, together with all improvements thereon
(hereinafter, "Building"). The Building is further described as a
free standing building containing approximately 24,000 square feet
having a street address of 65 West Dudley Town Road. The Tenant
hereby hires from the Landlord and Landlord leases to Tenant a
8,800 square feet portion of the Building as per the attached plan
(hereinafter, "Improvements"). The Land and Improvements are
sometimes collectively referred to in this Lease as the "Premises."
In addition, Tenant shall have use of twenty five (25) parking
spaces.
2.
Use of Premises - The Tenant shall use and occupy the
Improvements for office, laboratory and manufacturing operations,
only and for no other purpose without the prior written consent of
the Landlord which consent shall not be unreasonably withheld or
delayed. The Tenant hereby warrants that no toxic or hazardous
materials shall be stored, utilized or disposed of on the Premises
in excess of amounts permitted under applicable law. In the event
of any such storage, use or disposal, Tenant shall be liable for
any costs reasonably incurred by the Landlord in connection with,
or arising out of, the storage, use or disposal of said toxic or
hazardous materials. The term "toxic or hazardous materials" shall
be as defined by applicable State and Federal laws and regulations.
Landlord acknowledges that Tenant's operation on the Premises will
require the use of certain materials which may be considered "toxic
or hazardous materials" under applicable law. Landlord hereby
consents to the use of such materials, provided that all such
materials are used, stored and disposed of in accordance with the
requirements of applicable laws.
3.
Term
of Lease - The term of this lease shall be for a period
of five (5) years, commencing on August 1, 2007 (the
"Commencement Date") and ending July 31, 2012. From the date
of mutual execution of this Lease, through the Commencement
Date, the Landlord shall permit the Tenant to have access to
the Premises for the purpose of permitting the Tenant and its
agents and contractors to make alterations to the Improvements
so that the Premises, as of the Commencement Date will be
fit for
the conduct of the Tenant's business thereon. During the
period prior to the Commencement Date, the Landlord and the
Tenant will cooperate and coordinate with one another so that
the work for which they are each responsible for prior to the
Commencement Date can be done in as efficient and expeditious
manner as possible.
4.
Base Rent -The Tenant agrees to pay the Landlord as rent,
without rights of set off, deduction, or necessity for demand, for
each of the years as follows. The first month's rent shall be paid
prior to the Tenant obtaining possession of the
Premises.
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YEAR
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YEARLY RENT
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MONTHLY RENT
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Commencement
Date –July 31, 2008
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$38,000.00
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$3,166.67
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August
1, 2008 – July 31, 2009
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$39,000.00
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$3,250.00
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August
1, 2008 – July 31, 2010
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$40,000.00
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$3,333.33
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August
1,
2008 July
31, 2011
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$41,000.00
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$3,416.67
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August
1, 2008 – July 31, 2012
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$42,000.00
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$3,500.00
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The
foregoing rent is allocated as follows:
$3,166.67
base rent adjusted as provided above
$
833.33 initial estimated additional rent due under Paragraph
33 until such time as adjusted pursuant to Paragraph
33.
The
foregoing rent shall be payable in equal monthly installments
in advance, commencing on the first day of the first full
calendar month following the Commencement Date and on the
first day of each and every calendar month thereafter. If the
Commencement Date is not the first day of the month, rent for
the initial partial month shall be pro-rated based upon the
actual number of days in such month and the number of days
from the Commencement Date until the last day of such month.
In the event said rent is not actually received by the
Landlord within ten (10) days, the Tenant shall be responsible
for a late charge of $10.00 per day for every day that said
rent is late beyond the ten (10) days up to a maximum charge
of $150.00. Said late charges shall be considered liquidated
damages for said late payment, but shall in no event affect
any other damages to which the Landlord may be entitled as a
result of the Tenant's late payment, i.e. back rent, unpaid
charges, costs of collection, etc. In the event that the
Landlord elects to terminate this lease the Tenant's liability
for said late charge payment shall cease on the date of said
election but the Tenant shall be liable for damages in
accordance with Paragraph 11 hereof following the date of said
election to terminate. The first installment of rent shall be
paid prior to the Tenant taking possession of the
Premises.
5.
Assignment and Subletting - The Tenant agrees not to assign
this lease or any interest therein or sublet the Premises or any
portion thereof, without the prior written approval of Landlord,
which approval shall not be unreasonably withheld or delayed, but
notwithstanding any assignment
or subleasing, Tenant shall remain liable for all the terms,
covenants, and conditions of this lease. If the Tenant is a
corporation, a transfer of 50% or more of the Tenant's stock shall
be considered to be an assignment or sublet for purposes of this
Paragraph. Any such sublet or assignment shall be subject to the
terms and provisions of this lease and the termination or other
expiration of this lease shall terminate any such sublease or
assignment.
6.
Indemnity - The Tenant agrees to indemnify and save Landlord
harmless against and from any and all claims, damages, costs and
expenses, including reasonable attorney's fees, arising from the
conduct or management of the business conducted by the Tenant in
the leased Premises, or from any breach or default on the part of
the Tenant in the performance of any covenant or agreement on the
part of the Tenant to be performed pursuant to the terms of this
lease, or from any act or negligence of the Tenant, its agents,
contractors, servants, employees, subleases, concessionaires or
licensees in or about the leased Premises. In case any action or
proceeding be brought against the Landlord by reason of any such
claim, Tenant, upon notice from Landlord, covenants to defend such
action or proceeding and reimburse the Landlord for its reasonable
expenses in connection therewith,
7.
Limitation of Landlord's Liability - The Landlord shall not
be liable for:
(a)
Loss
of or damage to any property of the Tenant or of any other person
entrusted to the Tenant;
(b)
Loss
of or damage to any property of the Tenant or of any person by
theft or otherwise;
(c)
Any
injury or damage to any person or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, dust, water or
snow or leaks from any part of the building or from the pipes,
appliances or plumbing system or any other place or by dampness or
from any other cause whatsoever;
(d)
Any
damage caused by other occupants or persons in the building leased
to Tenant; or
(e)
Any
latent defects in the building;
(f)
Any
interruption of services, utilities, or similar items to be
provided for by the Landlord pursuant to this lease.
The
foregoing provisions of this Paragraph 7 shall not excuse
Landlord from its own negligence or willful misconduct or the
negligence or willful misconduct of its employees, agents and
contractors. Landlord shall indemnify, defend and save Tenant
harmless from any and all claims, damages, losses costs and
expenses resulting from the negligence and/or willful
misconduct and acts of Landlord, its employees, agents and
contractors on or about the Premises,
8.
Insurance
- The Tenant shall keep in force during the term of this lease
public liability insurance with recognized companies licensed
in the State of Connecticut with liability limits of not less
than $1,000,000.00 for bodily injury and other casualty and
arising out of the occupancy, maintenance and use of the
Premises and $1,000,000.00 for contents/personal property
damage.
In
the event that Tenant wishes to maintain contents/personal
property limits at an amount less than $1,000,000, Tenant
shall provide sufficient proof of adequate coverage and shall
make no claim against Landlord in the event that said coverage
is insufficient.. Tenant will name the Landlord as an
additional insured on all policies of insurance, and will
furnish the Landlord with a copy of the policy or policies
within ten (10) days of the execution of this lease and
further proof of said insurance as the Landlord may require.
Neither party shall be liable for damages covered by
insurance.
Throughout
the term of this Lease, Landlord shall maintain a policy of
fire and extended casualty insurance covering the Premises in
an amount equal to the full replacement cost of the Premises
and liability coverage with respect to the Premises with
limits of not less that $1,000,000.00 for bodily injury and
$1,000,000.00 for property damage with the Tenant named as an
additional insured thereunder. All such insurance shall be
issued by recognized companies licensed in the State of
Connecticut. Tenant shall be responsible for payment of its
proportionate share as provided in Paragraph 33.
Landlord
and Tenant each hereby waives on behalf of all insurers under
all policies of insurance (casualty or liability) carried by
either covering the Premises or any part thereof or any
operations or activities thereon, all rights of subrogation
which any insurer might otherwise have, if at all, to any
claims of Landlord or Tenant against the other.
9.
Compliance With Law - Tenant agrees to comply and operate
its business in accordance with all statutes, laws, ordinances,
regulations and rules of the United States, the State of
Connecticut, the town in which the Premises are located and any
other governmental subdivisions claiming jurisdiction so far as the
Premises are or may be concerned.
10.
Subordination to Mortgages - This lease shall not take
precedence over any mortgage with any individual, savings bank,
commercial bank or insurance company or other recognized lending
institution, which may be placed, or arranged upon the Premises,
but any mortgage so placed or arranged at all times after the
execution hereof until the end of the term of this lease shall be
prior to any rights the Tenant may have in the Premises by reason
of this lease, to the same effect as though said mortgage had been
executed before this lease and recorded within a reasonable time
thereafter, provided that no such subordination shall occur unless
the lender in question delivers to Tenant an agreement in form and
substance reasonably satisfactorily to Tenant pursuant to which
such lender agrees not to name Tenant as a defendant in a
foreclosure action or disturb Tenant in its enjoyment of the
Premises and recognizing the rights of Tenant under this Lease, so
long as Tenant is not in default hereunder.
11.
Default -
If default be made in the payment of rent herein reserved or
any part thereof for ten (10) days after written notice from
Landlord or if default be made in any of the other covenants
and agreements herein contained to be kept by the Tenant which
default (other than nonpayment of rent) is not cured within
thirty (30) days following notice to the Tenant, provided
however, if such default cannot reasonably be cured within
thirty (30) days, Tenant shall not be in
default hereunder as long as Tenant commences such cure within
such thirty (30) day period, or if the Tenant shall make an
assignment for the benefit of creditors, or if a receiver or
trustee of the Tenant's property shall be appointed which is
not removed within sixty (60) days, then it shall be lawful
for the Landlord at the Landlord's election to declare said
term ended and to re-enter the Premises or any part thereof
without such re-entry working a forfeiture of rents to become
due hereunder, either with or without process of law, and to
expel, remove, and put out the Tenant or any person or persons
occupying the same, using such force as may be necessary so as
to repossess and enjoy the demised Premises as before this
demise, without prejudice to any remedies which the Landlord
might otherwise have.
(a)
In
the event that this lease is terminated, the Landlord shall make
reasonable effort to re-let the Premises, but shall have the sole
authority to determine and receive the rent therefore, applying the
same to the payment of the rent due by these presents, including
reasonable expenses of re-rental such as advertising, rental
commission, decorating and repairs and, if the full rental herein
provided shall not be realized by the Landlord over and above such
expenses of reletting, the said Tenant shall pay any deficiency in
all events and shall remain liable for failure to comply with all
the other terms, covenants and conditions of this lease. Said
deficiency shall be computed by subtracting the amount of rent that
the Landlord is scheduled to receive from any re-rental from the
amount of rent that the Tenant would have paid throughout the term
of this lease. The Landlord shall compute the amount of said
damages and shall render a statement to the Tenant for said amount.
The Tenant shall each month make a payment equal to the difference
between the rent due under this Lease and the rent due under such
sublease for such month. In addition to the foregoing, the Tenant
shall be liable for all other damages suffered by the Landlord in
the event of a breach of this lease.
(b)
The
Landlord shall have, in addition to the rights and remedies of the
Landlord enumerated in this lease (which shall be cumulative), such
other rights and remedies as may be allowed by law or in equity. If
the Landlord engages the services of an attorney-at-law after a
default as aforesaid, the Tenant shall reimburse the Landlord for
the actual amount of costs reasonably incurred plus a reasonable
attorney's fee. In the event there are any sums due the Landlord by
the Tenant following said breach, and said sums are not paid within
thirty (30) days after the time they become due, the Tenant shall
pay to the Landlord interest on said sums at the rate of one
percent (1%) per month.
12.
Alterations
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(a)
The Tenant may, at its own expense, make improvements to the
property as it may deem necessary or expedient in the
operation of the leased property, provided the Tenant, without
the written consent of the Landlord, shall not tear down or
materially demolish any of the improvements on the leased
property, or make any material changes or alterations in such
improvements without the prior consent of the Landlord, which
consent shall not be unreasonably withheld or delayed. Tenant
shall not make any change in or alteration to the leased
property which would violate the terms of any mortgage on the
leased property, or of any policy of insurance in force with
respect to the leased property.
Landlord
hereby acknowledges that Tenant has informed Landlord of its
plans for alteration as set forth in Schedule 12, attached
hereto, to be made to the Premises by Tenant at a future date
and Landlord consents to such alterations.
(b)
Subject to the foregoing, the Tenant shall have the right to
make changes or alterations to the building on the leased
property so long as:
(i)
No
change or alteration shall at any time be made which shall impair
the structural soundness or diminish the value of the building on
the leased property.
(ii)
Before
commencing any changes or alterations the Tenant shall procure and
deliver to the Landlord the written consent of the mortgagee to
which the lease is subordinate and Landlord shall assist Tenant in
procuring such consent.
(iii)
No
change or alteration shall be undertaken until the Tenant shall
have procured and paid for all required municipal and other
governmental permits and authorizations of the various municipal
departments and governmental subdivisions having
jurisdiction.
(iv)
All
work done in connection with any change or alteration shall be done
in a good and workmanlike manner and in compliance with the
building and zoning laws, and with all other laws, ordinances,
orders, rules, regulations, and requirements of all Federal, State,
and municipal governments in the appropriate departments,
commissions, boards, and their officers thereof, and in accordance
with the orders, rules, and regulations of the Board of Fire
Underwriters or any other body now or hereafter constituted
exercising similar functions, and the Tenant shall procure
certificates of occupancy and other certificates required by
law.
(v)
At all times when any change or alteration is in
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