3. Terms of Lease

The term of the lease to Power Storage is 65 years. The lessee would pay a base rent of $32,000 in Year 1, $65,000 in Year 2, $95,000 in Year 3, and $178,250 in Year 4 to the end of the lease term. Additionally, the base rent would be adjusted by appraisal every tenth year to reflect fair market value. The lease rate is substantially greater than current revenue from the Craig agreement, which has ranged from $17,200 to $17,716 annually.

The Power Storage agreement provides that the lessee's activities must not interfere with the operation of the electrical transmission facilities that cross the site. Power Storage would not be permitted to store hazardous substances on the site, and the company would be required to maintain at least a 20-foot clearance from all overhead electrical conductors. SCE also would require the lessee to maintain a 50-foot radius around all tower legs and a 10-foot radius around all steel and wood poles. The lessee would provide and maintain access roads on the property. The lessee would be responsible for obtaining all permits and approvals for construction, as well as any zoning changes or use permits required for the operation of a self-storage facility.

Under the lease, Power Storage would be responsible for all personal property taxes and fees levied against the property and improvements, and it would maintain comprehensive liability insurance, auto insurance and workers' compensation insurance. The company would indemnify SCE against all liability for damages or injury to persons or property not caused by SCE's negligent or willful misconduct.