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EXHIBIT 10.11
OFFICE LEASE
THIS OFFICE LEASE ("Lease"), is entered into on November 1, 2005,
between Noto
Properties II, LLC, a Michigan limited liability company with
offices located at
6600 - 28th Street, S.E., Grand Rapids, Michigan, 49546
("Landlord") and BestNet
Communications Corporation, a Nevada corporation, with offices
located at 5075
Cascade Road SE, Suite A, Grand Rapids, Michigan, 49546
("Tenant").
WITNESSETH
1. Description of the Premises. Landlord leases to Tenant and
Tenant hires
from Landlord Suite C (the "Leased Premises") in the building (the
"Building")
located at 2850 Thomhills Avenue SE, Grand Rapids, Michigan, 49546,
together
with the non-exclusive right to use the Common Areas hereinafter
defined.
2. Common Areas. Landlord shall also make available areas and
facilities of
common benefit to the tenants and occupants of the Building which
shall include,
without limitation, such parking areas, driveways, roadways,
sidewalks and
ramps, service areas, hallways and lighting facilities as are a
part of the
Building and surrounding areas (the "Common Areas"). Subject to
Section 5
hereof, Landlord shall manage, equip, light, insure, repair and
maintain the
Common Areas. All Common Areas shall be subject to the exclusive
control and
management of Landlord and Landlord shall have the right, from time
to time, to
establish, modify, and enforce rules and regulations with respect
thereto.
3. Term; Acceptance; Renewal & Holdover.
3.1 Initial Term: This Lease shall be for an Initial Term of
Twenty-four (24) months commencing at noon on November 1, 2005
("the
Commencement Date") and terminating at noon on November 1, 2007
(the "Expiration
Date").
3.2 Acceptance: By conducting business from the Leased
Premises,
Tenant shall be deemed to have accepted the Leased Premises in
their then
present condition and to have acknowledged that Landlord has
fulfilled its
obligation to make all improvements to the Leased Premises in
accordance with
any agreement, whether oral or written, between the parties.
3.3 Commencement and Termination Dates: Landlord and the Tenant
shall,
upon the request of either of them, execute an Agreement in
recordable form
expressing the Commencement and Termination Dates of the Term of
this Lease.
3.4 Renewal Term: Provided Tenant is not in default of any
covenant
contained in this Lease, Tenant shall have one (1) right of
renewal, which may
be exercised by Tenant, in Tenant's sole discretion, for a further
term of two
(2) years (a "Renewal Term"), provided, however, that Tenant gives
Landlord
written notice that Tenant intends to exercise its right of renewal
not later
than 60 days prior to the end of the then-current lease or renewal
term (the
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"Renewal Notice"). Each renewal shall be on the terms contained in
this Lease,
except that there shall be no further rights to renew and except as
to Base Rent
which shall be adjusted as set forth in Section 4.2.
3.5 Holdover: In the event Tenant remains in possession of the
Leased
Premises after the expiration or termination of the Lease, without
the execution
of a lease renewal or new Lease, Tenant shall be deemed to be
occupying the
Leased Premises as a tenant from month-to-month subject to all
conditions,
provisions, and obligations of this Lease, insofar as the same can
be applicable
to a month-to-month tenancy, cancelable by either party upon thirty
(30) days
written notice to the other, except that the rent shall increase by
ten percent
(10%) over the rent for the last month of the Lease, and Landlord
may increase
the rent on 30 days' written notice to Tenant.
4. Base Rental.
4.1 Tenant shall pay to Landlord annual rent during the Initial
Term
of this Lease in the amount of Thirty-Five Thousand One Hundred and
Sixty
Dollars and 00/100 Dollars ($35,160) ("Base Rent"), which shall be
paid in equal
consecutive monthly installments of One Thousand Four Hundred and
Sixty-Five
Dollars and 00/100 Dollars ($1,465.00) and a prorated portion for
any partial
calendar month. Installments of rent shall be paid on the first day
of each
calendar month in advance.
4.2 In the event that Tenant exercises its right to a Renewal
Term,
the Base Rent payable during the Renewal Term (and the Base
Building Expense
figure), as specified in Section 4.1 for Base Rent and Section 5.1
for Base
Building Expense, shall be adjusted as of the first day of each
Renewal Term
(the "First Adjustment Date") by the percentage increase in the
Consumer's Price
Index for all Urban Consumers specified for All Items, All
Cities
(1982-1984=100) and issued by the Bureau of Labor Statistics of the
United
States Department of Labor, or any replacement thereof (the
"Index"). The
increased annual Base Rent shall be equal to the annual Base Rent
payable for
the year preceding the Adjustment Date multiplied by a fraction,
the numerator
of which is the Index for the second calendar month immediately
preceding the
Adjustment Date and the denominator is the Index for the second
calendar month
one year preceding. In no event shall the Base Rent be
decreased.
Notwithstanding the foregoing, the increase in Base Rent for any
one Renewal
Term shall not be greater than five percent (5%).
4.3 All rent shall be paid to Landlord at the address set forth
herein
or at such other address as Landlord may designate in writing,
without any prior
demand therefore and without any deduction or offset
whatsoever.
4.4 In the event that Tenant shall fail to pay any amount
under this Lease when the same shall be due, such amount shall be
subject to a
one-time late charge of five cents (.050) for each One Dollar
($1.00) not paid
when due and thereafter shall be subject to a service charge until
such amount
is paid at the lesser of the rate of two percent (2%) per month or
the highest
rate permitted by law.
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5. Building Expenses.
5.1 Tenant also shall pay to Landlord as additional rent its
proportionate share of Building Expenses for each calendar year
(and a
proportionate amount for any partial calendar year) during the term
of this
Lease (initial and renewal), whenever such Building Expenses exceed
Four
Thousand, Nine Hundred Eighty Seven and 50/100 Dollars ($4,987.50)
for the
Leased Premises. Tenant's pro rata share of all Building Expenses
is Ten and
28/100ths percent (10.28%).
5.2 "Building Expenses" shall mean all costs and expenses incurred
by
Landlord, directly or indirectly, in the maintenance, ownership,
operation,
repair, and replacement of land and the Building including the
Common Areas, and
including, without limitation: property taxes and assessments,
real, personal,
general and special; insurance; water, sewer, electricity, gas and
other sources
of power for heating, lighting, ventilating or air conditioning
(except when
separately billed to a specific tenant of the Building); management
fees, wages,
salaries, fringe benefits, and applicable taxes on the employer for
services
related to the Building performed by Landlord's employees; supplies
consumed in
connection with cleaning and general maintenance; cost incurred in
connection
with snow removal and exterior grounds care; and depreciation for
repairs.
Building Expenses shall not include janitorial expenses for the
Leased Premises
or other leased premises within the Building.
5.3 Tenant, in addition to the payment of Tenant's pro rata share
of
Building Expenses, shall be directly responsible for paying for any
telephone
and janitorial services servicing the Leased Premises. Tenant
hereby releases
Landlord from any liability whatsoever for any interruption of
electrical
service or gas to the Leased Premises, specifically including, but
not limited
to, any interruption of electrical current to word processing or
computer
equipment or the memories thereof.
5.4 At the end of each calendar year, Landlord shall furnish
Tenant
with a written statement itemizing Building Expenses and any other
additional
rent for that calendar year. Tenant shall pay the amount stated
therein within
ten (10) days of receipt of the written statement.
5.5 The additional rent provided to be paid pursuant to this
Section 5
may be escalated by Landlord for each renewal term.
6. Use.Tenant shall use and occupy the Leased Premises for
general
office purposes, and for no other purpose without the prior written
consent of
the Landlord. Tenant shall not intentionally and knowingly use the
Leased
Premises for any purpose or in any manner in violation of any law,
ordinance,
rule or regulation adopted or imposed by any federal, state,
county, or
municipal body or other governmental agency. The Tenant shall not
deface or
injure the Leased Premises or the Building, or permit any activity
in the Leased
Premises which will result in an increase of any premium for
insurance on the
Leased Premises or the Building unless Tenant shall pay such
increased premiums.
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Tenant may move its property into the Leased Premises on or
after
October 10, 2005. Tenant shall be liable for any costs or damages
that may
result therefrom. All property of Tenant kept on the premises shall
be so kept
at the sole risk of Tenant and Tenant shall hold Landlord harmless
from any
claims arising out of damage to same.
7. Taxes.Subject to Tenant's obligations set forth in Section 5
hereof,
Landlord shall pay all taxes and special assessments levied against
the land and
improvements on and in which the Leased Premises are situated.
Tenant shall pay
all personal property taxes assessed against any personal property
owned by
Tenant located on or in the Leased Premises.
8. Maintenance and Repair. Subject to Tenant's obligations set
forth in
Section 5, Landlord shall maintain and repair the Common Areas and
the Building
in good condition and repair, including the heating and air
conditioning
equipment, and the electrical and plumbing systems. Tenant shall
maintain the
Leased Premises in a neat and clean condition. Tenant also shall be
responsible
for all repairs or replacements to the Leased Premises, the
Building, and the
Common Areas occasioned by the negligence or willful act of Tenant,
its agents,
employees, invitees, or licensees, or resulting from Tenant's
failure to report
the need for repair or maintenance in a reasonably timely
manner.
9. Assignment and Subletting. Tenant shall not sell, assign,
mortgage,
pledge, or in any manner transfer this Lease nor sublet the Leased
Premises or
any portion thereof without the prior written consent of the
Landlord.
Notwithstanding any subletting for which consent is given by
Landlord, Tenant
shall remain fully liable on this Lease. Landlord's right to assign
this Lease
is and shall remain unqualified. Upon any sale of the Leased
Premises in which
the purchaser assumes all obligations under this Lease, Landlord
shall thereupon
be entirely free of all obligations of the Landlord hereunder and
shall not be
subject to any liability resulting from any act or omission or
event occurring
after such conveyance. Tenant agrees to recognize and attorn to any
such
transferee and Tenant further agrees, at Landlord's request, to
execute and
deliver a recordable instrument setting forth the provisions of
this paragraph.
10. Utilities. Subject to Tenant's obligations set forth in Section
5,
Landlord shall provide electricity, heat, air conditioning, and
ventilation to
the Leased Premises. Landlord shall not be liable in damages should
the
furnishing of any utilities be interrupted.
11. Insurance; Risk of Loss.
11.1 Subject to Tenant's obligations set forth in Section 5,
Landlord
shall insure the Building, including the Leased Premises (but not
Tenant's
leasehold improvements or personal property located therein) and
the Common
Areas, against loss or damage under a policy of fire or extended
coverage
insurance in such amounts as Landlord shall deem appropriate. No
insurance
proceeds pa
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