Document:

Exhibit10.8ClintonPropertyManagementAgreement

PROPERTY MANAGEMENT AGREEMENT
(Rudgate Clinton)

This PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into this 14th day of November, 2012 (the “Effective Date”), among RUDGATE CLINTON SPE, LLC, a Delaware limited liability company (“RC SPE”), RUDGATE CLINTON ESTATES SPE, LLC, a Delaware limited liability company (“RC Estates SPE,” and together with RC SPE, the “Owner”), and SUN HOME SERVICES, INC., a Michigan corporation (“Manager”).

RECITALS

A.    Owner is the owner of that certain manufactured housing community known as Rudgate Clinton, which is further described on the attached Exhibit A, including, without limitation, land, easements, buildings, structures, improvements, manufactured home sites, fixtures attached to or used at the property, parking, facilities, walkways, ramps, machinery, equipment, goods, licenses, permits and franchises issued with respect to the use, occupancy, maintenance or operation or the property, and all other items and rights now or hereafter belonging to Owner and used in any manner and in relation thereto (the “Property”).

B.    Owner and Rudgate Manor SPE, LLC, a Delaware limited liability company (“RM SPE” and together with Owner, the “Senior Loan Borrowers”), have obtained from Ladder Capital Finance LLC, (the “Senior Lender”) a loan (the “Senior Loan”) secured by first mortgages on the Property and that certain manufactured housing community owned by RM SPE (the “Rudgate Manor Owner”) known as Rudgate Manor (“Rudgate Manor”), pursuant to that certain Loan Agreement dated November 15, 2012 (the “Senior Loan Agreement”) among the Senior Loan Borrowers and the Senior Lender.

C.    Rudgate Village Holdings, LLC, a Michigan limited liability company (“RV Holdings”), is the sole member of RM SPE, Rudgate Clinton Holdings, LLC, a Michigan limited liability company (“RC Holdings”), is the sole member of RC SPE, and Rudgate Clinton Estates Holdings, LLC, a Michigan limited liability company (“RC Estate Holdings,” and together with RV Holdings and RC Holdings, the “Mezzanine Borrowers”), is the sole member of RC Estates SPE.

D.    The Mezzanine Borrowers have obtained from Sun Rudgate Lender LLC (the “Mezzanine Lender”) a mezzanine loan (the “Mezzanine Loan”) secured by, among other things,  their respective membership interests in the Owner and Rudgate Manor Owner, pursuant to that certain Mezzanine Loan Agreement, dated November 14, 2012 (the “Mezzanine Loan Agreement”) among the Mezzanine Borrowers and the Mezzanine Lender.

E.    Owner desires to (i) engage and appoint Manager to perform the property management and leasing services more particularly described in this Agreement, and (ii) engage and appoint Manager to act as asset manager of the Property and to perform the asset management services more particularly described in this Agreement, and Manager desires to accept such engagement and appointment, all upon and subject to the terms and conditions hereinafter set forth.

F.    Manager and the Rudgate Manor Owner have entered into a Property Management Agreement dated the date hereof (the “Rudgate Manor Management Agreement”) under which the Rudgate Manor Owner has engaged Manager to perform property management, leasing and asset management services with respect to Rudgate Manor on terms substantially the same as those set forth in this Agreement.  

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth below, Owner and Manager agree as follows:

1.        Appointment of Manager. Owner hereby appoints Manager as the exclusive managing and leasing agent for the Property, and as Owner's agent to perform asset management services and otherwise coordinate ownership activities for the Property, and Manager hereby accepts such appointment, each upon and subject to the terms and conditions set forth in this Agreement.  Manager shall be deemed to be an independent contractor and no partnership or joint venture relationship between Owner and Manager is created or is intended by this Agreement.

2.        Effective Date; Term.  Except as otherwise set forth in Section 8 herein, this Agreement shall commence on the date hereof and continue until the tenth anniversary of the date of this Agreement.

3.        Manager's Duties and Powers as Property Manager.

General Scope.  Manager shall manage, coordinate and supervise the proper conduct of the business and affairs pertaining to the operation, maintenance and management of the Property (all such activities being hereinafter collectively referred to as “Management Activities”), consistent with the same standards and practices Manager employs in connection with managing properties for Sun Communities Operating Limited Partnership and its affiliates (the “Applicable Standards”). Except as otherwise specifically provided in this Agreement, Manager shall have full control and decision-making authority over the operation, maintenance and management of the Property. Manager shall have such responsibilities, and shall perform and take, or cause to be performed or taken, all such services and actions customarily performed or taken by managing agents of property of similar nature, location and character to that of the Property as shall be necessary or advisable for the proper conduct of the Management Activities, including, without limitation, the duties and powers set forth in Sections 3(b) through 3(l) below.  Unless otherwise specifically provided in this Agreement, all services and actions which Manager is required or permitted to perform or take, or cause to be performed or taken, under this Agreement in connection with the Management Activities shall be performed or taken, as the case may be, for and on behalf of Owner and at Owner's sole expense including, without limitation, Manager's travel expenses, Manager's on-site personnel, including the property manager, and Manager's contracting with third parties for certain services as provided for herein. All Property Revenue (as defined in Section 3(c) below) shall be made available to Manager to be used in conducting the Management Activities. If, in the judgment of Manager, such Property Revenue is not sufficient to permit the Manager to conduct the Management Activities, Owner may, but shall not be required to, contribute cash in an amount equal to any such shortfall to permit the Manager to conduct the Management Activities.  In no event shall Owner be deemed 

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to be in default under this Agreement in the event Owner does not contribute cash to fund any such shortfalls.  To the extent Owner does not elect to so contribute cash to make up any such shortfall, and Manager reasonably determines that such funds are needed in order for Manager to perform the Management Activities in accordance with Applicable Standards, the Owner shall be required to cause the Mezzanine Borrowers to request additional advances under the Mezzanine Loan to fund such shortfalls and to the extent such Mezzanine Borrowers receive any additional advances under the Mezzanine Loan to fund such shortfalls, Mezzanine Borrowers shall cause such funds to be contributed to Owner and then funded to Manager to make up any remaining shortfall or Owner shall authorize or cause Mezzanine Borrowers to authorize Mezzanine Lender to cause the additional advance to be funded directly to Manager. 

(a)        Budget; Reconciliation.  Manager shall cause to be prepared on an annual operating budget (the "Operating Budget") for the operation, maintenance, repair and leasing of the Property in accordance with the Applicable Standards for the immediately succeeding calendar year. Manager shall deliver a copy of the Operating Budget to Owner at Owner's written request.  

(b)        Rent and Collections.  Manager shall endeavor in accordance with the  Applicable Standards to collect from all persons and/or entities occupying or using space in the Property (individually a “Tenant” and collectively “Tenants”) all fixed, based and minimum rent and all other amounts payable by such Tenants, including, without limitation, taxes and electricity or other utility services, if applicable (all such fixed, base or minimum rents and other amounts, if any, being sometimes hereinafter collectively referred to as “Rent”) under their respective leases or license, occupancy or similar agreements (individually a “Lease” and collectively “Leases”), and in connection therewith, shall prepare and deliver to Tenants all “late payment,” default and other appropriate notices, requests, bills, demands and statements, including notices of taxes, electricity and other utility services increases.  Manager may retain counsel, collection agencies and such other persons and firms as Manager shall deem appropriate or advisable, to enforce by legal action the rights and remedies of Owner against any Tenant in default in the performance of its obligations under the Lease and shall be entitled to utilize “Property Revenue” (as defined below) in order to pay all costs and expenses incurred in connection therewith.  In the event a portion of any Rent received by Manager represents such Tenant's installment payment towards its manufactured home, Manager shall cause such installment payment to be paid to holder to the installment contract for such manufactured home.  On the Effective Date, Manager and Owner shall make the following adjustments to Property Revenue:

(i)          Real estate taxes and personal property taxes which are a lien upon or levied against any portion of the Project prior to the Effective Date and which become delinquent prior to the Effective Date (other than current taxes), and all installments of special assessments levied on any portion of the Project prior to the Effective Date and which become delinquent prior to the Effective Date, shall be paid by Owner prior to the Effective Date.  Current real estate taxes, current installments of special assessments and current personal property taxes levied against any portion of any Project paid by Owner and applicable to the period after the Effective Date shall be prorated and adjusted between the parties on the due date basis of the taxing authority (it being agreed such taxes are payable in advance) and the portion allocable to the period on and after the Effective Date shall be paid by Manager to Owner on the Effective Date.

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(ii)          The amount of all unpaid water and other utility bills for the Project which are not directly billed to the tenants of the Project, and all other operating and other expenses incurred with respect to the Project relating to the period prior to the Effective Date, shall be paid by Owner on or prior to the Effective Date or, if not paid, as soon as possible after Closing following receipt of an invoice therefor and if prepaid by Owner, such amounts shall be reimbursed by Manager to Owner on the Effective Date.  In the event water is submetered and billed to the tenants, then the company completing such submetering shall continue to bill such tenants for the water services utilized through the date of Closing and shall remit all amounts received to the Owner as and when received for periods through the Effective Date.  In the event that Manager receives any payments from residents of the Projects which are payments for water bills for periods through the Effective Date, Manager shall promptly remit such amounts to Owner as and when received.

(iii)          Charges under service, utility, supply, maintenance and employment contracts and agreements and all other continuing contractual obligations affecting any Owner or the ownership, operation or development of any Project, and all amendments thereto and which will not be terminated as of the Effective Date (the “Project Contracts”) attributable to the period prior to the Effective Date shall be paid by Owner prior to the Effective Date, or, if not paid, the amount due shall be paid by Owner to Manager on the Effective Date and if prepaid by Owner, such amounts shall be reimbursed by Manager to Owner on the Effective Date.

(iv)          All prepaid rental and other revenues collected up to the Effective Date which are allocable to the period from and after the Effective Date shall be Property Revenue and as such paid by Owner to Manager for application in accordance with Section 3(d) below.  Current resident rents shall be prorated and adjusted as of the date of Closing based upon the actual number of days in the month of Closing with Manager being paid credited for rents on the date of Closing.  All rental and other revenues actually collected by Manager attributable to rent due for such month of Closing and received by Manager within sixty (60) days following the Effective Date, shall be prorated between Owner and Manager based on the number of days in such month with Owner receiving rents from the first (1st) day of such month through the Effective Date and with Manager receiving such rents from the Effective Date through the last day of the month.  Except as provided in the preceding paragraph, to the extent Manager collects, within one hundred eighty (180) after the Closing, any rental or revenues allocable to the period prior to the Effective Date, Manager shall pay the same to Owner and Manager shall use its good faith efforts to collect all such rent or revenues allocable to the period prior to the Effective Date, but Manager shall not be required to commence litigation or institute evictions with respect to such tenants; provided, however, and except as otherwise set forth above, Manager is assuming no obligation whatsoever for the collection of such rentals or revenues and all rentals and revenues collected subsequent to the Effective Date shall always, in the first instance, be applied first to the most current rentals and revenues, if any, then due under the tenant leases or otherwise.  Further, Owner shall not have the right to seek collection, through litigation or otherwise, of unpaid rent from any person while they remain a tenant of the Property, nor shall Owner institute any eviction or lockout proceedings against any residents to recover delinquent rents.  Owner shall retain one hundred (100%) percent of the right to receive any past due rents with respect to residents who are no longer residents of the Property. 

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(v)          An amount equal to all expenses of the Property which were paid prior to the Effective Date and for which Manager will benefit after the Effective Date including, without limitation, annual license and permit fees, shall be paid by Manager to Owner on the Effective Date, and an amount equal to all expenses of the Property which were incurred prior to the Effective Date and are due or paid after the Effective Date shall be paid by Manager from Project Revenues. 

(vi)          All compensation, fringe benefits and other amounts due the employees of any Owner or any manager of the Property for the period prior to the Effective Date, whether as hourly pay, salaries, overtime, bonus, vacation or sick pay, severance pay, pensions or otherwise, and all amounts due for the payment of employment taxes with respect thereto, shall be paid by Owner on or prior to the Effective Date, or as soon as reasonably possible following the Effective Date.

(vii)          Manager acknowledges and agrees that Owner may have entered into certain cable agreements prior to the date hereof and in the event Owner received any door fees or lump sum payments with respect to such cable agreements, such amounts shall be Owner' sole and exclusive property and shall not be prorated and in no event shall Manager receive a credit with respect to any such door fees or lump sum payments.

(c)      Property Revenue after the Effective Date.  From and after the Effective Date, each month, and except as otherwise set forth above, Manager shall apply the Rent so collected and any and all other revenue pertaining to the Property from whatever source (together with Rent, “Property Revenue”) as follows: 

(i)        First, to the payment of all operating and other expenses incurred in connection with the Property in order to manage the Property in accordance with the Applicable Standards, which are not otherwise payable by third parties, as reasonably determined by the Manager, including, but not limited to, all expenses incurred by Manager in performing its obligations under this Agreement, all capital expenditures, the cost of maintaining the Property, any and all repair, maintenance and other obligations under any Lease, the cost of all operation, maintenance, improvement, protection, preservation, display, marketing, leasing or other activities on or with respect to the Property, including without limitation, real estate taxes, insurance premiums and assessments (collectively, the “Operating Expenses”).  Operating Expenses shall also include, without limitation, all costs and expenses incurred by Owner and/or Manager related to corporate annual registration payments, resident agent fees, bank fees, independent director fees, loan servicing and related costs, expenses and fees, accounting fees and other costs and expenses incurred as a result of reporting requirements imposed under any mortgage loans (in excess of those incurred by Owner in the absences of such requirements) and all other similar excess costs and expenses incurred in order to comply with the requirements of any mortgage loans.  In the event that Property Revenue collected for any month is insufficient to pay that month's Operating Expenses in full, the Owner shall be required to cause the Mezzanine Borrowers to request additional advances under the Mezzanine Loan to fund such Operating Expense shortfalls and to the extent such Mezzanine Borrowers receive any additional advances under the Mezzanine Loan to fund such shortfalls, Mezzanine Borrowers shall cause such funds to be contributed to Owner and then funded to Manager 

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to make up any remaining shortfall or Owner shall authorize or cause Mezzanine Borrowers to authorize Mezzanine Lender to cause the additional advance to be funded directly to Manager.

(ii)        Second, to the payment of the debt service obligations of the Senior Loan Borrowers to the Senior Lender, under the Senior Loan Agreement. It is acknowledged and agreed that a portion of the revenue from Rudgate Manor will also be used to repay such debt service obligations pursuant to Section 3(c)(ii) of the Rudgate Manor Management Agreement.  It is further acknowledged and agreed that the obligation to apply Property Revenue to such debt obligations under this Section 3(c)(ii) shall be satisfied only when repayments under the Senior Loan Agreement pursuant to this Section 3(c)(ii) and Section 3(c)(ii) of the Rudgate Manor Management Agreement are in the aggregate sufficient to satisfy all such current debt service obligations, regardless of the relative portions of such repayments made under this Agreement and the Rudgate Manor Management Agreement.

(iii)        Third, to the payment of the Property Management Fees to Manager pursuant to the provisions of Section 7 of this Agreement, including any accrued and unpaid Property Management Fees.  

(iv)        Fourth, to the payment of that portion of the accrued and unpaid interest owing to the Mezzanine Lender under the Mezzanine Loan Agreement determined by applying a 2.0% annual interest rate on the principal outstanding under the Mezzanine Loan Agreement and the related promissory notes. It is acknowledged and agreed that a portion of the revenue from Rudgate Manor will also be used to repay the same amount of interest under the Mezzanine Loan Agreement pursuant to Section 3(c)(iv) of the Rudgate Manor Management Agreement.  It is further acknowledged and agreed that the obligation to apply Property Revenue to such portion of the Mezzanine Loan interest under this Section 3(c)(iv) shall be satisfied only when payments of such interest pursuant to this Section 3(c)(iv) and Section 3(c)(iv) of the Rudgate Manor Management Agreement are in the aggregate sufficient to satisfy the interest payment requirement set forth above, regardless of the relative portions of such repayments made under this Agreement and the Rudgate Manor Management Agreement.

(v)        Fifth, to the payment to the Owner of up to $135,000 per year, payable within thirty (30) days of the end of each calendar year of the Property, to permit the Owner to make distributions to its direct and indirect equity owners, including any accrued but unpaid amounts payable pursuant to this Section 3(c)(v) for prior years, less any unpaid amounts owed by Owner under the Guaranty executed by Owner in connection with that certain Asset Purchase Agreement (the “APA”) dated as of the date hereof between Owner, certain affiliates of Owner, and Sun Communities Operating Limited Partnership (“SCOLP”) which unpaid amounts which are not disputed by Owner shall be paid to SCOLP.  If the unpaid amounts under the Guaranty are disputed by Owner, Manager shall retain the disputed amount until instructed otherwise by a court of competent jurisdiction or in writing jointly by Owner and SCOLP or, if appropriate, interplead the disputed amount in to a court of competent jurisdiction, which the parties agree is the Oakland County, Michigan Circuit Court.  It is acknowledged and agreed that a portion of the revenue from Rudgate Manor will also be used to pay up to $135,000 per year to the Rudgate Manor Owner pursuant to Section 3(c)(v) of the Rudgate Manor Management Agreement.  It is further 

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acknowledged and agreed that, notwithstanding anything to the contrary in this Agreement or the Rudgate Manor Management Agreement, the aggregate payments to the Owner under this Section 3(c)(v) and to the Rudgate Manor Owner pursuant to Section 3(c)(v) of the Rudgate Manor Management Agreement shall not exceed $135,000, regardless of the relative amounts of the payments to Owner and the Rudgate Manor Owner hereunder and thereunder.

(vi)        Sixth, to the payment of the Asset Management Fees and reimbursable expenses to Manager pursuant to the provisions of Section 7 of this Agreement, including any accrued and unpaid Asset Management Fees and reimbursable expenses.  

(vii)        Seventh, to the establishment of such reserves as Manager shall deem necessary for the benefit of the Property in its sole and absolute discretion.

(viii)        Eighth, to the payment of all interest and principal payable to the Mezzanine Lender under the Mezzanine Loan Agreement and the related promissory notes that have not been previously paid under Section 3(c)(iv) of this Agreement, which payments shall be applied first to accrued and unpaid interest and then to unpaid principal. It is acknowledged and agreed that a portion of the revenue from Rudgate Manor will also be used to repay principal and interest under the Mezzanine Loan Agreement pursuant to Section 3(c)(viii) of the Rudgate Manor Management Agreement.  It is further acknowledged and agreed that the obligation to apply Property Revenue to such principal and interest repayment obligations under this Section 3(c)(viii) shall be satisfied only when repayments of Mezzanine Loan principal and interest pursuant to this Section 3(c)(viii) and Section 3(c)(viii) of the Rudgate Manor Management Agreement are in the aggregate sufficient to satisfy repay the Mezzanine Loan in full, regardless of the relative portions of such repayments made under this Agreement and the Rudgate Manor Management Agreement.

(d)        Employees.

(i)        To the extent Manager deems necessary for the conduct of the Management Activities, Manager shall hire personnel who, in each instance, shall be employees of Manager.  In no event shall Owner be obligated to hire any employees with respect to the Property.  The wages and benefits of any personnel hired by Manager shall be paid as provided in Section 3(c) above.  Manager shall direct and supervise all personnel hired by Manager in the performance of their duties and shall discharge all personnel whose employment Manager shall determine to be unnecessary or undesirable.  Manager shall use all reasonable efforts to minimize duplication of services among its employees and to avoid overtime whenever reasonably possible.  Manager shall select the personnel it employs to perform the Management Activities in accordance with the Applicable Standards.

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(ii)        Manager shall (A) pay all wages and other benefits properly payable to the employees hired by Manager under Section 3(d)(i) above, (B) maintain adequate payroll records, (C) remit to the proper authorities all required income and social security withholding taxes, unemployment insurance payments, workmen's compensation payments and such other amounts with respect to the wages and other benefits payable to such employees as may be required under applicable laws, together in each case with all required reports or other filings, and (D) obtain, maintain and administer all medical, disability and other insurance benefits and other fringe benefits as may from time to time be required under any union or other agreements or arrangements pertaining to Manager's employment, as the case may be, of such personnel.

(e)        Professionals and Contractors.  To the extent Manager deems necessary in connection with the Management Activities, Manager shall (i) identify and enter into contracts with architects, engineers, accountants, attorneys, tradesmen and other independent contractors qualified to perform services at the Property, and (ii) supervise the administration, and monitor the performance, of all work to be performed and services to be rendered under all such contracts.  Manager shall use due care in the selection of all such contracts.  Manager shall select all such professionals and other independent contractors in accordance with the Applicable Standards.  All contracts entered into in connection with the performance of the Management Activities shall be entered into in the name of Manager.

(f)        Maintenance.

(i)        Manager shall cause the Property, including common areas thereof, sidewalks, signs, parking lots and landscaping, to be maintained in good and safe condition.  In connection with such maintenance obligations, Manager shall be permitted to use the equipment and vehicles owned by Owner and located on the Property and Manager shall obtain insurance for such equipment and fund the costs thereof from Property Revenue.

(ii)        To the extent of the capacity of all equipment and systems located in or servicing the Property, Manager shall cause all such equipment and systems to be operated effectively and maintained in good repair.  Further, Manager shall cause to be provided or made available to Tenants those services which Owner is required to provide or to make available under Leases.

(iii)        Manager shall enter into such service and maintenance contracts as Manager shall reasonably deem necessary or appropriate for the operation and maintenance of the Property, including, but not limited to, the equipment and systems located in or servicing the Property, contracts for utilities, telephone service, landscape maintenance, rubbish removal, fuel, security, food vending and vermin extermination.  Manager shall purchase in reasonable quantities and at reasonable prices all supplies, materials, tools and equipment which Manager shall deem necessary or appropriate for the proper operation and maintenance of the Property.  Manager shall be required to utilize Property Revenue in order to pay any and all amounts due under such service and maintenance contracts, to pay for all utilities and to pay for all such supplies, materials, tools and equipment.

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(g)        Supervision of Tenants.
    
(i)        Manager shall plan and coordinate the moving in and moving out of Tenants in the Property in order to insure a minimum of disturbance to the operation of the Property and to other Tenants then occupying or preparing to occupy space in the Property.
    
(ii)        Manager shall receive and use all reasonable efforts to attend to and resolve any complaints, disputes or disagreements by or among Tenants.

(iii)        Manager shall take steps in accordance with the Applicable Standards to cause the Tenants' compliance with the terms and provisions of their respective Leases.

(iv)        Manager may terminate tenancies, evict Tenants and recover possession of premises occupied by them, and sue in Owner's name to recover Rents and other sums due, and shall be required to utilize Property Revenue in order to pay all actual attorneys' fees, court costs and legal expenses incurred in connection with such actions.

(h)        Insurance.  Manager shall procure and maintain in full force and effect at all times insurance coverage to adequately protect Owner and the Property, which shall be in compliance with the terms of the Senior Loan Agreement and the Mezzanine Loan Agreement, and in compliance with Applicable Standards and all insurance costs shall be funded by Manager by applying Property Revenue to all such insurance costs.  In all events, the insurance maintained by Manager with respect to the Property shall be consistent with the insurance obtained by Manager with respect to the other similar manufactured home communities managed by Manager or its affiliates in southeast Michigan.  In the event that the insurance maintained by Manager does not provide coverages for the benefit of Owner consistent with the insurance previously maintained by Owner, as evidenced by the certificate which is attached hereto as Exhibit B, then, in such event, Manager shall indemnify, defend and hold Owner harmless with respect to all liabilities incurred by Owner which would have been covered by such insurance in the event Manager had maintained such insurance set forth on Exhibit B and Sun Communities Operating Limited Partnership shall guarantee such indemnity for the benefit of Owner by joining in this Agreement as provided below.  Pursuant to Section 3(c), Manager shall pay all premiums for such insurance coverage as part of Operating Expenses. Additionally, Manager agrees and covenants to carry at all times Workers' Compensation and Employers' Liability coverage and shall be entitled to utilize Property Revenue to pay for such insurance coverages.  Manager shall be required to cause the Senior Lender to be identified as the loss payee with respect to any casualty insurance and shall be required to identify Owner as a named insured and any other parties reasonably designated by Owner as additional insureds on all insurance policies and shall provide Owner with copies of insurance certificates promptly upon request by Owner and shall provide Owner with such additional information regarding such insurance policies as Owner or Owner's insurance agent may reasonably request including, without limitation, copies of all such insurance policies. All insurance obtained by Manager shall state that the insurance shall be considered primary and non-contributory with any similar coverage maintained by additional insureds.  In the event that Manager self-insures any of the insurance coverage otherwise required to be obtained hereunder, then, in such event, Manager shall be directly liable to Owner for all amounts which would have otherwise receivable by Owner 

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under such insurance policies, Manager shall be permitted to utilize Property Revenues to fund this liability to Owner, and Sun Communities Operating Limited Partnership joins in this Agreement solely for the purpose of guarantying payment to Owner of all such amounts and payment of all insurance deductibles related to claims under such insurance policies and guarantying payment under the indemnity by Manager to Owner set forth above.

(i)        Advertising - Public Relations.  Manager may, but shall not be required to, hire such advertising services, place such advertisements and generally supervise and attend to all promotional matters pertaining to the operation of the Property as Manager shall deem advisable.

(j)        Litigation.  To the extent Manager in its sole discretion deems it prudent, Manager shall institute legal or other actions, in the name of the Owner, to enforce the collection of rent or other income from the Property, and to dispossess tenants or other persons from the Property, and to enforce the rules and regulations thereof; provided, however, Manager shall be obligated to utilize Property Revenue to pay all actual attorneys' fees, court costs and legal expenses incurred in connection with such actions including payment of any sums which may become due as a result of counter and/or cross-claims in such actions.  In the event that there are insufficient funds to pay any and all such actual attorneys' fees, court costs and legal expenses or other sums due in connection with such action(s), Manager shall be required to fund such shortfalls.  In connection with such legal action, Manager may engage legal counsel reasonably acceptable to Owner.  All such suits and proceedings shall be brought in the name of Owner but shall be handled in such manner as Manager directs; provided, however, in the event that a suit or proceeding could result in liability to Owner in excess of $10,000, then Owner shall be entitled to retain separate counsel to defend Owner in connection with such suit or proceeding.  Unless counsel engaged by Manager is prohibited from representing Owner due to a conflict of interest, Owner's separate counsel shall be engaged by Owner at its expense.  Owner shall be entitled to join in any settlements of any such suits and proceedings if the settlement could reasonably be expected to create a material liability for the Owner which is not required to be satisfied by the Manager, and any such settlements will require Owner's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  All legal expenses incurred in bringing such suits or proceedings or defending against all such suits and proceedings in conformance with this Section 3(j) (other than for Owner's separate counsel if no conflict exists) shall be reimbursable Operating Expenses to Manager.

(k)        Permits and Licenses.  Manager shall apply for, obtain and maintain, in the name of Owner, all licenses and permits required by any federal, state, county or municipal authority in connection with the management or operation of the Property.

(l)        Compliance.  In accordance with the Applicable Standards, Manager shall take or cause to be taken such actions in and about or affecting the Property as Manager shall deem advisable to comply with all legal requirements applicable to the Property.  Manager agrees not to permit the use of the Property for any purpose in violation of the Applicable Standards which may void any policy of insurance, which may render any loss thereunder uncollectible or which would be in violation of any governmental laws, regulations or restrictions.

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Manager shall, without Owner's prior written approval, take or cause to be taken any such actions without limitation as to cost if failure to do so would or might, in Manager's reasonable judgment, expose Owner or Manager to criminal liability.  Manager and Owner shall each promptly notify the other of any violation, order, rule or determination affecting the Property of any governmental authority or agency.

In accordance with the Applicable Standards, Manager shall take or cause to be taken such actions in and about or affecting the Property as Manager shall deem advisable to comply with all terms and conditions contained in any ground lease, space lease, mortgage, deed of trust or other security instrument affecting the Property.

Owner may, without Manager's prior written approval, take or cause to be taken any actions which reasonably must be taken by Owner to prevent Owner from incurring exposure for criminal liability or civil liability and all costs and expenses incurred by Owner in connection therewith shall be paid by Owner, unless Manager has failed to act in accordance with the Applicable Standards with respect to such matter, in which event the cost thereof shall be a reimbursable Operating Expense, to be repaid by Manager to Owner from the Property Revenue within thirty (30) days after written request therefor.

(m)        In the event Owner incurs any costs or expenses associated with the operation, maintenance, repair, replacement and/or management of the Property, Owner shall be reimbursed from Property Revenue for all such costs and expenses and Manager shall cause such reimbursement to occur within thirty (30) days after written request therefor by Owner.

(n)        All service, utility, supply, maintenance and employment contracts and agreements and all other continuing contractual obligations affecting Owner or the ownership, operation or development of the Project, and all amendments thereto and which will not be terminated as of the Effective Date (collectively, the "Project Contracts") are listed on the attached Exhibit C.  True, correct and complete copies of all Project Contracts have been delivered to Manager.  Those Project Contracts identified on Exhibit C as being assumed by Manager after the Effective Date and shall be the “Assumed Project Contracts”.  To Owner's knowledge, each Assumed Project Contract is in full force and effect, Owner has complied in all material respects with the provisions of each Assumed Project Contract to which it is a party and is not in material default under any such Assumed Project Contract and, to the actual knowledge of Owner, no other party to any Assumed Project Contract has failed to comply in any material respect with, or is in default under, the provisions of any Assumed Project Contract.  Prior to or at the Effective Date, Owner shall terminate (x) any contract of Owner not identified as Project Contracts, and (y) the contracts listed on Exhibit C (the “Non-Assumed Project Contracts”).  Prior to and after the Closing, Owner shall be responsible for all liabilities and obligations of Owner under the Non-Assumed Project Contracts, and shall indemnify and hold harmless Manager from all such liabilities and obligations.

4.        Manager's Duties and Powers as Leasing Manager.

(a)        Duties.  Manager shall use all reasonable efforts, consistent with normal and customary practices in the manufactured home leasing business, to negotiate and consummate Leases for all space in the Property available for rent from time to time, at rentals and 

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upon such other terms and conditions as shall be consistent with the relevant market for the Property, as reasonably determined by Manager.  Owner acknowledges that Manager and its affiliates own manage and operate other manufactured home communities in the vicinity of the Property.  In connection with such leasing activities, Manager shall be required to comply with the Applicable Standards and to comply in all material respects with all applicable laws, rules and regulations of all applicable governmental authorities and agencies which could reasonable be expected to expected to create a material liability for the Owner which is not required to be satisfied by the Manager hereunder.

(b)        Powers.  Subject to the terms and conditions of this Agreement, Manager shall have the power to:

(i)        negotiate on behalf of Owner, on such terms as may be designated by Owner to Manager from time to time, with respect to the rental of space at the Property, the extension or renewal of existing Leases and the modification or termination of Leases and other agreements pertaining to all of the above;

(ii)        prepare or cause to be prepared, using Manager's form of Lease, all new Leases and modifications or terminations of existing Leases; and

(iii)        authorize or provide for advertisements and other promotional activities, including, leasing plans and signs and circular matter, contemplated under the marketing and promotional program developed by Owner.

5.        Manager's Duties and Powers as Asset Manager. In connection with its appointment as asset managers hereunder, Manager shall perform the following services:

(a)    oversee the preservation of the assets and properties associated with the Property in an efficient and satisfactory manner, and all property management and leasing functions in connection with the Property;

(b)    review the financial performance of the Property;

(c)    handle the financial reporting and cash management requirements of Owner relative to the Property including, without limitation, all reporting and cash management requirements associated with the Senior Loan and/or Mezzanine Loan;

(d)    maintain proper books of accounts and other records with respect to Owner's interest in the Property;

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(e)     compile information relating to the Property as necessary for the preparation of tax returns by the Owner and provide such information to the tax return preparers and advisers designated by Owner not later than April 1st of each year;

(f)    handle all loan compliance procedures and reporting with the Senior Lender, the Mezzanine Lender and their successors and assigns;

(g)    investigate, select and manage relationships with accountants, legal counsel, property managers, brokers, investors, builders and developers, banks and other lenders in connection with the Senior Loan and the Mezzanine Loan, and others as necessary in connection with the business of Owner; and 

(h)    manage, on behalf of Owner, the collection and disbursement of funds derived from the Property, payment of the debts and fulfillment of the obligations of Owner as to the Property, and subject to the limitations set forth in this Agreement, handle, prosecute and settle any claims of Owner as to the Property.

In performing its asset management services under this Agreement, the Manager may from time to time call upon and utilize various facilities, personnel and support services of other persons including one or more affiliates of the Manager.  The Manager shall have the authority to execute agreements, contracts and other documents as asset manager pursuant to this Agreement to the extent such documentation is necessary or appropriate to carry out Manager's asset management responsibilities hereunder, and no separate approval or consent of Owner shall be required as to such documentation, as long as the execution of such documentation does not create any material adverse impact on Owner and does not violate the terms and conditions of the loan documents with respect to the Senior Loan and/or the Mezzanine Loan.

6.        Books, Accounts, Records and Remittances.

(a)        Books and Records.  Manager shall establish and maintain such books of account, records and other documentation pertaining to the operation and maintenance of the Property as Manager determines are customarily maintained by managing agents of Property similar in location and size to that of the Property. Owner and any representative of Owner shall have the right to inspect such records and audit any and all statements during all business hours, and make photocopies of same at Owner's expense and such right of inspection, audit and photocopying shall survive the expiration or termination of this Agreement.  

(b)        Operating Accounts.  Manager shall open and maintain an account or accounts separate from Manager's personal account (collectively, “Operating Accounts”), as Manager shall deem necessary, in a banking institution or institutions designated from time to time by Manager.  Manager shall deposit in the Operating Accounts all funds collected by Manager under this Agreement, and shall make withdrawal from the Operating Accounts, pursuant to Section 3(c) above.  

(c)        Security Deposits.  If and when required by law and/or Lease, Manager shall deposit in separate accounts all security deposits, if any, of Tenants.  Notwithstanding 

13

the foregoing, irrespective of whether Manager holds security deposits in a separate account, in all events, Manager shall be required to repay all security deposits collected by Manager to the Tenants (to the extent required by law and/or such Tenant's Lease) and Manager shall indemnify, defend and hold Owner harmless with respect to liabilities incurred by Owner as a result of any unpaid security deposits.

(d)        Year-End Reports.  As soon as practicable after the end of each Operating Year but in no event later than one hundred twenty (120) days after the end of each Operating Year, Manager shall prepare detailed statements of all receipts, expenses and charges pertaining to the operation and maintenance of the Property during the preceding Operating Year. Manager shall deliver such other reports as are created by Manager in accordance with the Applicable Standards or which are required to be prepared under any mortgage loan documents (which it may legally distribute to Owner in accordance with applicable law). Owner shall be responsible for the preparation of its own federal, state and local tax returns, including income and informational tax returns.

7.        Compensation 

(a)        Property Management Fees.  Manager shall be paid Manager's property management fee (the “Property Management Fee”) from Property Revenue for its performance of the Management Activities an amount equal to three percent (3%) of the Property Revenue actually collected by or for the account of Owner in each calendar month, or proportion thereof, during the term of this Agreement. Subject to the terms of Section 3(c) above, the Property Management Fee shall be payable monthly, on or about the 10th day of each calendar month, based upon Property Revenue actually collected during the immediately preceding month, and in accordance with Section 3(c) above. Manager shall be entitled to receive any accrued and unpaid Property Management Fees for prior months to the extent there is Property Revenue available to pay such accrued and unpaid Property Management Fee. If this Agreement is terminated and the effective date of such termination is a day other than the last day of any calendar month, the Property Management Fee earned by Manager for such month shall be prorated and adjusted based on the Property Revenue collected for such month.

(b)        Asset Management Fees and Reimbursement.  

(i)        Manager shall be paid Manager's asset management fees (the “Asset Management Fee”) from Property Revenue for its performance of its asset management services hereunder, an amount equal to four percent (4%) of the Property Revenue actually collected by or for the account of Owner in each calendar month, or proportion thereof, during the term of this Agreement. Subject to the terms of Section 3(c) above, the Asset Management Fee shall be payable monthly, on or about the 10th day of each calendar month, based upon Property Revenue actually collected during the immediately preceding month, and in accordance with Section 3(c) above.  Manager shall be entitled to receive any accrued and unpaid Asset Management Fees for prior months to the extent there is Property Revenue available to pay such accrued and unpaid Asset Management Fees. If this Agreement is terminated and the effective date of such termination is a day other than the last day of any calendar month, the Asset Management Fees earned by Manager 

14

for such month shall be prorated and adjusted based on the Property Revenue collected for such month.

(ii)        In addition, Manager shall be reimbursed from Property Revenue for all costs and expenses incurred by the Manager in connection with performing its asset management duties set forth in this Agreement; provided, however, the Manager shall not reimburse the Manager for any such asset management expenses related to the Manager's overhead and other internal expenses, personnel expenses of employees located at the Manager's home office and costs attributable to losses arising from criminal acts, gross negligence, willful misconduct or fraud by the Manager or the Manager's employees. 

8.        Termination.

(a)        Termination.  This Agreement may be terminated:

(i)        by the mutual written agreement of Owner and Manager; 

(ii)        by either Owner or Manager, if the entire Property is condemned or acquired by eminent domain; 

(iii)        by Manager, if Owner is in default of its obligations under this Agreement, which such default remains uncured for a period of thirty (30) days following receipt by Owner of written notice from Manager of such default, or for such longer period as may be reasonably necessary to cure the default if Manager is diligently pursuing a cure of such default; 

(iv)        by Manager, at any time on not less than 60 days' prior written notice to Owner;
(v)        by Manager, at any time, if the Rudgate Manor Management Agreement is validly terminated pursuant to Section 8(a)(iii) thereof. 

(vi)        by Owner, if Manager commits a fraud against Owner or a crime consisting of moral turpitude or in the event of embezzlement or any other felony which is likely to materially impact Owner.

(vii)        by Owner, to the extent Owner is required to terminate the Agreement as a result of the requirements of the Senior Lender or Mezzanine Lender;

(viii)        by Owner, if Manager is in material default of its obligations under this Agreement, which such default remains uncured for a period of thirty (30) days following receipt by Manager of written notice from Owner of such default provided however, if such default is not capable of cure within such thirty (30) day period, Manager shall have such additional time as may needed so long as Manager is diligently pursuing such default, such default will create a material adverse liability to Owner; provided, however, in the event Manager disputes that it has created such a default, this Agreement shall not be terminated by Owner until a court of competent jurisdiction has determined that Manager has in fact defaulted under the terms of this Agreement and Manager has failed to satisfied the judgment within sixty (60) days after it has become final 

15

and un-appealable. 

(b)        Upon the expiration of the initial term of this Agreement, in the event that Mezzanine Loan remains outstanding, and except as otherwise provided in Subsections 8(a)(vi), (vii) and (viii) hereof, Owner shall not replace the Manager with respect to the Property without first obtaining the prior written consent of the Mezzanine Lender and until such time as Owner has obtained such consent, Manager shall continue to operate the Property in accordance with the terms of this Agreement and shall be entitled to receive all amounts due hereunder including reimbursement of costs and expenses incurred during such extended management period.

(c)        Survival of Obligations.  Upon the expiration or termination of this Agreement, (i) Owner's appointment of Manager hereunder shall cease and terminate and, except as otherwise specifically provided hereunder, Owner and Manager shall have no further obligation or liability to the other, (ii) Manager shall no longer have any authority to represent Owner or take or cause to be taken any actions on Owner's behalf, and (iii) Owner shall remain liable to Manager to pay all Property Management Fees, Asset Management Fees and other fees, expenses and amounts payable to Manager hereunder which shall have accrued through the date of termination; provided, however, Owner's obligation to fund such amounts shall be limited to available net cash flow received from Property Revenue not otherwise used to pay Operating Expenses.  The provisions of this Section shall survive any such expiration or termination.

(d)        Continuation of Services.  In the event this Agreement is terminated as a result of actions taken by the Senior Lender and/or Mezzanine Lender, then, at the request of Owner, Manager shall continue to manage the Property until such time as a successor property management company and/or receiver has been appointed in order to insure a continuation of management services without interruption and, subject to the Senior Lender and/or Mezzanine Lender making sums available to pay Manager all sums due hereunder, Manager shall continue to have the right to be paid all fees due hereunder and to be reimbursed for all amounts due hereunder during such extended management period.

9.        No Encumbrance; Cooperation.  Owner agrees that during the term of this Agreement, neither Owner nor Manager shall, absent mutual consent:  (a) permit any liens to be placed upon the Property, other than to the Senior Lender under the Senior Loan Agreement and the Mezzanine Lender under the Mezzanine Loan Agreement; or (b) grant any easements, rights of way, surface oil or mineral rights, or other encumbrances.  Owner and Manager will, if required, or deemed reasonably necessary or desirable by both Owner and Manager, join and assist in the preparation and/or filing by Manager, the execution of all permits, applications, and other written requests, reports and documents, including, but not limited to, rezoning and site plan approval applications for easements, tax splits, challenges to or reduction of real estate taxes and any other documents necessary for Owner's use of the Property, and appear at zoning and site plan approval hearings.  Owner agrees not to hinder or object to any site plan approval applications submitted by or on behalf of Manager, which site plan approval application is intended to improve the value or operation of the Property in the reasonable opinion of Manager. 

16

10.        Indemnification.

(a)        Scope.

(i)        Subject to the limitations set forth in this Section 10(a)(i) below, Owner shall indemnify, defend and hold harmless Manager and its principals, officers, directors, shareholders, partners, employees and agents (individually and collectively, the “Owner's Indemnitees”) from and against any and all liabilities, claims, suits, damages, judgments, costs and expenses of whatever nature, including reasonable counsel fees and disbursements (collectively, “Damages”) incurred by reason of or arising out of Owner's breach of this Agreement, willful misconduct or bad faith.  Owner shall not be required to indemnify, hold harmless or reimburse Owner's Indemnitees with respect to any matter arising out of Manager's, Manager's officers' and/or directors' or employees' gross negligence, willful misconduct or fraud. Notwithstanding the foregoing, Owner's liability and obligation to indemnify Owner's Indemnitees under this Section 10(a)(i) shall be paid by the  Property Revenue only and otherwise shall be non-recourse to Owner.

(ii)        Manager shall indemnify, defend and hold harmless Owner and its principals, officers, directors, shareholders, members, partners, employees and agents (individually and collectively, the “Manager's Indemnitees”) from and against any and all Damages incurred by reason of or arising out of (A) Manager's breach of this Agreement, gross negligence, willful misconduct or bad faith, and (B) any injury to or death of any person(s), damage to property, loss or use of any property or otherwise in connection with the performance by Manager of Manager's obligations under this Agreement, (C) any claim, proceeding or suit involving an alleged violation by Manager, its agents or employers, of any law pertaining to (1) fair employment, fair credit reporting, rent control, payment of employment or other taxes which are the responsibility of Manager, or fair housing, including, but not limited to, any law prohibiting or making illegal discrimination on the basis of race, sex, creed, family status, age, color, religion, national origin or mental or physical handicap, or (2) any law pertaining to environmental matters, provided, however, Manager only shall be liable for the indemnity under this Section 10(a)(ii)(B)(2) if Manager, its agents or employees is finally adjudged to have violated any such law pertaining to environmental matters. Manager shall not be required to indemnify, hold harmless or reimburse Manager's Indemnitees with respect to any matter arising out of Owner's, Owner's officers', directors', members' or employees' gross negligence, willful misconduct or fraud, and (D) Manager's failure to fund any shortfall needed to pay for amounts due by Manager under this Agreement to the extent Manager is obligated to fund such amounts irrespective of whether Property Revenue is available.  Furthermore, Manager shall indemnify Owner against, all expenses incurred by Owner including, without limitation, actual attorneys' fees, court costs and legal expenses and any liability, fines, penalties or the like, in connection with any claim, proceeding or suit involving an alleged violation of law by Manager, its agents or employees or with respect to the payment of any employment or other taxes required to be paid by Owner and which are the responsibility of Manager or to be funded from Property Revenue.  Manager shall be permitted to utilize Property Revenues to fund its liability and obligation to indemnify Manager's Indemnities under this Section 10(a)(ii) hereof.

(b)        Conditions.  The obligation of Owner or Manager to indemnify, hold harmless and reimburse Manager's Indemnitees or Owner's Indemnitees, respectively, under 

17

Section 10(a) above are subject to the condition that Manager's Indemnitees or Owner's Indemnitees, as applicable, shall not take or fail to take any actions, including the prompt notification of the indemnitor or an admission of liability, which would bar Owner or Manager, as the case may be, from enforcing any applicable coverage under policies of insurance or would prejudice any defense of Owner or Manager, as the case may be, in any appropriate legal proceedings pertaining to any such matter or otherwise prevent Owner or Manager, as the case may be, from defending itself with respect to any such matter.

(c)        Survival.  The provisions of this Section 10 shall survive the expiration and any termination of this Agreement.

(d)        Release from Liability.  Each party hereby releases the other in respect of any claim (including a claim for negligence) that it might otherwise have against the other party for loss, damage or destruction with respect to its property by fire or other casualty occurring during the term of this Agreement if, and to the extent, covered under the fire insurance policy covering the Property or any other insurance policy carried by Owner or Manager.  Owner and Manager shall be named insureds under the fire and extended coverage, rent insurance and “all risk” insurance covering the Property, as well as any other insurance carried by Owner or Manager in respect of the Property.  The foregoing release shall not apply to the extent Manager self-insures for any of the insurance otherwise required to be carried by Manager under this Agreement.

11.        Timely Performance.  Owner and Manager shall each perform all of their respective obligations under this Agreement in a proper, prompt and timely manner.  Each shall furnish the other with such information and assistance as the other may from time to time reasonably request in order to perform its responsibilities hereunder.  Owner and Manager each shall take all such actions as the other may from time to time reasonably request and otherwise cooperate with the other so as to avoid or minimize any delay or impairment of either party's performance of its obligations under this Agreement.

12.        Assignment.

(a)        Manager's Permissible Assignments.  Manager may assign this Agreement or delegate its responsibilities hereunder to any entity controlled by Manager or any entity that controls or is under common control with Manager. Further, Manager may assign this Agreement or delegate its responsibilities hereunder as a part of any sale of all or substantially all of its assets.  Manager shall not otherwise assign this Agreement or delegate its responsibilities hereunder, except as contemplated by this Agreement, without the prior written consent of Owner, which consent shall not be unreasonably withheld or delayed.

(b)        Owner's Permissible Assignment.  Owner shall not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of Manager which consent may be withheld by Manager for any reason.

(c)        Assumption and Release.  Each permitted assignee of this Agreement shall agree in writing to personally assume, perform and be bound by all of the terms, covenants, conditions and agreements contained in this Agreement, and thereupon the assignor of this 

18

Agreement shall be relieved of all obligations hereunder except those which shall have accrued prior to the effectiveness of such assignment.

13.        Notices.  Any and all notices or other communications given under this Agreement shall be deemed duly served (i) when personally served; (ii) three (3) days after deposited in the U.S. certified mail, return receipt requested; (iii) upon receipt if sent by telephone facsimile with fax acceptance sheet verifying receipt; or (iv) one (1) day after being sent via “overnight” courier service, addressed to the parties at the following address:

If to the Owner:

Rudgate Clinton SPE, LLC
Attn:  Mr. Graham A. Orley
201 W. Big Beaver Road, Suite 720
Troy, MI  48084-5297
Fax:  (248) 689-2221

And:

Rudgate Clinton Estates SPE, LLC
Attn:  Mr. Graham A. Orley
201 W. Big Beaver Road, Suite 720
Troy, MI  48084-5297
Fax:  (248) 689-2221

And to:

Mr. Gregg L. Orley
40900 Woodward Avenue, Suite 130
Bloomfield Hills, Michigan  48304
Fax:  (248) 593-0323

With a required copy to:

Maddin, Hauser, Wartell, Roth & Heller, P.C.
28400 Northwestern Hwy., 3rd Floor
Southfield, MI  48034-1839
Attn: Mr. Lowell D. Salesin
Fax: (248) 359-6189

If to the Manager:

Sun Home Services, Inc.
Attn: Jeff Davidson
27777 Franklin Road, Suite 200
Southfield, Michigan 48034

19

Fax: (248) 208-2645

With a required copy to:

Jaffe, Raitt, Heuer & Weiss, P.C.
27777 Franklin Road, Suite 2500
Southfield, Michigan 48034
Attn:     Mr. Mark P. Krysinski
Fax: (248) 351-3082 

Any party may change its address for the giving of notices under this Agreement by delivering to the other party ten (10) days' written notice of such change of address.

14.        Governing Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of Michigan, without regard to conflicts-of-laws principles that would require the application of any other law.

15.        Compliance with the Law.  Manager, in fulfilling its obligations under this Agreement, shall comply with all applicable law.

16.        Government Orders.  In the event that any governmental agency, authority or department should order the repair, alteration or removal of any structure or matter in the Property and if after written notice of the same to Owner by such body or by Manager, Owner fails to authorize Manager or others to make such repairs, alterations or removal, Manager shall be released from any responsibility in connection therewith, and Owner shall be answerable to such body for any and all penalties and fines whatsoever imposed because of such failure on Owner's part.  Notwithstanding the foregoing, however, Manager is hereby expressly authorized and shall comply with any governmental agency, authority or department order promptly following receipt thereof and may do so without first obtaining Owner prior written consent and, subject to any limitation set forth herein, shall be entitled to be reimbursed for any and all costs and expenses incurred in connection therewith from Property Revenue.

17.        Subordination and Assignment Agreements.  Manager shall enter into such customary assignments and/or subordination agreements as may be requested by the Senior Lender and/or the Mezzanine Lender, all promptly after written request therefor.

18.           Attorneys' Fees.  Should either party retain an attorney to enforce any of the provisions hereof or to protect its interest in any manner arising under this Agreement, or to recover damages for the breach of this Agreement, then the non-prevailing party in any action agrees to pay to the prevailing party all reasonably costs, damages and expenses, including reasonable attorneys' fees expended or incurred in connection therewith.

20

19.        Waiver of Trial by Jury.  OWNER AND MANAGER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.  OWNER AND MANAGER REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

20.          Property Sale Restrictions.  Prior to any offer or sale of the Property, Owner shall comply with the following restrictions:

(a)     At least sixty (60) days prior to offering the Property for sale or soliciting offers for the sale of the Property, Owner shall give Manager written notice thereof, together with a summary of the material terms of the sale (a “Sale Notice”).  If Manager responds in writing to the Sale Notice within ten (10) days after the receipt thereof stating that it wishes to Purchase the Property upon the terms set forth in the Sale Notice, Owner and Manager shall have a period of thirty (30) days (“Negotiation Period”) within which to negotiate the terms of and execute a binding purchase and sale agreement for the Property.

(b)      If such an agreement is not executed within the Negotiation Period, or if Manager fails to timely respond to the Sale Notice, then for a period of six (6) months after the expiration of the Negotiation Period or Manager's failure to timely respond to the Sale Notice, as applicable, (the “Offer Period”) Owner, may offer the Property for sale and shall be permitted to sell the Property to a purchaser for the Property based upon terms no more favorable to Owner than the terms and conditions set forth in the Sale Notice.  In the event Owner intends to offer the Property on terms other than the terms and conditions set forth in the Sale Notice, then Owner shall again be required to provide Manager with a revised Sales Notice incorporating a summary of the modified terms of the sale.  If Owner intends to enter into a binding agreement with a purchaser for the sale of the Property (“Sale Agreement”) within the Offer Period, Owner shall give Manager written notice thereof accompanied by a copy of the proposed Sale Agreement pertaining to the sale of the Property (a “Third Party Sale Notice”).  For a period of ten (10) days thereafter, Manager shall have the right to enter into the Sale Agreement by written notice to Owner, in which event the Sale Agreement shall constitute a binding agreement between Owner and Manager, and the named purchaser under the Sale Agreement shall have no further rights or obligations thereunder.  If Manager does not enter into such Sale Agreement within such ten (10) day period, then Owner may sell the Property to the named purchaser pursuant to the Sale Agreement; provided, however, that any material modification of the Sale Agreement shall be considered a new Sale Agreement, which will entitle Manager to a new Third Party Sale Notice and the right to assume the obligation of the named purchaser within ten (10) days following the Manager's receipt of the new Third Party Sale Notice as aforesaid.  If a Sale Agreement is not entered into within the Offer Period, or Owner fails to close upon the sale of the Property pursuant to the Sale Agreement, then Owner may not sell the Property, offer the Property for sale or solicit offers for the sale of the Property without giving Manager a new Sale Notice, in which event the provisions of this Section 20 shall be applicable with respect to such new Sale Notice. 

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(c)        At Manager's request, Owner shall join in the execution and acknowledgement of a memorandum setting forth the provisions of this Section 20, which may be recorded.
21.        Miscellaneous.  This Agreement embodies the entire agreement and understanding between the parties and supersedes all prior agreements and understandings relating to the management of the Property.  This Agreement shall be construed without regard to any presumption or other rule requiring construction against the party causing this Agreement to be drafted.  This Agreement may not be modified, amended or terminated, nor may any term or provision hereof be waived or discharged, except by instrument signed by Owner and Manager.  All of the terms of this Agreement, whether so expressed or not, shall be binding upon the respective successors and permitted assigns of the parties hereto and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.  If any of the provisions of this Agreement shall to any extent be invalid or unenforceable, the remaining provisions of this Agreement shall not be affected thereby and every provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.  The headings of this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Any references in this Agreement to any one gender, masculine, feminine or neuter, includes the other two, and the singular includes the plural, and vice versa, unless the context otherwise requires.

[Signatures on following page]
    

22

IN WITNESS WHEREOF, the parties have executed this Property Management Agreement as of the day and year first above written.

MANAGER:

SUN HOME SERVICES, INC.,
a Michigan corporation
                        
By: /s/ Jonathan M. Colman
Name:  Jonathan M. Colman
Title:  Executive Vice President

                    

23

OWNER:

RUDGATE CLINTON SPE, LLC, a Delaware limited liability company

By:     Rudgate Manager, LLC, its Manager
By:     /s/ Graham A. Orley                    
Graham A. Orley, Authorized Signatory    
And
By:     /s/ Gregg L. Orley                    
Gregg L. Orley, Authorized Signatory

RUDGATE CLINTON ESTATES SPE, LLC, a Delaware limited liability company

By:     Rudgate Manager, LLC, its Manager
By:     /s/ Graham A. Orley                    
Graham A. Orley, Authorized Signatory    
And
By:     /s/ Gregg L. Orley                    
Gregg L. Orley, Authorized Signatory

24

JOINDER

THE UNDERSIGNED hereby joins in this Agreement solely for purposes of agreeing to fund the obligations to the extent set forth under Section 3(i) hereof.

SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP, a Michigan limited partnership

By:   Sun Communities, Inc., its General Partner

By: /s/ Jonathan M. Colman                    
Name: Jonathan M. Colman
Title: Executive Vice President

    

Exhibit List

A Legal Description
B Existing Rudgate Insurance
C Project Contracts, Assumed Project Contracts, and Non-Assumed Project Contracts

25Lease Agreement

EXHIBIT 10.13

		
	

	

 

	2400 North Commerce Parkway

Suite 405

Weston. FL 33326

954.453.5660

www dukerealty com

	

 

		
	October 1, 2012 

	VIA UPS OVERNIGHT DELIVERY

Mr. Alan Sandler

Vice-President

Puradyn Filter Technologies Incorporated

2017 High Ridge Road

Boynton Beach, Florida 33426

Re:  LEASE by and between DUKE PGC AT QUANTUM 1-9, LLC, a Delaware limited liability company ("Landlord") and PURADYN FILTER TECHNOLOGIES INCORPORATED, a Delaware corporation ("Tenant").

Dear Mr. Sandler:

Enclosed please find one (1) fully executed original counterpart of the above referenced document for your files.

If I can be of further assistance, or if you have any questions, please do not hesitate to call. 

Sincerely,

DUKE REALTY CORPORATION

Ana M. Hernandez

Property Administrator

2400 North Commerce  Parkway

Suite 405

Weston, FL 33326

Main: 954-453-5660

P: 954-453-5265

F: 954.453.5695 

ana.hernandez@dukerealty.com 

www.dukerealty.com

Cc: File

LEASE

THIS LEASE (the "Lease") is executed this 27 day of September, 2012, by and between DUKE PGC AT QUANTUM 1-9, LLC, a Delaware limited liability company ("Landlord"), and PURADYN FILTER TECHNOLOGIES INCORPORATED, a Delaware corporation ("Tenant").

ARTICLE 1 - LEASE OF PREMISES

Section 1.01.  Basic Lease Provisions and Definitions.

(a) 

Leased Premises (shown outlined on Exhibit A attached hereto): a portion of the building commonly known as Gateway Center 7 (the "Building"), located at 2017 High Ridge Road, Boynton Beach, Florida 33426, within Gateway Center at Quantum (the "Park").

(b) 

Rentable Area: approximately 25,541 square feet. 

(c) 

Tenant's Proportionate Share: 31.87%.

(d)

Minimum Annual Rent:

					
	 
	Year 1

	$

	120,255.50

	 

	 
	Year 2

	$

	148,635.84

	 

	 
	Year 3

	$

	153,094.92

	 

	 
	Year 4

	$

	157,687.80

	 

	 
	Year 5

	$

	162,418.44

	 

	 
	Year 6

	$

	167,290.92

	 

(Note: Minimum Annual Rent does not include applicable Florida State Sales Tax, or Additional Rent, which sums shall be the sole responsibility of Tenant.)

(e)

Monthly Rental Installments:

					
	 
	Month 1 - 2

	$

	0.00

	 

	 
	Months 3 - 12

	$

	12,025.55

	 

	 
	Months 13 - 24

	$

	12,386.32

	 

	 
	Months 25 - 36

	$

	12,757.91

	 

	 
	Months 37 - 48

	$

	13,140.65

	 

	 
	Months 49 - 60

	$

	13,534.87

	 

	 
	Months 61 - 72

	$

	13,940.91

	 

(Note: Monthly Rental Installments do not include applicable Florida State Sales Tax, or Additional Rent, which sums shall be the sole responsibility of Tenant.)

(f) 

Intentionally Omitted.

(g) 

Commencement Date: August 1, 2013. 

(h) 

Lease Term: Six (6) years.

(i) 

Security Deposit: $34,970.00.

(j)

Broker(s): Duke Realty Services, LLC and CBRE, Inc. representing Landlord, and

Flagler Real Estate Services, LLC representing Tenant.

(k) 

Permitted Use: General office, warehousing and storage of oil filtration systems and related purposes.

(l) 

Address for notices and payments are as follows: 

Landlord:

Duke PGC at Quantum 1-9, LLC

c/o Duke Realty Corporation

Attn.: South Florida Market- V.P., Asset Mgmt. & Customer

Service

2400 North Commerce Parkway, Suite 405

Weston, FL 33326

With Payments to: 

Duke PGC at Quantum 1-9, LLC

c/o Duke Realty Corporation

75 Remittance Drive, Suite 1477

Chicago, IL 60675-1477

Tenant: 

Puradyn Filter Technologies Incorporated

2017 High Ridge Road

Boynton Beach, Florida 33426

(m) 

Guarantor: None.

EXHIBITS 

Exhibit A: 

Leased Premises

Exhibit B: 

Intentionally Omitted

Exhibit C: 

Letter of Understanding

Exhibit D: 

Rules and Regulations

Exhibit E:

Offer Space

 

Section 1.02. Lease of Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Leased Premises, under the terms and conditions herein, together with a non-exclusive right, in common with others, to use the following (collectively, the "Common Areas"): the areas of the Building and the underlying land and improvements thereto that are designed for use in common by all tenants of the Building and their respective employees, agents, customers, invitees and others.

ARTICLE 2 - TERM AND POSSESSION

Section 2.0 I. Term. The Commencement Date and Lease Term shall be as set forth in Sections 1.01(g) and 1.01 (h) above.

Section 2.02. Condition ofthe Leased Premises.

(a) 

As Is Condition. Tenant has personally inspected the Leased Premises and accepts the same "AS IS" without representation or warranty by Landlord of any kind.

2

(b) 

Letter of Understanding.  Promptly following the Commencement Date, Tenant shall execute Landlord's Letter of Understanding in substantially the form attached hereto as Exhibit C and made a part hereof, acknowledging, among other things, that Tenant has accepted the Leased Premises. If Tenant takes possession of and occupies the Leased Premises, Tenant shall be deemed to have accepted the Leased Premises and that the condition of the Leased Premises and the Building was at the time satisfactory and in conformity with the provisions of the Lease in all respects.

Section 2.03. Surrender of the Leased Premises. Upon the expiration or earlier termination of this Lease, Tenant shall, at its sole cost and expense, immediately (a) surrender the Leased Premises to Landlord in broom-clean condition and in good order, condition and repair, reasonable wear and tear and casualty damage excepted, (b) remove from the Leased Premises or where located (i) Tenant's Property (as defined in Section 8.01 below), (ii) all data and communications equipment, wiring and cabling (including above ceiling, below raised floors and behind walls), and (iii) any alterations required to be removed pursuant to Section 7.03 below, and (c) repair any damage caused by any such removal and restore the Leased Premises to the condition existing upon the Commencement Date, reasonable wear and tear and casualty damage excepted.  All of Tenant's Property that is not removed within ten (I 0) days following Landlord's written demand therefor shall be conclusively deemed to have been abandoned and Landlord shall be entitled to dispose of such property at Tenant's cost without incurring any liability to Tenant. This Section 2.03 shall survive the expiration or any earlier termination of this Lease.

Section 2.04. Holding Over. If Tenant retains possession of the Leased Premises after the expiration or earlier termination of this Lease, Tenant shall be a tenant at sufferance at one hundred fifty percent (150%) of the Monthly Rental Installments and Annual Rental Adjustment (as hereinafter defined) for the Leased Premises in effect upon the date of such expiration or earlier termination, and otherwise upon the terms, covenants and conditions herein specified, so far as applicable. Acceptance by Landlord of rent after such expiration or earlier termination shall not result in a renewal of this Lease, nor shall such acceptance create a month-to-month tenancy. In the event a month-to-month tenancy is created by operation of law, either party shall have the right to terminate such month-to-month tenancy upon thirty (30) days' prior written notice to the other, whether or not said notice is given on the rent paying date. This Section 2.04 shall in no way constitute a consent by Landlord to any holding over by Tenant upon the expiration or earlier termination of this Lease, nor limit Landlord's remedies in such event.

ARTICLE 3 - RENT

Section 3.01. Base Rent. Tenant shall pay to Landlord the Minimum Annual Rent in the Monthly Rental Installments, plus Florida State Sales Tax, in advance, without demand, deduction or offset, on the Commencement Date and on or before the first day of each and every calendar month thereafter during the Lease Term. The Monthly Rental Installments for partial calendar months shall be prorated. Tenant shall be responsible for delivering the Monthly Rental Installments to the payment address set forth in Section 1.01(1) above in accordance with this Section 3.01.

Section 3.02. Annual Rental Adjustment Definitions.

(a) 

"Annual Rental Adjustment" shall mean the amount of Tenant's Proportionate Share of Operating Expenses for a particular calendar year.

(b) 

"Operating Expenses" shall mean the amount of all of Landlord's costs and expenses paid or incurred in operating, repairing, replacing and maintaining the Building and the Common Areas in good condition and repair for a particular calendar year (including all additional costs and expenses that Landlord reasonably determines that it would have paid or incurred during such year if the Building had been fully occupied), including by way of illustration and not limitation, the following: all Real Estate

3

Taxes (as hereinafter defined), insurance premiums and deductibles; water, sewer, electrical and other utility charges other than the separately billed electrical and other charges paid by Tenant as provided in this Lease (or other tenants in the Building); painting; stormwater discharge fees; tools and supplies; repair costs; landscape maintenance costs; access patrols; license, permit and inspection fees; management fees (which shall not exceed 5% of the gross rental receipts for the Building); administrative fees; supplies, costs, wages and related employee benefits payable for the management, maintenance and operation of the Building; maintenance, repair and replacement of the driveways, parking areas, curbs and sidewalk areas (including snow and ice removal), landscaped areas, drainage strips, sewer lines, exterior walls, foundation, structural frame, roof, gutters and lighting; and maintenance and repair costs, dues, fees and assessments incurred under any covenants or charged by any owners association. The cost of any Operating Expenses that are capital in nature shall be amortized over the useful life of the improvement (as reasonably determined by Landlord), and only the amortized portion shall be included in Operating Expenses.

(c) 

"Tenant's Proportionate Share of Operating Expenses" shall mean an amount equal to the product of Tenant's Proportionate Share times the Operating Expenses.

(d) 

"Real Estate Taxes" shall mean any form of real estate tax or assessment or service payments in lieu thereof, and any license fee, commercial rental tax, improvement bond or other similar charge or tax (other than inheritance, personal income or estate taxes) imposed upon the Building or Common Areas, or against Landlord's business of leasing the Building, by any authority having the power to so charge or tax, together with the reasonable costs and expenses of contesting the validity or amount of the Real Estate Taxes; provided, however, in no event shall Real Estate Taxes included in the Operating Expenses exceed the total amount assessed (less any savings Landlord realizes as a result of contesting the validity or amount of the same) less the maximum discount available for early payment.

Section 3.03. Payment of Additional Rent.

(a) 

Any amount required to be paid by Tenant hereunder (in addition to Minimum Annual Rent) and any charges or expenses incurred by Landlord on behalf of Tenant under the terms of this Lease shall be considered "Additional Rent" payable in the same manner and upon the same terms and conditions as the Minimum Annual Rent reserved hereunder, except as set forth herein to the contrary. Any failure on the part of Tenant to pay such Additional Rent when and as the same shall become due shall entitle Landlord to the remedies available to it for non-payment of Minimum Annual Rent.

(b) 

In addition to the Minimum Annual Rent specified in this Lease, commencing as of the Commencement Date, Tenant shall pay to Landlord as Additional Rent for the Leased Premises, in each calendar year or partial calendar year during the Lease Term, an amount equal to the Annual Rental Adjustment for such calendar year. Landlord shall estimate the Annual Rental Adjustment annually, and written notice thereof shall be given to Tenant prior to the beginning of each calendar year. Tenant shall pay to Landlord each month, at the same time the Monthly Rental Installment is due, an amount equal to one-twelfth (1112) of the estimated Annual Rental Adjustment. Tenant shall be responsible for delivering the Additional Rent to the payment address set forth in Section 1.01(1) above in accordance with this Section 3.03. If Operating Expenses increase during a calendar year, Landlord may increase the estimated Annual Rental Adjustment one (1) time during such year by giving Tenant written notice to that effect, and thereafter Tenant shall pay to Landlord, in each of the remaining months of such year, an amount equal to the amount of such increase in the estimated Annual Rental Adjustment divided by the number of months remaining in such year. Within one hundred twenty (120) days after the end of each calendar year, Landlord shall prepare and deliver to Tenant a statement showing the actual Annual Rental Adjustment.  Within thirty (30) days after receipt of the aforementioned statement, Tenant shall pay to Landlord, or Landlord shall credit against the next rent payment or payments due from Tenant, as the case

4

may be, the difference between the actual Annual Rental Adjustment for the preceding calendar year and the estimated amount paid by Tenant during such year. This Section 3.03 shall survive the expiration or any earlier termination of this Lease.

Section 3.04. Late Charges. Tenant acknowledges that Landlord shall incur certain additional unanticipated administrative and legal costs and expenses if Tenant fails to pay timely any payment required hereunder. Therefore, in addition to the other remedies available to Landlord hereunder, if any payment required to be paid by Tenant to Landlord hereunder shall become overdue, such unpaid amount shall bear interest from the due date thereof to the date of payment at the prime rate of interest, as reported in the Wall Street Journal (the "Prime Rate") plus six percent (6%) per annum; provided, however such interest rate shall not be less than twelve percent (12%) per annum.

Section 3.05.  Maximum Increase in Operating Expenses. Notwithstanding anything in this Lease to the contrary, Tenant will be responsible for Tenant's Proportionate Share of Real Estate Taxes, insurance premiums, utilities, janitorial services, snow removal, landscaping, management fees, and charges assessed against the Building pursuant to any covenants or owner's association ("Uncontrollable Expenses"), without regard to the level of increase in any or all of the above in any year or other period of time. Tenant's obligation to pay Tenant's Proportionate Share of Operating Expenses that are not Uncontrollable Expenses (herein "Controllable Expenses") shall be limited to a five percent (5%) per annum increase over the amount the Controllable Expenses per square foot for the immediately preceding calendar year would have been had the Controllable Expenses per square foot increased at the rate of five percent (5%) in all previous calendar years beginning with the actual Controllable Expenses per square foot for the calendar year ending December 31, 2014.

Section 3.06. Inspection and Audit Rights.

(a) 

Tenant shall have the right to inspect, at reasonable times and in a reasonable manner, during the sixty (60) day period following the delivery of Landlord's statement ofthe actual amount of the Annual Rental Adjustment (the "Inspection Period"), such of Landlord's books of account and records as pertain to and contain information concerning the Annual Rental Adjustment for the prior calendar year in order to verify the amounts thereof. Such inspection shall take place at Landlord's office upon at least fifteen (15) days prior written notice from Tenant to Landlord. Only Tenant or a certified public accountant that is not being compensated for its services on a contingency fee basis shall conduct such inspection. Tenant shall also agree to follow Landlord's reasonable procedures for auditing such books and records. Landlord and Tenant shall act reasonably in assessing the other party's calculation of the Annual Rental Adjustment. Tenant shall provide Landlord with a copy of its findings within thirty (30) days after completion of the audit. Tenant's failure to exercise its rights hereunder within the Inspection Period shall be deemed a waiver of its right to inspect or contest the method, accuracy or amount of such Annual Rental Adjustment.

(b) 

If Landlord and Tenant agree that Landlord's calculation of the Annual Rental Adjustment for the inspected calendar year was incorrect, the parties shall enter into a written agreement confirming such undisputed error and then Landlord shall make a correcting payment in full to Tenant within thirty (30) days after the determination of the amount of such error or credit such amount against future Additional Rent if Tenant overpaid such amount, and Tenant shall pay Landlord within thirty (30) days after the determination of such error if Tenant underpaid such amount. In the event of any errors on the part of Landlord that Landlord agrees were errors costing Tenant in excess of five percent (5%) of Tenant's actual Operating Expense liability for any calendar year, Landlord will also reimburse Tenant for the costs of an audit reasonably incurred by Tenant in an amount not to exceed $2,500 within the above thirty (30) day period. If Tenant provides Landlord with written notice disputing the correctness of Landlord's statement, and if such dispute shall have not been settled by agreement within thirty (30) days

5

after Tenant provides Landlord with such written notice, Tenant may submit the dispute to a reputable firm of independent certified public accountants selected by Tenant and approved by Landlord, and the decision of such accountants shall be conclusive and binding upon the parties. If such accountant decides that there was an error, Landlord will make correcting payment if Tenant overpaid such amount, and Tenant shall pay Landlord if Tenant underpaid such amount. The fees and expenses involved in such decision shall be borne by the party required to pay for the audit.

(c) 

All of the information obtained through Tenant's inspection with respect to financial matters (including, without limitation, costs, expenses and income) and any other matters pertaining to Landlord, the Leased Premises, the Building and/or the Park as well as any compromise, settlement or adjustment reached between Landlord and Tenant relative to the results of the inspection shall be held in strict confidence by Tenant and its officers, agents, and employees; and Tenant shall cause its independent professionals to be similarly bound. The obligations within the preceding sentence shall survive the expiration or earlier termination of this Lease.

ARTICLE 4 - SECURITY DEPOSIT

Tenant heretofore deposited the Security Deposit with Landlord as security for the performance by Tenant of all of Tenant's obligations contained in this Lease. In the event of a default by Tenant, Landlord may apply all or any part of the Security Deposit to cure all or any part of such default; provided, however, that any such application by Landlord shall not be or be deemed to be an election of remedies by Landlord or considered or deemed to be liquidated damages. Tenant agrees promptly, upon demand, to deposit such additional sum with Landlord as may be required to maintain the full amount of the Security Deposit. All sums held by Landlord pursuant to this Article 4 shall be without interest and may be commingled by Landlord.  Within forty-five (45) days following the end of the Lease Term, provided that there is then no uncured default or any repairs required to be made by Tenant pursuant to Section 2.03 above or Section 7.03 below, Landlord shall return the Security Deposit to Tenant.

ARTICLE 5 - OCCUPANCY AND USE

Section 5.01. Use. Tenant shall use the Leased Premises for the Permitted Use and for no other purpose without the prior written consent of Landlord.

Section 5.02. Covenants of Tenant Regarding Use.

(a) 

Tenant shall (i) use and maintain the Leased Premises and conduct its business thereon in a safe, careful, reputable and lawful manner, (ii) comply with all covenants that encumber the Building and all laws, rules, regulations, orders, ordinances, directions and requirements of any governmental authority or agency, now in force or which may hereafter be in force, including, without limitation, those which shall impose upon Landlord or Tenant any duty with respect to or triggered by a change in the use or occupation of, or any improvement or alteration to, the Leased Premises, and (iii) comply with and obey all reasonable directions, rules and regulations of Landlord, including the Building Rules and Regulations attached hereto as Exhibit D and made a part hereof, as may be modified from time to time by Landlord on reasonable prior written notice to Tenant.

(b) 

Tenant shall not do or permit anything to be done in or about the Leased Premises that will in any way cause a nuisance, obstruct or interfere with the rights of other tenants or occupants of the Building or injure or annoy them. Landlord shall not be responsible to Tenant for the non-performance by any other tenant or occupant of the Building of any of Landlord's directions, rules and regulations, but agrees that any enforcement thereof shall be done uniformly. Tenant shall not overload the floors of the Leased Premises. All damage to the floor structure or foundation of the Building due to improper

6

positioning or storage of items or materials shall be repaired by Landlord at the sole expense of Tenant, who shall reimburse Landlord immediately therefor upon demand. Tenant shall not use the Leased Premises, nor allow the Leased Premises to be used, for any purpose or in any manner that would (i) invalidate any policy of insurance now or hereafter carried by Landlord on the Building, or (ii) increase the rate of premiums payable on any such insurance policy unless Tenant reimburses Landlord for any increase in premium charged.

Section 5.03. Landlord's Rights Regarding Use. Without limiting any of Landlord's rights specified elsewhere in this Lease (a) Landlord shall have the right at any time, without notice to Tenant, to control, change or otherwise alter the Common Areas in such manner as it deems necessary or proper so long as any such control, change or alteration does not materially and adversely affect Tenant's use of the Leased Premises for the Permitted Use, and (b) Landlord, its agents, employees and contractors and any mortgagee of the Building shall have the right to enter any part of the Leased Premises at reasonable times upon reasonable notice (except in the event of an emergency where no notice shall be required) for the purposes of examining or inspecting the same (including, without limitation, testing to confirm Tenant's compliance with this Lease), showing the same to prospective purchasers, mortgagees or tenants, and making such repairs, alterations or improvements to the Leased Premises or the Building as Landlord may deem necessary or desirable. Landlord shall incur no liability to Tenant for such entry, nor shall such entry constitute an eviction of Tenant or a termination of this Lease, or entitle Tenant to any abatement of rent therefor.

Section 5.04.  Hurricane Shutters. Landlord shall provide Tenant with hurricane shutters for Tenant's use at the Leased Premises in case of a threat of hurricane, tropical storm, or other adverse weather conditions. Tenant agrees to (a) store the hurricane shutters in the Leased Premises in accordance with Landlord's recommendations, (b) be solely responsible for the maintenance and protection of the hurricane shutters, and (c) replace the hurricane shutters in the event of damage, theft or loss. If there is a threat of hurricane, tropical storm, or other adverse weather condition, it will be Tenant's sole responsibility to promptly install the hurricane shutters and to then remove the hurricane shutters after the weather threat has passed. Hurricane shutters will be installed on the pre-existing bolts installed by Landlord for such purposes, and Tenant shall not be permitted to drill or install other bolts, nails or other devices into the exterior of the Building. Tenant shall be solely responsible to monitor weather reports, and Landlord has no duty to advise Tenant of the threat of hurricane, tropical storm or other adverse weather condition nor will Landlord have any duty or obligation to assist or instruct Tenant in the installation or removal of the hurricane shutters. Upon the expiration or earlier termination of this Lease, Tenant shall return the hurricane shutters to Landlord in substantially the same condition in which such hurricane shutters were received, ordinary wear and tear excepted. From time to time but not more than once in any calendar year, with in ten (I 0) days following Tenant's receipt of written notice from Landlord, Tenant shall deliver to Landlord an inventory of the hurricane shutters on hand. If Tenant fails to deliver the inventory to Landlord within the time specified, Landlord's agents or employees shall be given access to the Leased Premises to take the inventory themselves, and in such event, Tenant agrees to reimburse to Landlord, within ten (I 0) days of demand, an administrative fee in the fixed amount of $500.00 representing a reimbursement to Landlord of Landlord's time and expense to have the inventory performed.

ARTICLE 6 - UTILITIES

Tenant shall obtain in its own name and pay directly to the appropriate supplier the cost of all utilities and services serving the Leased Premises. However, if any services or utilities are jointly metered with other property, Landlord shall make a reasonable determination of Tenant's proportionate share of the cost of such utilities and services (at rates that would have been payable if such utilities and services had been directly billed by the utilities or services providers) and Tenant shall pay such share to

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Landlord within fifteen (15) days after receipt of Landlord's written statement.  Landlord shall not be liable in damages or otherwise for any failure or interruption of any utility or other Building service and no such failure or interruption shall entitle Tenant to terminate this Lease or withhold sums due hereunder.

ARTICLE 7 - REPAIRS, MAINTENANCE AND ALTERATIONS

Section 7.01.  Repair and Maintenance of Building. Landlord shall make all necessary repairs, replacements and maintenance to the roof, sprinkler systems, exterior walls, foundation, structural frame of the Building and the parking and landscaped areas and other Common Areas. The cost of such repairs, replacements and maintenance shall be included in Operating Expenses to the extent provided in Section 3.02; provided however, to the extent any such repairs, replacements or maintenance are required because of the negligence, misuse or default of Tenant, its employees, agents, contractors, customers or invitees, Landlord shall make such repairs at Tenant's sole expense.

Section 7.02. Repair and Maintenance of Leased Premises. Tenant shall, at its own cost and expense, maintain the Leased Premises in good condition, regularly servicing and promptly making all repairs and replacements thereto, including but not limited to the electrical systems, heating and air conditioning systems, plate glass, floors, windows and doors, and plumbing systems. Tenant shall obtain a preventive maintenance contract on the heating, ventilating and air-conditioning systems and provide Landlord with a copy thereof. The preventive maintenance contract shall meet or exceed Landlord's standard maintenance criteria, and shall provide for the inspection and maintenance of the heating, ventilating and air conditioning system on at least a semi-annual basis.

Section 7.03. Alterations. Tenant shall not permit alterations in or to the Leased Premises unless and until Landlord has approved the plans therefor in writing; provided, however, that Tenant shall have the right to make alterations to the Leased Premises, without obtaining Landlord's prior written consent provided that (a) such alterations do not exceed Ten Thousand and Noll 00 Dollars ($1 0,000.00) in cost in any one instance and Fifty Thousand and No/100 Dollars ($50,000.00) in cost in the aggregate during the Lease Term; (b) such alterations are non-structural and non-mechanical in nature; (c) such alterations do not require a permit; (d) Tenant provides Landlord with prior written notice of its intention to make such alterations, stating in reasonable detail the nature, extent and estimated cost of such alterations, together with the plans and specifications for the same, to the extent applicable, and (e) at Landlord's option, Tenant must remove such alterations and restore the Leased Premises upon termination of this Lease. As a condition of such approval, Landlord may require Tenant to remove the alterations and restore the Leased Premises upon termination of this Lease; otherwise, all such alterations shall at Landlord's option become a part of the realty and the property of Landlord, and shall not be removed by Tenant. Notwithstanding anything contained herein to the contrary, Tenant shall have no obligation hereunder to remove any of the Tenant Improvements or to otherwise remove any other alterations or improvements which have been made by Tenant with the express written consent of Landlord, unless, at the time of granting such consent, Landlord has expressly required the removal of any such proposed alterations or improvements as a condition to granting such consent. Tenant shall ensure that all alterations shall be made in accordance with all applicable laws, regulations and building codes, in a good and workmanlike manner and of quality equal to or better than the original construction of the Building. No person shall be entitled to any lien derived through or under Tenant for any labor or material furnished to the Leased Premises, and nothing in this Lease shall be construed to constitute Landlord's consent to the creation of any lien. If any lien is filed against the Leased Premises for work claimed to have been done for or material claimed to have been furnished to Tenant, Tenant shall cause such lien to be discharged of record within thirty (30) days after filing. Tenant shall indemnify Landlord from all costs, losses, expenses and attorneys' fees in connection with any construction or alteration and any related lien.

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ARTICLE 8 - INDEMNITY AND INSURANCE

Section 8.01. Release. All of Tenant's trade fixtures, merchandise, inventory, special fire protection equipment, telecommunication and computer equipment, supplemental air conditioning equipment, kitchen equipment and all other personal property in or about the Leased Premises, the Building or the Common Areas, which is deemed to include the trade fixtures, merchandise, inventory and personal property of others located in or about the Leased Premises or Common Areas at the invitation, direction or acquiescence (express or implied) of Tenant (all of which property shall be referred to herein, collectively, as "Tenant's Property"), shall be and remain at Tenant's sole risk. Landlord shall not be liable to Tenant or to any other person for, and Tenant hereby releases Landlord (and its affiliates, property managers and mortgagees) from (a) any and all liability for theft or damage to Tenant's Property, and (b) any and all liability for any injury to Tenant or its employees, agents, contractors, guests and invitees in or about the Leased Premises, the Building or the Common Areas, except to the extent of personal injury caused directly by the negligence or willful misconduct of Landlord, its agents, employees or contractors. Nothing contained in this Section 8.01 shall limit (or be deemed to limit) the waivers contained in Section 8.06 below. In the event of any conflict between the provisions of Section 8.06 below and this Section 8.01, the provisions of Section 8.06 shall prevail. This Section 8.01 shall survive the expiration or earlier termination of this Lease.

Section 8.02. Indemnification by Tenant. Tenant shall protect, defend, indemnify and hold Landlord, its agents, employees and contractors of all tiers harmless from and against any and all claims, damages, demands, penalties, costs, liabilities, losses, and expenses (including reasonable attorneys' fees and expenses at the trial and appellate levels) to the extent (a) arising out of or relating to any act, omission, negligence, or willful misconduct of Tenant or Tenant's agents, employees, contractors, customers or invitees in or about the Leased Premises, the Building or the Common Areas, (b) arising out of or relating to any of Tenant's Property, or (c) arising out of any other act or occurrence within the Leased Premises, in all such cases except to the extent of personal injury caused directly by the negligence or willful misconduct of Landlord, its agents, employees or contractors. Nothing contained in this Section 8.02 shall limit (or be deemed to limit) the waivers contained in Section 8.06 below. In the event of any conflict between the provisions of Section 8.06 below and this Section 8.02, the provisions of Section 8.06 shall prevail. This Section 8.02 shall survive the expiration or earlier termination of this Lease.

Section 8.03. Indemnification by Landlord. Landlord shall protect, defend, indemnify and hold Tenant, its agents, employees and contractors of all tiers hannless from and against any and all claims, damages, demands, penalties, costs, liabilities, losses and expenses (including reasonable attorneys' fees and expenses at the trial and appellate levels) to the extent arising out of or relating to any act, omission, negligence or willful misconduct of Landlord or Landlord's agents, employees or contractors in or about the Leased Premises, the Building or the Common Areas. Nothing contained in this Section 8.03 shall limit (or be deemed to limit) the waivers contained in Section 8.06 below. In the event of any conflict between the provisions of Section 8.06 below and this Section 8.03, the provisions of Section 8.06 shall prevail. This Section 8.03 shall survive the expiration or earlier termination of this Lease.

Section 8.04. Tenant's Insurance.

(a)

During the Lease Tenn (and any period of early entry or occupancy or holding over by Tenant, if applicable), Tenant shall maintain the following types of insurance, in the amounts specified below:

(i) 

Liability Insurance. Commercial General Liability Insurance, ISO Form CG 00 01, or its equivalent, covering Tenant's use of the Leased Premises against claims for bodily injury or

9

death or property damage, which insurance shall be primary and non-contributory and shall provide coverage on an occurrence basis with a per occurrence limit of not less than $2,000,000 for each policy year, which limit may be satisfied by any combination of primary and excess or umbrella per occurrence policies.

(ii) 

Property Insurance. Special Form Insurance in the amount of the full replacement cost of Tenant's Property (including, without limitation, alterations or additions performed by Tenant pursuant hereto, but excluding those improvements, if any, made pursuant to Section 2.02 above), which insurance shall waive coinsurance limitations.

(iii) 

Worker's Compensation Insurance. Worker's Compensation insurance in amounts required by applicable law; provided, if there is no statutory requirement for Tenant, Tenant shall still obtain Worker's Compensation insurance coverage.

(iv) 

Business Interruption Insurance. Business Interruption Insurance with limits not less than an amount equal to six (6) months rent hereunder.

(v) 

Automobile Insurance. Comprehensive Automobile Liability Insurance insuring bodily injury and property damage arising from all owned, non-owned and hired vehicles, if any, with minimum limits of liability of $1,000,000 combined single limit, per accident.

(b) 

All insurance required to be carried by Tenant hereunder shall (i) be issued by one or more insurance companies reasonably acceptable to Landlord, licensed to do business in the State in which the Leased Premises is located and having an AM Best's rating of A VII or better, and (ii) provide that said insurance shall not be materially changed, canceled or permitted to lapse on less than thirty (30) days' prior written notice to Landlord. In addition, Tenant shall name Landlord, Landlord's managing agent, and any mortgagee requested by Landlord, as additional insureds under its commercial general liability, excess and umbrella policies (but only to the extent of the limits required hereunder). On or before the Commencement Date (or the date of any earlier entry or occupancy by Tenant), and thereafter, within thirty (30) days prior to the expiration of each such policy, Tenant shall furnish Landlord with certificates of insurance in the form of ACORD 25 (or other evidence of insurance reasonably acceptable to Landlord), evidencing all required coverages, and that with the exception of Workers Compensation insurance, such insurance is primary and non-contributory. Upon Tenant's receipt of a request from Landlord, Tenant shall provide Landlord with copies of all insurance policies, including all endorsements, evidencing the coverages required hereunder. If Tenant fails to carry such insurance and furnish Landlord with such certificates of insurance or copies of insurance policies (if applicable), Landlord may obtain such insurance on Tenant's behalf and Tenant shall reimburse Landlord upon demand for the cost thereof as Additional Rent. Landlord reserves the right following the initial Lease Term or in the event of any expansion of the Leased Premises to require Tenant to obtain higher minimum amounts or different types of insurance if it becomes customary for other landlords of similar buildings in the area to require similar sized tenants in similar industries to carry insurance of such higher minimum amounts or of such different types.

Section 8.05. Landlord's Insurance. During the Lease Term, Landlord shall maintain the following types of insurance, in the amounts specified below (the cost of which shall be included in Operating Expenses):

(a) 

Liability Insurance. Commercial General Liability Insurance, ISO Form CG 00 01, or its equivalent, covering the Common Areas against claims for bodily injury or death and property damage, which insurance shall be primary and non-contributory and shall provide coverage on an occurrence basis

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with a per occurrence limit of not less than $2,000,000 for each policy year, which limit may be satisfied by any combination of primary and excess or umbrella per occurrence policies.

(b) 

Property Insurance. Special Form Insurance in the amount of the full replacement cost of the Building, including, without limitation, any improvements, if any, made pursuant to Section 2.02 above, but excluding Tenant's Property and any other items required to be insured by Tenant pursuant to Section 8.04 above.

All insurance required to be carried by Landlord hereunder shall be issued by one or more insurance companies licensed to do business in the State in which the Leased Premises is located and having an AM Best's rating if A VII or better.

Section 8.06. Waiver of Subrogation. Notwithstanding anything contained in this Lease to the contrary, Landlord (and its affiliates, property managers and mortgagees) and Tenant (and its affiliates) hereby waive any rights each may have against the other on account of any loss of or damage to their respective property, the Leased Premises, its contents, or other portions of the Building or Common Areas arising from any risk which is required to be insured against by Sections 8.04(a)(ii), 8.04(a)(iii), and 8.05(b) above. The special form property insurance policies and worker's compensation insurance policies maintained by Landlord and Tenant as provided in this Lease shall include an endorsement containing an express waiver of any rights of subrogation by the insurance company against Landlord and Tenant, as applicable.

ARTICLE 9 - CASUALTY

In the event of total or partial destruction of the Building or the Leased Premises by fire or other casualty, Landlord agrees promptly to restore and repair same; provided, however, Landlord's obligation hereunder with respect to the Leased Premises shall be limited to the reconstruction of such of the leasehold improvements as were originally required to be made by Landlord pursuant to Section 2.02 above, if any. Rent shall proportionately abate during the time that the Leased Premises or part thereof are unusable because of any such damage; provided, however, that in the event fifty percent (50%) or more of the Leased Premises is unusable in Tenant's good faith judgment, then Rent shall abate in full. Notwithstanding the foregoing, if the Leased Premises are (a) so destroyed that they cannot be repaired or rebuilt within one hundred eighty (180) days from the casualty date; or (b) destroyed by a casualty that is not covered by the insurance required hereunder or, if covered, such insurance proceeds are not released by any mortgagee entitled thereto or are insufficient to rebuild the Building and the Leased Premises; then, in case of a clause (a) casualty, either Landlord or Tenant may, or, in the case of a clause (b) casualty, then Landlord may, upon thirty (30) days' written notice to the other party, terminate this Lease with respect to matters thereafter accruing. Tenant waives any right under applicable laws inconsistent with the terms of this paragraph. Notwithstanding the provisions of this paragraph, if any such damage or destruction occurs within the final six (6) months of the term hereof, then either Landlord or Tenant, may, without regard to the aforesaid one hundred eighty ( 180) day period, terminate this Lease by written

notice to the other.

ARTICLE 10 - EMINENT DOMAIN

If all or any substantial part of the Building or Common Areas shall be acquired by the exercise of eminent domain, Landlord may terminate this Lease by giving written notice to Tenant on or before the date possession thereof is so taken. If all or any part of the Leased Premises shall be acquired by the exercise of eminent domain so that the Leased Premises shall become impractical for Tenant to use for the Permitted Use, Tenant may terminate this Lease by giving written notice to Landlord as of the date

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possession thereof is so taken. All damages awarded shall belong to Landlord; provided, however, that Tenant may claim dislocation damages if such amount is not subtracted from Landlord's award.

ARTICLE 11 - ASSIGNMENT AND SUBLEASE

Section 11.01. Assignment and Sublease.

(a) 

Tenant shall not assign this Lease or sublet the Leased Premises in whole or in part without Landlord's prior written consent (but in accordance with Section 16.12 below). In the event of any permitted assignment or subletting, Tenant shall remain primarily liable hereunder. The acceptance of rent from any other person shall not be deemed to be a waiver of any of the provisions of this Lease or to be a consent to the assignment of this Lease or the subletting ofthe Leased Premises. Any assignment or sublease consented to by Landlord shall not relieve Tenant (or its assignee) from obtaining Landlord's consent to any subsequent assignment or sublease.

(b) 

By way of example and not limitation, Landlord shall be deemed to have reasonably withheld consent to a proposed assignment or sublease if in Landlord's opinion (i) the Leased Premises are or may be in any way adversely affected; (ii) the business reputation of the proposed assignee or subtenant is unacceptable; (iii) the financial worth of the proposed assignee or subtenant is insufficient to meet the obligations hereunder, or (iv) the prospective assignee or subtenant is a current tenant at the Park or is a bona-fide third-party prospective tenant. Landlord further expressly reserves the right to refuse to give its consent to any subletting if the proposed rent is publicly advertised to be less than the then current rent for similar premises in the Building. If Landlord refuses to give its consent to any proposed assignment or subletting, Landlord may, at its option, within thirty (30) days after receiving a request to consent, terminate this Lease by giving Tenant thirty (30) days' prior written notice of such termination, whereupon each party shall be released from all further obligations and liability hereunder, except those which expressly survive the termination of this Lease.

(c) 

If Tenant shall make any assignment or sublease, with Landlord's consent, for a rental in excess of the rent payable under this Lease, Tenant shall pay to Landlord all of any such excess rental upon receipt. Tenant agrees to pay Landlord $500.00 upon demand by Landlord for reasonable accounting and attorneys' fees incurred in conjunction with the processing and documentation of any requested assignment, subletting or any other hypothecation of this Lease or Tenant's interest in and to the Leased Premises as consideration for Landlord's consent.

Section 11.02. Permitted Transfer. Notwithstanding anything to the contrary contained in Section 11.01 above, Tenant shall have the right, without Landlord's consent, but upon ten (I0) days' prior notice to Landlord, to (a) sublet all or part of the Leased Premises to any related corporation or other entity which controls Tenant, is controlled by Tenant or is under common control with Tenant; (b) assign all or any part of this Lease to any related corporation or other entity which controls Tenant, is controlled by Tenant, or is under common control with Tenant, or to a successor entity into which or with which Tenant is merged or consolidated or which acquires substantially all of Tenant's assets or property; or (c) effectuate any public offering of Tenant's stock on the New York Stock Exchange or in the NASDAQ over the counter market, provided that in the event of a transfer pursuant to clause (b), the tangible net worth after any such transaction is not less than the tangible net worth of Tenant as of the date hereof and provided further that such successor entity assumes all of the obligations and liabilities of Tenant (any such entity hereinafter referred to as a "Permitted Transferee").  For the purpose of this Article II, (i) "control" shall mean ownership of not less than fifty percent (50%) of all voting stock or legal and equitable interest in such corporation or entity, and (ii) "tangible net worth" shall mean the excess of the value of tangible assets (i.e. assets excluding those which are intangible such as goodwill, patents and trademarks) over liabilities. Any such transfer shall not relieve Tenant of its obligations under this Lease.

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Nothing in this paragraph is intended to nor shall permit Tenant to transfer its interest under this Lease as part of a fraud or subterfuge to intentionally avoid its obligations under this Lease (for example, transferring its interest to a shell corporation that subsequently files a bankruptcy), and any such transfer shall constitute a Default hereunder. Any change in control of Tenant resulting from a merger, consolidation, or a transfer of partnership or membership interests, a stock transfer, or any sale of substantially all of the assets of Tenant that do not meet the requirements of this Section 11.02 shall be deemed an assignment or transfer that requires Landlord's prior written consent pursuant to Section 11.01 above.

ARTICLE 12 - TRANSFERS BY LANDLORD

Section 12.01. Sale of the Building. Landlord shall have the right to sell the Building at any time during the Lease Term, subject only to the rights of Tenant hereunder; and such sale shall operate to release Landlord from liability hereunder that arises or accrues after the date of such conveyance. This release shall not apply to the Security Deposit unless Landlord transfer the Security Deposit to its successor, who acknowledges receipt of same in writing to Tenant.

Section 12.02. Estoppel Certificate.  Within ten ( 1 0) days following receipt of a written request from Landlord, Tenant shall execute and deliver to Landlord, without cost to Landlord, an estoppel certificate in such fonn as Landlord may reasonably request certifying (a) that this Lease is in full force and effect and unmodified or stating the nature of any modification, (b) the date to which rent has been paid, (c) that there are not, to Tenant's knowledge, any uncured defaults or specifying such defaults if any are claimed, and (d) any other matters or state of facts reasonably required respecting the Lease. Such estoppel may be relied upon by Landlord and by any purchaser or mortgagee of the Building.

Section 12.03. Subordination. This Lease is and shall be expressly subject and subordinate at all times to the lien of any present or future mortgage or deed of trust encumbering fee title to the Leased Premises. If any such mortgage or deed of trust be foreclosed, upon request of the mortgagee or beneficiary ("Landlord's Mortgagee"), as the case may be, Tenant will attorn to the purchaser at the foreclosure sale. The foregoing provisions are declared to be self-operative and no further instruments shall be required to effect such subordination and/or attornment; provided, however, that subordination of this Lease to any present or future mortgage or trust deed shall be conditioned upon the mortgagee, beneficiary, or purchaser at foreclosure, as the case may be agreeing that Tenant's occupancy of the Leased Premises and other rights under this Lease shall not be disturbed by reason of the foreclosure of such mortgage or trust deed, as the case may be, so long as Tenant is not in default under this Lease. Within ten (1 0) days following receipt of a written request from Landlord, Tenant shall execute and deliver to Landlord, without cost, any instrument that Landlord deems reasonably necessary or desirable to confirm the subordination of this Lease.

ARTICLE 13 - DEFAULT AND REMEDY

Section 13.01. Default. The occurrence of any of the following shall be a "Default":

(a) 

Tenant fails to pay any Monthly Rental Installments or Additional Rent (i) within five (5) business days following written notice from Landlord on the first occasion in any twelve (12) month period, or (ii) within five (5) business days after the same is due on any subsequent occasion within said twelve ( 12) month period. Tenant hereby expressly waives any additional notice required under §83.20 of the Florida Statutes.

(b) 

Tenant fails to perform or observe any other term, condition, covenant or obligation required under this Lease for a period of thirty (30) days after written notice thereof from Landlord;

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provided, however, that if the nature of Tenant's default is such that more than thirty (30) days are reasonably required to cure, then such default shall be deemed to have been cured if Tenant commences such performance within said thirty (30) day period and thereafter diligently completes the required action within a reasonable time.

(c) 

Tenant shall vacate or abandon the Leased Premises, or fail to occupy the Leased Premises or any substantial portion thereof for a period of thirty (30) days, unless Tenant continues to timely pay all Monthly Rental Installments and Additional Rent as it comes due.

(d) 

Tenant shall assign or sublet all or a portion of the Leased Premises in contravention of the provisions of Article 11 of this Lease.

(e) 

All or substantially all of Tenant's assets in the Leased Premises or Tenant's interest in this Lease are attached or levied under execution (and Tenant does not discharge the same within sixty (60) days thereafter); a petition in bankruptcy, insolvency or for reorganization or arrangement is filed by or against Tenant (and Tenant fails to secure a stay or discharge thereof within sixty (60) days thereafter); Tenant is insolvent and unable to pay its debts as they become due; Tenant makes a general assignment for the benefit of creditors; Tenant takes the benefit of any insolvency action or law; the appointment of a receiver or trustee in bankruptcy for Tenant or its assets if such receivership has not been vacated or set aside within thirty (30) days thereafter; or, dissolution or other termination of Tenant's corporate charter if Tenant is a corporation.

Section 13.02. Remedies. Upon the occurrence of any Default, Landlord shall have the following rights and remedies, in addition to those stated elsewhere in this Lease and those allowed by law or in equity, any one or more of which may be exercised without further notice to Tenant:

(a) 

Landlord may re-enter the Leased Premises and cure any Default of Tenant, and Tenant shall reimburse Landlord as Additional Rent for any reasonable costs and expenses that Landlord thereby incurs; and Landlord shall not be liable to Tenant for any loss or damage that Tenant may sustain by reason of Landlord's action.

(b) 

Landlord may terminate this Lease by giving Tenant notice of termination, in which event this Lease shall expire and terminate on the date specified in such notice of termination and all rights of Tenant under this Lease and in and to the Leased Premises shall terminate. Tenant shall remain liable for all obligations under this Lease arising up to the date of such termination, and Tenant shall surrender the Leased Premises to Landlord on the date specified in such notice. Furthermore, Tenant shall be liable to Landlord for the unamortized balance of any leasehold improvement allowance and brokerage fees paid in connection with the Lease.

(c) 

Without terminating this Lease, Landlord may terminate Tenant's right to possession of the Leased Premises, and thereafter, neither Tenant nor any person claiming under or through Tenant shall be entitled to possession of the Leased Premises. In such event, Tenant shall immediately surrender the Leased Premises to Landlord, and Landlord may re-enter the Leased Premises and dispossess Tenant and any other occupants of the Leased Premises by any lawful means and may remove their effects, without prejudice to any other remedy that Landlord may have. Upon termination of possession, Landlord may re-let all or any part thereof as the agent of Tenant for a term different from that which would otherwise have constituted the balance of the Lease Term and for rent and on terms and conditions different from those contained herein, whereupon Tenant shall be immediately obligated to pay to Landlord an amount equal to (i) the difference between the rent provided for herein and that provided for in any lease covering a subsequent re-letting of the Leased Premises, for the period which would otherwise have constituted the balance of the Lease Term had this Lease not been terminated (said period

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being referred to herein as the "Remaining Term"), (ii) the costs of recovering possession of the Leased Premises and all other expenses, loss or damage incurred by Landlord by reason of Tenant's Default ("Default Damages"), which shall include, without limitation, reasonable expenses of preparing the Leased Premises for re-letting, demolition, repairs, tenant finish improvements, brokers' commissions and attorneys' fees, and (iii) all unpaid Minimum Annual Rent and Additional Rent that accrued prior to the date of termination of possession, plus any interest and late fees due hereunder (the "Prior Obligations"). Neither the filing of any dispossessory proceeding nor an eviction of personalty in the Leased Premises shall be deemed to terminate the Lease.

(d) 

Landlord may terminate this Lease and recover from Tenant all damages Landlord may incur by reason of Tenant's default, including, without limitation, an amount which, at the date of such termination is equal to the sum of the following: (i) the value of the excess, if any, discounted at the prime rate of interest (as reported in the Wall Street Journal), of (A) the Minimum Annual Rent, Additional Rent and all other sums that would have been payable hereunder by Tenant for the Remaining Term, less (B) the aggregate reasonable rental value of the Leased Premises for the Remaining Term, as determined by a real estate broker licensed in the State of Florida who has at least ten (1 0) years of experience, (ii) all of Landlord's Default Damages, and (iii) all Prior Obligations. Landlord and Tenant acknowledge and agree that the payment of the amount set forth in clause (i) above shall not be deemed a penalty, but shall merely constitute payment of liquidated damages, it being understood that actual damages to Landlord are extremely difficult, if not impossible, to ascertain. It is expressly agreed and understood that all of Tenant's liabilities and obligations set forth in this subsection (d) shall survive termination.

(e) 

Intentionally omitted.

(f)

Landlord may sue for injunctive relief or to recover damages for any loss resulting from the Default.

(g) 

If Landlord terminates this Lease or Tenant's right to possession, Landlord's duty to mitigate its damages under this Lease shall be as follows: (i) Landlord shall be required only to use reasonable efforts to mitigate, which shall not exceed such efforts as Landlord generally uses to lease other space in the Building, (ii) Landlord will not be deemed to have failed to mitigate if Landlord leases any other portions of the Building before reletting all or any portion of the Leased Premises, and (iii) Landlord shall not be deemed to have failed to mitigate if it incurs costs and expenses for repairs, maintenance, changes, alterations and improvements to the Leased Premises (whether to prevent damage or to prepare the Leased Premises for reletting), brokerage commissions, advertising costs, attorneys' fees, any economic incentives given to replacement tenants, and costs of collecting rent from replacement tenants. In recognition that the value of the Building depends on the rental rates and terms of leases therein, Landlord's rejection of a prospective replacement tenant based on an offer of rentals below Landlord's published rates for new leases of comparable space at the Building at the time in question, or at Landlord's option, below the rates provided in this Lease, or containing terms less favorable than those contained herein, shall not give rise to a claim by Tenant that Landlord failed to mitigate Landlord's damages. Tenant shall bear the burden of proving Landlord's failure to mitigate.

Section 13.03. Landlord's Default and Tenant's Remedies. Landlord shall be in default if it fails to perform any term, condition, covenant or obligation required under this Lease for a period of thirty (30) days after written notice thereof from Tenant to Landlord; provided, however, that if the term, condition, covenant or obligation to be performed by Landlord is such that it cannot reasonably be performed within thirty (30) days, such default shall be deemed to have been cured if Landlord commences such performance within said thirty-day period and thereafter diligently undertakes to complete the same. Upon the occurrence of any such default, Tenant may sue for injunctive relief or to recover damages for

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any loss directly resulting from the breach, but Tenant shall not be entitled to terminate this Lease or withhold, offset or abate any sums due hereunder. As to Landlord's maintenance and repair obligations hereunder inside the Leased Premises, if Landlord has not cured or commenced to cure a maintenance or repair default set forth in said notice from Tenant within said 30-day period, Tenant may undertake all reasonable action to cure Landlord's failure of performance.  If Tenant elects to cure said default, Tenant shall, prior to commencement of said work, provide to Landlord a specific description of the work to be performed by Tenant and the name of Tenant's contractor. Any materials used shall be of equal or better quality than currently exists in the Building and Tenant's contractor shall be adequately insured and of good reputation. Landlord agrees to reimburse Tenant on demand for all reasonable, third party out-of­ pocket expenses incurred by Tenant in connection therewith, provided that Tenant delivers to Landlord adequate bills or other supporting evidence substantiating said cost. In no event, however, shall Landlord be liable to Tenant for any consequential or punitive damages.

Section 13.04. Limitation of Landlord's Liability. If Landlord shall fail to perform any term, condition, covenant or obligation required to be performed by it under this Lease and if Tenant shall, as a consequence thereof, recover a money judgment against Landlord, Tenant agrees that it shall look solely to Landlord's right, title and interest in and to the Building including any net proceeds of the sale or refinancing (after paying off any encumbrances) received within the twelve month period prior to date Tenant's claim was filed, and any insurance proceeds or condemnation awards not applied to the reconstruction or restoration of the Building or the Leased Premises for the collection of such judgment; and Tenant further agrees that no other assets of Landlord shall be subject to levy, execution or other process for the satisfaction of Tenant's judgment.

Section 13.05. Nonwaiver of Defaults. Neither party's failure or delay in exercising any of its rights or remedies or other provisions of this Lease shall constitute a waiver thereof or affect its right thereafter to exercise or enforce such right or remedy or other provision. No waiver of any default shall be deemed to be a waiver of any other default. Landlord's receipt of less than the full rent due shall not be construed to be other than a payment on account of rent then due, nor shall any statement on Tenant's check or any letter accompanying Tenant's check be deemed an accord and satisfaction. No act or omission by Landlord or its employees or agents during the Lease Term shall be deemed an acceptance of a surrender of the Leased Premises, and no agreement to accept such a surrender shall be valid unless in writing and signed by Landlord.

Section 13.06. Attorneys' Fees. If either party defaults in the performance or observance of any of the terms, conditions, covenants or obligations contained in this Lease and the non-defaulting party obtains a judgment against the defaulting party, then the defaulting party agrees to reimburse the non­ defaulting party for reasonable attorneys' fees incurred in connection therewith. In addition, if a monetary Default shall occur and Landlord engages outside counsel to exercise its remedies hereunder, and then Tenant cures such monetary Default, Tenant shall pay to Landlord, on demand, all expenses incurred by Landlord as a result thereof, including reasonable attorneys' fees, court costs and expenses actually incurred.

ARTICLE 14 - LANDLORD'S RIGHT TO RELOCATE TENANT

INTENTIONALLY OMITTED.

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ARTICLE 15 - TENANT'S RESPONSIBILITY REGARDING 

ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES

Section 15.01.  Environmental Definitions.

(a) 

"Environmental Laws" shall mean all present or future federal, state and municipal laws, ordinances, rules and regulations applicable to the environmental and ecological condition of the Leased Premises, and the rules and regulations of the Federal Environmental Protection Agency and any other federal, state or municipal agency or governmental board or entity having jurisdiction over the Leased Premises.

(b) 

"Hazardous Substances" shall mean those substances included within the definitions of "hazardous substances," "hazardous materials," "toxic substances" "solid waste" or "infectious waste" under Environmental Laws and petroleum products.

Section 15.02. Restrictions on Tenant. Tenant shall not cause or permit the use, generation, release, manufacture, refining, production, processing, storage or disposal of any Hazardous Substances on, under or about the Leased Premises, or the transportation to or from the Leased Premises of any Hazardous Substances, except as necessary and appropriate for its Permitted Use in which case the use, storage or disposal of such Hazardous Substances shall be performed in compliance with the Environmental Laws.

Section 15.03. Notices, Affidavits, Etc. Tenant shall immediately (a) notify Landlord of (i) any violation by Tenant, its employees, agents, representatives, customers, invitees or contractors of any Environmental Laws on, under or about the Leased Premises, or (ii) the presence or suspected presence of any Hazardous Substances on, under or about the Leased Premises, and (b) deliver to Landlord any notice received by Tenant relating to (a)(i) and (a)(ii) above from any source. Tenant shall execute affidavits, representations and the like within five (5) days of Landlord's request therefor concerning Tenant's best knowledge and belief regarding the presence of any Hazardous Substances on, under or about the Leased Premises.

Section 15.04. Tenant's Indemnification. Tenant shall indemnify Landlord and Landlord's managing agent from any and all claims, losses, liabilities, costs, expenses and damages, including attorneys' fees, costs of testing and remediation costs, incurred by Landlord in connection with any breach by Tenant of its obligations under this Article 15. The covenants and obligations under this Article 15 shall survive the expiration or earlier termination of this Lease.

Section 15.05. Existing Conditions. Notwithstanding anything contained in this Article 15 to the contrary, Tenant shall not have any liability to Landlord under this Article 15 resulting from any conditions existing, or events occurring, or any Hazardous Substances existing or generated, at, in, on, under or in connection with the Leased Premises prior to the Commencement Date of this Lease (or any earlier occupancy of the Leased Premises by Tenant) except to the extent Tenant exacerbates the same.

ARTICLE 16 - MISCELLANEOUS

Section 16.01. Benefit of Landlord and Tenant. This Lease shall inure to the benefit of and be binding upon Landlord and Tenant and their respective successors and assigns.

Section 16.02. Governing Law. This Lease shall be governed in accordance with the laws of the State where the Building is located.

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Section 16.03. Force Majeure. Landlord and Tenant (except with respect to the payment of any monetary obligation) shall be excused for the period of any delay in the performance of any obligation hereunder when such delay is occasioned by causes beyond its control, including but not limited to work stoppages, boycotts, slowdowns or strikes; shortages of materials, equipment, labor or energy; unusual weather conditions; or acts or omissions of governmental or political bodies.

Section 16.04. Examination of Lease. Submission of this instrument by Landlord to Tenant for examination or signature does not constitute an offer by Landlord to lease the Leased Premises. This Lease shall become effective, if at all, only upon the execution by and delivery to both Landlord and Tenant. Execution and delivery of this Lease by Tenant to Landlord constitutes an offer to lease the Leased Premises on the terms contained herein.

Section 16.05. Indemnification for Leasing Commissions. The parties hereby represent and warrant that the only real estate brokers involved in the negotiation and execution of this Lease are the Brokers and that no other party is entitled, as a result of the actions of the respective party, to a commission or other fee resulting from the execution of this Lease. Each party shall indemnify the other from any and all liability for the breach ofthis representation and warranty on its part and shall pay any compensation to any other broker or person who may be entitled thereto. Landlord shall pay any commissions due Brokers based on this Lease pursuant to separate agreements between Landlord and Brokers.

Section 16.06. Notices.  Any notice required or permitted to be given under this Lease or by law shall be deemed to have been given if it is written and delivered in person or by overnight courier or mailed by certified mail, postage prepaid, to the party who is to receive such notice at the address specified in Section 1.01 (1). If sent by overnight courier, the notice shall be deemed to have been given one (1) day after sending. If mailed, the notice shall be deemed to have been given on the date that is three (3) business days following mailing. Either party may change its address by giving written notice thereof to the other party.

Section 16.07. Partial Invalidity; Complete Agreement. If any provision ofthis Lease shall be held to be invalid, void or unenforceable, the remaining provisions shall remain in full force and effect. This Lease represents the entire agreement between Landlord and Tenant covering everything agreed upon or understood in this transaction. There are no oral promises, conditions, representations, understandings, interpretations or terms of any kind as conditions or inducements to the execution hereof or in effect between the parties. No change or addition shall be made to this Lease except by a written agreement executed by Landlord and Tenant.

Section 16.08. Financial Statements. During the Lease Term and any extensions thereof, Tenant shall provide to Landlord on an annual basis, within ninety (90) days following the end of Tenant's fiscal year, a copy of Tenant's most recent financial statements prepared as of the end of Tenant's fiscal year. Such financial statements shall be signed by Tenant or an officer of Tenant, if applicable, who shall attest to the truth and accuracy of the information set forth in such statements, or if the Minimum Annual Rent hereunder exceeds $100,000.00, said statements shall be certified and, if available, audited. All financial statements provided by Tenant to Landlord hereunder shall be prepared in conformity with generally accepted accounting principles ("GAAP"), consistently applied, but only if Tenant utilizes GAAP in the normal preparation of its financial statements.

Section 16.09. Representations and Warranties.

(a) 

Tenant hereby represents and warrants that (i) Tenant is duly organized, validly existing and in good standing (if applicable) in accordance with the laws of the State under which it was

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organized; (ii) Tenant is authorized to do business in the State where the Building is located; and (iii) the individual(s) executing and delivering this Lease on behalf of Tenant has been properly authorized to do so, and such execution and delivery shall bind Tenant to its terms.

(b) 

Landlord hereby represents and warrants that (i) Landlord is duly organized, validly existing and in good standing (if applicable) in accordance with the laws of the State under which it was organized; (ii) Landlord is authorized to do business in the State where the Building is located; and (iii) the individual(s) executing and delivering this Lease on behalf of Landlord has been properly authorized to do so, and such execution and delivery shall bind Landlord to its terms.

Section 16.1 0. Signage. Tenant may, at its own expense, erect a sign concerning the business of Tenant that shall be in keeping with the decor and other signs on the Building. All signage (including the signage described in the preceding sentence) in or about the Leased Premises shall be first approved by Landlord and shall be in compliance with any codes and recorded restrictions applicable to the sign or the Building. The location, size and style of all signs shall be approved by Landlord. Tenant agrees to maintain any sign in good state of repair, and upon expiration of the Lease Term, Tenant agrees to promptly remove such signs and repair any damage to the Leased Premises.

Section 16.11. Parking. Tenant shall be entitled to the non-exclusive use of the parking spaces designated for the Building by Landlord. Tenant agrees not to overburden the parking facilities and agrees to cooperate with Landlord and other tenants in the use of the parking facilities. Landlord reserves the right in its absolute discretion to determine whether parking facilities are becoming crowded and, in such event, to allocate parking spaces between Tenant and other tenants; provided, however that in no event shall fewer than fifty (50) parking spaces be available to Tenant. There will be no assigned parking unless Landlord, in its sole discretion, deems such assigned parking advisable. No vehicle may be repaired or serviced in the parking area and any vehicle brought into the parking area by Tenant, or any of Tenant's employees, contractors or invitees, and deemed abandoned by Landlord will be towed and all costs thereof shall be borne by Tenant. All driveways, ingress and egress, and all parking spaces are for the joint use of all tenants. There shall be no parking permitted on any of the streets or roadways located within the Park. In addition, Tenant agrees that its employees will not park in the spaces designated visitor parking. Landlord and Tenant acknowledge and agree that Tenant shall have the right, at Tenant's sole risk, to park its company trucks and other vehicles overnight in the truck loading area serving the Leased Premises, so long as such parking is in compliance with all applicable laws, codes and ordinances.

Section 16.12. Consent or Approval. Where the consent or approval of a party is required, such consent or approval will not be unreasonably withheld, conditioned or delayed.

Section 16.13. Time. Time is of the essence of each term and provision of this Lease.

Section 16.14. Patriot Act. Each of Landlord and Tenant, each as to itself, hereby represents its compliance and its agreement to continue to comply with all applicable anti-money laundering laws, including, without limitation, the USA Patriot Act, and the laws administered by the United States Treasury Department's Office of Foreign Assets Control, including, without limitation, Executive Order 13224 ("Executive Order"). Each of Landlord and Tenant further represents (such representation to be true throughout the Lease Term) (a) that it is not, and it is not owned or controlled directly or indirectly by any person or entity, on the SON List published by the United States Treasury Department's Office of Foreign Assets Control and (b) that it is not a person otherwise identified by government or legal authority as a person with whom a U.S. Person is prohibited from transacting business. As of the date hereof, a list of such designations and the text of the Executive Order are published under the website address www.ustreas.gov/offices/enforcement/ofac.

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Section 16.15. Radon Gas. Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health unit.

ARTICLE 17 - SPECIAL STIPULATIONS

Section 17.01. Termination of Preceding Lease. Landlord, as successor in interest to Premier Gateway Center at Quantum LLP, and Tenant heretofore entered into that certain Lease Agreement dated May 29, 2002, as amended by that certain Lease Amendment No. 1 dated August 14, 2002, and as supplemented by that certain Clarification of Lease Terms dated November 12, 2002, and as amended by that certain Lease Amendment No. 2 dated August 1, 2008, and as amended by that certain Lease Amendment No.3 dated May 1, 2009 (as so amended, the "Preceding Lease"). Landlord and Tenant acknowledge and agree that as of the Commencement Date hereunder, this Lease shall supercede the Preceding Lease in its entirety and that as of the Commencement Date hereunder, the Preceding Lease shall be null and void and of no further force or effect, except with respect to any provisions thereunder that expressly survive such termination.

Section 17.02. Tenant Allowance.  Landlord and Tenant acknowledge and agree that Tenant intends to construct and install certain improvements within the Leased Premises (the "Tenant Alterations").  Within thirty (30) days following the full execution of this Lease, Landlord shall pay to Tenant an amount equal to Twenty-Five Thousand Five Hundred Forty-One and No/100 Dollars ($25,541.00) (the "Allowance") for the construction and installation ofthe Tenant Alterations. Tenant acknowledges and agrees that the construction and installation of the Tenant Alterations shall be performed in accordance with Section 7.03 of this Lease.

Section 17.03. Options to Extend.

(a) 

Grant and Exercise of Option. Provided that (i) no default has occurred and is then continuing, and (ii) Tenant originally named herein or its Permitted Transferee remains in possession of the Leased Premises, Tenant shall have the option to extend the Lease Term for two (2) additional periods of five (5) years each (each an "Extension Term"). Each Extension Term shall be upon the same terms and conditions contained in the Lease except (x) this provision giving two (2) extension options shall be amended to reflect the remaining options to extend, if any, (y) any improvement allowances or other concessions applicable to the Leased Premises under the Lease shall not apply to the Extension Term, and (z) the Minimum Annual Rent shall be adjusted as set forth below (the "Rent Adjustment"). Tenant shall exercise each option by delivering to Landlord, no later than one hundred eighty (180) days prior to the expiration of the preceding term, written notice of Tenant's desire to extend the Lease Term. Tenant's failure to timely exercise such option shall be deemed a waiver of such option and any succeeding option. Landlord shall notify Tenant of the amount of the Rent Adjustment no later than ninety (90) days prior to the commencement of the Extension Term. Tenant shall be deemed to have accepted the Rent Adjustment if it fails to deliver to Landlord a written objection thereto within five (5) business days after receipt thereof. If Tenant properly exercises its option to extend, Landlord and Tenant shall execute an amendment to the Lease (or, at Landlord's option, a new lease on the form then in use for the Building) reflecting the terms and conditions of the Extension Term within thirty (30) days after Tenant's acceptance (or deemed acceptance) of the Rent Adjustment.

(b)

Rent Adjustment. The Minimum Annual Rent for the applicable Extension Term shall be ninety-eight percent (98%) of the fair market rent rate as reasonably determined by Landlord based on the monthly rent charged to prospective renewing tenants for the Building and comparable buildings (e.g.,

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buildings of comparable age, physical condition, number of stories, total size, comparable location) in the area in which the Leased Premises are located, taking into account all financial terms, including without limitation, base rent, free rent, escalations, work contributions and allowances and leasing and brokerage commissions; provided, however, that in no event shall the Minimum Annual Rent during any Extension Term be less than the highest Minimum Annual Rent payable during the immediately preceding term. The Monthly Rental Installments shall be an amount equal to one-twelfth (1112) of the Minimum Annual Rent for the Extension Term and shall be paid at the same time and in the same manner as provided in the Lease. Without limiting the foregoing, if Tenant delivers to Landlord a written objection to Landlord's calculation of the Rent Adjustment within five (5) business days after Tenant's receipt of Landlord's determination of the Rent Adjustment, and the parties cannot agree on a Rent Adjustment within ten (10) days after Tenant's written objection then Tenant may retract its exercise of its option to extend, or Tenant may choose arbitration to determine the Rent Adjustment. If Tenant chooses arbitration, Tenant shall give Landlord written notice of its desire to seek arbitration within three (3) days after expiration of such ten (10) day period ("Arbitration Notice"). Within ten (10) days after Tenant provides Landlord with its Arbitration Notice, the parties shall each appoint an appraiser to determine the Rent Adjustment for the Leased Premises. Each appraiser so selected shall be either a MAI appraiser or a licensed real estate broker, each having at least ten (10) years prior experience in the appraisal or leasing of comparable space in the metropolitan area in which the Leased Premises are located and with a working knowledge of current rental rates and practices. If the two appraisers cannot agree upon the Rent Adjustment for the Leased Premises within twenty (20) days after their appointment, then, within ten (I 0) days after the expiration of such twenty (20) day period, the two appraisers shall select a third appraiser meeting the above criteria. Once the third appraiser has been selected as provided for above, then such third appraiser shall within ten (1 0) days after appointment make its determination of the Rent Adjustment. The average of the two closest determinations of the Rent Adjustment shall be used as the Minimum Annual Rent for the applicable Extension Term and shall be binding on both Landlord and Tenant. Landlord and Tenant shall each bear the cost of its appraiser and shall share the cost of the third. If Tenant fails to provide the Arbitration Notice as provided above, then Tenant's exercise of its option to extend shall be deemed retracted.

Section 17.04. Right of First Offer.

(a) 

Provided that (i) no default has occurred and is then continuing, (ii) the creditworthiness of Tenant is then reasonably acceptable to Landlord, and (iii) Tenant originally named herein or its Permitted Transferee remains in possession of the Leased Premises, and subject to any rights of other tenants to the Offer Space (as defined herein) and Landlord's right to renew or extend the lease term of any other tenant with respect to the portion of the Offer Space now or hereafter leased by such other tenant, Landlord shall, before entering into a lease with a third party for the space located in the Building contiguous to the Leased Premises as shown on the attached Exhibit E (the "Offer Space"), notify Tenant in writing of the availability of the Offer Space for leasing and setting forth the terms and conditions upon which Landlord is willing to lease the Offer Space to Tenant ("Landlord's Notice"). Tenant shall have five (5) business days from its receipt of Landlord's Notice to deliver to Landlord a written notice agreeing to lease the Offer Space on the terms and conditions contained in Landlord's Notice ("Tenant's Acceptance").  In the event Tenant fails to deliver Tenant's Acceptance to Landlord within said five (5)­business day period, such failure shall be conclusively deemed a rejection of the Offer Space and a waiver by Tenant of this right of first offer, whereupon Tenant shall have no further rights with respect to the Offer Space and Landlord shall be free to lease the Offer Space to a third party.

(b) 

In the event that Tenant exercises its right of first offer in the first twenty-four (24) months of the Lease Term, the Offer Space shall be offered to Tenant at the rental rate per square foot (including periodic escalations) in effect with respect to the then existing Leased Premises ("Existing Premises") as of the commencement of the term for the Offer Space and upon the other terms and

21

conditions as are set forth in this Lease, including a tenant improvement allowance equal to a rate per square foot used to determine the Allowance granted under this Lease prorated for the number of months remaining in the Lease Term for the Existing Premises and two (2) months of free Monthly Rental Installments for the Offer Space.

(c) 

In the event that Tenant exercises its right of first offer after the first twenty-four (24) months of the Lease Term, the term for the Offer Space shall be coterminous with the term for the original Leased Premises; provided, however, that the minimum term for the Offer Space shall be five (5) years and the term for the Existing Premises shall be extended, if necessary, to be coterminous with the term for the Offer Space. If the Lease Term for the Existing Premises is extended as provided above, the Minimum Annual Rent for such extension term shall be an amount equal to the Minimum Annual Rent then being quoted by Landlord to prospective renewing tenants of the Building for space of comparable size and quality and with similar or equivalent improvements as are found in the Building, and if none, then in similar buildings in the vicinity; provided, however, that in no event shall the Minimum Annual Rent during such extension term be less than the highest Minimum Annual Rent payable during the immediately preceding term.

(d) 

lf Tenant properly exercises its right of first offer, Landlord and Tenant shall enter into an amendment to this Lease adding the Offer Space to the Leased Premises upon the terms and conditions set forth herein and making such other modifications to this Lease as are appropriate under the circumstances. If Tenant shall fail to enter into such amendment within ten (1 0) days following Tenant's Acceptance, then Landlord may terminate this right of first offer by notifying Tenant in writing, in which event Tenant shall have no further rights with respect to the Offer Space and Landlord shall be free to lease the Offer Space to a third party.

Section 17.05. Quiet Enjoyment. So long as Tenant has not committed a Default hereunder that remains uncured, Landlord agrees that Tenant shall have the right to quietly use, possess and enjoy the Leased Premises for the Lease Term, without hindrance by anyone claiming by, through or under Landlord.

[SIGNATURES FOLLOW ON NEXT PAGE]

22

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above written.

								
	 
	 
	 
	LANDLORD:

	 
	 
	 
	 

	WITNESSES:

	 
	 
	DUKE PGC AT QUANTUM 1-9, LLC, 

	 
	 
	 
	a Delaware limited liability company

	 
	 
	 
	 
	 

	/s/ Ana M. Hernandez

	 
	By: 

	Duke Realty Limited Partnership,

	Printed Name: 

	Ana M. Hernandez

	 
	 
	an Indiana limited partnership, its managing 

	 
	 
	 
	 
	member

	 
	 
	 
	 
	 

	/s/ Nina Sorla

	 
	 
	By:

	Duke Realty Corporation, an 

	Printed Name: 

	Nina Sorla

	 
	 
	 
	Indiana corporation, its general

	 
	 
	 
	 
	partner

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	By:

	/s/ Edward P. Mitchell

	 
	 
	 
	 
	 
	 
	Edward P. Mitchell

	 
	 
	 
	 
	 
	 
	Senior Vice President

	 
	 
	 
	 
	 
	 
	South Florida Operations

Date of execution: 9/28/2012

						
	 
	 
	 
	TENANT:

	 
	 
	 
	 

	WITNESSES:

	 
	PURADYN FILTER TECHNOLOGIES INCORPORATED, a Delaware corporation

	 
	 
	 
	 
	 

	/s/ Kathryn A. Morris

	 
	By:

	/s/ Alan J. Sandler

	Printed Name: 

	Kathryn A. Morris

	 
	 
	Name: 

	Alan J. Sandler

	 
	 
	 
	 
	Title: 

	Vice Pres.

	 
	 
	 
	 
	 

	/s/ David Duckworn

	 
	 
	 

	Printed Name:

	David Duckworn

	 
	 
	 

Date of execution: 9/27/12

23

EXHIBITA

SITE PLAN OF LEASE PREMISES

Exhibit A

Page 1 of 1

EXHIBIT B

INTENTIONALLY OMITTED

Exhibit B

Page 1 of 1

EXHIBIT C

LETTER OF UNDERSTANDING

Duke PGC at Quantum 1-9, LLC

c/o Duke Realty Corporation

Attn.: South Florida Market-V.P., Asset Mgmt. & Customer Service

2400 North Commerce Parkway, Suite 405

Weston, FL 33326

RE: 

Lease between Duke PGC at Quantum 1-9, LLC, a Delaware limited liability company 

("Landlord") and Puradyn Filter Technologies Incorporated, a Delaware corporation 

("Tenant"), dated  _______________________2012 (the "Lease") for the premises located at 

2017 High Ridge Road, Boynton Beach, Florida 33426 (the "Leased Premises"), within 

Gateway Center at Quantum

Dear ______________________:

The undersigned, on behalf of Tenant, certifies to Landlord as follows:

1. 

The Commencement Date under the Lease is August 1, 2013.

2. 

The rent commencement date is September 1, 2013.

3. 

The expiration date of the Lease is August 31, 2019.

4. 

The Lease (including amendments or guaranty, if any) is the entire agreement between Landlord and Tenant as to the leasing of the Leased Premises and is in full force and effect.

5. 

Landlord has completed the improvements designated as Landlord's obligation under the Lease (excluding punchlist items as agreed upon by Landlord and Tenant), if any, and Tenant has accepted the Leased Premises as of the Commencement Date.

6. 

To the best of the undersigned's knowledge, there are no uncured events of default by either Tenant or Landlord under the Lease.

IN WITNESS WHEREOF, the undersigned has caused this Letter of Understanding to be executed this ___ day of _________________, 20__.

Exhibit C

Page 1 of 2

						
	 
	 
	 
	TENANT:

	 
	 
	 
	 

	 
	 
	PURADYN FILTER TECHNOLOGIES INCORPORATED, a Delaware corporation

	 
	 
	 
	 
	 

	 
	 
	By:

	 

	 
	 
	 
	 
	Name: 

	 

	 
	 
	 
	 
	Title: 

	 

	 
	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	Attest:  

	 

	 
	 
	 
	Name:

	 

	 
	 
	 
	Title:

	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	[Exhibit- Not to be executed]

Exhibit C

Page 2 of 2

EXHIBIT D

RULES AND REGULATIONS

1.

The sidewalks, entrances, driveways and roadways serving and adjacent to the Leased Premises shall not be obstructed or used for any purpose other than ingress and egress. Landlord shall control the Common Areas.

2. 

No awnings or other projections shall be attached to the outside walls of the Building. No curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Leased Premises other than Landlord standard window coverings without Landlord's prior written approval.  All electric ceiling fixtures hung in offices or spaces along the perimeter of the Building must be fluorescent, of a quality, type, design and tube color approved by Landlord. Neither the interior nor the exterior of any windows shall be coated or otherwise sunscreened without written consent of Landlord.

3. 

No sign, advertisement, notice or handbill shall be exhibited, distributed, painted or affixed by any tenant on, about or from any part of the Leased Premises, the Building or in the Common Areas including the parking area without the prior written consent of Landlord. In the event of the violation of the foregoing by any tenant, Landlord may remove or stop same without any liability, and may charge the expense incurred in such removal or stopping to tenant.

4. 

The sinks and toilets and other plumbing fixtures shall not be used for any purpose other than those for which they were constructed, and no sweepings, rubbish, rags, or other substances shall be thrown therein. All damages resulting from any misuse of the fixtures shall be borne by the tenant who, or whose subtenants, assignees or any of their servants, employees, agents, visitors or licensees shall have caused the same.

5. 

No boring, cutting or stringing of wires or laying of any floor coverings shall be permitted, except with the prior written consent of Landlord and as Landlord may direct. Landlord shall direct electricians as to where and how telephone or data cabling are to be introduced. The location of telephones, call boxes and other office equipment affixed to the Leased Premises shall be subject to the approval of Landlord.

6. 

No bicycles, vehicles, birds or animals of any kind (except seeing eye dogs) shall be brought into or kept in or about the Leased Premises, and no cooking shall be done or permitted by any tenant on the Leased Premises, except microwave cooking, and the preparation of coffee, tea, hot chocolate and similar items for tenants and their employees. No tenant shall cause or permit any unusual or objectionable odors to be produced in or permeate from the Leased Premises.

7. 

The Leased Premises shall not be used for manufacturing, unless such use conforms to the zoning applicable to the area, and Landlord provides written consent. No tenant shall occupy or permit any portion of the Leased Premises to be occupied as an office for the manufacture or sale of liquor, narcotics, or tobacco in any form, or as a medical office, or as a barber or manicure shop, or a dance, exercise or music studio, or any type of school or daycare or copy, photographic or print shop or an employment bureau without the express written consent of Landlord. The Leased Premises shall not be used for lodging or sleeping or for any immoral or illegal purpose.

8. 

No tenant shall make, or permit to be made any unseemly, excessive or disturbing noises or disturb or interfere with occupants of this or neighboring buildings or premises or those having

Exhibit D

Page 1 of 3

business with them, whether by the use of any musical instrument, radio, phonograph, unusual noise, or in any other way. No tenant shall throw anything out of doors, windows or down the passageways.

9. 

No tenant, subtenant or assignee nor any of its servants, employees, agents, visitors or licensees, shall at any time bring or keep upon the Leased Premises any flammable, combustible or explosive fluid, chemical or substance or firearm.

10. 

No additional locks or bolts of any kind shall be placed upon any of the doors or windows by any tenant, nor shall any changes be made to existing locks or the mechanism thereof. Each tenant must upon the termination of its tenancy, restore to Landlord all keys of doors, offices, and toilet rooms, either furnished to, or otherwise procured by, such tenant and in the event of the loss of keys so furnished, such tenant shall pay to Landlord the cost of replacing the same or of changing the lock or locks opened by such lost key if Landlord shall deem it necessary to make such changes.

11. 

No tenant shall overload the floors of the Leased Premises. All damage to the floor, structure or foundation of the Building due to improper positioning of storage items or materials shall be repaired by Landlord at the sole cost and expense of tenant, who shall reimburse Landlord immediately therefor upon demand.

12. 

Each tenant shall be responsible for all persons entering the Building at tenant's invitation, express or implied. Landlord shall in no case be liable for damages for any error with regard to the admission to or exclusion from the Building of any person. In case of an invasion, mob riot, public excitement or other circumstances rendering such action advisable in Landlord's opinion, Landlord reserves the right without any abatement of rent to require all persons to vacate the Building and to prevent access to the Building during the continuance of the same for the safety of the tenants and the protection of the Building and the property in the Building.

13. 

Canvassing, soliciting and peddling in the Building are prohibited, and each tenant shall report and otherwise cooperate to prevent the same.

14. 

All equipment of any electrical or mechanical nature shall be placed by tenant in the Leased Premises in settings that will, to the maximum extent possible, absorb or prevent any vibration, noise and annoyance.

15. 

There shall not be used in any space, either by any tenant or others, any hand trucks except those equipped with rubber tires and rubber side guards.

16. 

The scheduling of tenant move-ins shall be before or after normal business hours and on weekends, subject to the reasonable discretion of Landlord.

17. 

The Building is a smoke-free Building. Smoking is strictly prohibited within the Building. Smoking shall only be allowed in areas designated as a smoking area by Landlord. Tenant and its employees, representatives, contractors or invitees shall not smoke within the Building or throw cigar or cigarette butts or other substances or litter of any kind in or about the Building, except in receptacles for that purpose. Landlord may, at its sole discretion, impose a charge against monthly rent of $50.00 per violation by tenant or any of its employees, representatives, contractors or invitees, of this smoking policy.

18. 

Tenants will insure that all doors are securely locked, and water faucets, electric lights and electric machinery are turned off before leaving the Building.

Exhibit D

Page 2 of 3

19 

Tenant, its employees, customers, invitees and guests shall, when using the parking facilities in and around the Building, observe and obey all signs regarding fire lanes and no-parking and driving speed zones and designated handicapped and visitor spaces, and when parking always park between the designated lines. Landlord reserves the right to tow away, at the expense of the owner, any vehicle which is improperly parked or parked in a no-parking zone or in a designated handicapped area, and any vehicle which is left in any parking lot in violation of the foregoing regulation. All vehicles shall be parked at the sole risk of the owner, and Landlord assumes no responsibility for any damage to or loss of vehicles.

20. 

Tenant shall be responsible for and cause the proper disposal of medical waste, including hypodermic needles, created by its employees.

21. 

Except as otherwise expressly set forth in the Lease, no outside storage is permitted including without limitation the storage of trucks and other vehicles.

22. 

No tenant shall be allowed to conduct an auction from the Leased Premises without the prior written consent of Land lord.

It is Landlord's desire to maintain in the Building and Common Areas the highest standard of dignity and good taste consistent with comfort and convenience for tenants. Any action or condition not meeting this high standard should be reported directly to Landlord. Landlord reserves the right to make such other and further rules and regulations as in its judgment may from time to time be necessary for the safety, care and cleanliness of the Building and Common Areas, and for the preservation of good order therein.

Exhibit D

Page 3 of 3

EXHIBIT E

OFFER SPACE

Exhibit E

Page 1 of 1

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