BEAVERTON LEASE AGREEMENT

EXHIBIT 10.1                                                      

BEAVERTON LEASE AGREEMENT

INDUSTRIAL LEASE AGREEMENT

THIS INDUSTRIAL LEASE AGREEMENT (this “Lease”) dated for references purposes only is made between PS, Business Parks, L.P. a California limited partnership (“Landlord”), and Pro-Dex. Inc. a Colorado corporation (“Tenant”), as of September 24, 2007 (the “date of this Lease”).

BASIC LEASE INFORMATION

PREMISES:      Approximately 7,482 rentable square feet commonly known as Suite B-1 15201 NW Greenbrier Parkway, Beaverton, Oregon as depicted on Exhibit A-1.

BUILDING & PROJECT: Approximately 22,920 rentable square feet located at NW Greenbrier Parkway, Beaverton, OR 97006 and commonly referred to as the Ridgeview B Building, as depicted on Exhibit A-2. The Building is a part of the Project commonly referred to as Ridgeview  and contains approximately 93,143 square feet, as depicted and more particularly described on Exhibit A-2. The project is part of the property commonly referred to as Cornell Oaks Corporate Center and contains approximately 688,216 square feet as depicted on Exhibit A-2.

PERMITTED USE:      General office use and laboratory and warehouse purposes for motion control devices.

TERM:    A period of 76 months and 0 days.  Subject to Section 1.02, the Term shall commence on November 1, 2007 (the “Commencement Date”) and, unless terminated early in accordance with this Lease, end on February 28, 2014 (the “Termination Date”).

BASE RENT:

ESTIMATED INITIAL MONTHLY OPERATING EXPENSES: $2,244.60 per month, subject to Exhibit D.

SECURITY DEPOSIT: $9,481.60

TENANT’S PROPORTIONATE SHARE OF BUILDING: 32.64% OF PROJECT: 8.0328% OF PROPERTY: 1.0872%

PARKING DENSITY:        Approximately 3.4 unreserved spaces per 1,000 square feet of the Premises, which spaces shall be in common with other tenants of the Project, at no cost to Tenant during for the duration of the Lease.

LANDLORD’S BROKER: Trevor Kafoury
CB Richard Ellis

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TENANT’S BROKER:       Josh Schweitz
GVA Kidder Matthews

TENANT’S SIC CODE: 384

ADDRESSES FOR
NOTICES:                          To: Tenant                                      To:  Landlord

                                          151 E. Columbine Avenue                15455 NW  Greenbrier Parkway, Suite 245

                                          Santa Ana, California 92707             Beaverton, Oregon 97006

                                          Attn: Jeff Ritchey                            Attn:     ___________________

                                          FAX: 714-433-7200                                  FAX: 503-629-4821

TENANT’S BILLING ADDRESS if different from Notice Address — same as above

LANDLORD’S REMITTANCE ADDRESS:    PS Business Parks, Pacific NW, PO Box 39000, Dept. #33666,
San Francisco, California 94139

This Lease consists of the foregoing Basic Lease Information, the following Lease provisions consisting of Sections 1 through 28 and Exhibits A-1, A-2, B, C, D and E all of which are incorporated herein by this reference. Defined terms used in this Lease and included in the Basic Lease Information shall have the meanings given them in the Basic Lease information.

1.         Lease of Premises; Compliance with Laws; Surrender.

1.01      Landlord leases to Tenant, and Tenant leases from Landlord, the Premises, upon the terms of this Lease. The Premises are leased “AS IS” except only for the improvements, if any, which are to be constructed by Landlord pursuant to Exhibit B. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty regarding the Premises, except as otherwise expressly provided in this Lease. By taking possession of the Premises, Tenant agrees that the Premises are in good order and satisfactory condition. The square footages set forth in this Lease are approximate and agreed. For purposes of this Lease, the term “Property” means the Building (as defined above in the Basic Lease information), the Project (as defined above in the Basic Lease Information), and the parcel(s) of land on which they are located and, at Landlord’s discretion, the parking facilities and other improvements, if any, serving the Building, Project and/or the parcel(s) of land on which they are located. if the Project is part of a larger complex of structures, the term “Property” may include the entire complex, where appropriate in Landlord’s reasonable discretion.

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1.02      If for any reason Landlord cannot deliver possession of the Premises on the Commencement Date, Landlord will not be subject to any liability nor will the validity of this Lease be affected in any manner. Rather, the actual Commencement Date shall be delayed until delivery of possession in which event the Termination Date shall be extended to include the same number of full calendar months as set forth in the Basic Lease Information (plus any partial first month); provided, in the event delivery of possession is delayed by any act, omission or request of Tenant or any Tenant Entity, then the Premises shall be deemed to have been delivered (and the actual Commencement Date shall occur) on the earlier of the actual date of delivery or the date delivery would have occurred absent the number of days of such delay attributable to Tenant and the Term (as defined above in the Basic Lease Information) shall then be for such number of full calendar months (plus any partial first month). Upon request made by Landlord following the Commencement Date, Tenant shall execute and deliver a commencement letter setting forth the actual Commencement Date, the date upon which the Term shall expire, and such other matters regarding the commencement of this Lease as Landlord shall request. Tenant’s failure to execute and return the commencement letter, or to provide written objection to the statements contained in the commencement letter, within 10 days after the date of the commencement letter shall be deemed an approval by Tenant of the statements contained therein. Notwithstanding the foregoing, if the Commencement Date has not occurred on or before the Outside Date (defined below) due to no fault of Tenant, Tenant, as its sole remedy, may terminate this Lease by giving Landlord written notice of termination on or before the Outside Date. If such a termination notice is so given to Landlord, Landlord shall promptly refund any prepaid rent and Security Deposit previously advanced by Tenant under this Lease so long as Tenant has not previously defaulted under any of its obligations under this Lease or Exhibit B (Tenant Improvements), this Lease shall be null and void and the parties hereto shall have no further responsibilities or obligations to each other with respect to this Lease except with respect to any such defaults and any obligations which survive a termination of this Lease. The “Outside Date” shall mean the date which is 90 days after the later of the date this Lease is properly executed and delivered by Tenant, the data all prepaid rental and the Security Deposit under this Lease is delivered to Landlord, the date the building permit for the Tenant Improvements (as defined in Exhibit B) has been obtained. Landlord and Tenant acknowledge and agree that the Outside Date shall be postponed by the number of days the Commencement Date is delayed due to Tenant Delays (defined in Exhibit B) and events of force majeure as provided in Article 26. Notwithstanding anything herein to the contrary, if Landlord determines in good faith that it will be unable to cause the Commencement Date to occur by the Outside Date, Landlord shall have the right to immediately cease its performance of the Tenant Improvements performed by Landlord and provide Tenant with written notice (the “Completion Date Extension Notice”) of such inability, which Completion Date Extension Notice shall set forth the date on which Landlord reasonably believes that the Commencement Date will occur. Upon receipt of the Completion Date Extension Notice, Tenant shall have the right to terminate this Lease by providing written notice of termination to Landlord within 5 business days after the date of the Completion Date Extension Notice. If Tenant does not terminate this Lease within such 5 business day period, the Outside Date automatically shall be amended to be the date set forth in Landlord’s Completion Date Extension Notice. in addition, if the Commencement Date has not occurred on or before the date that is 180 days following the date that is the rater of the date this Lease is properly executed and delivered by Tenant and the date all prepaid rental and the Security Deposit under this Lease is delivered to Landlord for any reason, Tenant, as its sole remedy, may terminate this Lease by giving Landlord written notice of termination on or before the expiration of such 180 day period. If such a termination notice is so given to Landlord, Landlord shall promptly refund any prepaid rent and Security Deposit previously advanced by Tenant under this Lease so long as Tenant has not previously defaulted under any of its obligations under this Lease or Exhibit B (Tenant Improvements) (provided that such funds shall be retained by Landlord to the extent required to compensate Landlord for damage or loss sustained by Landlord in connection with such default in accordance with Article 18 (Remedies) below), this Lease shall be null and void and the parties hereto shall have no further responsibilities or obligations to each other with respect to this Lease except with respect to any such defaults and any obligations which survive a termination of this Lease.

1.03      If Landlord elects to permit Tenant to enter upon the Premises prior to the Commencement Date for the sole purpose of installing furniture, equipment or other personal property or any other purpose permitted by Landlord other than for the conduct of its business, such early entry shall be at Tenant’s sole risk and shall be subject to all the terms and provisions of this Lease, except that Tenant shall not be required to pay Base Rent or Tenant’s Proportionate Share of Operating Expenses for any days of possession before the Commencement Date during which Tenant, with the approval of Landlord, is in possession of the Premises for the sole purpose of performing improvements or installing furniture, equipment or other personal property. If Tenant takes possession of the Premises before the Commencement Date for any other purpose, such possession shall be subject to the terms and conditions of this Lease, including without limitation, Tenant’s obligation to pay rent hereunder, and the date Tenant takes possession of the Premises shall be deemed to be the Commencement Date,

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1.04      Tenant, at its sole expense, agrees to comply with all federal, state and local laws, codes, ordinances, statutes, rules, regulations and other legal requirements (including covenants and restrictions) applicable to the Premises (collectively, “Laws”). Tenant agrees to cause the Premises to comply with all Laws, including by making any changes to the Premises necessitated by any Tenant activity, including but not limited to changes required by (a) any Tenant Improvements or Tenant Alterations (as defined below), or (b) any use of the Premises or Property by Tenant or any Tenant Entity. If any activity of Tenant or any Tenant Entity necessitates changes to the Project other than the Premises, then Landlord shall elect that Landlord accomplish the same at Tenant’s expense or that Tenant accomplish the same at its own expense. In the event that as a result of Tenant’s use, or intended use, of the Premises, the Americans with Disabilities Act or any other Law requires modifications or the construction or installation of improvements in or to the Premises, Building, Project and/or common areas of the Property (as the same are identified from time to time by Landlord for common use) (the “Common Areas”), the parties agree that such modifications, construction or improvements shall be made at Tenant’s expense. As of the date hereof, to Landlord’s actual knowledge, Landlord has not received written notice from any governmental agencies that the Building is in violation of any Laws (including, without limitation, the Americans with Disability Act), which violation has not been cured. For purposes of this Section, “Landlord’s actual knowledge” shall be deemed to mean and limited to the current actual knowledge of Coby Holley, Vice President, at the time of execution of this Lease and not any implied, imputed, or constructive knowledge of said individual or of Landlord or any Landlord Related Parties or any other party related to Landlord and without any independent investigation or inquiry having been made or any implied duty to investigate or make any inquiries; it being understood and agreed that such individual shall have no personal liability in any manner whatsoever hereunder or otherwise related to the transactions contemplated hereby.  Notwithstanding anything to the contrary contained herein, Landlord shall be responsible for correcting any violations of Title III of the Americans with Disabilities Act with respect to the Premises or the Common Areas of the Building; provided that Landlord’s obligation with respect to the Premises shall be limited to violations that arise out of the Tenant Improvements (defined in Exhibit B) performed by Landlord only and/or the condition of the Premises at the execution of this Lease and prior to the installation of any furniture, equipment and other personal property of Tenant; and provided further that Tenant, not Landlord, shall be responsible for the correction of any violations that arise out of or in connection with any claims brought under any provision of the Americans with Disabilities Act other than Title III, the specific nature of Tenant’s business in the Premises, the acts or omissions of Tenant or any Tenant Entity, the arrangement of any furniture, equipment or other property in the Premises, any repairs or Tenant Alterations performed by or on behalf of Tenant (other than the Tenant Improvements performed by Landlord), requirements of any employees of Tenant, and any design or configuration of the Premises specifically requested by Tenant. Landlord shall have the right to contest any alleged violation in good faith, including, without limitation, the right to apply for and obtain a waiver or deferment of compliance, the right to assert any and all defenses allowed by law and the right to appeal any decisions, judgments or rulings to the fullest extent permitted by law. The cost of any such compliance by Landlord shall constitute an Operating Expense hereunder. Landlord or such other person(s) as Landlord may appoint shall have the exclusive control and management of the Common Areas. Landlord shall have the right, in Landlord’s sole discretion, from time to time, (i) to make changes to the Common Areas, including, without limitation, changes in the location, size, shape and number of the lobbies, windows, stairways, air shafts, elevators, escalators, restrooms, driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways, (ii) to close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available, (iii) to designate other land outside the boundaries of the Property to be a part of the Common Area, (iv) to add additional buildings and improvements to the Common Areas, and (v) and to do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Property as Landlord may, in the exercise of sound business judgment, deem to be appropriate; provided that such changes do not materially and adversely interfere with the Permitted Use of the Premises.

1.05      Upon expiration or termination of this Lease, Tenant agrees to remove all of Tenant’s personal property from the Premises and return the Premises to Landlord in the same condition as received by Tenant (excepting normal wear and tear) with all removal, repair, and restoration duties of Tenant, including without limitation pursuant to Section 9.04, being fully performed to Landlord’s reasonable satisfaction. Notwithstanding any other provision of this Lease to the contrary, Tenant shall remove at its expense in compliance with the National Electric Code or other applicable Law, at or prior to the expiration or termination of this Lease, all wiring and cabling installed at or about the Premises which shall have been installed by or on behalf of Tenant. Such wiring and cabling shall include but not be limited to (a) wiring and cabling above the ceiling panels, behind or within walls, and under or within floors, and (b) wiring and cabling for voice, data, security or other purposes. If Tenant abandons, vacates, or surrenders the Premises, or is dispossessed by process of Law, or otherwise, any personal property belonging to Tenant left in or about the Premises will, at the option of Landlord, be deemed abandoned and may be disposed of by Landlord at the expense and risk of Tenant.

1.06      Landlord has no duty to provide security for any portion of the Property. To the extent Landlord elects to provide any security, Landlord is not warranting the effectiveness of any security personnel, services, procedures or equipment and Tenant shall not rely on any such personnel, services, procedures or equipment. Landlord shall not be liable for failure of any such security personnel, services, procedures or equipment to prevent or control, or to apprehend anyone suspected of, personal injury or property damage in, on or around the Property.

2.         Base Rent. On or before the first day of each calendar month of the Term, Tenant will pay to Landlord the Base Rent for such month. Base Rent and Additional Rent (defined below) for any first partial month and for the first full calendar month of the Term, together with the Security Deposit, are due and payable upon execution of this Lease.  Monthly rent for any partial calendar month will be prorated. All sums and other charges payable by Tenant to Landlord hereunder shall be deemed rent.  Base Rent and all other amounts required to be paid by Tenant hereunder shall be paid without deduction or offset and without prior notice or demand. All such amounts shall be paid in lawful money of the United States of America and shall be paid to Landlord at the address stated herein or to such other persons or to such other places as Landlord may designate in writing from time to time. Amounts payable hereunder shall be deemed paid when actually received by Landlord.

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3.         Additional Rent. Unless otherwise specifically stated in this Lease, any charge payable by Tenant under this Lease other than Base Rent is called “Additional Rent.” The term “rent” whenever used in this Lease means Base Rent, Additional Rent and/or any other charge, fee or monies payable by Tenant under the terms of this Lease. Tenant shall pay Tenant’s Proportionate Share of Operating Expenses in accordance with Exhibit D of this Lease.

4.         Late Charges. If any sum payable by Tenant to Landlord is not received by Landlord on the date due, Tenant shall pay a late charge equal to the greater of (a) $50.00, or (b) 10% or the highest per annum rate of interest permitted from time to time under applicable Law (whichever is less) of the then delinquent amount. A $50,00 handling fee will be paid to Landlord by Tenant for each bank returned check. In the event of a Default, Tenant, at Landlord’s election, shall make all future payments to Landlord by wire or electronic transfer, by cashier’s check or by an automatic payment from Tenant’s bank account to Landlord’s account, in each case without cost to Landlord. The acceptance of late charges and returned check charges by Landlord will not constitute a waiver of any Tenant default nor any other rights or remedies of Landlord.

5.         Security Deposit. Upon Tenant’s execution of this Lease, Tenant will deposit with Landlord the Security Deposit (as defined above in the Basic Lease Information) in the amount specified in the Basic Lease Information as security for Tenant’s full and faithful performance of every provision under this Lease. Landlord will not be required to keep the Security Deposit separate from its general funds. Without limiting or impairing any right Landlord may have or hereafter acquire under this Lease or applicable Law with respect to the Security Deposit, Tenant hereby grants to Landlord a security interest in the Security Deposit. The Security Deposit is not an advance rent payment or a measure of damages under this Lease. If Tenant fails to pay any rent due herein, or otherwise is in default of any provision of this Lease, Landlord may, without waiver of the default or of any other right or remedy, use, apply or retain all or any portion of the Security Deposit for the payment of any amount due Landlord or to compensate Landlord for any loss or damage suffered by Tenant’s default, Within 5 days after written notification by Landlord, Tenant will restore the Security Deposit to the full amount required under this Lease. No part of the Security Deposit shall be considered to be held in trust, to bear interest (except when required by Law) or to be prepayment for any monies to Landlord by Tenant under this Lease. Landlord shall return any unapplied portion of the Security Deposit to Tenant within 45 days after the later to occur of:  (a) determination of the final rent due from Tenant; or (b) the later to occur of the Termination Date or the date Tenant surrenders the Premises to Landlord in compliance with this Lease. Landlord may assign the Security Deposit to a successor or transferee and, following the assignment, Landlord shall have no further liability for the return of the Security Deposit.

6.         Use of Premises.

6.01      The Premises will be used and occupied only for the Permitted Use. Tenant will, at its sole expense, comply with all conditions and covenants of this Lease, and all Laws. Tenant will not use or permit the use of the Premises, the Property or any part thereof, in a manner that is unlawful, diminishes the appearance or aesthetic quality of any part of the Property, creates waste or a nuisance, or causes damage to the Property.  Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to emanate from the Premises nor take or permit any other action in the Premises that would endanger, unreasonably annoy, or interfere with the operations of, Landlord or any other tenant of the Property.  Tenant shall obtain, at its sole expense, any permit or other governmental authorization required for Tenant to legally operate its business from the Premises.  Any animals, excepting guide dogs, on or about the Property or any part thereof are expressly prohibited.

6.02      In the event of any excessive trash in or outside the Premises, as determined by Landlord in its sole discretion, Landlord will have the right to remove such excess trash, charge all costs and expenses attributable to its removal to Tenant and impose fines in the event Tenant fails to remedy the situation.  Tenant will not cause, maintain or permit any outside storage on or about the Property. In the event of any unauthorized outside storage by Tenant or any Tenant Entity, Landlord will have the right, without notice, in addition to such other rights and remedies it may have, to remove any such storage at Tenant’s expense.

7.         Parking. All parking will comply with the terms and conditions of this Lease and applicable Rules and Regulations (as defined in Exhibit C hereto), Tenant will have a non-exclusive privilege on a “first-come, first-served” basis to use Tenant’s Proportionate Share of those parking spaces designated by Landlord for public parking. The parking privileges granted to Tenant are personal to Tenant; Tenant shall not assign or sublet parking privileges.

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8.         Utilities and Services.

8.01      Tenant agrees to make all arrangements for, and to pay directly all costs of, utility services supplied to the Premises, including but not limited to, water, gas, heat, light, power, telephone, and sewer. In the event it is not possible for Tenant to obtain separate utility and/or other services, or if Landlord, in its sole discretion, elects to provide any such utility and/or other services to Tenant, such utility and/or other services may, at Landlord’s discretion, be obtained in Landlord’s name, and Tenant will pay Landlord, as Additional Rent, the cost of any utility services provided by Landlord either: (a) through inclusion in Operating Expenses (except for excess usage, which will be paid as a separate charge by Tenant to Landlord); (b) by a separate charge payable by Tenant to Landlord; or (c) by a separate charge billed by the applicable utility company and payable directly by Tenant. Landlord reserves the right to separately meter any such service at Tenant’s expense at any time during the Term.

8.02      Landlord will not be liable or deemed in default, nor will there be any abatement of rent, breach of any covenant of quiet enjoyment, partial or constructive eviction or right to terminate this Lease, for (a) any interruption or reduction of utilities, utility services or telecommunication services, (b) any telecommunications or other company (whether selected by Landlord or Tenant) failing to provide such utilities or services or providing the same defectively, and/or (c) any utility interruption in the nature of blackouts, brownouts, rolling interruptions, hurricanes, tropical storms or other natural disasters. If the Premises, or a material portion of the Premises, are made untenantable for a period in excess of 30 consecutive business days as a result of any failure to furnish, or any interruption, diminishment or termination of services due to the application of Laws, the failure of any equipment, the performance of repairs, improvements or alterations, utility interruptions or the occurrence of an event of Force Majeure (collectively, a “Service Failure”) that is reasonably within the control of Landlord to correct, then Tenant, as its sole remedy, shall be entitled to receive an abatement of Base Rent and Tenant’s Proportionate Share of Operating Expenses payable hereunder during the period beginning on the 31st consecutive business day of the Service Failure and ending on the day the service has been restored. If the entire Premises have not been rendered untenantable by the Service Failure, the amount of abatement shall be equitably prorated. Tenant agrees to comply with any energy conservation programs required by Law or implemented by Landlord. Landlord reserves the right, in its sole discretion, to designate, at any time, the utility and service providers for Tenant’s use within the Property; no such designation shall impose liability upon Landlord. Tenant has satisfied itself as to the adequacy of any Landlord owned utility equipment and the quantity of telephone lines and other service connections to the “Building’s Point of Demarcation” available for Tenant’s use.

8.03      In the event that Landlord elects, in its sole discretion, to maintain a preventive maintenance/service contract with respect to any heating and air conditioning systems and equipment serving the Premises, and Tenant shall pay to Landlord as Additional Rent, the cost of such contract and any service either as a separate charge payable by Tenant to Landlord or through inclusion in Operating Expenses. Notwithstanding the foregoing, at Landlord’s request at any time during the Term, Tenant shall, at its own cost and expense, enter into a regularly scheduled preventive maintenance/service contract with a maintenance contractor approved by Landlord for servicing all heating and air conditioning systems and equipment serving the Premises (and a copy thereof shall be furnished to Landlord). The service contract must include all services suggested by the equipment manufacturer in the operation/maintenance manual and must become effective within 30 days of the date Landlord requires Tenant to obtain and maintain such service contract, Should Tenant fail to do so, Landlord may, upon notice to Tenant, enter into such service contract on behalf of Tenant or perform the work and in either case, charge Tenant the cost thereof along with a reasonable amount for Landlord’s overhead.

8.04      Tenant shall have access to the Building for Tenant and its employees 24 hours per day/7 days per week, subject to the terms of this Lease and such security or monitoring systems as Landlord may reasonably impose, including, without limitation, sign-in procedures and/or presentation of identification cards.

9.         Tenant Improvements; Tenant Alterations; Mechanic’s Liens.

9.01      Any improvements to be constructed in the Premises by Tenant prior to Tenant initially commencing use of the Premises are referred to throughout this Lease as “Tenant Improvements.” All Tenant Improvements will be performed in accordance with the terms and conditions outlined in Exhibit B and also in accordance with the provisions set forth in this Lease, including this Article 9 regarding Tenant Alterations,

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9.02      The following provisions apply to “Tenant Alterations” which means and includes (a) any alterations, additions or improvements to the Premises undertaken by or on behalf of Tenant, (b) any utility installations at the Premises undertaken by Tenant, and (c) any repair, restoration, replacement, or maintenance work at the Premises undertaken by or on behalf of Tenant. Tenant shall not commence any Tenant Alteration without first obtaining the prior written consent of Landlord in each instance.  Tenant shall submit such information regarding the intended Tenant Alteration as Landlord may reasonably require, and no request for consent shall be deemed complete until such information is so delivered. The following provisions apply to all Tenant Alterations: (i) Tenant shall hire a licensed general contractor approved by Landlord who, in turn, shall hire only licensed subcontractors; (ii) Tenant shall obtain all required permits and deliver a copy of the same to Landlord. Tenant shall install all Tenant Alterations in strict compliance with all Laws, permits, any plans approved by Landlord, and all conditions to Landlord’s approval; (iii) Unless Landlord elects otherwise, Tenant shall remove each Tenant Alteration at the end of this Lease or Tenant’s right of possession and restore the Premises to its prior condition, all at Tenant’s sole expense; and (iv) Tenant shall deliver to Landlord, within ten (10) days following installation of each Tenant Alteration, (A) accurate, reproducible as-built plans, (B) proof of final inspection and approval by all governmental authorities, (C) complete lien waivers acceptable to Landlord for all costs of the Tenant Alteration, and (D) a copy of a recorded notice of completion. Landlord’s approval of any Tenant Improvements and Tenant Alterations and/or Landlord’s approval or designation of any general contractor, subcontractor, supplier or other project participant will not create any liability whatsoever on the part of Landlord. Tenant shall reimburse Landlord for any sums paid by Landlord for third party examination of Tenant’s plans for any Tenant Alterations and any other costs incurred by Landlord in connection with such Tenant Alterations.

9.03      Tenant shall pay all costs of Tenant Alterations as and when due.  Tenant shall not allow any lien to be filed. Tenant shall obtain advance lien waivers and third-party beneficiary agreements from all contractors, subcontractors, suppliers, and others providing equipment, labor, materials, or services, in the form required by Landlord. If any lien is filed, Tenant shall within 15 days remove such lien. In addition, if any such lien is filed and not removed by Tenant as required hereunder, then, without waiver of any other right or remedy, Landlord shall have the right to cause such lien to be removed by any means allowed by Law. All reasonable sums expended by Landlord in connection with such lien and/or its removal, including attorney fees, shall be immediately due from Tenant to Landlord, together with interest at the rate of 12% or the highest per annum rate of interest permitted from time to time under applicable Law (whichever is less).

9.04      All Tenant Improvements and Tenant Alterations are part of the realty and belong to Landlord. Tenant shall be solely responsible for all taxes applicable to any Tenant Alterations, to insure all Tenant Alterations and to restore the same following any casualty. At any time prior to the expiration or earlier termination of this Lease, Landlord may require, upon 10 days’ prior written notice to Tenant, that Tenant remove all, or any part of the Tenant Improvements and/or Tenant Alterations at its sole cost and expense and repair any damage caused by such removal not later than the expiration or earlier termination of this Lease. Notwithstanding the foregoing, Tenant shall not be required to remove any portion of the Tenant Improvements shown on Exhibit B hereto as of the date of this Lease. Notwithstanding anything to the contrary contained herein, so long as Tenant’s written request for consent for a proposed Tenant Alteration contains the following statement in large, bold and capped font “PURSUANT TO ARTICLE 9 OF THE LEASE, IF LANDLORD CONSENTS TO THE SUBJECT ALTERATION, LANDLORD SHALL NOTIFY TENANT IN WRITING WHETHER OR NOT LANDLORD WILL REQUIRE SUCH ALTERATION TO BE REMOVED AT THE EXPIRATION OR EARLIER TERMINATION OF THE LEASE.”, at the time Landlord gives its consent for any Tenant Alterations, if it so does, Tenant shall also be notified whether or not Landlord will require that such Tenant Alterations be removed upon the expiration or earlier termination of this Lease. Notwithstanding anything to the contrary contained in this Lease, at the expiration or earlier termination of this Lease and otherwise in accordance with the terms and conditions of this Lease, Tenant shall be required to remove all Tenant Alterations made to the Premises except for any such Tenant Alterations which Landlord expressly indicates or is deemed to have indicated shall not be required to be removed from the Premises by Tenant.  If Tenant’s written notice strictly complies with the foregoing and if Landlord fails to so notify Tenant whether Tenant shall be required to remove the subject Tenant Alterations at the expiration or earlier termination of this Lease, it shall be assumed that Landlord shall require the removal of the subject Tenant Alterations. If Tenant fails to perform its obligations in a timely manner, Landlord may perform such work at Tenant’s expense. The provisions of this Article 9 shall survive the expiration or any earlier termination of this Lease.

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10.        Repairs.

10.01    Subject to Section 10.02 below, Tenant shall, at all times and at its sole cost and expense, keep all parts of the Premises (including without limitation the Tenant Improvements and Tenant Alterations, windows, glass and plate glass, doors (including, without limitation, overhead and roll up doors), skylights, any special office entries, interior walls and finish work, floors and floor coverings), interior and exterior, and all equipment and facilities within or serving the Premises, in good order, condition and repair regardless of whether the portion of the Premises requiring repairs, or the means of repairing same, are reasonably or readily accessible, and regardless of whether the need for such repairs or maintenance occurs as a result of Tenant’s use, any prior use, vandalism, acts of third parties, Force Majeure (as defined in Article 26 below) or the age of the Premises, reasonable wear and tear excepted. The standard for comparison of condition will be the condition of the Premises as of the original date of Landlord’s delivery of the Premises to Tenant and failure to meet such standard shall create the need to repair. If Tenant does not perform required maintenance or repairs, Landlord shall have the right, without waiver of Default or of any other right or remedy, to perform such obligations of Tenant on Tenant’s behalf, and Tenant will reimburse Landlord for any costs incurred, together with an administrative fee in an amount equal to 10% of the cost of the repairs, immediately upon demand.

10.02    As the Premises constitute a portion of a multiple occupancy Building, Landlord shall perform the repair and maintenance of the roof, exterior walls, exterior areas, foundations and common sewage line plumbing which are otherwise Tenant’s obligation under Section 10.01 above, fire sprinkler system, Common Area fire alarm, utility systems serving the Common Area, the Common Areas and any other maintenance and repair of exterior, structural, and/or common elements which Landlord shall elect, and Tenant shall, in lieu of the obligations set forth under Section 10.01 above with respect to such items, be liable for its Proportionate Share of the expenses so incurred by Landlord; provided, Tenant shall reimburse Landlord for 100% of any such expense incurred by Landlord due to the act or omission of Tenant or any Tenant Entity. Tenant expressly waives the benefit of any statute or other legal right now or hereafter in effect which would otherwise afford Tenant the right to make repairs at Landlord’s expense, whether by deduction of rent or otherwise, or to terminate this Lease because of Landlord’s failure to keep the Property, or any part thereof in good order, condition and repair.

11.        Insurance.

11.01    Tenant will not do or permit anything to be done within or about the Premises or the Property which will increase the existing rate of any insurance on any portion of the Property or cause the cancellation of any insurance policy covering any portion of the Property (including, without limitation, any liability coverage). Tenant will, at its sole cost and expense, comply with any requirements of any insurer of Landlord. Tenant agrees to maintain policies of insurance described in this Article. Landlord reserves the right, from time to time, to require additional coverage (including, flood insurance, if the Premises is located in a flood hazard zone), and/or to require higher amounts of coverage. No insurance policy of Tenant shall have a deductible greater than $5,000.00. Tenant shall maintain the following insurance (“Tenant’s Insurance”): (a) Commercial General Liability Insurance applicable to the Premises and its appurtenances providing, on an occurrence basis, a minimum of $1,000,000.00, and not less than $2,000,000.00 in the annual aggregate, covering third-party bodily injury, property damage, personal injury and advertising injury, product/completed operations as applicable, medical expenses and contractual liability. Defense costs will be in addition to the limit of liability.  A combination of a General Liability policy and an umbrella policy or excess liability policy may be used to satisfy this limit; (b) Property/Business Interruption Insurance written on an All Risk or Special Cause of Loss Form, including earthquake sprinkler leakage, at replacement cost value and with a replacement cost endorsement covering all of Tenant’s business and trade fixtures, equipment, movable partitions, furniture, merchandise and other personal property within the Premises, including for which Tenant has repair obligations and any Tenant Improvements and Tenant Alterations performed by or for the benefit of Tenant, No coinsurance provision will apply; (c) Excess Liability in the amount of $2,000,000.00; (d) Workers’ Compensation Insurance in amounts not less than the amounts required by Law; (e) Employers Liability Coverage of at least $1,000,000.00 per occurrence; (f) Automobile Liability coverage of not less than $1,000,000.00 combined single limit including property damage covering Tenant’s owned, non-owned and hired vehicles; and (g) if Tenant uses any part of the Premises or Property to store or to perform work on vehicles, Tenant shall maintain garage, liability insurance in such form and amount as Landlord may require from time to time, but not less than $2,000,000.00. Any company writing Tenant’s Insurance shall be licensed to do business in the state in which the Premises is located and shall have an A.M. Best rating of not less than A-VIII. Tenant will deliver to Landlord (and, at Landlord’s request, to any Mortgagee (as defined in Article 25 below) or to any other third party), simultaneously with its execution of this Lease and thereafter at least 30 days prior to expiration, cancellation or change in insurance, certificates acceptable to Landlord of insurance evidencing, at a minimum, the coverage specified in this Section 11.01. All such certificates shall be in form and substance satisfactory to Landlord, shall affirmatively demonstrate all coverage and requirements set forth in this Lease, shall contain no disclaimers of coverage, and shall include a firm and unconditional obligation to give to Landlord at least 30 days’ prior written notice prior to cancellation or change in any coverage. Tenant hereby assigns to Landlord all its rights to receive any proceeds of such insurance policies attributable to any Tenant Improvements and Tenant Alterations if this Lease is terminated due to damage or destruction. Landlord and the Landlord Related Parties shall be named additional insureds on Tenant’s insurance policies (excluding Workers’ Compensation Insurance); provided, however, that with respect to property insurance covering any Tenant Improvements and Tenant Alterations, Landlord and the Landlord Related Parties shall be loss payee thereunder (and the foregoing designations shall be evidenced on the insurance certificates delivered to Landlord as required hereby). All insurance to be carried by Tenant will be primary to, and non-contributory with, Landlord’s insurance, and there will be no exclusion for cross-liability endorsements and will in addition to the above coverage specifically insure Landlord against any damage or loss that may result either directly or indirectly from any default of Tenant under Article 13 (Hazardous Materials) herein, Any similar insurance carried by Landlord will be non-contributory and considered excess insurance only.

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11.02    Tenant will name Landlord (and, at Landlord’s request, any Mortgagee (as defined in Article 25 below) and Landlord’s agents as additional insureds on all insurance policies required of Tenant under this Lease, other than Worker’s Compensation, Employer’s Liability, and Fire and Extended coverage (except on Tenant Improvements or Tenant Alterations to the Premises for which Landlord shall be named loss payee) insuring Landlord and such other additional insureds regardless of any defenses the insurer may have against Tenant and regardless of whether the subject claim is also made against Tenant. All insurance policies carried by Tenant will permit the insured, prior to any loss, to agree with a third party to waive any claim it might have against said third party without invalidating the coverage under the insurance policy, and will release Landlord and the Landlord Related Parties (as defined in Article 24 below), from any claims for damage to any person, to the Property of which the Premises are a part, any existing improvements, Tenant Improvements and Tenant Alterations to the Premises, and to any furniture, fixtures, equipment, installations and any other personal property of Tenant caused by or resulting from, risks which are to be insured against by Tenant under this Lease, regardless of cause. The foregoing shall be evidenced in Tenant’s certificate of insurance,

11.03    Landlord will secure and maintain insurance coverage in such limits as Landlord may deem reasonable in its sole judgment to afford Landlord adequate protection. The premiums for such coverage are “Insurance Premiums” under Exhibit D to this Lease. Any proceeds of such insurance shall be the sole property of Landlord to use as Landlord determines. Tenant will p