ncoatsb2a1ex10-12.htm


    
      

      

    

    
      Exhibit
        10.12



    LEASE
      EXTENSION AGREEMENT

    


    THIS
      LEASE AGREEMENT (this "Lease") made and entered into this 1st day of June,
      2006,
      by and between Remco Management Company, LLC., a Utah limited liability company,
      whose address is c/o Ron Mast, 8690 Hidden Oaks Cir, Salt Lake City, Utah 84121
      (hereinafter referred to as "Lessor") and High Performance Coatings;. (HPC)
      (hereinafter referred to as "Lessee").

    


    


    WITNESSETH:

    


    WHEREAS,
      Lessor is the owner (manager) of certain real property located at
      14788
      Heritage Crest Way, Bluffdale Utah 84065

    


    WHEREAS,
      Lessee wishes to Extend its present lease on said premises with certain
      Modifications, to the old lease document. Lessor is willing to lease said
      premises to Lessee, upon the terms and conditions set forth below in this
      Lease.

    


    WHEREAS,
      this is to be a lease in which Lessee pays all costs, expenses,
      repairs, replacement costs and in which the Lessor shall receive its rent,
      totally net, of any cost or expense, dating back to the 15th of May 2001,
except only roof repairs unrelated to Lessee roof penetration, all
      foundations, exterior walls, and structural components of the 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
                Heritage Crest Way, Bluffdale Utah,. Lessor retains free title to
                all of
                the premises and shall have access 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.

            


    

    


    
      	
              2.

            	
              Uses.
                Lessee agrees to use the premises for only lawful business
                operation. Lessor makes no representation or warranty concerning
                zoning
                requirements for any such uses.

            


    

    


    
      	
              3.

            	
              Term.

            


    

    


    
      	
               

            	
              (a)

            	
              This
                Lease shall be for an initial period of Two (2) years commencing
                on the
                1st day of July 2006 (the "Commencement Date") and terminating on
                the 30th day of June, 2008 ("Initial
                Term”)

            


    

    


    
      	
               

            	
              (b)

            	
              Lessee
                will have the right to extend the Lease for up to one additional
                period of
                three year (3) years from the terminating date of June 30,
                2008

            


    

    


    
      	
              4.

            	
              Holding
                Over. Lessee shall vacate the premises upon the
                expiration or earlier termination of this Lease. Lessee shall reimburse
                Lessor for all damages that 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
                by
                twenty five percent (25%).

            


    

     

    


    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    


    
      	
              5.

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

            


    

     

    
      	
              1st
                year

            	
              $7200.00

            
	
              2nd
                year

            	
              $7416.00

            


    

    


    


    
      	
              5.1.

            	
              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 Tenn to the last day 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 first 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, nsurance 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 lease, 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 not 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 and shall be mailed to Remco Management LLC, at
                8690
                Hidden Oaks Circle, Salt Lake City, Utah
                84121.

            


    

    


    
      	
              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.

            


    

    


    


    


    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    


    
      	
              10.

            	
              Maintenance
                and Repairs.

            


    

    


    (a)
      Except as otherwise provided in this Lease, Lessee shall, at all times 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, tear, obsolescence or
      defects, latent or otherwise. Except as otherwise expressly provided on this
      Lease, Lessee shall replace at its sole cost, any part of the building requiring
      replacement. Lessee shall be responsible for repair and replacement of any
      glass
      breakage. Lessee shall be responsible for maintaining landscaped area costs
      and
      keeping it 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 property, 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 clean condition, subject to reasonable wear and tear. Also the
      aluminum loading ramp provided to the lessee will be left on the
      premises

    


    
      	
              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 subject to Lessee'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 Lease and is not otherwise in default
      hereunder. If 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.

    


    (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 10 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.

    


    


    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    


    (a)
      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. ch. 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, fees, taxes, insurance or expenses that Lessee is
      required to pay under this Lease and shall not cure such failure within Ten
      (10)
      days after having been given written notice of non-payment. If payment is made
      of all rent, late fees, and attorneys' fees and costs (including all sums due
      to
      the date of the cure) prior to Ten (10) 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 shall make an assignment for the benefit of
      creditors.

    


    (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;

    


    


    


    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    


    (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 Lessee'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

    


    


    


    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    


    (j)
      The
      Lessor shall have the right to recover from Lessee any and all of the following:
      Airy 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 improvements 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.

     

    (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;

     

    (1)
      If
      the net proceeds 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 any 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 tinder 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.

    


    (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 created 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
      are 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.

    


    


    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    


    (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 rent 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 condemnor.

    


    (d)
      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
      hereunder, without first requiring that any action or

    


    
      	
              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 $10,000.00 in any one occurrence, or the intentional
      acts of Lessor, and is not covered by insurance.

    


    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 Lessee 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 may 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.

    


    


    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    


    (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 are paid to or for the account
      of Lessor to be made available to Lessee to be applied toward the cost
      thereof.

    


    (d)
      If
      Lessor is not required to rebuild under subsection (a) and elects not to rebuild
      under subsection (b), and Lessee is not required to rebuild under subsection
      (c), Lessee shall have fifteen (I5) 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
      $20,000.00, 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. If 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;

    


    (e)
      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.

    


    


    


    
      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

    


    
      	
              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 any
                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
      namedinsured:

    


    1)
      Commercial general liability insurance with a limit of not less than One Million
      Dollars ($1,000,000.00) 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.

    


    (b)
      No
      insurance required by this Section shall have a deductible in excess of $
      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 limi he liability of Lessee pursuant
      to
      this Lease.

    


    


    


    
      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

    

    


    
      	
              19.

            	
              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 therefore and evidence of such loss.

    


    
      	
              20.

            	
              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, fees 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
                any part thereof during the Term (all of which are herein called
                "Taxes").
                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.

            


    

    


    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 not shared with another tenants. this Premise totals 100% of the area
      that is assessed the County Assessor for property taxes., Lessee is responsible
      for 100% of the total assessment .

    


    
      	
              21.

            	
              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.

            


    

    


    
      	
              22.

            	
              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 tortuous act or failure to act, by Lessee or Lessee's
      agents in or about the premises.

    


    


    
      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

    

    


    (b)
      Limitation on Lessor's Liability: Release of Trustees, Officers and
      Partners 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
      $500,000.00. 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 by 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.

    


    
      	
              23.

            	
              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 was
                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

            


    

    


    
      	
              24.

            	
              Surrender
                of 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 Lease or a surrender of the premises without Lessor's express written
      consent.

    


    
      	
              25.

            	
              Assignment,
                Sublease or License, Lessee 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.

            


    

    


    


    
      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

    


    
      	
              26.

            	
              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.

            


    

    


    
      	
              27.

            	
              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 Lessee
                and shall not exceed in size of the face of the east side of the
                existing
                Awning.

            


    

    


    
      	
              28.

            	
              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 Coating (HPC)

            


    

    14788
      South Heritagecrest Way

    Bluffdale,
      Utah 85065

     

    or
      to
      such other address as a party may specify by like notice. A notice is deemed
      properly 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.

    


    


    
      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

    

    


    
      	
              30.

            	
              Waiver
                of Right. No failure on the part of either party to enforce
                any covenant or provision herein contained, nor any waiver of any
                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.

            


    

    


    
      	
              31.

            	
              Attorney'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.

            


    

    


    
      	
              32.

            	
              Liens,
                Lessee shall keep all of the premises and every part thereof and
                all
                buildings and other improvements at any time located thereon free
                and
                clear of any and all mechanic's, materialman'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 any kind incurred by Lessee.
                Lessee
                shall at all times promptly and fully pay and discharge any and all
                claims
                on which any such lien may or could be based, and to indemnify 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 so, provided Lessee
      shall first place funds into escrow in 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 and/or other
      financial arrangement sufficient to assure payment of the claim or
      lien.

    


    
      	
              33.

            	
              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.

            


    

    


    
      	
              34.

            	
              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.

            


    

    


    
      	
              35.

            	
              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.

            


    

    


    
      	
              36.

            	
              Lease
                Binding, Upon Heirs, Executors, Administrators, Successors, and Assigns
                of
                Lessor
                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, administrators,
                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.

            


    

    


    


    
      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

    

    


    
      	
              37.

            	
              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.

    


    
      	
              38.

            	
              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.

            


    

    


    
      	
              39.

            	
              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.

            


    

    


    
      	
              40.

            	
              Hazardous
                Materials. Lessee agrees that it shall not cause or permit
                any Hazardous Material containing asbestos on or into the premises
                this is
                absolutely prohibited. Lessee also agrees, it represents and warrants
                that
                it shall not incorporate or permit any Hazardous Material on the
                premise
                during the term of this lease, that has not been approved or explained
                to
                Bluffdale City when acquiring its Conditional use permit. Or any
                governmental permits to use such Material under any precaution they
                may
                require.

            


    

    


    
      	
              41.

            	
              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 without 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.

            


    

     

    


     

    


    


    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

    


     

    Lease
      Purchase OptionPage 16

    


    DATED
      this 9th day of June, 2006.

    


    
      	
              LESSOR:

            	
              LESSEE:

            
	
              Remco
                Management, LLC.

              A
                Utah limited liability company

            	
              High
                Performance Coatings

              A
                Oklahoma Corporation

            
	 	 
	 	 
	
              By:
                /s/ Ron
                Mast                          
                

            	
              By:
                /s/ Terry R.
                Holmes                         
                

            
	
              Ron
                Mast

            	
              Terry
                R. Holmes

            
	
              Its:
                Managing Member

            	
              Its:
                President

            


    

    


    


    


    


    


    


    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    


    Remco
      Heritage Park 114 LLC

    Lease
      Purchase Option

     

     

    June,
      2006

    


    Lessee,
      has been given this offer to purchase the Property located at 14788
      Heritagecrest Way. Bluffdale Utah 84065 The Purchase option will be as follows,
      The project is known as the Remco Heritage Park 114 LLC.

    


    
      
        	
                 

              	
                •

              	
                
                  The
                    Purchase Price will be at $98.00 per Square foot Based on 14400
                    Sf.

                

              


      

       

    

    
      	
               

            	
              •

            	
              $1,411,200.00

            


    

    


    •  
       Pryor to the end of a 24 month period June 30, 2008 30% of the base
      lease payments $ 52,617.00 will be applied towards the 15% down payment needed
      to close on the purchase of the property and is to be used only at the time
      of
      closing the purchase contract.

    


    •   
      This Purchase Option must be exercised in written form by the Lessee
      no
      sooner than 30 days Pryor to June 30, 2008 date with no exception.
      Notifying of their intent to Purchase. And the closing date will be set and
      agreed on by both party's no later than 30 days thereafter. Buyer to pay all
      closing costs.

    


    •    
      Note! If this Purchase Option is not exercised by the lessee High
      Performance Coatings (HPC ) there will be no equity accrued on
      this property and this Option is not Transferable to anyone other than the
      Lessee so named and if the option is not exercised. the lease will then
      continue on as written.

     

    •   
       Lessor agrees to carry a Purchase contract at a rate of 8.5%
      percent for a period of 30 years with a 15 year call. Note! If the trust deed
      note, is paid off sooner than a five year period, all rebates of lease payments
      given at time of closing against the down payment will be taken back and
      re-added back to the contract price, as a
pre-payment
      penalty.

     

    
       

       

      /s/
        Ron
        Mast                                 


      Ron
        Mast

       

      /s/
        Terry R.
        Holmes                      


      Terry
        R.
        Holmes

       

    

     

     

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