EX-10.11 6 dex1011.txt LEASE AGREEMENT EXHIBIT 10.11 Landing Center Lease Agreement Property Reserve, Inc. Landlord Flow International Corporation Tenant Index to Lease Agreement for Landing Center Page ---- Specific Lease Provisions 1. Leased Premises.................................................4 2. Term............................................................4 3. Rental Payment..................................................4 4. Operating Expenses..............................................5 5. Security Deposit................................................7 6. Proposed Use....................................................7 7. Improvements....................................................7 8. HVAC Major Repair and Replacement...............................7 9. Service and Repairs.............................................8 10. Parking.........................................................9 11. Option to Renew.................................................9 12. Lease Cancellation..............................................9 13. Broker's Commission.............................................9 14. Graphics........................................................9 15. Tenant's Notice Address.........................................9 16. Exhibits........................................................9 Exhibit A, General Lease Provisions 1. Abandonment.....................................................1 2. Assignment of Sublease..........................................1 3. Attorney's Fees.................................................2 4. Binding.........................................................2 5. Care of Leased Premises.........................................2 6. Choice of Law...................................................3 7. Common Areas - Utility Access ..................................4 8. Condition of Premises...........................................4 9. Damage to Lease Premises........................................4 10. Damage or Destruction - Tenant's Election to terminate..........4 11. Damage Near End of Term.........................................5 12. Events of Default by Tenant.....................................5 13. Defects.........................................................6 14. Eminent Domain..................................................6 15. Entire Agreement................................................7 16. Estoppel Certificate............................................7 17. Force Majeure...................................................8 18. No Hazardous Substances Allowed.................................8 19. Hold Harmless...................................................9 20. Holding Over...................................................10 21. Improvements, Alterations, and Additions.......................10 22. Inconvenience Damage...........................................11 2 23. Insurance by Landlord..........................................11 24. Insurance by Tenant............................................11 25. Laws, Ordinances, Regulations, and Americans with Disabilities Act...........................................11 26. Lease Memorandum...............................................12 27. Limitation of Landlord's Liability.............................12 28. Name of Project................................................12 29. No Joint Venture...............................................12 30. Notices........................................................12 31. Occupancy Delay................................................13 32. Peaceful Enjoyment.............................................13 33. Personal Property Tax..........................................14 34. Prohibited Activities..........................................14 35. Relocation.....................................................14 36. Repairs and Inspection Entry...................................14 37. Reservations by Landlord.......................................14 38. Rules and Regulations..........................................15 39. Sales Tax......................................................15 40. Severability...................................................15 41. Services Interruption..........................................15 42. Subordination to Mortgages.....................................16 43. Successors and Assigns.........................................16 44. Tenant to Keep the Leased Premises Lien Free...................17 45. Tenant's Property..............................................17 46. Tenant's Request...............................................17 47. Tenant's Right to Audit........................................17 48. Time is of the Essence.........................................18 49. Total Destruction..............................................18 50. Waiver.........................................................18 51. Waiver of Jury Trial...........................................18 52. Waiver of Time Limitations.....................................18 53. Waiver of Subrogation..........................................19 Exhibit A, General Lease Provisions Exhibit B, Description of the Demised Premises _________________________ Exhibit C, Tenant Improvements Exhibit D, Rules and Regulations 3 LANDING CENTER LEASE AGREEMENT THIS LEASE AGREEMENT made and entered into this ___ day of January, 2003 between PROPERTY RESERVE, INC. (herein_______________________ to as "Landlord"), whose address for purpose hereof is c/o Norris, Beggs & Simpson, 777 108th Avenue NE, Suite 103, Bellevue, Washington 98004-5121 and FLOW INTERNATIONAL CORPORATION (hereinafter referred to as "Tenant"), whose address for purposes hereof is 23500 64th Avenue South, Kent, Washington 98032. This LEASE AGREEMENT consists of the SPECIFIC LEASE PROVISIONS written here below, the GENERAL LEASE PROVISIONS attached hereto as Exhibit "A," and all other EXHIBITS attached hereto. In the event there is a conflict between the SPECIFIC LEASE PROVISIONS and the GENERAL LEASE PROVISIONS, the SPECIFIC LEASE PROVISIONS shall prevail. SPECIFIC LEASE PROVISIONS 1. Leased Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, subject to the terms and conditions of this Lease Agreement, those certain premises hereinafter described, and referred to the "Leased Premises" located in the project commonly referred to as Landing Center (hereinafter referred to as the "Project") and the building within the Project commonly referred to as the Flow Building (hereinafter referred to as the "Building") consisting of approximately 140,000 rental square feet and located at 23500 64th Avenue South, Kent, Washington 98032, together with right in common with others to the use of any and all common entrance ways, lobbies, restaurants, elevators, drives, parking areas, stairs and other similar access and service ways and common areas in or adjacent to and used in common with the building of which said Leased Premises are a part. The Leased Premises are described below and reflected on the plan attached hereto and made a part hereof as Exhibit "B." 2. Term. Subject to and upon the term and conditions set forth herein, this Lease Agreement shall continue in force for a term of 120 months, beginning on the 1st day of January, 2003, ("Beginning Date") and ending on the 21st day of December, 2012 ("Expiration Date"). 3. Rental Payment. a. Tenant shall pay to Landlord on the first day of each month during the term of this Lease Agreement in legal tender of the United States of America, without prior notice or demand and without any offset or deduction whatsoever, at the office of the Landlord, or at such place or to such property manager as Landlord may from time to time designate in writing, rental comprised of both Base Rental ("Base Rental") described be1ow and Additional Rent ("Additional Rent") as hereinafter described. Base Rental and Additional Rent are sometimes referred to hereafter as Rent ("Rent"). 4 b. Tenant agrees that if any rental payment or other money due hereunder from Tenant to Landlord remains unpaid five (5) calendar days after said amount is due, a late charge shall be paid to Landlord by Tenant in the amount of the greater of five (5%) percent of such payment due or two hundred fifty dollars ($250.00) provided that in no event shall such charge be greater than that permitted by law. Tenant agrees that such amount is a reasonable estimate of Landlord's collection and administration expenses. c. Base Rental is: Months 1-12 $25,760/NNN Months 13-36 $64,400/NNN Months 37-72 $68,600/NNN Months 73-84 $71,400/NNN Months 85-96 $72,800/NNN Months 97-108 $75,600/NNN Months 109-120 $78,400/NNN 4. Operating Expenses. Tenant shall also pay as Additional Rent, the following Operating Expenses of the Project and/or Building. a. Tax and Insurance Expenses. i. Tenant agrees to pay, as additional Rent, Tax and Insurance Expenses. Prior to the commencement of the Lease at least annually during the Leases Term, Landlord will deliver to Tenant a written estimate of the Tax and Insurance Expenses for the building in which the Leased Premises are located the monthly Base Rental shall be increased by one-twelfth (1/12) of said estimated additional Rent. In the case of a multi-building Project, if such Tax and Insurance Expense are not separately assessed against the Building but are assessed against the Project as a whole. Landlord shall determine the portion of such Taxes and Insurance Expenses allocable to the Building in which the Leased Premises are located. Landlord will review and challenge, if necessary, property tax assessments allocable to the Leased Premises. Tenant may request Landlord to perform a subsequent review if Tenant disputes Landlord's determination not to appeal a particular assessment. ii. Tax and Insurance Expense shall mean: (A) all ad_valorem, rental, sales, use, and other taxes (other than Landlord's income taxes), special assessments and other governmental charges, and all assessments ________________ deed restrictions and/or owner's associations which accrue against the Project during _________________ of this Lease and (B) all insurance premiums paid by Landlord with respect to the Project including, without limitation public liability, casualty, rental, and property damage insurance. b. Common Area Maintenance. i. Tenant agrees to pay as additional Rent, the Common Area Maintenance Expenses. Prior to the commencement of the Lease, and at least annually during the Lease Term, Landlord will deliver to Tenant a written estimate of the Common Area Maintenance Expenses for the building in which the Leased Premises are located, and Tenant's 5 proportionate share, and the monthly Base Rental shall be increased by one-twelfth (1/12) of said estimated Additional Rent. In the case of a multi-building Project, if such Common Area Maintenance is not separately assessed against the _________ but are assessed against the Project as a whole, Landlord shall determine the portion of such Common Area Maintenance allocable to the Building in which the Leased Premises are located. ii. Common Area Maintenance shall mean all expenses incurred by Landlord for the maintenance, repair, and operation of the Project (excluding only structural soundness of the roof, foundation, and exterior walls), including but not limited to management fees, common area utilities, maintenance and repair, mechanical systems (if Landlord provide maintenance services), system surveys, supplies, material water and sewer, common area janitorial services, exterior lighting maintenance, maintance of elevators, where applicable, and mechanical systems, supplies, maintenance, ____________ tools used in Project, landscaping, trash, security, wages and fringe benefits payable, to employees of Landlord whose duties are connected with the operation and maintenance of the Project but only to the extent that they are working on the operation or maintenance of the Project, amounts paid to contractors or subcontractors for work or services performed in in __________ with the operation and maintenance of the Project, all services, supplies, repairs, ____________ other expenses for maintaining, repairing and operating the Project including, without __________, common areas and parking areas and roof, exterior walls and foundation work that is not related to structural soundness. It shall include landscape maintenance, landscape irrigation repairs, pest and rodent control, parking lot repairs and maintenance, parking lot sweeping _________ lighting, exterior signage and roof repair and maintenance. Common Area Maintance does not include the cost of any capital improvement to the Project other than ___________ amortized cost of capital improvements which result in the reduction of insurance or Common Area Maintenance Expenses. Further, Common Area Maintenance shall not include repair, restoration or other work occasioned by fire, windstorm or other casualty with respect to which Landlord actually receives insurance proceeds, income and franchise __________ Landlord, expenses or commissions incurred in procuring and leasing to tenants, or ____________ renovating of space for new tenants, interest or principal payments on any mortgage or other indebtedness of Landlord, compensation paid to any employee of Landlord above the grade of building superintendent, or depreciation allowance or expense. c. Annual Statement. A _____________ the actual Tax and Insurance and the actual Common Area Maintenance Expenses thereafter referred to as the "Statement of Actual Adjustment") shall be delivered by Landlord to Tenant after any calendar year in which Additional Rent was paid by or due from or due from Tenant. Within ten (10) days after the delivery by Landlord to Tenant of such Statement of Actual _____________ Tenant shall pay Landlord the amount of any Additional Rent shown on such _______________ such State rent shows that Tenant has paid more than the amount of Additional Rent actual due from Tenant for the preceding calendar year, and if Tenant is not in default under __________ Agreement, Landlord shall credit the amount of such excess to the next Additional Rent payment due from Tenant. d. Proration i. If the Commencement Date of this Lease is a day other than the first day of a month, or if the Termination Date of this Lease is a day other than the last day of a month, the amount of Additional Rent shown as due by Tenant on the Statement of Actual 6 Adjustment shall reflect a proration based on the ratio of the number of days this Lease was in effect during the month to the actual number of days in the month. ii. If any data necessary to calculate Additional Rent are unavailable so that the calculation cannot be timely made, Landlord's estimate shall be used in lieu thereof. iii. If the term of this Lease Agreement expires on other than the last day of a calendar year, then the Tenant's Share of the Estimated Operating Expenses and Actual Operating Expenses shall be prorated for said year. If the Lease Agreement shall expire or other wise terminate with any operating expenses owed by the Tenant, Tenant shall immediately pay the balance due. Landlord shall pay any refund due Tenant. The provisions of this paragraph shall survive the termination of the Lease Agreement. e. Landlord's Rights. The failure of Landlord to exercise its rights hereunder to estimate Additional Rent and to require payment of such shall not constitute a waiver of Landlord's rights which rights may be exercised from time to time at Landlord's discretion. f. Tenant's Additional Cost. If the ______ of Tenant's business or use of the Leased Premises is such that additional costs are incurred by Landlord for cleaning, sanitation, trash collection or disposal services, Tenant agrees to pay as Additional Rent to Landlord the amount of such additional costs upon demand. 5. Security Deposit. Tenant has paid to Landlord as holdover rent the sum of Eighty-One Thousand Five Hundred Fifty-Eight Dollars and Seventy-Five Cents ($81,558.75). Such amount shall be treated as a security deposit, shall not earn interest for Tenant and shall be used for the purposes set forth in the General Provisions attached hereto. Provided that Tenant has not been in default of the Lease Agreement, the deposit shall be applied to the 25th month of rent due under the Lease and any remaining balance in excess of such monthly rent shall be refunded to Tenant at the time such 25th month of rent is due. 6. Proposed Use. Tenant represents, covenants, and warrants that the Leased Premises will be used lawfully for the following purposes and for no other purposes: manufacturing, warehousing, storage, and distribution of high pressure cutting, cleaning and food safety equipment and industrial automation and _______ equipment, and administrative offices, research and development facilities, demonstration laboratories. 7. Improvements. Landlord's obligation to construct and install tenant improvements (sometimes called "Improvement Items" herein) in the Leased Premises is set forth in Exhibit "C" hereto. Landlord agrees to ______ these improvements to the Leased Premises by February 1, 2005, provided Tenant has not been in default on any rent payment under the terms of the Lease Agreement. The estimated cost for installation of these improvements, space planning, construction drawings and permits, and construction management fees is $314,875.00. 8. HVAC Major Repairs and Replacement. The Landlord shall be responsible for any major repairs or replacement of any HVAC units during the term of the lease. Major repairs will be defined as repairs costing in excess of one-third of the replacement cost of the unit in 7 question. The determination of whether a unit requires replacement or major repair will be made by a licensed mechanical contractor acceptable to both parties. 9. Service and Repairs. a. Utilities. Tenant shall pay for all gas, electricity, water, sewer, and telephone service utilized in the operations of Tenant's business. Landlord further reserves the right to have separate meters installed for any of these services. Water and sewer are part of the common area charges of which Tenant shall pay its pro rata share to the extent that it is not separately metered. b. Lighting. Tenant agrees, at its expense, to maintain and replace lamps, bulbs, starters and ballasts. c. HVAC Maintenance. By signing this Lease Agreement Tenant shall, at its own cost and expense, enter into a regularly scheduled preventative maintenance/service contract for servicing all heating and air-conditioning systems and equipment servicing the Leased Premises. The maintenance contractor and the contract must be approved by Landlord, which approval shall not be unreasonably withheld. The service contract must include all services suggested by the equipment manufacturer within the operation/maintenance manual and must become effective (and a copy be delivered to Landlord) within thirty (30) days of the effective date of this Lease Agreement. If the Tenant fails to enter into such service contract as required, Landlord shall have the right to do so on Tenant's behalf and Tenant agrees to pay Landlord the cost and expense of same upon demand. d. Routine Maintenance. Landlord shall provide only routine maintenance, and painting to the structure, and electric lighting service for all public areas and special service areas of the Project in the manner and to the extent reasonably deemed by Landlord to be standard. e. Repairs by Tenant. The Tenant will keep, maintain and preserve the Leased Premises in good condition. When and if needed, at the Tenant's sole cost and expense, the Tenant will make all interior repairs and replacements including but not limited to interior walls, doors and windows, floors, floor coverings, light __lbs, plumbing fixtures, heating/air conditioning systems, except as outlined above, hot _____ systems, and electrical fixtures. Tenant shall also make all repairs and replacements to Tenant's overhead garage and exterior pedestrian doors. The Tenant will also repair and replace _ its sole cost and expense any broken windows and/or damage to the building or Premises caused by the Tenant or its employees, agents, guests or invitees during the Lease term hereof. If Tenant fails to make such repairs or replacements promptly, Landlord may, at its option, make such repairs or replacements, and Tenant shall repay the cost thereof to the Landlord as Additional Rent on demand. However, Tenant shall not suffer any repair work costing over $5,000 to be performed by Tenant or Tenant's agents without Landlord's prior written consent. f. Additional Services. In the event Tenant desires any of the aforementioned services in amounts in excess of those deemed by Landlord to be Project 8 standard, and in the event Landlord elects to provide such additional services, Tenant shall pay Landlord as Additional Rent hereunder the cost of providing such additional services. 10. Parking. Tenant shall have exclusive use of approximately 223 unassigned parking spaces at the Project, which may be modified if the City of Kent parking requirements are revised. 11. Option to Renew. Tenant shall be granted two (2), five (5) year options at future market rates, but not less than the rent payable in Year 10 as outlined above, provided that Tenant has not been in default during the term of the Lease. Tenant shall provide Landlord one hundred eighty days (180) written notice of its intent to exercise this option. 12. Lease Cancellation. Provided that Tenant has not been in default during the term of the Lease, Tenant will be granted a one-time right to cancel the Lease in the sixtieth (60) month of the Lease Term by providing nine (9) months' prior written notice. The cancellation penalty shall be equal to any unamortized tenant improvements, unamortized broker commissions and three months' rent. The cancellation penalty will be paid in full and accompany Tenant's written notice of cancellation as outlined herein. 13. Broker's Commission. Landlord acknowledges that Tenant has entered into an agreement with a broker for representation in connection with this Lease Agreement. Landlord agrees that it recognizes Puget Sound Properties as Tenant's sole representative and that Landlord will pay to Puget Sound Properties a market lease renewal brokerage commission of three percent (3%) of the net lease consideration for years one through five of the Lease Term, and one and one-quarter percent (1.25%) for years six through ten of the Lease Term. Tenant agrees to indemnify Landlord against and to hold Landlord harmless from, all liabilities arising as a result of a claim brought against Landlord for any other broker's commission or fee based on an agreement between Tenant and the claimant. 14. Graphics. Landlord, at Tenant's cost, shall provide and install one sign complying with the sign criteria of the Landlord. Sign to be installed within sixty days of the signing of this Lease Agreement. All graphics of Tenant, visible in or from public corridors or the exterior of the Leased Premises, shall require Landlord's prior written approval. All of the above shall be in accordance with the Project's Rules and Regulations. 15. Tenant's Notice Address. Flow International Corporation 23500 64th Avenue South Kent, WA 98032 16. Exhibits. The following exhibits are attached hereto and pertain to this Lease Agreement: 1. Exhibit A General Lease Provisions 2. Exhibit B Description of the Demised Premises 3. Exhibit C Improvement Items 4. Exhibit D Rules and Regulations 9 IN WITNESS WHEREOF, the parties have executed this Lease Agreement the day and year first above written. AGREED and ACCEPTED AGREED and ACCEPTED LANDLORD: TENANT PROPERTY RESERVE, INC. FLOW INTERNATIONAL CORPORATION By: /s/ Mark B. Gibbons By: /s/ Stephen R. Light --------------------------- ----------------------------------- Its: Mark B. Gibbons, President Stephen R. Light Date: President & Chief Executive Officer -------------------------- Date: ______uary 30, 200_ 10 STATE OF WASHINGTON ) ) ss TENANT COUNTY OF KING ) I certify that I know that Stephen R. Light signed this instrumentation oath stated that he was authorized to execute the instrument, and acknowledged it as the President and Chief Executive Officer of Flow International Corporation to be the free and voluntary _____ _____ party for the uses and purposes mentioned in the instrument. Dated: January 30, 2003 /s/ Jean G Balton ----------------------------------------- Notary Public for the State of Washington Residing at King _________, Washington [Seal] STATE OF UTAH ) ) ss LANDLORD COUNTY OF SALT LAKE ) I certify that I know or have satisfactory evidence that Mark B. Gibbons signed this instrument, on oath stated that he/she was authorized to execute the instrument, and acknowledged it as the President of Property Reserve Inc. to be the free and voluntary act of such party for the uses and purpose mentioned in the instrument. Dated: Feb. 3, 2003 /s/ Illegible ----------------------------------------- Notary Public for the State of Utah Residing at ____________ [Seal] ----------------------------- COSETTE SNARR NOTARY PUBLIC . STATE OF UTAH 10 E South Temple, Ste 400 Balt Lake City, UT 84133-1101 My Comm. Exp. 11-29-2004 ----------------------------- 11 EXHIBIT "A" GENERAL LEASE PROVISIONS These following General Lease Provisions shall become effective when attached to the signed Lease Agreement containing the Specific Lease Provisions and shall, together with the Exhibits, form the Lease Agreement. 1. Abandonment. Tenant shall not vacate nor abandon the Leased Premises at any time during the term of this Lease Agreement, nor permit the Leased Premises to remain unoccupied for a period longer than fifteen (15) consecutive days during the term of this Lease Agreement. If Tenant vacates the Leased Premises but continues to pay all sums due hereunder and otherwise complies with the terms hereof, it shall not be considered abandonment. 2. Assignment or Sublease. Tenant sha11 not, either voluntarily or by operation of law, assign, encumber, pledge, or otherwise transfer or hypothecate all or any part of Tenant's leasehold estate hereunder, or permit the Leased Premises to be occupied by anyone other than Tenant or Tenant's employees, or sublet the Leased Premises ____ any portion thereof, without Landlord's prior written consent in every instance. Tenant shall give Landlord written notice of such desire at least thirty (30) days in advance of the date on which Tenant desires to make such assignment or sublease, which notice shall include the name, address, evidence of financial capability, and other pertinent information regarding the proposed assignee or sublessee. Landlord agrees to cooperate with Tenant in satisfying _______ interest requirements of its existing lenders. a. No assignment or subletting by Tenant shall relieve Tenant of any obligations under this Lease Agreement. If Tenant is a partnership, a withdrawal of or change in partners, in one or more transfers, owning more than a fifty percent(50%) interest in the partnership, shall constitute a voluntary assignment and shall __ subject to be provisions of this section. If the Tenant is a corporation (excluding any corporation whose stock is traded on NASDAQ), a transfer of fifty percent (50%) or more of the corporation's stock in one or more transfers to a single party and/or its affiliates, or a change in the control of such company, unless the transfer of stock or control is to a corporation whose net worth exceeds $50,000,000 and which has a long term debt to equity ratio or less than ________ deemed for the purposes hereof to be an assignment of this Lease, and shall be subject to the provisions of this section. b. In the event Tenant shall propose to a _____ or sublet the Leased Premises and request the consent of Landlord to any assignment or _______, or if Tenant shall request consent of Landlord to any other act Tenant _________ _____ ____ provided, then Tenant shall pay Landlord's reasonable attorney's fees incurred in connection therewith. Any assignment or subletting shall not relieve Tenant from responsibility under the Lease Agreement, and Tenant 1 shall therefore remain liable for the faithful performance of the Lease Agreement in case of breach or default by assignee or sublessee. c. If the proposed Base Rental between Tenant and any Sublessee is greater the Base Rental of this lease, then fifty percent (50% of _____ excess renta1 shall be deemed Additional Rent owed by Tenant to Landlord. d. Tenant shall not publicly advertise the Rent for which Tenant is willing to sublet the space; and all public advertisements of the assignment of the Lease Agreement or sublet of Leased Premises, or any portion thereof, shall be subject to prior approval in writing by Landlord. e. In any assignment or transfer each assignee or transferee, other than Landlord, shall assume, as provided herein, all obligations of the Tenant under this Lease Agreement which relate to all or a portion of the Leased Premises assigned or sublet, as the case may be, and shall be and remain liable jointly and severally with Tenant for the payment of the Rent and for due performance of all the terms, convenants, conditions and agreements herein contained on Tenant's part to be performed during the term of this Lease Agreement. f. No consent by Landlord to assignment or subletting by Tenant shall relieve Tenant of any obligation to be performed by the Tenant under this Lease Agreement, whether accruing before or after such assignment of subletting, unless granted by Landlord to Tenant in writing. The consent by Landlord to any assignment or subletting shall not relieve Tenant from the obligation to obtain Landlord's express written consent to any other assignment or subletting. Any assignment or subletting which is not in compliance with this Lease Agreement shall be void, and, at the option of Landlord shall constitute a material default by Tenant under this Lease Agreement. 3. Attorney's Fees. In the event either party ________ the enforcement of this Lease Agreement, or any part thereof, or the collection of any _________, or to become due hereunder, or recovery of the possession of the Leased Premises __ the ___ of an attorney, or files suit upon the same, the nonprevailing (or defaulting) party shall pay to other party's reasonable attorney's fees and court costs, in any proceeding, whether _____, or appeal therefrom, or on any petition for review, or in bankruptcy. 4. Binding. Each individual executing ______ Agreement on behalf of Tenant and Landlord represents and warrants that he/she __ duly authorized to execute and deliver this Lease Agreement on behalf of Tenant and Landlord, and t__, this Lease Agreement is binding upon each in accordance with its terms. This Lease Agreement shall not be considered binding until it has been fully executed by Landlord and Tenant. 5. Care of Leased Premises. Tenant shall not commit or allow any waste or damage to be committed on any portion of the Leased Premises. Tenant shall not permit the Leased Premises to be used for any purpose other than stated in the Lease Agreement. 2 a. No later than the last day of the Term, Tenant will remove all Tenant's personal property and repair all damage done by or in connection with installation or removal of said property and surrender the Leased Premises (together with all keys, access cards, or entrance passes to the Leased Premises and/or the Project) in as good a condition as they were at the beginning of the Term, reasonable wear and tear, unrepaired casualty not caused by Tenant, and condemnation excepted. All property of Tenant remaining in the Leased Premises after surrender of the Leased Premises by Tenant shall be deemed conclusively abandoned and may be removed by Landlord, and Tenant shall reimburse Landlord for the ____ ____ of removing the same, subject, however, to Landlord's right to require Tenant to remove any improvements or additions made to the Leased Premises by Tenant pursuant to this Lease Agreement. b. In doing any work related to the installation of Tenant's furnishings, fixtures, or equipment in the Leased Premises, Tenant, will ____ only contractors or workmen consented to by Landlord in writing prior to the time such work is commenced. Landlord may condition its consent upon its receipt of evidence of workers compensation insurance acceptable lien waivers from such contractors or workmen. Tenant shall promptly remove any lien or claim of lien for material or labor claimed against the Leased Premises or Project, or both, by such contractors or workmen, if such claim should arise, and hereby indemnifies and holds Landlord harmless from and against any and all loss, cost, damage, expense, or liabilities including, but not limited to, attorney's fees incurred by Landlord as a result of __ in any way related to such claims or such liens. c. Tenant agrees that all personal property brought into the Leased Premises by Tenant, its employees, licensees, and invitees shall be at the sole risk of Tenant, and Landlord shall not be liable for theft thereof or of money deposited therein or for any damages thereto, such theft or damage being the sole responsibility of Tenant. d. Upon termination of this Lease Agreement Landlord shall have the right to reenter and resume possession of the Leased Premises. Landlords costs of post termination cleanup required to return the Leased Premises to as good a condition as existed at time of commencement of the Lease Agreement, with normal wear and tear excepted, shall be billed to and promptly paid by Tenant. 6. Choice of Law. All rights and remedies of Landlord and Tenant under this Lease Agreement shall be cumulative and none shall exclude any other rights or remedies allowed by law. All of the terms hereof shall be construed and enforced according to the laws of the State in which the Leased Premises are located. 7. Common Areas--Utility _________. Premises shall include the appurtenant right to use, in common with others, the lobbies, entrances, stairs, elevators, restrooms, and other public portions of the Project. Landlord retains the right to make changes in the common areas as it solely deems be in the best interest of the Project. All of the outside 3 walls and windows of the Leased Premises, and any space in the Leased Premises used for shafts, stacks, pipes, conduits, ducts, and electric or other utilities, custodial sinks or other Project facilities, are part of the rentable area of the Leased Premises; however, the right to the use thereof and access thereto through the Leased Premises for the purposes of operation, maintenance, and repair, are reserved to Landlord. 8. Condition of Premises. Tenant's taking possession of the Leased Premises shall be deemed conclusive evidence that, as of the date of taking possession, the Leased Premises are in good order and satisfactory condition. No promise of Landlord to alter or remodel, repair, or improve the Lease Premises or the Project, and no representation, express or implied, respecting any matter or thing relating to the Leased Premises, the Project or this Lease Agreement, including, without limitation, the condition of the Leased Premises, has been made to Tenant by Landlord other than as may he contained herein or in a separate Exhibit or Addendum attached to this Lease Agreement and incorporated herein or separately signed by Landlord and Tenant. 9. Damage to Leased Premises. If all or a portion of the Leased Premises are rendered untenantable by damage from any casualty insured against under a standard fire and extended coverage insurance policy, the damage shall be repaired forthwith by and at the expense of Landlord, provided such repairs can be, in Landlord's reasonable opinion, completed within one hundred twenty (120) days after notice to Landlord of the occurrence of such damage, without the payment of repair, overtime or other premiums. Except as set forth herein below, until such repairs are completed, the rent shall be abated in proportion to the part of the Leased Premises which is unusable by Tenant in the conduct of its business. Should the damage be caused by a casualty not insured against under a standard fire and extended coverage insurance policy, Landlord shall have no obligation to repair or rebuild Should Landlord elect not to repair or rebuild, this lease may be terminated by thirty (30) days' notice to tenant. There shall be no abatement of rent by reason of any portion of the Leased Premises being unusable for a period of less than two days. Landlord's opinion as to completion date of any repair shall be given to Tenant in writing within thirty (30) days of the occurrence of the damage. 10. Damage or Destruction --Tenant's Election to Terminate. In case of any significant damage or destruction mentioned herein, which Landlord is required or undertakes to repair as provided herein, Tenant may terminate this Lease Agreement by written notice to Landlord any time prior to completion of the required repair if Landlord has not restored and rebuilt the Leased Premises (exclusive of any property of Tenant or improvements installed by Tenant located therein) to substantially the same condition as existed immediately prior to such damage or destruction within one hundred twenty (120) days after notice to Landlord of the occurrence of such damage or destruction, unless Landlord may have been delayed in doing so by acts of God, adjustment of insurance, labor trouble, governmental controls, unavailability of materials, or any other cause beyond Landlord's reasonable control, but in no event shall the repair period exceed a total of one hundred and eighty (18O) days. 4 11. Damage Near End of Term. Notwithstanding anything to the contrary contained in this Lease Agreement, Landlord shall not have any obligation whatsoever to repair, reconstruct, or restore the Leased Premises or the Project when such damage occurs during the last twelve (12) months of the Lease term or any extension thereof, and when the cost of repair exceeds twenty percent (20%) of the value of the Leased Premises or the Project. 12. Events of Default by Tenant. The following shall constitute events of default by Tenant: (a) 1f Tenant shall fail to make any payment due under this Lease Agreement, and such failure shall continue for ten (10) days after written notice by Landlord; (b) if a default exists in the performance of any of the other covenants or conditions which Tenant is required to observe and to perform, and such default shall continue for twenty (20 days after written notice by Landlord; (c) if the interest of Tenant under this Lease Agreement is levied upon, or is under execution or other legal process, or if any petition shall be filed by or against Tenant to declare Tenant as bankrupt or to delay, reduce, or modify Tenant's debts or obligations; (d) if any petition shall be filed or other action taken to reorganize or modify Tenant's capital structure if Tenant be a corporation or other entity; (e) if Tenant is declared insolvent, or if any assignment of Tenant's property is made for the benefit of creditors or if a receiver or trustee is appointed for Tenant or its property; (f) if Tenant vacates or abandons the Leased Premises, as defined above, during the term of this Lease Agreement or any extensions thereof; or (___ if Tenant makes any transfer of any interest in the Leased Premises not in accordance with the requirements of this Lease Agreement, then Landlord may treat the occurrence of any one or more of the foregoing events as a breach of this Lease Agreement and thereupon, at Landlord's option, Landlord shall have one or more of the following described remedies in addition to all other rights and remedies provided at law or in equity: a. Landlord may terminate this Lease Agreement and forthwith, in accordance with applicable law, repossess the Leased Premises and remove all persons or property therefrom, and be entitled to recover as damages a sum of money equal to the total of (i) the cost of recovering the Leased Premises (ii) the unpaid rent owed thereon from due date plus interest thereon at the rate of 18% per annum or the maximum rate permitted by applicable law, whichever is lower, (iii) the present value of the balance of the rent for the remainder of the term, discounted to the present at 8% per annum, and (iv) any other sum of money and damages owed by Tenant to Landlord; b. Landlord shall also be entitled to terminate Tenant's right of possession in accordance with applicable law and to repossess the Leased Premises, without demand or notice of any kind to Tenant, by summary proceedings, any other applicable action or proceeding, or otherwise, all without terminating this Lease Agreement, in which event Landlord may, but shall be under no obligation to, relet the same for the account of Tenant for such rent and upon such terms as shall be satisfactory to Landlord. None of these actions will be deemed an acceptance of surrender of the Leased Premises. For the purpose of such reletting Landlord is authorized to decorate or to make any repairs, changes, alterations, or additions in or to the Leased Premises that may be necessary or convenient, and (i) if Landlord shall fail or refuse to relet the Leased 5 Premises, or (ii) if the same are relet and a sufficient sum shall not be realized from such reletting, after paying the unpaid Base Rental due hereunder earned or unpaid at the time of reletting, plus interest thereon at the rate set forth herein, the cost of recovering possession, and all of the costs and expenses of such decoration, repairs, changes, alterations, and additions, and the expense of such reletting, and of the collection of the rent accruing therefrom to satisfy the payment of the rent provided for in this Lease Agreement, then Tenant shall pay to Landlord as damages a sum equal to the amount of the rental reserved in this Lease Agreement for such period or periods, or if the Leased Premises have been relet, Tenant shall satisfy and pay any such deficiency upon demand therefor from time to time; and Tenant agrees that Landlord may file suit to recover any sums falling due under the terms of this Lease Agreement from time to time on one or more occasions without Landlord being obligated to wait until expiration of the term of this Lease Agreement and without barring or affecting in any manner Landlord's right to bring a later action or actions for further damages; nor shall such reletting be construed as an election on the part of Landlord to terminate this Lease Agreement unless a written notice of such intention be given to Tenant by Landlord. Notwithstanding any such reletting without termination, Landlord may at any time thereafter elect to terminate this Lease Agreement for such previous breach. c. Without prejudice to any other remedy for default, Landlord may perform any obligation or make any payment required to cure a default by Tenant. The cost of performance, including attorneys' fees and all disbursements, shall immediately be paid by Tenant to Landlord upon demand as Additional Rent. 13. Defects. Tenant agrees to report in writing to Landlord any defective condition in or about the Leased Premises known to Tenant, and further agrees to attempt to contact Landlord by telephone immediately in such instance. 14. Eminent Domain a. In the event the Leased Premises are taken pursuant to powers of eminent domain, all awards for the taking other than awards for interruption of Tenant's business shall belong solely to Landlord, and Tenant shall make no claim therefor. b. In the event of a partial taking, which does not result in a termination of this Lease Agreement, rent shall be abated in proportion to the part of the Leased Premises so made unusable by said partial taking, and any award for the taking shall belong solely to Landlord. c. No temporary taking of the Leased Premises and/or of Tenant's rights therein or under this Lease Agreement shall terminate this Lease Agreement or give Tenant any right to any abatement of rent hereunder; and any award made to Tenant by reason of any such temporary taking shall belong entirely to Tenant, and Landlord shall not be entitled to share therein. The Tenant and Landlord will work together to cause the governmental agency 6 responsible for the taking to restore the Leased Premises and Project, after the taking, to their original condition prior to the taking. d. If the whole of the Leased Premises, or so much thereof as to render the balance unusable by Tenant, shall be taken by any governmental authority under power of Eminent Domain, this Lease Agreement shall automatically terminate as of the date of such condemnation, or as of the date possession is taken by the condemning authority, whichever is earlier. No award for any partial or entire taking shall be apportioned, and Tenant hereby assigns to Landlord any award which may be made in such taking or condemnation, together with any and all rights of Tenant now or hereafter arising in or to the same or any part thereof, provided, however, that nothing contained herein shall be deemed to give Landlord any interest in or to require Tenant to assign to Landlord any award made to Tenant for the taking of personal property, equipment, and fixtures belonging to Tenant and/or for the interruption of or damage to Tenant's business or for Tenant's unamortized cost of improvements installed by Tenant and/or the cost of moving and/or the lost value of Tenant's unexpired Lease Agreement term. 15. Entire Agreement. This instrument, along with any exhibits and attachments or other documents affixed hereto or referred to herein, constitute the entire and exclusive agreement between Landlord and Tenant relative to the Leased Premises herein described, and this Agreement and said exhibits and attachments and other documents may be altered and/or revoked only by an instrument in writing signed by both Landlord and Tenant. Landlord and Tenant hereby agree that all prior written and oral agreements, understandings and/or practices relative to the leasing of the Leased Premises are merged in or revoked by this Lease Agreement. 16. Estoppel Certificate. Tenant shall at any time and from time to time, upon not less than ten (10) business days prior written notice from Landlord, execute, acknowledge and deliver to Landlord or to other parties as Landlord may direct, a statement in writing, (a) certifying that this Lease Agreement is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease Agreement as so modified is in full force and effect), the date to which the rental and other charges are paid in advance, and the amount of the Base Rental, Estimated Operating Expense Adjustment, and the commencement and termination dates of the Lease Agreement, and (b) acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of the real property of which the Leased Premises are a part. Tenant's failure to deliver such statement within such time shall be conclusive upon Tenant that: (i) this Lease Agreement is in full force and effect, without modification except as may be represented by Landlord, (ii) there are no uncured defaults in Landlord's performance, and (iii) not more than one month's Base Rental, or Estimated Operating Expense Adjustment installment, has been paid in advance. If Landlord desires to finance or refinance the Project, or any part thereof, Tenant agrees to deliver to any lender designated by Landlord such financial statements of Tenant as Tenant make publicly available. 7 17. Force Majeure. Any prevention, delay, or stoppage of work to be performed by Landlord or Tenant which is due to strikes, labor disputes, inability to obtain labor, materials, equipment, or reasonable substitutes therefor, acts of God, governmental restrictions or regulations or controls, judicial orders, enemy or hostile government actions, civil commotion, fire or other casualties, or other causes beyond the reasonable control of the party obligated to perform hereunder, shall excuse performance of the work by that party for a period equal to the duration of that prevention, delay, or stoppage. Nothing herein shall excuse or delay Tenant's obligation to pay rent or other charges under this Lease Agreement, except as otherwise provided in this Lease Agreement. 18. No Hazardous Substances Allowed. Tenant shall not cause or permit any "Hazardous Substances," as defined below, except in amounts as permitted by law, to be brought upon or kept or used in or about the Premises or the Project by Tenant, its agents, employees, contractors, or invitees. a. Tenant shall at all times and in all respects comply with all local, state, and federal laws, ordinances, regulations and orders (collectively, "Hazardous Substances Laws") relating to industrial hygiene, environmental protection, or the use, analysis, generation, manufacture, storage, disposal, or transportation of any Hazardous Substances. b. As used in this Agreement, the term "Hazardous Substances" means any hazardous or toxic substances, materials or wastes, including, but not limited to, those substances, materials, and wastes listed in the United States Department of Transportation Hazardous Materials Table (49 CFR 172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR Part 302) and amendments thereto, or such substances, materials and wastes which are or become regulated under any applicable local, state or federal law including, without limitation, any material, waste or substance which is (i) petroleum or any fraction thereof, (ii) asbestos, (iii) polychlorinated biphenyls, (iv) defined as a "hazardous waste" under relevant state statutes or any rule promulgated thereunder, (v) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33, U.S.C. (S)1251, et seq. (33 U.S.C. (S)1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. (S)1317), (vi) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. (S)6901, et seq. (42 U.S.C. (S)6903) or (vii) defined as "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. (S)9601, et seq. (42 U.S.C. (S)9601). c. Tenant shall indemnify, defend (by counsel acceptable to Lessor), protect, and hold harmless Lessor, and each of Lessor's partners, directors, officers, employees, agents, attorneys, successors, and assigns, from and against any and all claims, liabilities, penalties, fines, judgments, forfeitures, losses (including, without limitation), diminution in the value of the Premises or the Building, damages for the loss or restriction on use of rentable or usable space or of any amenity of the Premises or the Building, costs or expenses (including attorneys' fees, consultant fees, and expert fees) for the death of or injury to any person or damage to any 8 property whatsoever, arising from or caused in whole or in part, directly or indirectly, (a) by the presence in, on, under, or about the Premises, or any discharge or release in or from the Premises of any Hazardous Substances, or Tenant's use, analysis, storage, transportation, disposal, release, threatened release, discharge, or generation of Hazardous Substances to, in, on, under, about, or from the Premises or the Building, or (b) Tenant's failure to comply with any Hazardous Substances Law. Tenant's obligations under this Section shall include, without limitation, and whether foreseeable or unforeseeable, any and all costs incurred in connection with any investigation of site conditions, and any and all costs of any required or necessary repair, cleanup, detoxification, or decontamination of the Premises or the Building, and the preparation and implementation of any closure, remedial action, or other required plans in connection therewith. Tenant's obligations under this Section shall survive the expiration or earlier termination of the term of the Lease. For purposes of the release and indemnity provisions hereof, any acts or omissions of Tenant, or by employees, agents, assignees, contractors, or subcontractors of Tenant or others acting for or on behalf of Tenant (whether or not they are negligent, intentional, willful, or unlawful), shall be strictly attributable to Tenant. d. Tenant acknowledges and agrees that it shall not be unreasonable for Lessor to withhold its consent to any proposed assignment, subletting, or transfer of Tenant's interest in this Lease if (a) the anticipated use of the Premise by the proposed assignee, subtenant, or transferee (collectively, a "Transferee") involves the generation, storage, use treatment, or disposal of Hazardous Substances; (b) the proposed Transferee has been required by any prior lessor, lender, or governmental authority to make remedial action in connection with Hazardous Substances contaminating a property, if the contamination resulted from such Transferee's actions or use of the property in question; or (c) the proposed Transferee is subject to an enforcement order issued by any governmental authority in connection with the use, disposal, or storage of a Hazardous Substance. e. Landlord does hereby represent to Tenant that, to the best of Landlord's knowledge, no toxic or hazardous substances have been deposited in or located on the Leased Premises on the commencement date of the lease except in the amounts as permitted by law. 19. Hold Harmless: a. By Tenant: Tenant hereby agrees to indemnify and hold Landlord harmless from and against any injury, expense, damage, liability, or claim imposed on Landlord by any person or entity, whether due to damage to the Leased Premises or the Project, claims for injuries to the person or property of any other tenant of the Project or of any other person in or about the Project for any purpose whatsoever, or due to administrative or criminal action by a governmental authority, whether such injury, expense, damage, liability, or claim results either directly or indirectly from the act, omission, negligence, misconduct, or breach of any provisions of this Lease Agreement by Tenant, the agents, servants, or employees of Tenant, or any other person entering upon the Leased Premises under express or implied invitation or consent of Tenant. Tenant further agrees to reimburse Landlord for any costs or expenses, including, but 9 not limited to, court costs and reasonable attorney's fees which Landlord may incur in investigating, handling, or litigating any such claim or any action by a governmental authority. b. By Landlord: Landlord hereby agrees to indemnify and hold Tenant harmless from and against any injury, expense, damage, liability, or claim imposed on Tenant by any person or entity, whether due to damage to the Leased Premises or the Project, claims for injuries to the person or property of any other tenant of the Project or of any other person in or about the Project for any purpose whatsoever, or due to administrative or criminal action by a governmental authority, whether such injury, expense, damage, liability, or claim results either directly or indirectly from the act, omission, gross negligence, misconduct, or breach of any provisions of this Lease Agreement by Landlord, the agents, servants, or employees of Landlord, or any other person entering upon the Leased Premises under express or implied invitation or consent of Landlord. Landlord further agrees to reimburse Tenant for any costs or expenses, including, but not limited to, court costs and reasonable attorney's fees, which Tenant may incur in investigating, handling, or litigating any such claim or any action by a governmental authority 20. Holding Over. In the event of holding over by Tenant, after expiration or termination of this Lease Agreement without the written consent of Landlord, Tenant shall pay to Landlord one and three-eighths times the total of Base Rental which Tenant was obligated to pay for the month immediately preceding the end of the term of this Lease Agreement, for each month or any part thereof of any such holdover period, together with any Additional Rent. No holding over by Tenant after the termination of this Lease Agreement shall operate to extend the Lease Agreement term. In the event of any unauthorized holding over, Tenant shall indemnify Landlord against all claims for damages by any other tenant against Landlord to whom Landlord may have leased all or any part of the Leased Premises covered hereby effective upon the termination of this Lease Agreement. Any holding over with the written consent of Landlord shall thereafter constitute this Lease Agreement a lease from month to month, and Landlord or Tenant may terminate it upon not less than thirty (30) days prior written notice. 21. Improvements, Alterations, and Additions. Tenant shall not make or allow to be made any alterations or physical additions in or to the Leased Premises which affect the structure or any other improvements in excess of the amount stated in the Specific Lease Provisions without first obtaining the written consent of Landlord. All work shall be done by contractors approved by Landlord. Landlord's approval or consent shall not be unreasonably withheld or delayed. Any and all such alterations, physical additions, or improvements, when made to the Leased Premises by Tenant, shall at once become the property of Landlord and shall be surrendered to Landlord upon the termination of this Lease Agreement by lapse of time or otherwise; provided, however, this clause shall not apply to movable equipment or furniture owned by Tenant. Tenant shall comply with all government, local building code and permitting requirements and provide Landlord with evidence of compliance. Tenant shall give Landlord written notice five (5) days prior to employing any laborer or contractor to perform work on the Leased Premises so that Landlord may post a notice of nonresponsibility if allowed by law. Landlord reserves the right to require Tenant, at Tenant's expense, to remove such alterations, 10 physical additions, or improvements upon termination of this Lease Agreement and to repair any damage caused by such removal. 22. Inconvenience Damage. No damages, compensation, or claim shall be payable by Landlord for inconvenience, loss of business, or annoyance arising from any repair or restoration of any portion of the Leased Premises or other portion of the Project. Landlord shall use commercially reasonable efforts to effect such repair or restoration promptly and in such manner as to not unreasonably interfere with Tenant's use and occupancy. 23. Insurance by Landlord. Landlord shall maintain during the term of this Lease Agreement an all-risk commercial property policy insuring the project, common areas, and personal property owned by Landlord, in amounts equal to replacement value. Landlord shall not be obligated to insure any furniture, equipment, machinery, goods, or supplies owned by Tenant or which Tenant may bring or obtain upon the Leased Premises, or any additional improvements which Tenant may construct thereon. If the annual premiums charged Landlord for such insurance exceed the standard premium rates because of the nature of Tenant's operations, then Tenant shall, upon receipt of appropriate premium invoices, reimburse Landlord for such increases in premium. Landlord may, should it choose to do so, self insure all or part of the above referenced risks. Should Landlord choose to self insure any insurance risks, the cost demonstrated by a bid from a reputable insurance company shall be included in the cost of insurance for expense reimbursement purposes. 24. Insurance by Tenant. Tenant shall, at all times during the term of this Lease Agreement, insure Tenant's personal property including any additional improvements made by Tenant, while in or upon the Leased Premises, with an all-risk policy. In addition, Tenant shall maintain a policy or policies of Commercial General Liability Insurance with the premiums thereon fully paid on or before due date, issued by an insurance company having at least an A.M. Best rating of A or better and licensed to do business within the state the Project is located. The limits afforded by said liability policy shall not be less than One Million Dollars ($1,000,000) combined single occurrence limit for personal injury and property damage and $2,000,000 annual aggregate. Landlord shall be added as an additional insured thereto; and said policy shall not be canceled or substantially modified without first giving Landlord thirty (30) days written notice thereof. In addition, Tenant shall maintain Workers Compensation insurance as required by statute. Tenant shall furnish, within thirty (30) days of Landlord's request and approval, a certificate of insurance, acceptable to Landlord, evidencing the Commercial General Liability and Workers Compensation coverages referred to herein and naming Landlord and Property Manager as additional insured as to the General Liability Insurance. 25. Laws, Ordinances, Regulations, and Americans with Disabilities Act. Landlord shall comply, at its sole cost, with all laws, ordinances, orders, rules and regulations (state, federal, municipal, or promulgated by other agencies or bodies having any jurisdiction thereof) relating to the use (based upon the approved use for Tenant hereunder), condition, or occupancy of the Leased Premises. Tenant shall comply, at its sole cost, with requirements of the 11 Americans with Disabilities Act which provides for the removal of architectural barriers that prevent equal access to disabled persons on the interior of the Leased Premises. To the extent that barrier removal relates to access on the exterior of the Project, the obligation shall be that of the Landlord. 26. Lease Memorandum. Neither this Lease Agreement, nor any notice nor memorandum regarding the terms hereof, shall be recorded by Tenant without the prior written consent of the Landlord. Landlord agrees to cooperate with Tenant in satisfying the security interest requirements of its existing lenders. 27. Limitation of Landlord's Liability. The obligations of Landlord under this Lease Agreement do not constitute personal obligations of Landlord or of the individual partners, directors, officers, employees, or shareholders of Landlord or its partners, and Tenant shall look solely to the property that is the Project described in this Lease Agreement and to no other assets of Landlord for satisfaction of any liability in respect of this Lease Agreement, and Tenant will not seek recourse against any other property of Landlord or against the individual partners, directors, officers, employees, or shareholders of Landlord or its partners or any of their personal assets for such satisfaction. 28. Name of Project. Tenant shall not use the name of the Project for any purpose other than as an address of business to be conducted by the Tenant. Landlord and its agents shall have the right to change the name, number, or designation of the Project without liability to Tenant upon fourteen (14) days prior written notice to Tenant. 29. No Joint Venture. This Lease Agreement shall not be deemed or construed to create or establish any relationship of partnership or joint venture or similar relationship or arrangement between Landlord and Tenant hereunder. 30. Notices. All notices, demands, consents, and approvals, which may or are required to be given by either party to the other hereunder, shall be in writing and shall be deemed to have been fully given when personally delivered or delivered by a nationally recognized over night courier, or, if the notice is deposited in the United States mail, certified or registered, return receipt requested, postage prepaid, and addressed to the party to be notified at the address for such party specified in this Lease Agreement (with copies to Property Reserve, Inc., 10 E. South Temple Street, Suite 400, Salt Lake City, Utah 84133, and Kirton and McConkie, 60 E. South Temple Street, Suite 1800, Salt Lake City, UT 84145), then the notice shall be deemed fully given on earlier of (i) the (date of delivery, if delivered personally or by courier, or (ii) the date set forth on the receipt, or (iii) three (3) days after the notice is deposited in the mail. a. Either party may change its address for notice by at least fifteen (15) days written notice to the other party. Tenant hereby appoints as its agent to receive the service of all dispossessory or distraint proceedings and notices thereunder the person in charge of or 12 occupying the Leased Premises at the time, and, if no person shall be in charge of or occupying the same, then, if allowed by law, such service may be made by attaching the same on the main entrance of the Leased Premises. 31. Occupancy Delay. In the event that the Leased Premises should not be ready for occupancy for any reason, this Lease Agreement shall not be void or voidable, and Landlord shall not be liable or responsible for any claims, damages, or liabilities in connection therewith or by reason thereof, and the term of this Lease Agreement shall be for the same term of months as set forth in the Lease Agreement, but the beginning date shall be effective only from the time that the Leased Premises are prepared for occupancy in accordance with the terms and conditions set forth herein. Should the term of this Lease Agreement begin on a date other than the beginning date, Landlord and Tenant will, at the request of either, execute a declaration specifying the revised beginning the term of this Lease Agreement. In such event rental under this Lease Agreement shall not commence until said revised beginning date, and the stated term in this Lease Agreement shall thereupon commence and the expiration date shall be extended so as to give effect to the full stated term. Within five (5) days after Tenant receives Landlord's notice that the Leased Premises are ready for occupancy, Tenant shall inspect the Leased Premises, and except for items specified by Tenant to Landlord within five (5) days of Tenant's inspection, Tenant shall be deemed to have accepted the Leased Premises in their then condition, "as is." The existence of "punch list" (as that term is generally used in the construction industry) items shall not postpone the beginning date of this Lease Agreement. 32. Peaceful Enjoyment. Tenant shall occupy and may peacefully have, hold, and enjoy the Leased Premises, subject to the other provisions hereof, provided that Tenant pays the rent herein recited and performs all of Tenant's covenants and agreements herein contained, including the observance of all reasonable rules and regulations made by Landlord from time to time pursuant to this Lease Agreement. It is understood and agreed that this covenant and any and all other covenants of Landlord contained in this Lease Agreement shall be binding upon Landlord and its successors only with respect to breaches occurring during its and their respective ownerships of Landlord's interest hereunder. 33. Personal Property Tax. Tenant shall be liable for and shall pay, not later than ten (10) days before delinquency, all taxes levied against any personal property or trade fixture placed by Tenant, in or about the Leased Premises. Landlord may, after written notice to Tenant, pay any such levy or tax, regardless of the validity of such levy, but only under proper protest if so requested by Tenant in writing. Additionally, if the assessed value of Landlord's property is increased by the inclusion of the value placed upon any of the personal property or trade fixture of Tenant, Landlord may, after written notice to Tenant, pay those taxes which are based upon such increased assessment, regardless of the validity thereof, but only with proper protest if so requested by Tenant in writing. In such an event Tenant shall, upon demand, repay to Landlord taxes so levied and paid by Landlord, or that portion of such taxes resulting from such increase in the assessment. Tenant shall have the right, in the name of the Landlord and with Landlord's full cooperation, at no cost to Landlord, to bring suit in any court of competent jurisdiction to 13 recover the amount of any such taxes so paid under protest. Any amounts so recovered shall belong to Tenant. 34. Prohibited Activities. Tenant shall not do or permit anything to be done in or about the Leased Premises nor bring or keep anything therein which will in any way increase the existing rate of or affect any fire or other insurance upon the Project or any of its contents, or cause cancellation of any insurance policy covering said Project or any part thereof or any of its contents. Tenant shall not do or permit anything to be done in or about the Leased Premises which will in any way obstruct or interfere with the rights of other tenants or occupants of the Project or injure or annoy them, or use or allow the Leased Premises to be used for any improper, immoral, unlawful, or objectionable purpose, nor shall Tenant cause, maintain, or permit any nuisance in, on, or about the Leased Premises. Tenant shall not violate any of the rules and regulations of the Project. a. Tenant shall not do or permit to be done on or about the Leased Premises, and the Landlord shall not do or permit to be done outside the Leased Premises any of the following: (a) any violation of any federal, state or local law, ordinance, or any regulation, ordinance, order or directive of a governmental agency as such statutes, ordinances, regulations, orders, or directives now exist or may hereafter come into effect and concern the use, safety, or environment of the Property; (b) any violation of any Certificate of Occupancy covering or affecting the use of the Property or any part thereof; (c) commit any public or private nuisance. 35. Relocation. If the size of the Leased Premises is less than Ten Thousand (10,000) rentable square feet, Landlord reserves the right to relocate Tenant during the Term of this Lease Agreement or any renewal thereof, to similar or higher quality space within the Project. If Landlord exercises this right to relocate Tenant, then any and all costs incident to said relocation shall be the responsibility of Landlord, said costs to be determined prior to relocation of Tenant. 36. Repairs and Inspection Entry. Tenant shall permit Landlord or its agents or representatives to enter into and upon any part of the Leased Premises at all reasonable hours to inspect same, clean, make repairs, alterations, or additions thereto or for any reasonable purpose as Landlord may deem necessary or desirable, and Tenant shall not he entitled to any abatement or reduction sums due under this Lease Agreement by reason thereof. 37. Reservations by Landlord. Landlord reserves the right to: a. Make changes, additions improvements, or deletions to, or to reduce, partition, or otherwise eliminate the Common Areas, including, without limitation, changes in the location, size shape and number of driveways, entrances, parking spaces except as may be required by City of Kent moficiations, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, and hallways. 14 b.Close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Leased Premises remains available. c. Designate other land to be part of the Common Area where the additional Common Area is available for the use and benefit of tenants of the Project. d. Expand the Project. 38. Rules and Regulations. Landlord shall have the right to make and enforce rules and regulations (the "Rules and Regulations") consistent with this Lease Agreement for the purposes of regulating access, parking, use of the common areas in the Leased Premises, and promoting safety, order, cleanliness, and good service to the Project. Tenant will promptly comply with all such Rules and Regulations. The parties acknowledge that the Rules and Regulations attached hereto as Exhibit "D" are presently the Rules and Regulations now in effect; however, Landlord, may at its option and at any time, reasonably amend and modify said Rules and Regulations, and Tenant, upon receipt of written notice of same, shall be obligated to comply with said Rules and Regulations. 39. Sales Tax. In addition to the rental payments hereunder, all state, county, and municipal transaction privilege (sales) taxes or similar excise taxes imposed by any state, county, municipality, or other governmental entity relative to the rental activity under this Lease Agreement, if required, shall be reimbursed to the Landlord by the Tenant as Additional Rent. 40. Severability. If any term or provision of this Lease Agreement, or the application thereof to any person or circumstances, shall to any extent be invalid or unenforceable, the remainder of this Lease Agreement, or the application of such provision to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each provision of this Lease Agreement shall be valid and shall be enforceable to the extent permitted by law. 41. Services Interruption. It is understood that Landlord does not warrant that any of the services referred to above, or any other services which Landlord may supply, will be free from interruption. Tenant acknowledges that any one or more such services may be suspended or reduced by reason of accident or repairs, alterations, or improvements necessary to be made, by strikes or accident or by any cause beyond the reasonable control of Landlord, or by orders or regulations of any federal, state, county, or municipal authority. a. Any such interruption or suspension of services shall never be deemed an eviction of or disturbance to Tenant's use and possession of the Leased Premises or any part thereof, or render Landlord liable to Tenant for damages by abatement of rent, or otherwise relieve Tenant of performance of Tenant's obligation under this Lease Agreement. Landlord will use commercially reasonable efforts to restore service to full operations, and in the event of a strike to secure parties not involved in the labor dispute to provide minimum services. 15 42. Subordination to Mortgages. This Lease Agreement shall automatically be subject and subordinate to the lien of any mortgage or deed of trust given by Landlord which does now or may hereafter encumber the Project of which the Leased Premises form apart, and to all renewals, modifications, consolidations, replacements, and extensions thereof. Landlord shall also have the right to assign its interest in this Lease Agreement for security purposes to any mortgagee or trust deed beneficiary. Tenant agrees that it will execute, within ten (10) days of Landlord's request, such instrument or certificate that Landlord or any mortgagee or trust deed beneficiary may reasonably require to further document this subordination, provided that such mortgagee or trust deed beneficiary shall agree with Tenant not to disturb Tenant's right to possess the Leased Premises so long as Tenant complies with all of the terms and conditions of this Lease Agreement. Tenant further agrees that it will provide any such mortgagee or trust deed beneficiary with any evidence required to show the authority of Tenant to execute any such subordination instrument or certificate and will, if so requested by any such mortgagee or trust deed beneficiary, provide to that person or entity a copy of any notice Tenant gives or is required to give Landlord under this Lease Agreement. In the event of the enforcement by the mortgagee or the beneficiary under such mortgage or deed of trust of the remedies provided for by law or by such mortgage or deed of trust, or in the event Landlord gives a deed-in-lieu-of foreclosure to such mortgagee or trust deed beneficiary, Tenant will, upon request of any person or party succeeding to the interest of Landlord as a result of such enforcement or termination, automatically become the Tenant of such successor in interest without change in the terms or other provisions of this Lease Agreement, provided, however, that such successor in interest shall not be bound by (i) any payment of rent or additional rent for more than one month in advance, (ii) any amendment or modification of this Lease Agreement made without the written consent of such mortgagee or such beneficiary or their successor in interest, or (iii) any defaults of Landlord under this Lease Agreement which remain uncured at the time such successor in interest obtains title to the Project. Tenant shall execute and deliver any instrument or instruments confirming the attornment herein provided for. a. In the event of any act or omission by Landlord by reason of which Tenant may claim the right to terminate this Lease Agreement or claim a defense or offset against the Base Rental due hereunder, Tenant agrees not to exercise any such right until: (i) Tenant has notified the mortgagee or trust deed beneficiary in writing of such act or omission by Landlord, and (ii) Tenant has given the mortgagee or trust deed beneficiary a reasonable opportunity to cure such act or omission, including the time as shall be reasonably required to obtain possession of the property and to commence and carry to completion the foreclosure of its mortgage or deed of trust. 43. Successors and Assigns. This Lease Agreement shall be binding upon and inure to the benefit of Landlord, its successors and assigns, and shall be binding upon and inure to the benefit of Tenant, its successors, and, to the extent assignment may be approved by Landlord hereunder, Tenant's permitted assigns. 16 44. Tenant to Keep the Leased Premises Lien Free. Tenant shall keep the Leased Premises and Project free from any mechanic's liens arising from any work performed, material furnished, or obligations incurred by Tenant, and shall obtain from its contractor lien releases if required by Landlord. Tenant shall keep Landlord informed of the status of any contest and shall defend, indemnify, and hold harmless Landlord from and against any such lien or claim or action thereon, together with costs of suit and reasonable attorneys' fees incurred by Landlord in connection with any such claim or action. 45. Tenant's Property. Landlord shall not be required to carry insurance of any kind on Tenant's personal property, and shall not be obligated to repair any damage thereto or replace the same for any reason. 46. Tenants Requests. Tenant shall pay all the out of pocket legal expenses incurred by Landlord as a result of requests from Tenant to exercise its rights granted under this Lease Agreement, except for litigation in which the Tenant is the prevailing party. 47. Tenant's Right to Audit. In the event Tenant's Proportionate Share of Operating Expense increases, excluding property taxes and insurance, by more than five percent (5%) in any Calender Year, Tenant may audit Landlord common area operating costs in order to verify the accuracy of operating expense charges, provided that: a. Tenant specifically designates the calender year(s) that Tenant intends to audit, which shall be a year within two (2) years of date of the audit, but must be within the Term of this Lease Agreement. b. Such audit will be conducted only by a licensed firm, unaffiliated with Tenant, with prior Landlord approval, and during regular business hours at the office where Landlord maintains Operating Expense records, and only after Tenant gives Landlord fourteen (14) days' notice. c. Tenant shall pay for all costs associated with audit, provided however, that Landlord shall reimburse Tenant the costs associated with such audit should the audit show that Operating Expenses were inaccurate by more than seven percent (7%). d. If audit yields a result that Tenant has underpaid the Tenant will reimburse Landlord upon receipt of invoice. e. Tenant agrees not to divulge the results of the audit to any other party. (f) Tenant shall deliver to Landlord a copy of the results of such audit within fifteen (15) days of its receipt by Tenant. No such audit shall be conducted if any other tenant has conducted an audit for the time period Tenant intends to audit and Landlord furnishes to 17 Tenant a copy of the results of such audit. No audit shall be conducted at any time that Tenant is in default of any of the terms of the Lease Agreement. No subtenant shall have any right to conduct an audit and no assignee shall conduct an audit for any period during which such assignee was not in possession of the Leased Premises. Any refund due Tenant as a result of such audit shall be paid by Landlord upon receipt of audit and invoice from Tenant. 48. Time is of the Essence. Time shall be of the essence of this Agreement. 49. Total Destruction. A total destruction of the Project shall automatically terminate this Lease Agreement. 50. Waiver. Failure of Landlord to declare any default immediately upon occurrence thereof, or delay in taking any action in connection therewith, shall not waive such default, but Landlord shall have the right to declare any such default at any time thereafter. Landlord's acceptance of rent will not be deemed a waiver of any Tenant breach or default existing at the time of payment, except a default in the payment of money, and then only to the extent of the amount received by Landlord. 51. Waiver of Jury Trial. To the full extent allowed by law, the respective parties hereto shall and they hereby do waive trial by jury in any action, proceeding or cross-action whatsoever arising out of or in any way connected with this lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises, or any claim for injury or damage, or the enforcement of any remedy under any statute or otherwise. 52. Waiver of Time Limitations. In the event Tenant shall have any claim or cause of action against Landlord arising out of or otherwise related to this lease, Tenant must file such action with a court of competent jurisdiction within one year after the accrual of such claim or cause of action; otherwise, such claim or cause of action shall be deemed waived and permanently barred by the passage of time and be void. 53. Waiver of Subrogation. Landlord and Tenant do each hereby release the other from any and all liability or responsibility (to the other or to anyone claiming through or under the other by way of subrogation or otherwise) for any loss or damage to property or for personal injury caused by perils insured against by the policies to be carried pursuant to this Lease, even if the cause of such peril or damage shall have been the negligence of the other party or of anyone for whom such party may be responsible. Such waiver of subrogation shall be effective with respect to such loss or damage, and each policy hereunder shall contain a clause or endorsement to the effect that any such release shall not adversely affect or impair said policies or prejudice the right of the releasing party to recover thereunder. Landlord and Tenant each agree that their policies shall include such a clause or endorsement. The failure to obtain a clause or endorsement providing such waiver of subrogation shall in no manner limit or restrict the validity and enforceability of the waivers of subrogation herein contained. 18 EXHIBIT C TENANT IMPROVEMENTS The Landlord, at Landlord's expense, agrees to complete the following improvements as outlined in Paragraph 7 of the Lease Agreement: 1. Repaint 71,634 of wall area. This includes walls and lids in office spaces; multipurpose room 128 and lunch room 129; and all doors and relites contained therein. Estimated cost $59,846. 2. Re-carpet existing carpeted office areas. The carpet will be a high quality 15-year carpet tile product. Product samples will be provided to the Tenant. New 2-1/2" base will be provided. Landlord will pay for cost of carpet installation, including demolition and disposal of existing carpet and base, and lifting of furniture. Estimated cost $161,973. 3. Install new vinyl flooring in designated areas. Mannington Multiflec coved sheet vinyl with heat welded seams will be provided in men's restroom 144, men's restroom 210, women's restroom 211, and new men's restroom between gridlines C and D. Rubber stair treads will be replaced on entry stair case. Estimated cost $33,111. 4. Remove existing sinks and counter top in men's restroom 144 and replace with two half round foot operated basins. Estimated cost $26,046. 5. Add one new restroom at north end of manufacturing area. Will include one sink, one toilet, one urinal, toilet partition, bath accessories, necessary electrical, HVAC and sprinklers, and concrete cutting and patching. Estimated cost $33,899. EXHIBIT "D" RULES AND REGULATIONS 1. The doors, sidewalks, passages, exits, and entrances shall be used for ingress and egress and shall not be obstructed. Tenant shall use reasonable efforts to keep such areas clean and free from rubbish. 2. Loitering anywhere in the Project shall not be permitted. Landlord reserves the right to exclude or expel from the Project any person who, in the judgment of Landlord, is under the influence of liquor or drugs or who shall in any manner do any act in violation of the Rules and Regulations of the Project. 3. Alterations in any way to the interior or exterior of the Leased Premises including attaching pictures, certificates, licenses, and similar items may be done only in a reasonable manner, subject to review by Landlord. 4. Tenant shall not alter, paint, cover, obstruct, screen, tint, install curtains, draperies, blinds, or shades, or obscure any window, shall not affix any signs, advertisements, or notices on or to any window, and shall not have any window treatment other than building standard as established by Landlord, without the written consent of Landlord. 5. All Tenant identification in the public areas of the Project must be installed and approved by Landlord based on the standard sign age as established by Landlord. 6. The location of electrical, telephone, computer or other wiring and of related outlets must be pre-approved prior to installation in writing by Landlord. Such items shall be installed by qualified personnel in accordance with building codes applicable to the Project and the Leased Premises. 7. No items of unusual size or weight shall be used or placed in the Project without Landlord's written permission. In no event shall any floor be overloaded as determined by a competent engineer. 8. The moving of any of Tenant's business or personal furniture, equipment, inventory, or other items in or out of the Project or Leased Premises will be at a time and in a manner designated by Landlord. 9. No Tenant shall use or keep any foul or noxious gas or substance which may in any manner be offensive or objectionable to Landlord or other occupants of the Project. No noises, vibrations, odors, or activities bothersome to other Tenants will be allowed in the Leased Premises or on the grounds of the Project. 10. No animals, fish, birds, etc., are allowed within the Project without Landlord's written permission. 11. The Tenant is prohibited from storing goods, wares, or merchandise in the Project or Leased Premises in areas not acceptable to Landlord for storage. No auction, public or private, will be permitted in the Leased Premises. 12. All Tenant requests for service or maintenance to the Landlord will be made by notifying the Landlord or its agents at a designated location. Landlord's agents or contractors shall not perform any work or do anything outside of their regular or contracted duties unless under special written instructions from the Landlord. 13. All keys shall be obtained from Landlord, and all keys shall be returned to Landlord upon termination or expiration of Tenant's Lease. No duplicate keys shall be made without Landlord's approval. Tenant is responsible to control the keys to the Leased Premises, and Tenant shall pay for lost keys. Tenant shall not change the locks or install other locks on the doors without Landlord's written approval. If Landlord gives Tenant written approval to change locks, then Tenant will provide Landlord with keys. 14. Tenant is responsible to lock and secure all doors to the Leased Premises after regular business hours or after entering or leaving on nonbusiness days. Landlord is not responsible to respond to after-hours tenant lock-outs 1 15. The following acts shall not be allowed or suffered to be done nor conditions allowed to exist upon the Leased Premises or any part thereof: a. Any violation of any federal, state, or municipal statute or ordinance, or any regulation, order, or directive of a governmental agency, as such statutes, ordinances, regulations, orders, or directives now exist or may hereafter provide concerning the use and safety of the Leased Premises. b. Any violation of any certificate of occupancy covering or affecting the use of the Leased Premises or any part hereof. c. Any public or private nuisance. d. The display or distribution of drug paraphernalia or sexually related paraphernalia, except as the same may be legally dispensed by a physician or surgeon, dentist, or pharmacist, duly licensed to practice such profession in the State. e. The manufacture, distribution, sales, or dispensing in any manner of illegal drugs, or any type of illegal drug activity or consumption. f. The sale or dispensing of alcoholic beverages. g. The showing, displaying, viewing, renting, or selling of movie films within the Leased Premises which would be classified or rated as "X or R-rated" under present standards or criteria for such classification and rating. h. Gambling. i. The establishment or maintenance of a bawdy house, bar, nightclub, or tavern. j. Any other act or condition which shall be lewd, obscene, or licentious. k. Performance of abortions. 1. Mark, or drive nails, screw or drill into, the partitions, woodwork or plaster or otherwise deface its premisses or any part thereof. m. Smoking shall not be permitted in or around any offices, interior common corridors, restrooms, lobby areas, elevators, stairwells, or building entrances. 16. Landlord shall have the right to regulate parking throughout the Project in a manner beneficial to the entire Project. Landlord shall have the right to re-stripe parking stalls, lanes, and other areas as Landlord deems reasonably necessary to control parking and access. Landlord may refuse to permit any person who violates the rules to park in the parking lot, and any violation of the rules shall subject the car to removal. No extended period parking for campers, trailers, motor homes, emergency equipment, or other nonstandard sized vehicles is permitted. 17. Tenant shall not use the Project, Leased Premises, or parking facilities for housing or sleeping without the written consent of the Landlord. 18. Landlord shall in no case be liable for damages for any error with regard to the admission to or exclusion from the Leased Premises of any person. In the case of invasion, mob riot, public excitement, or other circumstances rendering such action advisable in Landlord's opinion, Landlord reserves the right to prevent access to the Leased Premises during the continuance of the same by such action as Landlord may deem appropriate, including closing doors and restricting access to public areas of the Project. 2 19. Each Tenant shall see that appliances and utilities are shut off as appropriate before Tenant or Tenant's employees leave the Leased Premises. Tenant is required to prevent controllable waste or damage in all aspects of the Leased Premises from any default or carelessness. All Tenants shall keep the doors to the Project's corridors closed at all times, except for ingress and egress, unless door is equipped with an approved magnetic door holder. 20. No Tenant shall install any radio or television antenna, or satellite dish, loudspeaker, or other device on the roof or exterior walls of the Project without Landlord's written permission. 21. Each Tenant shall store all its refuse or waste within its Leased Premises and dispose of such refuse or waste only in accordance with Project rules and all applicable local, state, and federal regulations and laws. 22. Tenant is not allowed to disturb, solicit, or canvass any occupant of the Project and shall cooperate to prevent same. Canvassing, soliciting, distributing handbills or any other written material, or peddling in the Project is prohibited. 23. Tenant agrees to enforce and, as necessary, to acquaint all persons doing business with Tenant with the Project's Rules and Regulations. 24. The failure of Landlord to enforce any of the Rules and Regulations against any other Tenant in the Project shall not be deemed a waiver of any of such Rules and Regulations. Landlord shall not be liable to Tenant for violation of any of the Rules and Regulations or the breach of any covenant or condition in any lease by any other Tenant in the Project. 25. Landlord shall control and operate the public portions of the Project, and the public facilities, and heating and air conditioning, as well as facilities furnished for the common use of Tenant. Such control and operation shall be accomplished in a manner consistent with the best interests of the tenants in general. Tenant shall not obstruct, alter or in any way impair the effective operation of the heating and air conditioning, electrical, fire, safety, or lighting systems, and Tenant shall not tamper with or change any of the thermostats or temperature control valves in the Project except those that are in Tenant's space and are provided for Tenant's use. 26. Tenant shall not use or keep in the Leased Premises or in the Project any kerosene, gasoline, or other inflammable or combustible fluid or material, nor use any method or heating or air conditioning not acceptable to Landlord. 27. All damage done to the Leased Premises or the Project by the installation or removal of any property of Tenant, or done by Tenant's property while in the Leased Premises, shall be repaired at the expense of Tenant. 28. Plumbing fixtures and appliances shall be used only for their intended purposes, and Tenant shall not deposit any sweepings, rubbish, rags, or other unsuitable substances therein. Damage resulting from misuse shall be paid for by Tenant. 29. Landlord shall not be responsible for any loss or theft or damage to personal property in the Leased Premises or the Project from any cause whatsoever, whether or not such loss, theft, or damage occurs when the Leased Premises or other portions of the Project are locked against entry. 30. Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency. 31. Tenant shall participate in, to the extent possible and under the direction of the Landlord, the preparation and implementation of an Emergency Response Plan. The Tenant shall provide individuals to assist with the carrying-out of any Emergency Response Plan. 32. In the event of any conflict between these Rules and Regulations and any lease with Tenant, the provisions of the lease shall be controlling. 3