ncoatsb2a1ex10-11.htm


    
      

      

    

    
      Exhibit
        10.11

       

    

    LEASE
      AGREEMENT

    


    THIS
      LEASE AGREEMENT
      (this "Lease") made and entered into this 15 day of May,
2001, by and between Remco Management Company,
      L.C., a Utah limited
      liability company, whose address is do Ron Mast 8690 Hidden Oaks Cir SLC Ut
      (hereinafter referred to as "Lessor") and' High Performance Coatings (HPC).
      550
      W 3615 S Salt Lake City, Ut 84115 (hereinafter referred to as
      'Lessee").

    


    


    W
      ITNESSETH:

    


    WHEREAS,
      Lessor is the owner of certain real property located at 14788
      Heratagecrest Way, Bluffdale Utah 84065

    


    WHEREAS. Lessee
      wishes to lease all of said premises, and Lessor is willing to lease said
      premises to Lessee, upon the terms and conditions set forth in this Lease;
      and

    


    WHEREAS,
      this is to be a lease in which Lessee pays all costs, expenses,
      ze
      azirs, replacement costs and in which the Lessor shall receive its rent,
      totally net, of any cost or expense, except for repair of roof,
      foundations, exterior walls, and structural components of any building located
      on the premises (exclusive of all glass, and exclusive of all doors which are
      part of the premises), paving, and underground utility and sewer pipes, except
      repairs rendered necessary by the negligence of Lessee, its agents, employees,
      or invitees. Lessor gives to Lessee exclusive control of the Premises and shall
      be under no obligations to inspect the Premises. Lessee shall promptly report
      in
      writing to Lessor any condition of which Lessee becomes aware and which Lessor
      is required to repair as specifically set forth herein.

    


    NOW,
      THEREFORE, in consideration of the mutual promises and covenants
      contained herein and for other good and valuable consideration, the parties
      agree and contract as follows:

    


    1.    Premises.
      Lessor for and in consideration of the rents, covenants and agreements
      hereinafter specified, leases to Lessee, the premises located at 14788
      Heratagecrest Way, Bluffdale Utah.. Lessor retains free title to all of the
      premises and shall have accm to and through the premises as provided for herein.
      Lessee hereby agrees to lease the premises according to the terms and conditions
      of this Lease. Lessor represents that the building constituting a part of the
      premises is wholly situated on the land constituting part of the premises with
      required setbacks. Notwithstanding the foregoing, Lessor wil have the sole
      right
      and responsibility to resolve any title issues. Lessor shall take such
      action as may be necessary to cure any title defects, encumbrances and
      encroachments necessary to prevent any party from disturbing Lessee's quiet
      enjoyment of the premises, but otherwise shall not be deemed in default as
      a
      result of any such matters if Lessee's quiet enjoyment of the premises and
      use
      thereof for the rental. sales and servicing of equipment is not disturbed,
      even
      though there may be title or zoning problems or issues.

    


    2.    Use
      Lessee agrees to use the pr . uises for the for only lawful business operation.
      Lessor makes no representation or warranty concerning zoning requirements for
      any such uses.

     

    3.    Terms.

     

     (a)    Thus
      Lease
      shall be for an initial period of approximately five (5) years commencing on
      the
      1st day of June 1 2001 (the "Commencement Date") and terminating on the
      30st day of June . 2006 ("Initial Term"). Lessee shall have the right to
      extend this Lease far up to one additional periods of five (5) years referred
      to
      herein as an Extended Lease Term") by giving
      Lessor writlen notice not less than six (6) months prior to the end
      of
      the then existing lease term. This right to extend the lease term
      shall terminate if
      Lessee is in default at the end of the existing term of this Lease. For purposes
      of this Lease, "Term" shall refer to the Initial Term and each Extended Lease
      Term for which Lessee duly elects to extend the term of this Lease. Provided,
      however, if the Lease is terminated earlier pursuant to the provisions hereof.
      the Term shall end on the date such termination becomes effective.

     

    
      


      
        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

      

      


    

     
      (c)    Holding Over.
      Lessee shall vacate the premises upon the expiration or earlier termination
      of
      this Lease. Lessee shall reimburse Lessor for all damages which Lessor
      incurs from Lessee's delay in vacating the premises. If Lessee does not vacate
      the premises upon the expiration or earlier termination of this Lease
and Lessor accepts rent from Lessee, Lessee's occupancy
      of the premises shall be a month-to-month tenancy, subject to all of the terms
      of this Lease applicable to a "month-to-month" tenancy, except
      that the Base Rent then in effect shall be increased fir twenty five
      percent (25%).

    


    4.    Base
      Rental. The base monthly rental ("Base Rent") during the Initial
Term of the Leasr' shall be as
      follows:

    


    
      	
               

            	
              1st
                year

            	
              55,860.00

            


    

    
      	
               

            	
              2nd
                year

            	
              55,860.00

            


    

    
      	
               

            	
              3rd
                year

            	
              55,860.00.

            


    

    
      	
               

            	
              4th
                year

            	
              55.860.00

            


    

    
      	
               

            	
              5th
                year

            	
              55.860.00

            


    

    


    5.    Payment
      of
      Rent

    


     (a)    Base
      Rent. Base Rent for each month during the Term shall be due and
      payable in advance on the first day of each such month; provided, if the Term
      begins on a day other than the first day of the month, then Base Rent for the
      period from the first day of the Term to the last das• of
      the month in which the Term begins shall be due on the first day of the Term.
      If
      the Term begins on a day other than the fu-st
      day of the month
      or ends on a day other than the last day of the month, Base Rent for such
      partial month shall be prorated based upon the number of days of the Term
      occur-ring within such partial month.

     

     (b)    Additional
      Rent. All taxes, utilities, insurance charges, costs, interest, penalties
      and expenses that Lessee assumes or agrees to pay in this Lease shall be
      deemed to be additional rent, and, in the event of non-payment, Lessor shall
      have all the rights and
      remedies as herein provided for failure to pay rent. Lessee shall pay
      all such additional
      rent from the Commencement Date of this Lease to the date of termination of
      the
      Lease.

    


     (c)    Interest. Lessee
      shall pay to Lessor, interest at the rate of eighteen percent (18%) per annum
      on
      any amount due from Lessee not paid when due, as well as any amount that Lessor
      may elect to pay to meet an obligation of Lessee pursuant to the leak..
      which has not been met.

    


    6.    Time. Time
      is of the essence of this Lease If any payment or sum due to Lessor under this
      Lease is nor paid prior to the tenth day following the due date thereof, Lessee
      shall pay Lessor a late fee of five percent (5%) of the amount not timely
      paid.

    


    7.    Place
      of
      Payment. All payments due to Lessor hereunder shall be
      made to Lessor c/o Ron
      Mast 8690 Hidden Oaks Cir Salt Lake City, Utah 84121 or such other address
      as
      Lessor shall designate to Lessee in writing.

    


     

    
      
        
          
          

        

        
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    8.    Lessee's
      Acceptance of Property. Lessee represents that it has
      inspected the premises, fixtures and equipment and that the premises, the
      sidewalks and the structures adjoining the same, and the present uses and
      non-uses thereof have been examined by Lessee. Except to the extent the premises
      may be in a condition contrary to any representation or warranty expressly
      stated in this Lease, Lessee accepts the same in the condition
      in which it now is, without representation or warranty, express or implied,
      in
      fact or by law. Lessee is aware of the condition of that the subject premises
      and agrees to accept the premises in its "as is" condition.

    


    9.    Utilities,
      During the Term, all applications and connections for necessary utility services
      on the premises shall be made in the name of Lessee only, and Lessee shall
      be
      solely liable for all utility charges and shall pay the same as they become
      due.

    


    10.       
      Maintenance and Repairs.

    


     (a)    Except
      as
      otherwise provided in this Lease. Lessee shall, at all tips during the
      term, at its own expense, put and maintain in thorough repair and in the same
      or better condition than when received and in a safe condition,
      ordinary wear and tear excepted, the premises and its fixtures and equipment
      and
      appurtenances whether or not necessitated by wear, trar, obsolescence or
      defects, latent or otherwise_ Except as otherwise expressly provided on this
      Lease. Lessee shall replace at its sole cost, any pan
      of the building requiring replacement. Lessee shall be responsible
      for repair and replacement of any glass brealatge. Lessee shall be
      responsible for maintaining one half of the landscaped area and keeping in
      proper repair all landscaping, grounds, sprinkler system, and paving. Lessee
      responsible for all snow removal in there leased Area.

    


     (b)    Lessee
      shall
      not accumulate nor permit the accumulation of dirt, materials or substances
      that
      would render the premises unsanitary, unhealthy, unsightly or dangerous. Lessee
      shall be responsible for janitorial services for the premises.

    


     (c)    On
      default of
      the Lessee in making such maintenance, repairs or replacements as required
      herein, and after thirty (30) days notice to Lessee (except in the case
      of emergency no notice shall be necessary) Lessor may, but shall not be required
      to make such maintenance, repairs and replacements for Lessee's account, and
      the
      reasonable expense thereof shall constitute and be collectable as
      additional rent, due and payable on the first day of the month next
      following the month in which the work is performed.

    


     (d)    It
      is
      expressly understood and agreed that all improvements and additions to the
      premises other than Lessee's trade fixtures and personal properly, shall become
      the property of the Lessor at the termination of this lease. Except as
      otherwise provided in this Lease, at the termination of this Lease, the
      premises will be left in good condition, subject to reasonable wear and
      tear

    


    11.       
      Subordination. Lessor's Default, Attornment.

    


    (a)    Subordination. This
      Lease is and shall always be subordinate to any mortgage or deed of trust any
      advances made on the security thereof, and any renewals, modifications.
      considerations, replacements or extensions thereof, whenever made or recorded
      which is now or shall at any time be placed upon the premises and Lessee agrees
      to execute and deliver any instrument, without cost, which may be reasonably
      deemed necessary to further effect the subordination of this Lease to any such
      mortgage or deed of trust. However, any such subordination is sati;ec: 'o
      I.ene.'s right to possession of the premises during the Term and Lessee shall
      not be disturbed if Lessee pays the rent and performs all of Lessee's
      obligations under this I Ease and is not otherwise in default hereunder. IS
      any
      beneficiary or mortgagee elects to have this Lease prior to the lien of its
      deed
      of trust or mortgage and gives written notice thereof to Lessee. this Lease
      shall be deemed prior to such deed of trust or mortgage whether this Lease
      is
      dated prior or subsequent to the date of said deed of trust or mortgage or
      the
      date of recording thereof.

     

    


    


    
      
        
          
          

        

        
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    (b)    Lessor's
      Default. If Lessor shall default under the terms of this Lease, Lessee shall
      give Lessor written notice specifically setting forth the alleged default and
      providing Lessor with 30 days to cure any such default unless such default
      cannot be reasonably cured within 30 days, in which case Lessor shall have
      a
      reasonable time to cure such default. Lessee agrees to give any mortgagee and/or
      trust deed holder by certified mail, a copy of any notice of default served
      upon
      Lessor, provided that prior to such notice Lessee has been notified in writing
      of the existence. name and address of such mortgagee and/or trust deed holder.
      Lessor and any mortgagee and/or trust deed holder of which Lessee has been
      provided notice pursuant to the preceding sentence shall have such additional
      time as may be necessary to cure any default if Lessor or any mortgagee or
      Trust
      Deed holder has commenced and is diligently pursuing the remedies necessary
      to
      cure such default, (including in the case of any mortgagee and/or trust deed
      holder, commencement of foreclosure proceedings, if necessary to effect such
      cure) in which event the Lease shall not be terminated while such remedies
      are
      being so diligently pursued.

    


    (c)    Attornment.
      If Lessor's interest in the premises is transferred in any manner, Lessee shall
      attorn to the transferee of or successor to Lessor's interest in the premises
      and recognize such transferee or successor as Lessor under this Lease, provided
      such transferee or successor agrees in writing that it is accepting its title
      subject to this Lease. Lessee waives the protection of any statute or rule
      of
      law which gives or purports to give Lessee any right to this Lease or surrender
      possession of the premises upon the transfer of Lessor's interest. In the event
      of such a transfer by the Lessor, the transferring Lessor shall be released
      of
      any further obligations under this Lease to be performed after the date of
      such
      transfer.

    


     (d)    Non-Disturbance.
      Lessor shall use its best efforts to obtain a written agreement in a reasonable
      form from each holder of any existing and subsequent mortgage or deed of trust
      that it will not disturb Lessee's tenancy under this Lease so long as there
      is
      not a default or breach of the Lease by Lessee. Lessor shall attempt to obtain
      such agreement from existing mortgage or deed of trust holders within a
      reasonable time and from new mortgage holders at the time of the new mortgage
      or
      deed of trust.

    


    12.       
      Lessee's Default or Breach. Each of the following events shall constitute a
      default or breach of this Lease by Lessee:

    


     (a)    If
      Lessee
      shall not pay to Lessor when due any rent, or additional rent or pay to lessor
      any costs., charges or fees, taxes, insurance or expenses that Lessee is
      required to pay under this Lease and shall not cure such failure within fifteen
      (15) days after having been given written notice of non-payment. If payment
      is
      made of alt rent late fees. and attorneys' fees and costs (including all sums
      due to the date of the cure) prior to fifteen (15) days after date that the
      first unpaid rent was due, the default should be deemed cured_ If Lessee fully
      pays all sums then due pursuant to the preceding sentence, such sentence shall
      apply again to a subsequent default.

    


     (b)    If
      Lessee
      shall file a petition in bankruptcy or insolvency or for reorganization under
      any bankruptcy act, or shall voluntarily take advantage of any such act by
      answer or otherwise, or shal; r..aμ-c an - .eignr.icnt for the bcncfit of
      creitors.

    
    

    


    
      
        
          
          

        

        
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    (c)    If
      involuntary proceedings under any bankruptcy law or insolvency act shall be
      instituted against Lessee. or if a receiver or trustee shall be appointed of
      all
      or substantially all of the property of Lessee. and such proceedings shall
      not
      be dismissed or the receivership or trusteeship vacated within sixty (60)
      days after the institution or appointment.

    


    (d)    If
      Lessee shall fail to perform or comply with any of the terms, conditions or
      covenants of this Lease (other than non payment of rent) and if the
      nonperformance shall continue for a period of thirty (30) days after written
      notice thereof by Lessor
      to Lessee, or, if the performance cannot be reasonably completed within the
      thirty (30) day period, if Lessee shall not in good faith have commenced the
      cure of such failure within the thirty (30) day period and shall not thereafter
      diligently proceed to completion of performance.

    


    (e)    If
      this Lease
      or the estate of Lessee hereunder shall be assigned transferred, or
      sublet to or shall pass to or devolve on any other person or party, except
      in
      the manner herein permitted.

    


    13.       Lessor's
      Rights Upon Default,

     

    (a)    If
      Lessee
      shall fail to remedy any default of Lessee within the cure period, if any,
      as
      provided for in Section 12 hereof, then this
      Lease may be terminated at Lessor's option by ,written notice to
      Lessee:

    


    (b)    Upon
      default
      of Lessee that is not cured within the applicable cure period, Lessee shall
      peacefully surrender the premises to Lessor and Lessor upon or at any time
      after
      such default may, without further notice, re-enter the premises and repossess
      it
      by any and all lawful means and may dispossess Lessee and remove Lessee and
      all
      other persons and property from the premises and may have, hold and enjoy the
      premises and the right to receive all rental income therefrom. Lessor's
      obtaining possession of the premises shall not be a termination of the Lease
      unless lessor gives written notice to Lessee of its election to terminate this
      Lease.

     

    


    


    
      
        
          
          

        

        
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    (c)    At
      any time
      after the default of Lessee that is not cured within the applicable cure period
      Lessor may re-let the premises or any part thereof, in
      the
      name of Lessor, for such term which may be greater or less than the period
      which
      would otherwise have constituted the balance of the Term and on such conditions
      which may include concession, free rent_ or less rent than Lessee is required
      to
      pay, as the Lessor, in
      its reasonable
      discretion, may determine, and may collect and receive the rent
      therefrom;

    


    (d)    Lessor
      shall in
      no way be
      responsible or liable for any failure to re-let the premises or any part
      thereof, or for any failure to collect any rent due upon such re-
      letting;

    


    (e)    No
      entry,
      possession or relenting of the premises shall be deemed a termination of this
      Lease nor shall it be considered a release of any of Lessee's liability under
      the lease;

    


    (f)    No
      termination of this Lease resulting from Lee's default shall
      relieve the Lessee of its liability and obligations under this Lease
      (whether those obligations arise or become due before the date of termination
      or
      afterward), and such liability and obligations shall survive any such
      termination :

    


    (g)    In
      the event
      of default by Lessee (whether or not this Lease has been terminated and
      whether or not the premises or any part thereof shall have been re-let). Lessee
      shall pay to lessor the rent, additional rent, and all other charges required
      to
      be paid by Lessee up to the time of such termination, and thereafter Lessee,
      until the end of what would have been the Term shall be liable to Lessor for,
      and shall pay to Lessor, as and for agreed "current damages" for Lessee's
      default:

    


    
      	
               

            	
              1.

            	
              The
                equivalent of the amount of the rent and additional rent which would
                be
                payable under this Lease by the Lessee if this Lease were still in
                effect, less

            


    

    


    
      	
               

            	
              2.

            	
              The
                net proceeds of any re-letting of the premises effected after deducting
                all the Lessor's reasonable expenses in connection with such re-letting
                including,
                without limitation, all repossession costs, brokerage
                commissions, legal expenses and reasonable attorney's
                fees;

            


    

     

    (h)    Lessee
      shall
      pay such "current damages", herein called deficiency, to Lessor monthly on
      the
      days on which the rent and
      additional rent would have been payable under this Lease if this Lease were
      still in effect. and as such deficiency shall arise:


     

    (i)    
      Alternatively to paragraph (g), Lessor shall have the right to recover from
      Lessee the worth at the time of award of the amount by which the unpaid rent
      for
      the balance of the Term after the time of award exceeds the amount of rental
      loss that Lessee proves could be reasonably avoided, and

     

    (j)    
The
      Lessor
      shall have the right to recover from Lessee any
      and all of the following. Any other amount necessary to compensate
      Lessor for all the detriment proximately caused by Lessee's failure
      to perform its obligations under this Lease or which in the ordinary course
      of
      things would be likely to result therefrom, including, but not limited to,
      any
      attorneys' fees. broker's commissions or finder's fees (not only in connection
      with the reletting of the Premises, but also that portion of any leasing
      commission paid by Lessor in connection with this Lease which is applicable
      to
      that portion of the Term which is unexpired as of the date on which this Lease
      is terminated); the then unamortized cost of any Lessee impravements constructed
      for or on behalf of Lessee by or at the expense of Lessor or of any moving
      allowance or other concession made available to Lessee and/or paid by Lessor
      pursuant to this Lease; any costs for repairs, clean-up, refurbishing, removal
      (including the repair of any damage caused by such removal) and storage (or
      disposal) of Lessee's personal property, equipment, fixtures, and anything
      else
      that Lessee is required (under this Lease) to remove but does not remove, any
      costs for alterations, additions and renovations; and any other costs and
      expenses, including reasonable attorneys' fees and
      costs incurred by Lessor in regaining possession of and reletting (or
      attempting to relet) the Premises.

     

    


    


    
      
        
          
          

        

        
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    (k)    Nothing
      herein contained shall limit or prejudice the right of the Lessor to prove
      for
      and obtain as damages by reason of such termination an amount equal to the
      maximum allowed by law, whether or not such amount be greater, equal to, or
      less
      than the amount of the difference referred to above;

    


    (l)    
If
      the net
      pros of any reletting of the premises after deductions exceeds the amount due
      under this Lease, any excess
shall belong
      to Lessor
      and Lessee shall have no claim to the same;

    


    (m)   The
      remedies of the
      Lessor are, at Lessor's option, cumulative and not in the alternative. The
      remedies set forth
herein shall
      not limit anv other remedies to which the Lessor may be
      entitled

    


    (n)    Nothing
      in
      this Lease shall be construed as relieving Lessor of any duty which it may
      have
      under laws to mitigate its damages in connection with any default or breach
      on
      the part of Lessee or as allowing Lessor to recover any damages which could
      have
      been reasonably mitigated. In exercising its rights and remedies under this
      Lease in response to a default or breach on the part of Lessee, Lessor shall,
      in
      every instance, be required to act reasonably and in accordance with prudent
      business practices.

    


    14.       Condemnation.
      

     

    (a)    Total
      or
      Partial Taking. If all or substantially all of the Premises is permanently
      condemned or taken in any manner for public or quasi-public use, including
      but
      not limited to, a conveyance or assignment in lieu of the condemnation or
      taking, this Lease shall automatically terminate as of the earlier of the
      date on which actual physical possession is taken, by the condemnor or the
      date
      of dispossession of Lessee as a result of such condemnation or other taking.
      If
      less than all or substantial ty all of the Premises is so condemned or
      taken, this Lease shall automatically terminate as to the portion of the
      Premises so taken as of the earlier of the date on which actual physical
      possession is taken by the condemnor or the date of dispossession of Lessee
      as a
      result of such condemnation or taking. If such portion of the premises is
      condemned or otherwise taken so as to require, in the opinion of Lessor, a
      substantial alteration or reconstruction of the remaining portions thereof,
      this
Iease may
      be terminated
      by Lessor, as of
      the
date on which actual physical possession is taken by the condemnor
      or dispossession of Lessee as a result of such condemnation or taking by written
      notice to Lessee within sixty (60) days following notice to Lessor of the date
      on which such
physical possession
      is taken or dispossession will occur. If there
      is a partial taking of at least 30% of the land area or 25% of the
      building area, Lessee may elect to terminate the Lease by giving Lessor notice
      of said election within sixty (60) days following Lessee receiving notice of
      the
      taking.

     

     

    
 

    
      
        
          
          

        

        
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    (b)    Award.
      Except as otherwise provided herein, Lessor shall be entitled to the entire
      award in any condemnation proceeding or other proceeding for taking the Premises
      for public or quasi-public use, including, without limitation, any award made
      for the value of the leasehold estate e.weated by this Lease. No award for
      any
      partial or total taking shall be apportioned, and Lessee hereby assigns to
      Lessor any award that may be made in such condemnation or other taking, together
      with any and all rights of Lessee now or hereafter arising in or to the same
      or
      any part thereof. Although all damages in the event of any condemnation arc
      to
      belong to Lessor whether such damages are awarded as compensation for diminution
      in value of the leasehold or to the fee of the Premises; Lessee shall have
      the
      right to claim and recover from the condemnor, but not from Lessor, such
      compensation as may be separately awarded or recoverable by Lessee in Lessee's
      own right on account of relocation cost or loss to which Lessee might incur
      in
      removing Lessee's
merchandise. furniture
      and other personal property, fixtures,
      and equipment from the Premises. Lessee shall not be entitled to any award
      based
      on the value of the leasehold estate.

    


    (c)    Abatement
      in Rent. In the event of a partial condemnation or other taking that does
      not result in a termination of this Lease as to the entire premises pursuant
      to
      this Section, the vent and all other charges under this Lease shall abate in
      proportion to the value of the portion of the Premises taken by
      such condemnation or other taking. If this Lease is
      terminated, in whole or in part, pursuant to any of the provisions of this
      Section, all rentals and other charges payable by Lessee to Lessor hereunder
      and
      attributable to the Premises taken shall be paid up to the date upon which
      actual physical possession shall be taken by the conderanor.

    


    (d)    Temporary
      Taking. If all or any portion of the premises is temporarily condemned or
      otherwise taken for public or gnasi-public use for a period of time not
      in excess of six (6) months, this Lease shall remain in full force and
      effect and Lessee shall continue to perform all terms, conditions and
      covenants of this Lease: provided, however, the rent and all other charges
      payable by Lessee to Lessor hereunder shall abate during such period in
      proportion to the value of the portion of the Premises that is rendered
      unleasable and unusable as a result of such condemnation or other
      taking and Lessee shall be relieved of all of its other duties and
      obligations under this Lease as to the portion of the premises so condemned
      or
taken
      during the period such condemnation or taking is in effect. Lessor
shall be entitled to receive the entire award made in connection
      with any such temporary condemnation or other taking. Lessee shall have the
      right to claim and recover from the condemnor, but not from Lessor, such
      compensation as may be separately awarded or recoverable by Lessee in Lessee's
      own right on account of damages to Lessee's business by reason of the
      condemnation and for or on account of any cost or loss to which Lessee might
      be
      put in removing Lessee's merchandise, furniture and other personal property,
      fixtures and equipment or for the interruption of or damage to Lessee's
      business.

    


    (e)    Transfer
      of Lessor's Interest to Condemnor. Provided the condemnor has formally
      declared its intention to condemn all or part of the premises, Lessor may agree
      to sell and/or convey to the condemnor the premises, or any portion thereof,
      sought by the condemnor, free from this Lease and the rights of Lessee here
      under, without first requiring that any action or proceeding be instituted
      or,
      if instituted, pursued to a judgment. In such event, this Lease shall be deemed
      terminated effective on the date of such transfer.

    


    15.       Damage
      to Property

    


    (a)    Minor
      Insured Damage. In the event the premises, or any portion
      thereof, is damaged or destroyed by any casualty that is covered by insurance.
      Lessor shall promptly and in any event within 180 days after such damage or
      destruction occurs rebuild, repair and restore the damaged portion thereof,
      provided that (1) the amount of insurance proceeds, and any amounts Lessee
      elects to provide to Lessor equals or exceeds the cost of such rebuilding,
      restoration and repair. (2) such rebuilding, restoration and repair can be
      completed within one hundred eighty (180) days after the work commences in
      the
      opinion of a registered architect or engineer appointed by Lessor, (3) the
      damage or destruction has occurred more than twelve (12) months before the
      expiration of the Term and (4) such rebuilding, restoration, or repair is then
      permitted, under applicable governmental laws, rules and regulations, to be
      done
      in such a manner as to return the damaged portion thereof to substantially
      its
      condition immediately prior to the damage or destruction, including, without
      limitation, the same net rentable floor area. To the extent that insurance
      proceeds must be paid to a mortgage or beneficiary under, or must be applied
      to
      reduce any indebtedness secured by, a mortgage or deed of trust encumbering
      the
      premises, such proceeds, for the purposes of this subsection shall be deemed
      available to Lessor regardless of whether such mortgagee or beneficiary permits
      Lessor to use such proceeds for the rebuilding, restoration, and repair of
      the
      damaged portion thereof. Notwithstanding the foregoing, Lessor shall have no
      obligation to repair any damage to, or to replace any of, Lessee's personal
      property, furnishings, trade fixtures, equipment or other such property or
      effects of Lessee unless this damage or destruction was caused by the negligence
      of Lessor in an amount in excess of S10,000.00 in any one occurrence, or the
      intentional acts of Lessor, and is not covered by insurance.

     

     

     

    


    
      
        
          
          

        

        
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    Any
      rebuilding or repairs referred to in this section shall be performed as promptly
      as reasonably possible under the circumstances subject to matters outside of
      Lessor's control.

     

    (b)    Major
      or
      Uninsured Damage. In the event the premises, or any portion thereof, is
      damaged or destroyed
      by, any
      casual to the
      extent that Lessor is not obligated under subsection (a) above, to rebuild
      repair or restore the damaged portion thereof- then Lessor shall within sixty
      (60) days after such damage or destruction, notify Lessee of its election,
      at
      its option, to either (1) rebuild, restore and repair the damaged portions
      thereof, in which case Lessor's notice shall specify the time period within
      which Lessor estimates such repairs or restoration can be completed, which
      time
      period shall not exceed 365 days after the damage or destruction occurs; or
      (2)
      terminate this Lease effective as of the date the damage or destruction occurred
      If Lessor does not give Lessee written notice within sixty (60) days after
      the
      damage or destruction occurs of its election to rebuild or restore and repair
      the damaged portions thereof, Lessor shall be deemed to have elected to
      terminate this Lease. Notwithstanding the foregoing, this Lease shall not
      terminate if Lzssee repairs or rebuilds in accordance with the provisions of
      this section and commences repairs or rebuilding within sixty (60) days after
      notice that Lessor does not intend to rebuild or repair. Notwithstanding the
      foregoing, if Lessor does not elect to terminate this Lease, Lessee tray, terminate
      this
      Lease if the damage or destruction occurs within the last twelve- (12) months
      of
      the Term, unless Lessee's actions or omissions are the cause of
      the damage. If Lessee has the right
      to terminate the Lease in accordance with
      the above provisions, Lessee may so elect by written notice to
      Lessor which must be given within fifteen- (15) days after Lessee's receipt
      of
      Lessor's notice of its election to rebuild. Upon Lessor's receipt of such
      notice, the termination shall be effective as of the date the destruction
      occurred Any rebuilding or repairs referred to in this section shall be
      performed as promptly as reasonably possible under the circumstances subject to matters
      outside of Lessor's control.

     

    (c)    If
      Lessor is
      not required to rebuild or repair the building pursuant to (a) and does not
      elect to rebuild or repair under (b), then Lessee shall repair or replace the
      damage or destruction to the building at Lessee's cost, if the damage or
      destruction occurred to the premises as the result of the negligence or wrongful
      act or omission of Lessee, or any owner, officer, employee, contractor or agent
      of Lessee. Lessee shall repair or replace the damaged or destroyed portion
      of
      the premises to substantially its condition immediately prior to the
      damage or destruction. Such repair or replacement shall be at Lessee's expense.
      except that Lessor shall cause the insurance proceeds, if any, attributable
      to
      such damage or destruction that arc paid to or for the account of Lesser to
      be
      made available to Lessee to be applied toward the cost thereof.

     

    


     

    


    
      
        
          
          

        

        
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    (d)    If
      Lessor is
      not required to rebuild under subsection (a) and ejects not to rebuild under
      subsection (b), and Lessee is not required to rebuild under subsection
      (c). Lessee shall have fifteen (1 5) days after such notification from Lessor
      that Lessor is not rebuilding or repairing in which to notify Lessor that Lessee
      wishes to have the structure rebuilt at Lessee's own expense provided Lessor
      shall make available any insurance proceeds from such damage or destruction
      to
      pay such costs. Lessee's right to have the premises rebuilt shall be conditional
      upon (i) Lessee paying rent during the period of construction without abatement;
      (ii) obtaining the consent of Lessor if the estimated cost of rebuilding is
      over
      S20,000.00, said consent not to be unreasonably withheld; and (iii) the
      construction is to be completed within 180 days of commencement of construction
      unless delayed by matters outside of Lessee's control: and (iv) any rebuilding
      or repairs referred to in this section shall be performed as promptly
as reasonably possible under the circumstances subject to
      matters outside
      of Lessee's control. If Lessee decides to have the building rebuilt or repaired,
      Lessor can choose to control the construction or permit Lessee to rebuild.
      If
      Lessor controls the rebuilding pursuant to paragraph 1, Lessee shall provide
      funds to Lessor for the actual cost of rebuilding of the premises as payment
      becomes due and reasonable proof of availability of funds in an amount
      reasonably satisfactory to Lessor for the completion of the work Lf Lessor
      chooses to have Lessee control the rebuilding, Lessee shall use licensed
      contractors and provide reasonable proof to Lessor, that Lessee has adequate
      funding to complete the construction and pay as payments becomes due, all
      materialmen_ contractors and subcontractors so
      that there shall not be any mechanic's liens recorded against the
      premises:

     

    (c)    Abatement
      of Rent, Subject to the provisions of subsection (d). in the event of damage
      or destruction to the premises, rent shall continue for a minimum of three
      months. Thereafter, there shall be a fair and equitable abatement of rent
      by reason of damage to or destruction of the premises, or any portion thereof.
      to reflect the extent to which that the floor area of the Premises cannot be
      reasonably used by Lessee for the conduct of its business, in which event the
      Monthly Rental shall
abate proportionately.
      If Lessor or Lessee elects to
      terminate this Lease as provided in Subsection (b) above, no obligation
      shall accrue under this Lease after such termination except for the three
      month's rent referred to in the first sentence of this section. Notwithstanding
      the provisions of this Section, if any such damage is due to the fault or
      negligence of Lessee, any person claiming through or under Lessee, or any of
      their employees, suppliers. shippers, servants, customers or invitees, then
      there shall be no abatement of rent relating to any period during the Term
      by
      reason of such damage, unless and until Lessor is reimbursed for such abatement
      pursuant to any rental insurance policy_ Lessee's right to terminate this Lease
      in the event of any damage or destruction to the Premises, is governed by the
      terms of this Section and therefore Lessee hereby expressly waives the
      provisions of any and all laws, whether now or hereafter in force, and whether
      created by ordinance. statute, judicial decision, administrative rules or
      regulations, or otherwise, that would cause this Lease to be terminated, or
      give
      Lessee a right to terminate this Lease, upon any damage to or destruction of
      the
      Premises or Building that occurs.

     

    16.       Restrictions
      on Use, Lessee shall not keep, use or sell anything prohibited by any policy
      of fire insurance covering the premises, and shall comply with all requirements
      of the insurers' applicable to the premises necessary to keep in force the
      fire
      and liability insurance.

     

    17.       Waste,
      Nuisance or Unlawful Activity Lessee shall not allow
      anv waste or nuisance on the premises. or use or allow the premises to be used
      for any unlawful purpose.

     

    18.       Insurance,

     

    (a)    Lessee.
      During the Term hereof. Lessee shall
      keep in full force and effect the following insurance and
      shall provide
      appropriate insurance certificates evidencing such coverage to Lessor
      prior to the Commencement Date and annually thereafter before the expiration
      of
      each policy
and each
      such policy shall name Lessor as an additional named
      insured:

    


     

     

    
      
        
          
          

        

        
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    1)    Commercial
      general liability insurance with a limit of not less than One Million Dollars
      (51,000.000.00) combined single limit per occurrence, against claims for
      personal injury liability including, without limitation, bodily injury, death or property
      damage liability and covering the business(es) operated by Lessee and by any
      sublessee of Lessee on the Premises; and

     

    2)    All
risk
special
      form
      insurance covering (without limitation) fire, extended coverage and vandalism
      and malicious mischief insuring the building constituting a part of the premises
      in an amount not less than one hundred (100%) of the full replacement cost
      thereof, plus cost of debris removal with no deduction for
      depreciation.

    


    No
      insurance required try
this Section Shall have
      a deductible in
      excess of S 1,000.00. Each insurance policy obtained by Lessee pursuant to
      this
      Lease shall contain a clause that the insurer will provide Lessor with at least
      thirty (30) days prior to written notice of any material change, nonrenewal
      or
      cancellation of the policy, shall be in a form reasonably satisfactory to
      Lessor, shall be taken out with an insurance company authorized to do business
      in Utah and rated not less than Best's Financial Class X and Best's Policy
      Holder Rating "A". In addition, any insurance policy obtained by Lessee shall
      be
      written as a primary policy, and shall not be contributing with or in
      excess of any coverage which Lessor may carry, shall have loss payable clauses
      satisfactory to Lessor and in favor of Lessor naming Lessor
      and any other party having an insurable interest in the premises reasonably
      designated by Lessor as an additional insured and shall insure against loss
      caused by negligence of Lessee, and shall not permit subrogation against the
      Lessor. The liability limits of the
      above-described insurance policies shall in no matter limit the liability
      of Lessee pursuant to this Lease.

    


    Waiver
      of Subrogation. Lessor and Lessee hereby mutually waive their respective
      rights of recovery against each other for any loss insured by fire, extended
      coverage and other property insurance and liability policies existing for
      the benefit of the respective parties.

    


    If
      Lessee
      fails to maintain and secure the insurance coverage required under this Section
      18, then Lessor shall have, in addition to all other remedies provided herein
      and by law, the right, but not the obligation, to procure and maintain such
      insurance, the cost of which shall be due and payable to Lessor by Lessee within
      ten (10) business days after written demand

    


    If,
      on
      account of the failure of Lessee to comply with the provisions of this
      Section, Lessor is deemed a co-insurer by its insurance carrier, then any loss
      or damage which Lessor shall sustain by reason thereof shall be borne by Lessee
      and shall be paid by Lessee as additional rent within ten (10) business days
      after receipt of a bill therefor and evidence of such loss.

    


    19.       Payment
      of Taxes by Lessee, As and for additional rent, Lessee shall pay all real
      estate taxes and assessments, personal property taxes, excise or sales taxes,
      special improvement and other assessments (ordinary and extraordinary), and
      all
      other taxes, duties, charges, foes and payments imposed by any governmental
      or
      public authority which shall be imposed, assessed or levied upon, or arising
      in
      connection with Lessee's use, occupancy or possession of the premises or ant,
      part thereof during the Term (all of which are herein called "Taxes").
Leesee shall deliver to Lessor fifteen (15) day's prior to the last day
      upon which the such Taxes may be paid without penalty or interest, a receipt
      showing the payment thereof Taxes for the tax year in which the term shall
      commence or expire shall be apportioned according to the number of days during
      which each party shall be in possession during such tax year.

     

    
 

    


    
      
        
          
          

        

        
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    Lessee
      may contest any Taxes by appropriate proceedings conducted promptly at Lessee's
      expense. Lessor agrees to cooperate reasonably with Lessee and to execute any
      documents or pleadings reasonably required for such purpose, but Lessor shall
      not be obligated to incur any expense or liability in connection therewith.
      If
      Lessee wishes to protest Taxes. Lessee shall timely pay all Taxes due "under
      protest." All refunds of Taxes shall be the property of Lessee to the extent
      they are refunds of or related to payments made by Lessee.

    


    Lessee
      and Lessor acknowledge that the total area of assessment considered for property
      taxes is shared with another tenant. This
      Premise totals 50% (fifty-five percent) of
      the area that is assessed the County Assessor for property taxes. Lessee is
      responsible for 50% of the total assessment.

    


    20.       Right
      of Entry Lessor or its agents shall have the right to enter the premises at
      reasonable times, upon reasonable prior notice to Lessee in order to examine
      and
      inspect them, and to show them to prospective purchasers or to make such
      repairs, alterations, improvements. or additions as the Lessor may deem
      necessary or desirable. During the six (6) months prior to the expiration of
      the
      Term, and any extension thereof the Lessor shall have the right to advertise
      the
      premises for sale or rent and shall have right to place "For Sale" or "For
      Rent"
      signs on the premises. Lessor's right of entry shall not be deemed to impose
      upon the Lessor any obligation, responsibility, or liability for the care,
      supervision or repair of the premises other than as herein provided. In
      exercising any of its rights under this Section 20, Lessor shall not
      unreasonably interfere with the conduct by Lessee of its business at the
      premises.

    


    21.       Indemnity
      and Limit on Lessor's Liability.

     

    (a)    Lessee
      Indemnity. Lessee agrees to indemnify, defend and hold
      Lessor and its officers, directors, partners and employees entirely harmless
      from and against all liabilities, losses, demands, actions, expenses or claims,
      including reasonable attorneys' fees and court costs, for injury to or death
      of
      any person or for damages to any property or for violation of law arising out
      of
      or in any manner connected with (i) the use, occupancy or enjoyment of the
      premises by Lessee or Lessee's agents, employees, customers or contractors
      (the
      "Lessee's Agents") or any work activity or operations allowed or suffered by
      Lessee or Lessee's Agents to be done in or about the premises; (ii) any breach
      or default in the performance of any obligation of Lessee under this Lease;
      and
      (iii) any negligent or otherwise tortious act or failure to act, by Lessee
      or
      Lessee's agents in or about the premises.

    


    (b)    Limitation
      on
      Lessor's Liability: Release of Trustees, Officers and
      Parttscrs of Lessor. Lessee agrees that in the event,
      Lessee shall have any claim against Lessor under this Lease arising out of
      the
      subject matter of this Lease, Lessee's recourse shall be limited to a maximum
      liability of 5500,000.00. Moreover, Lessee agrees that Lessor
      shall in no event and under no circumstances be responsible for any
      consequential damages incurred or sustained by Lessee, or its employees, agents.
      contractors or invitees as a result of or in any way connected to Lessee's
      occupancy of the Premises. Lessee further hereby -waives any and all right
      to
      assert any claim against or obtain any damages from, for any reason whatsoever,
      the trustees, directors, officers and partners of Lessor including all injuries,
      damages or losses to Lessee's, property, real and personal. whether
      known- unknown, foreseen, unforeseen, patent or latent, which Lessee may have
      against Lessor or its directors, officers or partners (other than fraud or
      intentional wrongful conduct). Lessee understands and acknowledges the
      significance and consequence of such specific waiver. In any event, Lessor
      shall
      not be responsible for the first $10,000.00 of damages suffered b', Lessee
      caused by Lessor's liability with respect to any one incident
      or occurrence.

     

     

    Lessor
      shall not be liable or responsible to Lessee for any loss or damage to any
      property or person occasioned by theft, fire, act of God_ public enemy,
      injunction, riot. strike, insurrection, war, court order, requisition. or order
      of governmental body or authority or for inconvenience that may arise during
      the
      repair or alteration of any part of the premises_

    


    


    


    


    
      
        
          
          

        

        
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    22.       Compliance
      With Applicable Laws. Lessee at its sole expense shall
      comply with all laws, orders, and regulations of federal, state and municipal
      authorities. and with any direction of any public officer, pursuant to law,
      which shall impose any duty upon Lessor or Lessee with
      respect to the premises, except that Lessee shall have no such
      obligation with respect to any aspect or component of the premises that Leas
      not
      in compliance with any such law, order, regulation or direction as of the date
      of this Lease. Lessee, at its sole expense, shall obtain all
      licenses or permits which may be required for the conduct of its business within
      the terms of this Lease. or for the making of repairs, alterations, improvements
      or additions

    


    23.       Surrender
      o Premises,

    


    (a)    At
      the
      expiration of the Term and any extensions thereof, Lessee shall surrender the
      premises in good condition, excepting reasonable use and wear and tear and
      any
      damage or destruction that Lessee is not obligated to repair pursuant to
      paragraph 15.

    


    (b)    No
      act or
      thing done by the Lessor or its agents during the term of this Lease shall
      be
      deemed an acceptance or the surrender of the premises and no agreement to accept
      such surrender shall be valid unless in writing signed by Lessor. No employee
      nor agent of the Lessor shall have any power to accept the keys of the premises
      prior to the termination of this Lease, and the delivery of the keys to Lessor
      or to any employee or agent of Lessor shall not operate as a
      termination of this
      Cease or a surrender of the premises without Lessor's express
      written consent.

     

    24.       Assignment,
      Sublease or License, Lesee shall not assign or sublease the premises or any
      right or privilege connected therewith or allow any other
      person except agents and employees of Lessee to occupy the premises
      or any part thereof without the consent of Lessor, which
      shall not be unreasonably withheld An unauthorized
      assignment, sublease or license to occupy by Lessee shall be void and
      shall terminate this Lease at the option of Lessor. The interest of Lessee
      in
      this lease is not assignable by operation of law without the written consent
      of
      Lessor. Notwithstanding anything in this Lease to the contrary, Lessee may,
      without the prior written consent of Lessor, assign this Lease or sublet all
      of
      any portion of the Premises to any: (i) entity under the control of Lessee;
      (ii)
      any entity that controls Lessee, (iii) any entity that is controlled by an
      entity that also controls Lessee; or (iv) any entity that acquires Lessee or
      substantially all of Lessee's assets. For purposes of the foregoing, an entity
      shall be deemed to control another entity if it directly or indirectly (through
      one or more subsidiaries) owns at least 75% of the voting securities of such
      other entity. No assignment or sublease shall release Lessee from its
      responsibilities and obligations pursuant to the Lease.

     

    25.       Non-Liability
      of Lessor for Damages Except to the extent
      intentionally caused by Lessor, Lessor shall not be liable for liability or
      damage claims for injury to persons or property from any cause relating to
      the
      occupancy of the premises by Lessee, including those arising out of damages
      or
      losses occurring on sidewalks and other areas adjacent to the premises during
      the term of this lease or any extension thereof. Lessee shall indemnify Lessor
      from all liability, loss, or other damage claims or obligations resulting
      from any injuries or losses of this nature.

     

    26.       Signs,
      Awnings, and Marquees Installed by Lessee. Lessee may construct or place
      signs, awnings. marquees, or other structures on the exterior of the premises
      only (i) with the prior written consent of Lessor, said consent not to be
      unreasonably withheld; and (ii) having first obtained all required governmental
      permits. Lessee shall maintain in good repair the current signs on the property.
      Said signs belong to Lessor and shall not exceed in size of three foot wide
      by
      six foot long.

     

    


    


    
      
        
          
          

        

        
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    27.       Alterations.
      Lessee shall obtain the written approval of Lessor prior to making any
      alterations or modifications to the premises or to any equipment thereon
which exceeds $3,000 in cost in the cumulative. said approval not be
      unreasonable withheld. All approved and completed alterations or modifications.
      except Lessee's trade fixtures, shall become part of the premises
      and title thereto shall vest in Lessor. All alterations or
      modifications undertaken by Lessee shall be performed and completed
      in a workmanlike manner and at the sole expense of Lessee. No work shall be
      performed by Lessee without having received all necessary building
      permits and other municipal, county, and governmental approvals.

     

    29.       Notices. All
      notices and other communications hereunder shall be in writing and shall be
      deemed properly served if mailed by certified or registered mail, return
      receipt requested or delivered personally or by recognized overnight
      courier service addressed or delivered as follows:

    


    
      	
               

            	
              To
                Lessor at:

            	
              Remco
                Management Lc

            


    

    8690
      Hidden Oaks Cir

    Salt
      Lake
      City, Utah 84121

    


    
      	
               

            	
              To
                Lessee at:

            	
              High
                Performance Coatings, Inc 

            


    

    HPC

    14788
      South Hearitagecrest Way

    Bluffdale.
      Utah 84065

     

    or
      to
      such other address as a party may specify by like notice. A notice is decreed
      property served if mailed as set forth above whether or not the certified letter
      is accepted. Notices mailed in accordance with this section shall be deemed
      given on the third business day after depositing in the U.S. Mail. Notices
      delivered personally or by overnight courier shall be deemed given only upon
      actual receipt thereof.

    


    29.       Waiver
      of Right. No failure on the part of either party to enforce any covenant or
      provision herein contained, nor any waiver of an-•
      rights hereunder by either party, unless so stated in writing, shall
      discharge or invalidate such covenant or provision or effect the right of that
      party to enforce the same or any other right in the event of any subsequent
      breach or default.

    


    30.       Attornev's
      Fees, In the event of a breach or default by either
      party, the non-defaulting party shall be entitled to recover all costs of
      enforcing this Lease, including reasonable attorney's fees, whether or not
      litigation is instituted.

    


    31.       Liens, Lessee
      shall keep all of the premises and every part thereof and all buildings and
      other improvements at arty time located thereon free and clear of any and all
      mechanic's, materiairnan's, and other liens for or arising out of or in
      connection with work- or labor done, services performed or materials or
      appliances used or furnished for or in connection with any operations of Lessee,
      any alteration, improvement, or repairs or additions which Lessee may make
      or
      permit or cause to be made, or any work or construction_ by, for, or permitted
      by Lessee on or about the premises, or any obligations of arty kind incurred
      by
      Lessee. Lessee shall at all tunes promptly and hilly pay and discharge any
      and
      all claims on which any such lien may or could be based, and to indenutify
      Lessor and all of the premises and all buildings and improvements thereon
      against all such liens and claims and suits or other proceedings pertaining
      thereto.

    


    Notwithstanding
      the foregoing, if Lessee shall desire to resist any mechanic's or materialmens'
      liens. or any other claim against all or any portion of the premises on account
      of construction, building, rebuilding, repairing, reconstruction or otherwise
      improving the premises, Lessee shall have the right to do !n an amount as
      reasonably determined by Lessor sufficient to pay said claim or lien, along
      with
      interest, costs, attorneys fees and an amount sufficient for a cushion in the
      event of an increased claim, with said escrow directed to pay such claim or
      lien
      in the event of a result adverse to Lessee, or provide for a bond andlor other
      financial arrangement sufficient to assure payment of the claim or
      lien.

    


    


    
       

    

    


    
      
        
          
          

        

        
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    32.       Lessor's
      Remedies are Cumulative. The specified remedies to
      which the Lessor may resort under the terms of this Lease are cumulative and
      are
      not intended to be exclusive of any other remedies or means of redress to which
      the Lessor may be lawfully entitled in case of any breach or threatened breach
      by the Lessee of any provision or provisions of this Lease.

    


    33.       Declaration
      of Governing Law. This Lease shall be governed by, construed, and enforced
      in accordance with the laws of the State of Utah. The courts of the State of
      Utah, of the County in which the property is situated shall have exclusive
      jurisdiction over any disputes or defaults arising out of this
      Lease.

    


    34.       Grammatical
      Usage. In construing this Lease. feminine or neuter pronouns shall be
      substituted for those masculine in form and vice versa, and plural terms shall
      be substituted for singular and singular for plural- in any place in which
      the
      context so requires.

    


    35.       Lease
      Binding Upon Heirs, Executors, Administrators. Successors, and Assigns
      ofLessor and Lessee. The covenants, terms, conditions, provisions,
      and undertakings in this Lease or in any renewals thereof. shall extend to
      and
      be binding upon the heirs, executors. administrators_ successors, and assigns
      of
      the respective parties hereto, as if they were in every case named and
      expressed, and shall be construed as covenants running with the land; and
      whenever reference is made to either of the parties hereto, it shall be
      held to include and apply also to the heirs, executors, adnitnistrators,
      successors, and assigns of such party, as if in each and every case so
      expressed. Nothing contained in this section shall be deemed to authorize an
      assignment of this Lease by Lessee.

    


    36.       Entire Agreement.
      This Lease, together with any written agreements which shall have been executed
      simultaneously herewith, contains the entire agreement and understanding between
      the parties. There are no oral understandings, terms or conditions, and neither
      party has relied upon any representation, express or implied, not contained
      in
      this Lease or the simultaneous writings heretofore referred to. All prior
      understandings, terms, or conditions are deemed merged in this
      Lease.

    


    This
      Lease may not be changed orally, but only by an agreement in writing and signed
      by the party against whom enforcement of any waiver, change, modification,
      or
      discharge is sought.

    


    37.       Severability,
      If any provision of this Lease shall be declared invalid or unenforceable,
      the
      remainder of the Lease shall continue in full force and effect.

    


    38.       Conveyance
      by Lessor. If during the Term of this Lease Lessor, its successors or
assigns shall convey its interest in the premises, then from and after
      the effective date of the conveyance by Lessor, Lessor, or its successor or
      assign so conveying, shall be released and discharged from any and all
      obligations pursuant to this Lease except for those which shall have already
      accrued Nothing contained in this Lease shall prohibit Lessor from the sale,
      mortgaging, or hypothecation of the premises.

    


    


    


    
      
        
          
          

        

        
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    39.       Hazardous
      Materials. Lessee covenants and agrees that it shall
      not cause or permit any Hazardous Material (as defined below) to be brought
      upon, kept, or used in or about the premises, by Lessee, its agents. employees.
      contractors or invitees. The foregoing covenant shall not extend to
substances typically found or used in general office applications or in
      an equipment sales, rental and repair business so long as (i) such
      substances and any equipment which generates such substances are maintained
      only
      in such quantities as are reasonably necessary for Lessee's
      operations in the Premises, (ii) such substances are used strictly
      in accordance with the manufacturers' instructions if any, therefor, (iii)
      such substances are not disposed of in or about the premises in a manner which
      would constitute a reI O or discharge thereof. and (iv) all such
      substances and any equipment which generates such substances are removed from
      the premises by Lessee upon the expiration or earlier termination of this Lease.
      Any use. storage, generation. disposal. release or discharge by Lessee of
      Hazardous Materials in or about the premises as is permitted pursuant to this
      paragraph shall be carried out in compliance with all applicable federal, state
      and local laws, ordinances, rules and regulations. Moreover, no Hazardous
      Materials resulting from any operations by Lessee shall be stored
      or maintained by Lessee in or about the premises for more than ninety (90)
      days
      after Lessee completes its use thereof. Lessee shall, annually within
      thirty (30) days after Lessee's receipt of Lessor's written request therefor,
      provide to Lessor a written list identifying airy Hazardous Materials, other
      than common office supplies or household cleaning supplies, then maintained
      by
      Lessee in the premises, the use of each such Hazardous Material and the approximate
      quantity of each such Hazardous Material so maintained by Lessee, together
      with
      written certification by Lessee stating, in substance. that neither Lessee
      nor
      any person for whom Lessee is responsible has released or discharged any
      Hazardous Materials in or about the premises.

    


    In
      the
      event that Lessee proposes to conduct any use or to operate any equipment which
      will or may utilize or generate a Hazardous Material other than as specified
      in
      the first paragraph of this section Lessee shall first in writing submit such
      use or equipment to Lessor for approval in writing, which approval shall not
      be
      unreasonably withheld. No approval by Lessor shall relieve Lessee of any
      obligation of Lessee pursuant to this section, including the removal, clean-up
      and indemnification obligations imposed upon Lessee by this subsection. Lessee
      shall, within five (5) days after receipt thereof furnish to Lessor copies
      of
      all notices or other communications received by Lessee with respect to any actual or alleged
      release
      or discharge of any Hazardous Material in or about the premises and shall,
      whether or not Lessee receives any such notice or communication, notify Lessor
      in writing of any discharge or release of Hazardous Material byLessee or anyone
      for whom Lessee is responsible in or about the premises . In the event that
      Lessee is required to maintain any Hazardous Materials license or permit in
      connection 'nith any use conducted by Lessee or any equipment operated
      by Lessee  in the premises, copies of each such license or
      permit, each renewal or revocation thereof and any communication relating to
      suspension, renewal or revocation thereof shall be furnished to Lessor within
      five (5) days after receipt thereof by Lessee. Compliance by Lessee with the
      two
      immediately preceding sentences shall not relieve Lessee of any other obligation
      of Lessee
pursuant to
      this subsection.

    


    Upon
      any
      violation of the foregoing covenants, Lessee shall be obligated, at
      lessee's sole cost to clean-up and remove from the premises all Hazardous
      Materials introduced into the premises by Lessee or any person or entity for
      whom Lessee is responsible under this Lease. Such clean-up and removal shall
      include all testing and investigation required by any governmental authorities
      having jurisdiction and preparation and implementation of any remedial action
      plan required by any
governmental
      authorities having jurisdiction. All such clean-up and
      removal activities of Lessee shall, in each instance, be conducted to the
      reasonable satisfaction of Lessor and all governmental authorities having
      jurisdiction. Lessors right of entry pursuant to this Lease shall include
      the right to enter and inspect the Premises for violations of Lessee's covenants
      herein.

    


    Lessee
      shall indemnify, defend and hold
      harmless lessor, its partners, and its and their successors, assigns, partners.
      officers, employees, agents, lenders and attorneys from and against any and
      all
      claims, liabilities, losses actions, costs and
      expenses (including attorneys' fees
      and costs of defense) incurred by such indemnified persons, or any of them,
      as
      the result of (A) the introduction into or about the premises by Lessee or
      anyone for whom lessee is responsible under this Lease of any Hazardous
      Materials. (B) the usage. storage, maintenance, generation- disposition or
      disposal by Lessee or anyone for whom Lessee is responsible under this Lease
      of
      Hazardous Materials in or about the premises. (C) the discharge or release
      in or
      about the premises by Lessee
      or anyone for whom
      Lessee is responsible under this Lease of any Hazardous Materials, (D) any
      injury to or
      death of persons or damage to or destruction
      of properly resulting
      from the use, introduction, maintenance, storage, generation, disposal,
      disposition, release or discharge by Lessee
      or anyone for whom Lessee is
      responsible under this Lease of Hazardous Materials in or about the
      premises. and (E) any failure of Lessee or anyone for whom Lessee is responsible
      under this Lease to observe the foregoing covenants of this
      section.

    


    


    


    
      
        
          
          

        

        
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    Upon
      any
      violation of the foregoing covenants. Lessor shall be entitled to exercise
      all
      remedies available to a Lessor against a defaulting Lessee, including but not
      limited to those set forth in Section 13. Without limiting the generality of
      the
      foregoing, Lessee expressly agrees that upon any such violation that is not
      cured within any applicable cure period provided under Section 13. Lessor may,
      at its option, (i) immediately terminate this Lease or (ii) continue this
      Lease in effect for the remainder of the Term hereof. No action by Lessor
      hereunder shall impair the obligations of lessee pursuant to this
      section.

    


    As
      used
      in this subsection, "Hazardous Materials" is used in its broadest sense and
      shall include any petroleum based products, pesticides, paints and solvents,
      polychlorinated biphenyl, lead, cyanide, DDT, acids, ammonium compounds and
      other chemical products and any substance or material defined or designated
      as
      hazardous or toxic. or other similar term, by any federal, state or local
      environmental statute, regulation, or ordinance affecting the premises presently
      in effect or that may be
      promulgated in the future, as such statutes, regulations and ordinances may
      be
      amended from time to time, including but not limited to the statutes
      listed below:

    


    Resource
      Conservation and Recovery Act of 1976, 42 U. S.C. 0 6901 et
seq.

    


    Comprehensive
      Environmental Response, Compensation- and Liability Act of 1980.42 .S.C.
1
      9601 et seq.

    


    Clean
      Air
      Act. 42 U.S.C. 00 7401-7626

    


    Water
      Pollution Control Act (Clean Water Act of 19TT). 33 U_S.C.
      0 1251
      et leg

    


    Insecticide,
      Fungicide. and Rodenticide Act (Pesticide Act of 1987), 7 U.S.C. 0 135
      et seq

     

    Toxic
      Substances Control Act. 15 U.S.C. 0 2601 et seq

    


    Safe
      Drinking Water Act, 42 U.S.C. 0 300(f) et seq.

    


    National
      Environmental Policy Act (NEPA) 42 U.S.C. 0 4321 et seq

     

    Refuse
      Act of 1899. 33 U.S.C. 0 407 et seq.

    


    Lessee
      aclmowledges that incorporation of any material containing asbestos
      into the premises is absolutely prohibited Lessee agrees, represents
      and warrants that it shall not incorporate or permit or suffer to be
      incorporated during the Term, any material containing asbestos into the
      premises.

    


    41.       Right
      of First Refusal. Should Lessor during the Term enter into an agreement to
      sell the premises, or any portion thereof, Lessor shall provide to Lessee a
      written notice of intent to sell with a copy of such agreement of sale. Subject
      to the terms of this section, Lessee shall have the option of acquiring the
      premises. or portion thereof covered by such agreement, by substituting itself
      for the buyer under the agreement of sale. If Lessee does not give Lessor
      written notice of Lessee's intention to exercise this right of first refusal
      within thirty (30) days after receiving Lessor's notice of intent to sell and
      copy of the agreement of sale and make all earnest money deposits required
      by
      the agreement of sale within said thirty (30) day period.. Lessor shall be
      free
      to sell the premises. or a portion thereof, covered by such agreement within
      the
      180 days following the expiration of Lessee's option period according to the
      terms of the agreement of sale. if Lessor proposes to sell after said 180 days
      or on different terms. Lessor shall comply with the terms of this Section 41
      again. If Lessee exercises its right of first refusal, Lessee and Lessor shall
      be bound by the terms of the agreement of sale. No failure by Lessee to exercise
      its right of first refusal in connection with any such offer shall affect or
      operate to terminate Lessee's rights under this Lease.

    


    


    


    
      
        
          
          

        

        
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    42.       Quiet Enjoyment.
      As long as Lessee shall not be in default under the terms of this Lease. Lessor
      covenants that Lessee shall peaceably and quietly hold and enjoy the premises
      for the Term i;ithout hindrance or interruption by Lessor or any other person
      or
      persons lawfully or equitably claiming by, through. or under Lessor or any
      predecessor or successor of Lessor.

    


    43.       Lease
      Purchase Option.  Lease shall be given an offer to purchase the
      property located at 14788 South Heratagecresi Way Bluffdale Utah 84065 The
      Purchase Rill be as follows

     

    •
Purchase
      Price 5973,000.00

    •
      At the end of a three years term with 50% of lease payments going towards
      the 15% percent down payment as a rebate and used at the closing of the
      purchase. If option is not taken in the first 3 year period and is then
      exercised at the end of the five year lease tern- 30% of lease payments
      will go towards the 15% down payment needed to close Purchase.

    •
      If the five year option is exercised purchase price will be determined
      by
      and appraisal of which purchase price will not be lower than price mention
      above.

    •
      Both the three year purchase option or the five year option must be
      exercised in writing 30 days prior. June 1 2004 for the three year option.
      And
      exercised 30 days prior to June 1 2006 on the five year option. The option
      will
      become null and void if the option is not exercised in writing
      on or before the dates mention above.

    


    •
      Note! If the Option is not exercised by the lessee HPC there is no equity
      accrued an this property and this Option is not Transferable to anyone other
      than HPC.

    •
      Lessor agrees to carry a Purchase contract at a rate of 8.5% percent
      for
      a period of 30 years with a 15 call with a 15% of purchase price as a down
      payment. If the contract is paid sooner that a five year period a 5% penalty
      wilt be agreed to paid on the un-paid balance.

     

     

    DATED
      this ______________ day of ______________.2001.

     

    


     

    


    
      	
              LESSOR:

            	
              LESSEE:

            
	 	 
	 	 
	
              Remco
                Management, L.C.

            	
              High
                Performance Coatings, Inc

            
	
              a
                Utah limited liability company

            	
              a
                Corporation

            
	
               

            	 
	
              By:  _______________________________________

            	
              By:  /s/
                Jeff
                Holm                                      
                

            
	
                     Ron
                Mast

            	
                     Jeff
                Holm

            
	
              Its:  Managing
                Member

            	
              Its:  President

            


    

    


     

     

     

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