Exhibit 10.2

LEASE

BETWEEN

TDC PRUE ROAD, L.P., AS LANDLORD

AND

ASSET ACCEPTANCE, LLC, AS TENANT

NETWORK CROSSING

SAN ANTONIO, TEXAS

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TABLE OF CONTENTS

 

     Page

1. DEFINITIONS

   1

2. LEASE GRANT/POSSESSION

   4

3. USE

   5

4. RENT

   6

5. SECURITY DEPOSIT

   6

6. UTILITIES

   6

7. SIGNAGE

   7

8. MAINTENANCE, REPAIRS AND ALTERATIONS

   8

9. ASSIGNMENT AND SUBLETTING

   11

10. MECHANIC’S LIENS

   12

11. INSURANCE

   13

12. INDEMNITY

   14

13. DAMAGES FROM CERTAIN CAUSES

   15

14. CASUALTY DAMAGE

   16

15. CONDEMNATION

   17

16. EVENTS OF DEFAULT

   17

17. REMEDIES

   18

18. NO WAIVER

   21

19. PEACEFUL ENJOYMENT

   21

20. SUBSTITUTION

   21

21. HOLDING OVER

   21

22. SUBORDINATION TO MORTGAGE; ESTOPPEL CERTIFICATE; COLLATERAL ACCESS AGREEMENT

   22

 

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23. NOTICE

   22

24. SURRENDER OF PREMISES

   23

25. RIGHTS RESERVED TO LANDLORD

   23

26. MISCELLANEOUS

   24

27. NO OFFER

   26

28. ENTIRE AGREEMENT

   26

29. LIMITATION OF LIABILITY

   26

30. HAZARDOUS SUBSTANCES

   27

EXHIBIT A-OUTLINE AND LOCATION OF PREMISES

  

EXHIBIT A-1-LEGAL DESCRIPTION OF LAND

   A-1-1

EXHIBIT B-RULES AND REGULATIONS

   B-1

EXHIBIT C-PAYMENT OF BASIC COSTS

   C-1

EXHIBIT D-INTENTIONALLY OMITTED

   D-1

EXHIBIT E-ADDITIONAL PROVISIONS

   E-1

EXHIBIT F-COMMENCEMENT LETTER

   F-1

EXHIBIT G-PROJECT SIGN SPECIFICATIONS

  

EXHIBIT H-LOCATION OF MONUMENT SIGN

  

EXHIBIT I-SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

   I-1

 

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LEASE AGREEMENT

This Lease Agreement (the “Lease”) is made and entered into as of the 27th day
of April, 2009, by and between TDC PRUE ROAD, L.P., a Delaware limited
partnership (“Landlord”), and ASSET ACCEPTANCE, LLC, a Delaware limited
liability company (“Tenant”).

W I T N E S S E T H:

1. Definitions

The following are definitions of some of the defined terms used in this Lease.
The definition of other defined terms are found throughout this Lease.

A. “Building” shall mean the building known 5250 Prue Road, San Antonio, Bexar
County, Texas 78240.

B. “Base Rent”: Base Rent shall be paid according to the following schedule,
subject to the provisions of Section 4 hereof. For the purposes hereof, “Lease
Month” shall mean a period of time commencing on the same numeric day as the
Commencement Date and ending on (but not including) the day in the next calendar
month that is the same numeric date as the Commencement Date.

 

PERIOD

   ANNUAL BASE
RENT    MONTHLY INSTALLMENTS
OF BASE RENT

Lease Months 1 – 4

   $ 0.00    $ 0.00

Lease Months 5 – 64

   $ 231,146.25    $ 19,262.19

The Base Rent and Additional Rent due for Lease Month 5 of the Lease Term
(hereinafter defined) shall be paid by Tenant to Landlord contemporaneously with
Tenant’s execution hereof.

C. “Additional Rent” shall mean Tenant’s Pro Rata Share of Basic Costs
(hereinafter defined) and any other sums (exclusive of Base Rent) that are
required to be paid to Landlord by Tenant hereunder, which sums are deemed to be
Additional Rent under this Lease.

D. “Basic Costs” are defined in Exhibit C attached hereto. Tenant’s initial
estimated monthly Basic Costs payment is $6,149.36.

E. “Security Deposit” shall mean the sum of $0.00. The Security Deposit shall be
paid by Tenant to Landlord contemporaneously with Tenant’s execution hereof.

 

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F. “Lease Term” shall mean a period of sixty-four (64) months commencing on the
later to occur of (a) July 1, 2009 (the “Target Commencement Date”) and (b) the
date upon which Landlord’s Work in the Premises has been substantially
completed, as such date is determined pursuant to the Work Letter Agreement
entered into between the parties hereof and executed as of even date herewith
(the “Work Letter”) (the later to occur of such dates being defined as the
“Commencement Date”). “Expiration Date” shall mean the last day of the Lease
Term. Notwithstanding the foregoing, if the Expiration Date, as determined
herein, does not occur on the last day of a calendar month, the Lease Term and
the last Lease Year thereof shall be extended by the number of days necessary to
cause the Expiration Date to occur on the last day of the last calendar month of
the Lease Term. Tenant shall pay Base Rent and Additional Rent for such
additional days at the same rate payable for the portion of the last calendar
month immediately preceding such extension. Upon the determination of the actual
Commencement Date and the actual Expiration Date, Landlord and Tenant shall each
execute and deliver a Commencement Letter in the form of Exhibit F attached
hereto (the “Commencement Letter”) setting forth the Commencement Date and the
Expiration Date.

G. “Premises” shall mean the space located in the Building and outlined on
Exhibit A to this Lease and known as Suite 525.

H. “Rentable Square Footage in the Premises” shall mean 17,445 square feet.

I. “Rentable Square Footage in the Project” shall mean 143,831 square feet.

J. “Tenant’s Pro Rata Share” shall mean 12.1288%, being the Rentable Square
Footage of the Premises divided by the Rentable Square Footage of the Project,
expressed as a percentage.

K. “Permitted Use” shall mean general office use, including, but not limited to,
receiving, transmitting or administering (i) requests by telephone,
(ii) incoming product support or information inquiries from consumers, and
(iii) outgoing calls for telemarketing, clientele, product services, or debt
collection, and no other use or purpose.

L. “Guarantor(s)” shall mean any party that agrees in writing to guarantee
Tenant’s obligations under the Lease. As of the date of this Lease, there are no
Guarantor(s).

M. “Broker” shall mean, collectively, Transwestern and Providence Commercial
Real Estate Services, Inc.

N. “Business Day(s)” shall mean Mondays through Fridays exclusive of the normal
business holidays.

O. “Common Areas” shall mean those areas located within the Project designated
by Landlord, from time to time, for the common use or benefit of tenants
generally and/or the public.

 

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P. “Default Rate” shall mean the lower of (i) eighteen percent (18%) per annum,
or (ii) the highest rate of interest from time-to-time permitted under
applicable federal and state law.

Q. “Project” shall mean the project currently known as Network Crossing, located
at 5253 Prue Road and 5250 Prue Road, San Antonio, Texas. The Project includes
the Building and the other four (4) buildings located at 5253 Prue Road and 5250
Prue Road, which Landlord operates jointly with the Building, and the land upon
which all such buildings are located, which land is described in Exhibit A-1
attached hereto, and all other improvements located on such land.

R. “Notice Addresses” shall mean the following addresses for Tenant and
Landlord, respectively:

Tenant:

Asset Acceptance, LLC

28405 Van Dyke Avenue

Warren, Michigan 48093

Attn: Mark A. Redman, Chief Financial Officer

With a copy to:

Asset Acceptance, LLC

28405 Van Dyke Avenue

Warren, Michigan 48093

Attn: Edwin L. Herbert, General Counsel

Landlord:

c/o Transwestern

8200 IH-10 W, Suite 800

San Antonio, TX 78230

Attention: Property Manager

with a copy to:

Transwestern

901 South Mopac, Building 4, Suite 250

Austin, TX 78746

Attention: Josh Delk

 

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Payments of Rent only shall be made payable to the order of:

TDC Prue Road, L.P.

at the following address:

c/o Transwestem

8200 IH-10 W, Suite 800

San Antonio, TX 78230

Attention: Property Manager

or such other name and address as Landlord shall, from time to time, designate.

2. Lease Grant/Possession

A. Subject to and upon the terms herein set forth, Landlord leases to Tenant and
Tenant leases from Landlord the Premises on an “as is” basis (except as
otherwise expressly set forth herein), together with the right, in common with
others, to use the Common Areas. By taking possession of the Premises, Tenant is
deemed to have accepted the Premises and agreed that the Premises is in good
order and satisfactory condition, with no representation or warranty by Landlord
as to the condition of the Premises or the Building or suitability thereof for
Tenant’s use. NO WARRANTIES, EXPRESS OR IMPLIED, ARE MADE REGARDING THE
CONDITION OR SUITABILITY OF THE PREMISES ON THE COMMENCEMENT DATE. FURTHER, TO
THE EXTENT PERMITTED BY LAW, TENANT WAIVES ANY IMPLIED WARRANTY OF SUITABILITY
OR OTHER IMPLIED WARRANTIES THAT LANDLORD WILL MAINTAIN OR REPAIR THE PREMISES
OR ITS APPURTENANCES EXCEPT AS MAY BE CLEARLY AND EXPRESSLY PROVIDED IN THIS
LEASE.

B. Notwithstanding anything to the contrary contained in this Lease, if Landlord
is unable to tender possession of any portion of the Premises on the date
possession is to be delivered due to the holding over of another party, this
Lease shall not be void or voidable or otherwise affected. Landlord shall use
reasonable efforts to regain possession of the Premises in order to deliver the
same to Tenant. If the Commencement Date as set forth in Section IF is a
specified date, the Commencement Date shall be postponed until the date Landlord
delivers possession of the Premises to Tenant, the Expiration Date shall
correspondingly be postponed on a per diem basis, and, upon determination of the
actual Commencement Date and the actual Expiration Date, Landlord and Tenant
shall each execute and deliver a Commencement Letter.

C. Tenant may take possession of the Premises approximately thirty (30) days
prior to the Commencement Date for the sole purpose of performing any
improvements therein, including without limitation, installation of voice/data
cabling, telephone and networking equipment, staging or installing furniture,
equipment or other personal property of Tenant (collectively, “Tenant’s Work”);
provided that Tenant and Tenant’s contractors do not interfere with Landlord’s
contractors performing the Landlord’s Work. Such possession of the Premises
prior to the Commencement Date and the performance of Tenant’s Work shall be
subject to all of the terms and conditions of the Lease, except that Tenant
shall not be required to pay Rent with respect to the period of time prior to
the Commencement Date during which Tenant performs such work.

 

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Tenant shall, however, be liable for the reasonable cost of any additional
services that are requested by and provided to Tenant during the period of
Tenant’s possession prior to the Commencement Date.

D. Notwithstanding anything to the contrary set forth herein, in the event the
Tenant is unable to move into the Premises by June 30, 2009 for commencement of
business operation therein on such date for any reason, Tenant, as its sole and
exclusive remedy, shall be entitled to an abatement of Rent equal to $10,224.38.

3. Use

The Premises shall be used for the Permitted Use and for no other purpose.
Tenant shall not conduct or give notice of any auction, liquidation, or going
out of business sale on the Premises. Tenant agrees not to use or permit the use
of the Premises for any purpose which is illegal or dangerous, which creates a
nuisance or which would increase the cost of insurance coverage with respect to
the Building. Tenant will conduct its business and control its agents, servants,
employees, customers, licensees, and invitees in such a manner as not to
interfere with or disturb other tenants or Landlord in the management of the
Project. Tenant shall not permit any objectionable or unpleasant odors, smoke,
dust, gas, noise, or vibrations to emanate from the Premises, or take any other
action that would constitute a nuisance or would disturb, unreasonably interfere
with, or endanger Landlord or any tenants of the Project. Outside storage,
including without limitation, storage of trucks and other vehicles, is
prohibited without Landlord’s prior written consent. Tenant will maintain the
Premises in a clean and healthful condition, and comply with all laws,
ordinances, orders, rules and regulations of any governmental entity with
reference to the use, condition, configuration or occupancy of the Premises.
Landlord shall deliver the Premises to Tenant in compliance with all applicable
laws, failing which, Landlord, as Tenant’s sole and exclusive remedy, will cause
the Premises to be in compliance at no additional cost to Tenant. Tenant shall
not, and shall not knowingly allow its employees, agents, contractors or
invitees, to bring into the Project, Building or the Premises any dangerous or
hazardous materials, except for customary office and cleaning supplies, provided
Tenant uses, stores and disposes of the same in compliance with all applicable
law. In the event Tenant’s employees, agents, contractors or invitees bring into
the Project, Building or the Premises any dangerous or hazardous materials,
Tenant shall be responsible for all costs and expenses incurred by Landlord in
connection therewith. Tenant, at its expense, will comply with the rules and
regulations of the Project attached hereto as Exhibit B and such other rules and
regulations adopted and altered by Landlord from time-to-time and will cause all
of its agents, employees, invitees and visitors to do so. All such changes to
rules and regulations will be reasonable and shall be sent by Landlord to Tenant
in writing at least thirty (30) days prior to the date such changes become
effective. In the event of a conflict between the rules and regulations and the
terms of this Lease, the terms of this Lease shall control. Landlord shall not
knowingly enforce the rules and regulations against Tenant in a discriminatory
manner.

 

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4. Rent

A. Tenant covenants to pay to Landlord during the Lease Tern, without any setoff
or deduction except as otherwise expressly provided herein, the full amount of
all Base Rent and Additional Rent due hereunder and the full amount of all such
other sums of money as shall become due under this Lease, all of which
hereinafter may be collectively called “Rent.” In addition, Tenant shall pay, as
Additional Rent, all rent, sales and use taxes or other similar taxes, if any,
levied or imposed by any city, state, county or other governmental body having
authority, such payments to be in addition to all other payments required to be
paid to Landlord by Tenant under this Lease. Such payments shall be paid
concurrently with the payments of the Rent on which the tax is based. Base Rent
and Additional Rent for each calendar year or portion thereof during the Lease
Term, shall be due and payable in advance in monthly installments on the first
day of each calendar month during the Lease Term, without demand. If the Lease
Term commences on a day other than the first day of a month or terminates on a
day other than the last day of a month, then the installments of Base Rent and
Additional Rent for such month or months shall be prorated, based on the number
of days in such month. All amounts received by Landlord from Tenant hereunder
shall be applied first to the earliest accrued and unpaid Rent then outstanding.
Tenant’s covenant to pay Rent shall be independent of every other covenant set
forth in this Lease.

B. To the extent allowed by law, all installments of Rent not paid when due
shall bear interest at the Default Rate from the date due until paid, provided
with respect to such interest, Tenant shall be entitled to a grace period of
seven (7) days after notice from Landlord with respect to the first two (2) late
payments in any calendar year. In addition, if Tenant fails to pay any
installment of Base Rent and Additional Rent or any other item of Rent when due
and payable hereunder, a “Late Charge” equal to five percent (5%) of such unpaid
amount will be due and payable immediately by Tenant to Landlord, provided with
respect to such Late Charge, Tenant shall be entitled to a grace period of seven
(7) days after notice from Landlord with respect to the first two (2) late
payments in any calendar year.

C. The Additional Rent payable hereunder shall be adjusted from time-to-time in
accordance with the provisions of Exhibit C attached hereto.

5. Security Deposit

Intentionally omitted.

6. Utilities and Services

(a) Landlord agrees to provide water, sanitary sewer, gas, electricity and
telephone service connections to the Building. Landlord shall, as part of the
Landlord’s Work, shall bring such utilities except for telephone to the
Premises. Tenant shall be responsible for installation of Tenant’s
telecommunications wiring and cabling. From and after the Commencement Date,
Tenant shall pay for all water, gas, heat, light, power, telephone, sewer
charges and other utilities and services used on or from the Premises, together
with any taxes, penalties, surcharges or the like pertaining thereto and any
maintenance charges for utilities. To the extent possible, all utility

 

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services will be separately metered to the Premises and placed in Tenant’s name
on the Commencement Date. If it is not possible to place a utility service on a
separate meter in Tenant’s name, then all costs associated with the provision of
such utility service to the Premises will be included as part of Basic Costs and
paid by Tenant in accordance with the provisions of Exhibit C attached hereto.
Landlord shall have the right at any time and from time-to-time during the Lease
Term to designate the provider of electrical service to the Project as Landlord
shall elect (each being an “Electric Service Provider”). Tenant shall cooperate
with Landlord, and the applicable Electric Service Provider, at all times and,
as reasonably necessary, shall allow Landlord and such Electric Service Provider
reasonable access to the Building’s electric lines, feeders, wiring, and any
other machinery within the Premises. Tenant’s use of electrical services shall
not exceed in voltage, rated capacity, or overall load that which is standard
for the Building. In the event Tenant shall request that it be allowed to
consume electrical services in excess of Building standard, Landlord reasonably
may refuse to consent to such usage or may consent upon such conditions as
Landlord reasonably elects, and all such additional usage shall be paid for by
Tenant as Additional Rent.

(b) Except as otherwise expressly provided herein, the failure by Landlord to
any extent to furnish, or the interruption or termination of these defined
services in whole or in part, resulting from adherence to laws, regulations and
administrative orders, force majeure, unavailability of utilities from a service
provider, interruptions of utilities caused by repairs, construction, or any
other causes beyond the reasonable control of Landlord shall not render Landlord
liable in any respect nor be construed as an eviction of Tenant, nor cause an
abatement of rent, nor relieve Tenant from the obligation to fulfill any
covenant or agreement hereof. Should any of the equipment or machinery used in
the provision of such services for any cause cease to function properly,
Landlord shall use reasonable diligence to repair such equipment or machinery
but, except as otherwise expressly provided herein, Tenant shall have no claim
for offset or abatement of rent or damages on account of an interruption in
service thereby or resulting therefrom. Except as expressly provided herein,
Landlord shall not be required to make any repairs to or maintain the Premises.
Tenant shall have primary responsibility for security and janitorial services
with respect to the Premises.

7. Signage

A. Tenant shall not make any changes to the exterior of the Premises, install
any exterior lights, decorations, balloons, flags, pennants, banners, or
painting, or erect or install any signs, windows or door lettering, placards,
decorations, or advertising media of any type which can be viewed from the
exterior of the Premises, without Landlord’s prior written consent. All signs
installed by Tenant shall be subject to any applicable governmental laws,
ordinances, regulations, the sign criteria for the Project, and Landlord’s or
other architectural controls and other requirements. The current sign
specifications applicable to the Project are attached hereto as Exhibit G.
Tenant shall maintain all signs upon the Premises and the Building in good
condition and repair. Tenant shall pay all costs associated with any signage
installed by Tenant, including without limitation, installation expenses,
maintenance and repair costs, utilities and insurance. Tenant agrees that,
subject to inclusion in Basic Costs, Landlord shall have the right, after
written notice to Tenant, to temporarily remove and replace any of Tenant’s
signage in connection with and during the course of any repairs, changes,
alterations, modifications,

 

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renovations or additions to the Building. Upon surrender or vacation of the
Premises, Tenant shall remove all signs and repair, paint, and/or replace the
Building facia surface to which its signs are attached. All signs, blinds,
draperies and other window treatment or bars or other security installations
visible from outside the Premises shall be subject to Landlord’s approval and
conform in all respects to Landlord’s requirements.

B. Provided that (i) Tenant is not in default under the terms of the Lease after
the expiration of any applicable cure periods; (ii) Tenant is in occupancy of
the Premises; and (iii) Tenant has not assigned the Lease or sublet any part of
the Premises other than pursuant to a Permitted Transfer, then Tenant shall have
the right, at Tenant’s sole cost and expense, to have a single panel on the
multi-tenant monument sign designated as “B.2” on Exhibit H attached hereto (the
“Monument Sign”). Following installation of Tenant’s panel, Tenant shall remain
liable for all costs related to the maintenance of the panel and for Tenant’s
proportionate share of maintenance and repair expenses for the Monument Sign.
Tenant must obtain Landlord’s written consent to any proposed signage panel
prior to its fabrication and installation. Landlord will not unreasonably
withhold its consent to any signage panel that complies with the Project’s sign
specifications attached hereto as Exhibit G. To obtain Landlord’s consent,
Tenant shall submit design drawings to Landlord, showing the type and sizes of
all lettering, the colors, finishes and types of materials used. If during the
Lease Term (i) Tenant is in default under the terms of the Lease after the
expiration of any applicable cure periods; or (ii) Tenant fails to continuously
occupy (other than due to a casualty, condemnation or interruption of services)
the Premises; or (iii) Tenant assigns the Lease or subleases any part of the
Premises, then Tenant’s signage rights granted in this Section 7.B will
terminate and Landlord may remove any of Tenant’s panel from the Monument Sign
at Tenant’s cost. The right to install the panel on the Monument Sign is
personal to the Tenant listed in the first paragraph of this Lease and is not
assignable to any other tenant under this Lease. Further, in the event Tenant
does not install a panel on the Monument Sign by September 30, 2010, Tenant’s
right to the panel on the Monument Sign shall terminate.

8. Maintenance, Repairs and Alterations

A. Except to the extent such obligations are imposed upon Landlord hereunder,
Tenant shall, at its sole cost and expense, maintain the Premises in good order,
condition and repair throughout the entire Lease Term, ordinary wear and tear
excepted, including but not limited to, windows, glass, plate glass doors, any
special office entry, interior walls and finish work, and floors and floor
covering. Landlord shall assign to Tenant, on a non-exclusive basis with
Landlord, during the Lease Term, all warranties received by Landlord in
connection with any of the foregoing items Tenant is required to maintain and
repair. Tenant agrees to keep the areas visible from outside the Premises in a
neat, clean and attractive condition at all times. If Tenant fails to maintain
the Premises in good order, condition and repair, Landlord shall give Tenant
written notice to perform such acts as are reasonably required to so maintain
the Premises. If Tenant fails to commence such work within thirty (30) days
after receipt of such notice and diligently pursue it to its completion, then
Landlord may, at is option, make such repairs, and Tenant shall pay the cost
thereof to Landlord on demand as Additional Rent, together with an
administration charge in an amount equal to ten percent (10%) of the cost of
such repairs. Tenant shall, within thirty (30) days after Landlord’s written
demand therefor (which demand shall include reasonable evidence supporting such
costs), reimburse Landlord for the cost of all

 

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repairs, replacements and alterations (collectively, “Repairs”) in and to the
Premises, Building and Project and the facilities and systems thereof, plus an
administration charge of ten percent (10%) of such cost, the need for which
Repairs arises out of (1) Tenant’s use or occupancy of the Premises, (2) the
installation, removal, use or operation of Tenant’s Property (hereinafter
defined) or Alterations (hereinafter defined), or (3) the act, omission, misuse
or negligence of Tenant, its agents, contractors, employees or invitees.

B. Landlord shall, as a component of Basic Costs, keep and maintain in good
repair and working order and make repairs to and perform maintenance upon:
(1) the structural elements of the Building; (2) the Building systems that serve
the Building in general; and (3) the roof of the Building. In addition, Landlord
shall be responsible, at no additional cost to Tenant, for the costs of
correcting latent defects in the Landlord’s Work and/or the shell of the
Building. Landlord shall at Tenant’s sole cost and expense, but without mark-up
or profit, maintain and repair the mechanical (including HVAC), electrical,
plumbing and fire/life safety systems serving the Premises, including without
limitation, entering into a regularly scheduled preventative maintenance/service
contract with respect to the HVAC systems. Tenant shall immediately give
Landlord written notice of the need for repairs, after which Landlord shall have
reasonable opportunity to repair same. Tenant shall reimburse Landlord for the
reasonable cost of any maintenance or repair to be made at Tenant’s expense
within thirty (30) days after receipt of an invoice from Landlord therefor.
Landlord shall also maintain in good repair and condition the parking areas and
other Common Areas of the Project, including, but not limited to driveways,
alleys, landscape and grounds. Tenant will be responsible for the payment of all
costs associated with Landlord’s maintenance if the need therefor arises due to
the fault or negligence of Tenant or its agents, employees, licensees or
invitees. Except as otherwise expressly provided in this Section 8.B or
elsewhere in this Lease, Landlord will not at any time be required to make any
improvements, repairs, replacements or alterations to the Premises.

C. Tenant shall not make or allow to be made any alterations, additions or
improvements to the Premises (collectively, “Alterations”), without first
obtaining the written consent of Landlord. However, Landlord’s consent shall not
be required for any alteration that satisfies all of the following criteria (a
“Cosmetic Alteration”): (1) is of a cosmetic nature such as painting (but not
wallpapering), hanging pictures, hanging white boards and installing carpeting;
(2) is not visible from the exterior of the Premises or Building; (3) will not
affect the systems or structure of the Building; (4) does not require work to be
performed inside the Walls or above the ceiling of the Premises; and (5) does
not require a building permit. Cosmetic Alterations shall otherwise be subject
to all the other provisions of this Section 8 other than delivery of plans and
specifications. Prior to commencing any Alterations and as a condition to
obtaining Landlord’s consent, Tenant shall deliver to Landlord plans and
specifications acceptable to Landlord; names and addresses of contractors
reasonably acceptable to Landlord; copies of contracts; necessary permits and
approvals; evidence of contractor’s and subcontractor’s insurance in accordance
with Section 11 hereof; and a payment bond or other security, all in form and
amount satisfactory to Landlord. Tenant shall be responsible for insuring that
all such persons procure and maintain insurance coverage against such risks, in
such amounts and with such companies as Landlord may reasonably require. All
Alterations shall be constructed in a good and workmanlike manner using Building
standard materials or other new materials of equal or greater quality. Landlord,
to the extent reasonably necessary to avoid any disruption to the tenants and
occupants of the

 

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Project, shall have the right to designate the time when any Alterations may be
performed and to otherwise designate reasonable rules, regulations and
procedures for the performance of work in the Building. Upon completion of the
Alterations, Tenant shall deliver to Landlord “as-built” plans, contractor’s
affidavits and full and final waivers of lien and receipted bills covering all
labor and materials. All Alterations shall comply with the insurance
requirements and with applicable codes, ordinances, laws and regulations. Tenant
shall reimburse Landlord upon demand for all reasonable sums, if any, expended
by Landlord for third party examination of the architectural, mechanical,
electrical and plumbing plans for any Alterations. In addition, if Landlord so
requests, Landlord shall be entitled to oversee the construction of any
Alterations that may affect the structure of the Building or any of the
mechanical, electrical, plumbing or life safety systems of the Building.
Landlord’s approval of Tenant’s plans and specifications for any Alterations
performed for or on behalf of Tenant shall not be deemed to be a representation
by Landlord that such plans and specifications comply with applicable insurance
requirements, building codes, ordinances, laws or regulations or that the
Alterations constructed in accordance with such plans and specifications will be
adequate for Tenant’s use. Tenant may, without the consent of Landlord, but at
its own cost and expense and in a good workmanlike manner, erect such shelves,
bins, machinery, and trade fixtures (together with any other personal property
brought into the Premises by Tenant, collectively, “Tenant’s Property”) as it
may deem advisable, without altering the basic character of the Building or
improvements and without overloading or damaging such Building or improvements,
and in each case complying with all applicable governmental laws, ordinances,
regulations and other requirements. All Alterations and partitions erected by
Tenant shall be and remain the property of Tenant during the term of this Lease,
and Tenant shall, unless Landlord otherwise elects as hereinafter provided,
remove all Alterations and partitions erected by Tenant and restore the Premises
to its original condition by the date of termination of this Lease or upon
earlier vacating of the Premises; provided, however, that if Landlord so elects
prior to termination of this Lease or upon earlier vacating of the Premises,
such Alterations and/or partitions shall become the property of Landlord as of
the date of termination of this Lease or upon earlier vacating of the Premises
and shall be delivered up to the Landlord with the Premises. All of Tenant’s
Property may be removed by Tenant prior to the termination of this Lease, and
all of Tenant’s Property and all electronic, phone and data cabling exclusively
serving the Premises (whether such cabling is located within or outside of the
Premises) shall be removed by the date of termination of this Lease or upon
earlier vacating of the Premises. Any removal by Tenant shall be accomplished in
a good workmanlike manner so as not to damage the primary structure or
structural qualities of the Building. If Tenant fails to remove any of the
foregoing items or to perform any required repairs and restoration,
(i) Landlord, at Tenant’s sole cost and expense, may remove the same (and repair
any damage occasioned thereby) and dispose thereof or deliver such items to any
other place of business of Tenant, or warehouse the same, and Tenant shall pay
the cost of such removal, repair, delivery, or warehousing of such items within
ten (10) days after written demand from Landlord and (ii) such failure shall be
deemed a holding over by Tenant under Section 21 hereof until such failure is
rectified by Tenant or Landlord.

 

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9. Assignment and Subletting

A. Except in connection with a Permitted Transfer (defined in Section 9.E
below), Tenant shall not assign, sublease, transfer or encumber any interest in
this Lease or allow any third party to use any portion of the Premises
(collectively or individually, a “Transfer”) without the prior written consent
of Landlord, which consent to an assignment or sublease shall not be
unreasonably withheld, conditioned or delayed. Without limitation, it is agreed
that Landlord’s consent shall not be considered unreasonably withheld if:
(1) the proposed transferee’s financial condition is worse than the financial
condition of Tenant as of the Commencement Date; (2) the transferee’s business
or reputation is not suitable for the Project considering the business and
reputation of the other tenants and the Project’s prestige, as determined by
Landlord in the exercise of its reasonable discretion, or would result in a
violation of another tenant’s rights under its lease at the Project; (3) the
transferee is a governmental agency or occupant of the Project; (4) Tenant is in
default beyond any applicable notice and cure period; (5) any portion of the
Project or the Premises would likely become subject to additional or different
laws as a consequence of the proposed Transfer; or (6) Landlord or its leasing
agent has received a proposal from or made a proposal to the proposed transferee
to lease space in the Project within six (6) months prior to Tenant’s delivery
of written notice of the proposed Transfer to Landlord. Any attempted Transfer
in violation of this Section 9, shall, exercisable in Landlord’s sole and
absolute discretion, be void. Consent by Landlord to one or more Transfers shall
not operate as a waiver of Landlord’s rights to approve any subsequent
Transfers. In no event shall any Transfer or Permitted Transfer release or
relieve Tenant from any obligation under this Lease or any liability hereunder.

B. If Tenant requests Landlord’s consent to a Transfer, Tenant shall submit to
Landlord (i) financial statements for the proposed transferee, (ii) a copy of
the proposed assignment or sublease, and (iii) such other information as
Landlord may reasonably request. Within ten (10) Business Days after Landlord’s
receipt of the required information and documentation, Landlord shall either:
(1) consent or reasonably refuse consent to the Transfer in writing; (2) in the
event of a proposed assignment of this Lease, terminate this Lease effective the
first to occur of ninety (90) days following written notice of such termination
or the date that the proposed Transfer would have come into effect; and (3) in
the event of a proposed subletting for substantially all of the remaining Lease
Term, terminate this Lease with respect to the portion of the Premises which
Tenant proposes to sublease effective the first to occur of ninety (90) days
following written notice of such termination or the date the proposed Transfer
would have come into effect. Notwithstanding the foregoing, Tenant shall have
the right, exercisable within five (5) days after receipt of Landlord’s intent
to terminate this Lease pursuant to this Section 9.B, to withdraw its request
for consent to the proposed Transfer, in which case this Lease shall continue as
if such Transfer was never proposed by Tenant. Tenant shall pay Landlord a
review fee of $1,000.00 for Landlord’s review of any Permitted Transfer or
proposed Transfer. In addition, Tenant shall reimburse Landlord for its actual
reasonable costs and expenses (including, without limitation, reasonable
attorney’s fees) incurred by Landlord in connection with Landlord’s review of
such proposed Transfer or Permitted Transfer within thirty (30) days after
receipt of an invoice (including reasonable documentation of such costs)
therefor.

 

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C. Tenant shall pay to Landlord fifty percent (50%) of all cash and other
consideration which Tenant receives as a result of a Transfer (after deduction
of all out-of-pocket costs paid to third parties by Tenant in connection with
such Transfer, including, without limitation, marketing expenses and brokerage
fees) that is in excess of the rent payable to Landlord hereunder for the
portion of the Premises and Lease Term covered by the Transfer within ten
(10) days following receipt thereof by Tenant. This Section 9.C shall not apply
to a Permitted Transfer.

D. Except as provided below with respect to a Permitted Transfer, if Tenant is a
corporation, limited liability company, partnership or similar entity, and the
person, persons or entity which owns or controls a majority of the voting
interests at the time changes for any reason (including but not limited to a
merger, consolidation or reorganization), such change of ownership or control
shall constitute a Transfer. The foregoing shall not apply so long as (i) Tenant
or its parent is an entity whose outstanding stock is listed on a nationally
recognized security exchange, or (ii) if at least eighty percent (80%) of its
voting stock is owned by another entity, the voting stock of which is so listed.

E. Tenant may assign its entire interest under this Lease or sublet the Premises
(i) to any entity controlling or controlled by or under common control with
Tenant or (ii) to any successor to Tenant by purchase, merger, consolidation or
reorganization (hereinafter, collectively, referred to as “Permitted Transfer”)
without the consent of Landlord, provided: (1) Tenant is not in default under
this Lease beyond any applicable cure period; (2) if such proposed transferee is
a successor to Tenant by purchase, said proposed transferee shall acquire all or
substantially all of the stock or assets of Tenant’s business or, if such
proposed transferee is a successor to Tenant by merger, consolidation or
reorganization, the continuing or surviving entity shall own all or
substantially all of the assets of Tenant; (3) with respect to a Permitted
Transfer to a proposed transferee described in clause (ii), such proposed
transferee shall have a net worth which is at least equal to the greater of
Tenant’s net worth at the date of this Lease or Tenant’s net worth as of the day
prior to the proposed purchase, merger, consolidation or reorganization as
evidenced to Landlord’s reasonable satisfaction; and (4) Tenant shall give
Landlord written notice at least thirty (30) days prior to the effective date of
the proposed purchase, merger, consolidation or reorganization.

10. Mechanic’s Liens

Tenant has no express or implied authority to create or place any lien or
encumbrance of any kind upon, or in any manner to bind the interest of Landlord
or Tenant in, the Premises or the Project or to charge the rentals payable
hereunder for any claim in favor of any person dealing with Tenant, including
those who may furnish materials or perform labor for any construction or
repairs. Tenant covenants and agrees that it will pay or cause to be paid all
sums due and payable by it on account of any labor performed or materials
furnished in connection with any work performed on the Premises and that it will
save and hold Landlord harmless from all loss, cost or expense (including
without limitation, reasonable attorneys’ fees) based on or arising out of
asserted claims or liens against the leasehold estate or against the interest of
Landlord in the Premises or under this Lease. If a lien is attached to the
Project or any part thereof and the same is not discharged of record (by bonding
or payment) within fifteen (15)

 

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days after Tenant’s receipt of notice of such lien, then, in addition to any
other right or remedy of Landlord, Landlord may, but shall not be obligated to,
discharge the same. Any amount paid by Landlord for any of the aforesaid
purposes including, but not limited to, reasonable attorneys’ fees, shall be
paid by Tenant to Landlord within thirty (30) days after demand as Additional
Rent. Tenant shall within fifteen (15) days of receiving such notice of lien or
claim have such lien or claim released of record. Tenant’s failure to comply
with the provisions of the foregoing sentence shall be deemed an Event of
Default entitling Landlord to exercise all of its remedies therefor without the
requirement of any additional notice or cure period.

11. Insurance

A. Landlord shall, at all times during the Lease Term, procure and maintain:
(i) policies of insurance covering loss or damage to the Project in an amount
equal to the full replacement cost of the Building, including leasehold
improvements in the Premises, which shall provide protection against loss by
fire and other all-risk casualties including earthquake and flood and such other
property insurance as may be required by Landlord’s mortgagee or as otherwise
desired by Landlord, and (ii) commercial general liability insurance applicable
to the Building and the Common Areas, providing a minimum limit of $3,000,000.00
per occurrence. Landlord’s property insurance policy shall be endorsed to waive
the insurance carrier’s right of subrogation if such waiver is not contained in
the insurance policy.

B. Tenant shall procure and maintain, at its expense, (i) all-risk (special
form) property insurance in an amount equal to the full replacement cost of
Tenant’s Property located in the Premises; (ii) a policy or policies of general
liability and umbrella or excess liability insurance applying to Tenant’s
operations and use of the Premises, providing a minimum limit of $3,000,000.00
per occurrence and in the aggregate, naming Landlord and Landlord’s Project
manager as additional insureds, (iii) automobile liability insurance covering
owned, non-owned and hired vehicles in an amount not less than a combined single
limit of $1,000,000.00 per accident, and (iv) workers’ compensation insurance
covering Tenant’s employment of workers and anyone for whom Tenant may be liable
for workers’ compensation claims (workers’ compensation insurance is required
and no alternative forms of insurance are permitted) and employer’s liability
insurance in an amount not less than $1,000,000.00 each accident, $1,000,000.00
disease-each employee and policy limit, with the insurance policies required
under this clause (iv) to be endorsed to waive the insurance carriers’ right of
subrogation. Tenant shall maintain the foregoing insurance coverages in effect
commencing on the earlier to occur of the Commencement Date and the date Tenant
takes possession of the Premises, and continuing to the end of the Lease Term.

C. The insurance requirements set forth in this Section 11 are independent of
the waiver, indemnification, and other obligations under this Lease and will not
be construed or interpreted in any way to restrict, limit or modify the waiver,
indemnification and other obligations or to in any way limit any party’s
liability under this Lease. In addition to the requirements set forth in this
Section II, the insurance required of Tenant under this Lease must be issued by
an insurance company with a rating of no less than A-VIII in the current Best’s
Insurance Guide or that is otherwise acceptable to Landlord, and admitted to
engage in the business of insurance in the state in which the Building is
located; be primary insurance for all

 

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claims under it and provide that any insurance carried by Landlord, Landlord’s
Project manager, and Landlord’s lenders is strictly excess, secondary and
noncontributing with any insurance carried by Tenant; and provide that insurance
may not be cancelled, nonrenewed or the subject of change in coverage of
available limits of coverage, except upon thirty (30) days’ prior written notice
to Landlord and Landlord’s lenders. Tenant will deliver to Landlord a legally
enforceable certificate of insurance on all policies procured by Tenant in
compliance with Tenant’s obligations under this Lease on or before the date
Tenant first occupies any portion of the Premises, at least ten (10) days before
the expiration date of any policy and upon the renewal of any policy.

D. If Tenant’s business operations, conduct or use of the Premises or any other
part of the Project causes an increase in the premium for any insurance policy
carried by Landlord, Tenant will, within ten (10) days after receipt of written
notice from Landlord, reimburse Landlord for the entire increase.

E. Notwithstanding anything to the contrary set forth herein, neither Landlord
nor Tenant shall be liable (by way of subrogation or otherwise) to the other
party (or to any insurance company insuring the other party) for any loss or
damage to any of the property of Landlord or Tenant, as the case may be, with
respect to their respective property, the Building, the Project or the Premises
or any addition or improvements thereto, or any contents therein, to the extent
covered by insurance carried or required to be carried by a party hereto EVEN
THOUGH SUCH LOSS MIGHT HAVE BEEN OCCASIONED BY THE NEGLIGENCE OR WILLFUL ACTS OR
OMISSIONS OF THE LANDLORD OR TENANT OR THEIR RESPECTIVE EMPLOYEES, AGENTS,
CONTRACTORS OR INVITEES. Landlord and Tenant shall give each insurance company
which issues policies of insurance, with respect to the items covered by this
waiver, written notice of the terms of this mutual waiver, and shall have such
insurance policies properly endorsed, if necessary, to prevent the invalidation
of any of the coverage provided by such insurance policies by reason of such
mutual waiver. For the purpose of the foregoing waiver, the amount of any
deductible applicable to any loss or damage shall be deemed covered by, and
recoverable by the insured under the insurance policy to which such deductible
relates.

12. Indemnity

To the extent not expressly prohibited by law, and except to the extent caused
by Landlord’s negligence, neither Landlord nor Landlord’s Project manager nor
any of their respective officers, directors, employees, members, managers, or
agents shall be liable to Tenant, or to Tenant’s agents, servants, employees,
customers, licensees, or invitees for any injury to person or damage to property
caused by any act, omission, or neglect of Tenant, its agents, servants,
employees, customers, invitees, licensees or by any other person entering the
Building or upon the Project under the invitation of Tenant or arising out of
the use of the Project, Building or Premises by Tenant and the conduct of its
business or out of a default by Tenant in the performance of its obligations
hereunder. Landlord hereby agrees to indemnify, defend and hold Tenant and its
officers, directors, employees, members, managers and agents, harmless from all
liability and claims for any property damage, or bodily injury or death of, or
personal injury to, a person in or on the Project (other than in or on the
Premises) caused by or resulting

 

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from the negligence or willful misconduct of Landlord or its agents or
employees. Additionally, if a lien is placed on Tenant’s leasehold estate under
this Lease or against the interest of Tenant in the Premises on account of any
labor performed or materials furnished in connection with any work performed by
or at the request of Landlord, and the same is not discharged of record (by
bonding or payment) within fifteen (15) days after Landlord’s receipt of notice
of such lien, then, Landlord will save and hold Tenant harmless from all loss,
cost or expense (including without limitation, reasonable attorneys’ fees)
incurred by Tenant as a result of such lien. Tenant hereby indemnifies and holds
Landlord and Landlord’s Project manager and their respective officers,
directors, employees, members, managers and agents (“Indemnitees”), harmless
from all liability and claims (i) for any property damage, or bodily injury or
death of, or personal injury to, a person in or on the Premises, and this
indemnity shall be enforceable to the full extent, WHETHER OR NOT SUCH LIABILITY
AND CLAIMS ARE THE RESULT OF THE JOINT OR CONCURRENT ACTS, NEGLIGENT OR
INTENTIONAL (BUT NOT THE SOLE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT) of the Indemnitees, and for (ii) any property damage, or bodily
injury or death of, or personal injury to, a person in or on the Project caused
by or resulting from the negligence or willful misconduct of Tenant or its
agents or employees. To the extent that Tenant’s indemnity obligations are
satisfied by Tenant’s insurance companies providing Tenant coverage for such
obligations, Tenant shall be relieved of such obligations. Notwithstanding the
terms of this Lease to the contrary, the terms of this Section shall survive the
expiration or earlier termination of this Lease.

13. Damages from Certain Causes

To the extent not expressly prohibited by law, Landlord shall not be liable to
Tenant or Tenant’s employees, contractors, agents, invitees or customers, for
any injury to person or damage to property sustained by Tenant or any such party
or any other person claiming through Tenant resulting from any accident or
occurrence in the Premises or any other portion of the Project becoming out of
repair or by defect in or failure of equipment, pipes, or wiring, or by broken
glass, or by the backing up of drains, or by gas, water, steam, electricity, or
oil leaking, escaping or flowing into the Premises (except where due to
Landlord’s grossly negligent or willful failure to make repairs required to be
made pursuant to other provisions of this Lease, after the expiration of a
reasonable time after written notice to Landlord of the need for such repairs),
EVEN IF SUCH DAMAGE RESULTS FROM THE NEGLIGENCE OF LANDLORD OR ITS PARTNERS OR
THEIR RESPECTIVE PARTNERS, MEMBERS, AGENTS OR EMPLOYEES, nor shall Landlord be
liable to Tenant for any loss or damage that may be occasioned by or through the
acts or omissions of other tenants of the Project or of any other persons
whomsoever, including, but not limited to riot, strike, insurrection, war, court
order, requisition, order of any governmental body or authority, acts of God,
fire or theft.

 

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14. Casualty Damage

If the Premises or any part thereof shall be damaged by fire or other casualty,
Tenant shall give prompt written notice thereof to Landlord. In case the
Building shall be so damaged that substantial alteration or reconstruction of
the Building shall, in Landlord’s sole opinion, be required, which cannot
reasonably be completed within one hundred eighty (180) days from the date of
the fire or other casualty (whether or not the Premises shall have been damaged
by such casualty) or in the event there is less than two (2) years of the Lease
Term remaining or in the event Landlord’s mortgagee should require that a
material portion of the insurance proceeds payable as a result of a casualty be
applied to the payment of the mortgage debt or in the event of any material
uninsured loss to the Building, Landlord may, at its option, terminate this
Lease by notifying Tenant in writing of such termination within sixty (60) days
after the date of such casualty. If Landlord does not elect to terminate this
Lease pursuant to the foregoing termination right, Landlord shall deliver to
Tenant within sixty (60) days after the date of the damage, a reasonable
estimate of the time required to repair and restore the Building (the “Repair
Estimate”). If Landlord does not thus elect to terminate this Lease pursuant to
the foregoing and Tenant does not elect to terminate this Lease as provided
below, Landlord shall commence and proceed with reasonable diligence to restore
the Building, and the improvements located within the Premises to substantially
the same condition in which it was immediately prior to the happening of the
casualty. If as a result of such fire or casualty, the Premises or any part
thereof have been damaged and the Repair Estimate states that repair and
restoration will not be completed within one hundred eighty (180) days after the
date of the damage, Tenant may terminate this Lease by giving Landlord notice of
termination within ten (10) Business Days after the date Tenant receives the
Repair Estimate. If either Landlord or Tenant terminates this Lease pursuant to
this Section 14, Rent shall abate from and after the later to occur of
(i) Tenant’s vacation of the Premises and (ii) the date of the damage.
Notwithstanding the foregoing, Landlord’s obligation to restore the Building,
and the improvements located within the Premises shall not require Landlord to
expend for such repair and restoration work more than the insurance proceeds
actually received by Landlord as a result of the casualty. When the repairs
described above have been completed by Landlord, Tenant shall complete the
restoration of all furniture, fixtures and equipment which are necessary to
permit Tenant’s reoccupancy of the Premises. Landlord shall not be liable for
any inconvenience or annoyance to Tenant or injury to the business of Tenant
resulting in any way from such damage or the repair thereof, except that Rent
shall be abated from the date of the damage or destruction for any portion of
the Premises that is not susceptible to use by Tenant in a reasonably normal
manner, which abatement shall be in the same proportion that the Rentable Area
of the Premises which is unusable by Tenant bears to the total Rentable Area of
the Premises; provided that Tenant shall not be entitled to any abatement of
Rent if the damage or destruction in the Premises is restored within five
(5) Business Days after Landlord’s receipt of written notice from Tenant of the
occurrence of the damage or destruction. In the event the Lease is terminated
pursuant to this Section 14, neither party shall have any further obligations
hereunder after such termination except for those obligations that expressly
survive the termination hereof.

 

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15. Condemnation

If the whole or any substantial part of the Premises or if the Building or any
portion thereof which would leave the remainder of the Building unsuitable for
use comparable to its use on the Commencement Date, or if the land on which the
Building is located or any material portion thereof, shall be taken or condemned
for any public or quasi-public use under governmental law, ordinance or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof, then Landlord may, at its option, terminate this Lease and Rent shall
be abated during the unexpired portion of this Lease, effective when the
physical taking of said Premises or said portion of the Building or land shall
occur. If the whole or more than thirty percent (30%) of the Premises shall be
taken or condemned for any public or quasi-public use under governmental law,
ordinance or regulation, or by right of eminent domain, or by private purchase
in lieu thereof, then Tenant may, at its option terminate this Lease by
delivering notice of termination to Landlord within thirty (30) days after the
taking, and Rent shall be abated during the unexpired portion of this Lease,
effective when the physical taking of said Premises shall occur. If this Lease
is not terminated, the rent for any portion of the Premises so taken or
condemned shall be abated during the unexpired Lease Term effective when the
physical taking of said portion of the Premises shall occur. All compensation
awarded for any taking or condemnation, or sale proceeds in lieu thereof, shall
be the property of Landlord, and Tenant shall have no claim thereto, the same
being hereby expressly waived by Tenant, except for any portions of such award
or proceeds which are specifically allocated by the condemning or purchasing
party for the taking of or damage to trade fixtures of Tenant and moving costs,
which Tenant specifically reserves to itself.

16. Events of Default

The following events shall be deemed to be “Events of Default” under this Lease:
(i) Tenant fails to pay any Rent when due; provided that the first two (2) such
failures during any consecutive twelve (12) month period during the Term shall
not be an Event of Default if Tenant pays the amount due within seven (7) days
after Tenant’s receipt of written notice from Landlord such payment was not made
when due, (ii) Tenant fails to perform or observe any other provision or
covenant of this Lease not described in this Section 16, and such failure is not
cured within thirty (30) days (or immediately if the failure involves a
hazardous condition) after written notice from Landlord, however, other than
with respect to a hazardous condition, if Tenant’s failure to comply cannot
reasonably be cured within thirty (30) days, Tenant shall be allowed additional
time (not to exceed thirty (30) additional days) as is reasonably necessary to
cure the failure so long as Tenant begins the cure within thirty (30) days and
diligently pursues the cure to completion; (iii) Tenant fails to observe or
perform any of the covenants with respect to delivering subordination agreements
or estoppel certificates as set forth in Section 22, (iv) the leasehold interest
of Tenant is levied upon or attached under process of law; (v) Tenant dissolves;
(vi) Tenant abandons or vacates the Premises; or (vii) any voluntary or
involuntary proceedings are filed by or against Tenant or any guarantor of this
Lease under any bankruptcy, insolvency or similar laws and, in the case of any
involuntary proceedings, are not dismissed within ninety (90) days after filing.

 

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17. Remedies

A. Upon the occurrence of any Event of Default, Landlord shall have the
following rights and remedies, in addition to those allowed by law or equity,
anyone or more of which may be exercised without further notice to or demand
upon Tenant and which may be pursued successively or cumulatively as Landlord
may elect:

 

  (1) Landlord may re-enter the Premises and attempt to cure any default of
Tenant, in which event Tenant shall, upon demand, reimburse Landlord as
Additional Rent for all reasonable costs and expenses which Landlord incurs to
cure such default;

 

  (2) Landlord may terminate this Lease by giving to Tenant notice of Landlord’s
election to do so, in which event the Lease Term shall end, and all right, title
and interest of Tenant hereunder shall expire, on the date stated in such
notice;

 

  (3) Landlord may terminate the right of Tenant to possession of the Premises
without terminating this Lease by giving notice to Tenant that Tenant’s right to
possession shall end on the date stated in such notice, whereupon the right of
Tenant to possession of the Premises or any part thereof shall cease on the date
stated in such notice; and

 

  (4) Landlord may enforce the provisions of this Lease by a suit or suits in
equity or at law for the specific performance of any covenant or agreement
contained herein, or for the enforcement of any other appropriate legal or
equitable remedy, including recovery of all moneys due or to become due from
Tenant under any of the provisions of this Lease.

Landlord shall not be required to serve Tenant with any notices or demands as a
prerequisite to its exercise of any of its rights or remedies under this Lease,
other than those notices and demands specifically required under this Lease. In
order to regain possession of the Premises and to deny Tenant access thereto,
Landlord or its agent may, at the expense and liability of the Tenant, alter or
change any or all locks or other security devices controlling access to the
Premises without posting or giving notice of any kind to Tenant and Landlord
shall have no obligation to provide Tenant a key to new locks installed in the
Premises or grant Tenant access to the Premises. Tenant shall not be entitled to
recover possession of the Premises, terminate this Lease, or recover any actual,
incidental, consequential, punitive, statutory or other damages or award of
attorneys’ fees, by reason of Landlord’s alteration or change of any lock or
other security device and the resulting exclusion from the Premises of the
Tenant or Tenant’s agents, servants, employees, customers, licensees, invitees
or any other persons from the Premises. Landlord may, without notice, remove and
either dispose of or store, at Tenant’s expense, any property belonging to
Tenant that remains in the Premises after Landlord has regained possession
thereof. TENANT KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO TRIAL BY JURY IN
ANY LAWSUIT BROUGHT BY LANDLORD TO RECOVER POSSESSION OF THE PREMISES FOLLOWING
LANDLORD’S TERMINATION OF THIS LEASE OR THE RIGHT OF TENANT TO POSSESSION OF THE
PREMISES PURSUANT TO THE TERMS OF THIS LEASE AND ON ANY CLAIM FOR

 

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DELINQUENT RENT WHICH LANDLORD MAY JOIN IN ITS LAWSUIT TO RECOVER POSSESSION.
LANDLORD IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THE FOREGOING WAIVER.

B. If Landlord exercises either of the remedies provided in Sections 17A(2) or
17A(3), Tenant shall surrender possession and vacate the Premises and
immediately deliver possession thereof to Landlord, and Landlord may re-enter
and take complete and peaceful possession of the Premises, and Landlord may
remove all occupants and property therefrom, using such force as may be
necessary to the extent allowed by law, without being deemed guilty in any
manner of trespass, eviction or forcible entry and detainer and without
relinquishing Landlord’s right to Rent or any other right given to Landlord
hereunder or by operation of law.

C. If Landlord terminates the right of Tenant to possession of the Premises
without terminating this Lease, Landlord shall have the right to immediate
recovery of all amounts then due hereunder. Such termination of possession shall
not release Tenant, in whole or in part, from Tenant’s obligation to pay Rent
hereunder for the full Lease Term, and Landlord shall have the right, from time
to time, to recover from Tenant, and Tenant shall remain liable for, all Rent
accruing as it becomes due under this Lease during the period from the date of
such notice of termination of possession to the stated end of the Lease Term. In
any such case, Landlord shall make reasonable efforts, in accordance with
Section 17E hereof, to relet the Premises. In attempting to relet the Premises,
Landlord may make repairs, alterations and additions in or to the Premises and
redecorate the same to the extent reasonably deemed by Landlord necessary, and
Tenant upon demand shall pay the reasonable cost of all of the foregoing
together with Landlord’s reasonable expenses of reletting. The rents from any
such reletting shall be applied first to the payment of the expenses of reentry,
redecoration, repair and alterations and the expenses of reletting (including
reasonable attorneys’ fees and brokers’ fees and commissions) and second to the
payment of Rent herein provided to be paid by Tenant. Any excess or residue
shall operate only as an offsetting credit against the amount of Rent due and
owing as the same thereafter becomes due and payable hereunder.

D. If this Lease is terminated by Landlord, Landlord shall be entitled to
recover from Tenant all Rent accrued and unpaid for the period up to and
including such termination date, as well as all other additional sums payable by
Tenant, or for which Tenant is liable or for which Tenant has agreed to
indemnify Landlord, which may be then owing and unpaid, and all reasonable costs
and expenses, including court costs and reasonable attorneys’ fees incurred by
Landlord in the enforcement of its rights and remedies hereunder. In addition,
Landlord shall be entitled to recover as damages for loss of the bargain and not
as a penalty (l) the aggregate sum which at the time of such termination
represents the excess, if any, of the present value of the aggregate Rent which
would have been payable after the termination date had this Lease not been
terminated, including, without limitation, the amount projected by Landlord to
represent Additional Rent for the remainder of the Lease Term, over the then
present value of the then aggregate fair rent value of the Premises for the
balance of the Lease Term, such present worth to be computed in each case on the
basis of a ten percent (10%) per annum discount from the respective dates upon
which such Rent would have been payable hereunder had this Lease not been
terminated, and (2) any damages in addition thereto, including without
limitation reasonable attorneys’ fees and court costs, which Landlord sustains
as a result of the breach of any of the covenants of this Lease other than for
the payment of Rent.

 

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E. Landlord shall use commercially reasonable efforts to mitigate any damages
resulting from an Event of Default by Tenant under this Lease. Landlord’s
obligation to mitigate damages after an Event of Default by Tenant under this
Lease shall be satisfied in full if Landlord undertakes to lease the Premises at
then market rates to another tenant (a “Substitute Tenant”) in accordance with
the following criteria: (1) intentionally omitted; (2) Landlord shall not be
obligated to lease or show the Premises, on a priority basis, or offer the
Premises to a prospective tenant when other premises in the Project suitable for
that prospective tenant’s use are (or soon will be) available; (3) Landlord
shall not be obligated to lease the Premises to a Substitute Tenant for a rent
less than the current fair market rent then prevailing for similar uses in
comparable buildings in the same market area as the Building, nor shall Landlord
be obligated to enter into a new lease under other terms and conditions that are
unacceptable to Landlord under Landlord’s then current leasing policies for
comparable space in the Project; (4) Landlord shall not be obligated to enter
into a lease with a Substitute Tenant whose use would: (i) violate any
restriction, covenant, or requirement contained in the lease of another tenant
of the Project; (ii) adversely affect the reputation of the Project; or (iii) be
incompatible with the operation of the Project; and (5) Landlord shall not be
obligated to enter into a lease with any proposed Substitute Tenant which does
not have, in Landlord’s reasonable opinion, sufficient financial resources to
operate the Premises in a first class manner and to fulfill all of the
obligations in connection with the lease thereof as and when the same become
due.

F. The receipt by Landlord 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, and Landlord may accept such payment without prejudice to
Landlord’s right to recover the balance of the Rent due or to pursue any other
remedies provided in this Lease. The acceptance by Landlord of Rent hereunder
shall not be construed to be a waiver of any breach by Tenant of any term,
covenant or condition of this Lease. No act or omission by Landlord or its
employees or agents during the term of this Lease shall be deemed an acceptance
of a surrender of the Premises, and no agreement to accept such a surrender
shall be valid unless in writing and signed by Landlord.

G. In the event of any litigation between Tenant and Landlord to enforce or
interpret any provision of this Lease or to enforce any right of either party
hereto, the unsuccessful party to such litigation shall pay to the successful
party all costs and expenses, including reasonable attorney’s fees, incurred
therein.

H. All property of Tenant removed from the Premises by Landlord pursuant to any
provision of this Lease or applicable law may be handled, removed or stored by
Landlord at the cost and expense of Tenant, and Landlord shall not be
responsible in any event for the value, preservation or safekeeping thereof.
Tenant shall pay Landlord for all expenses incurred by Landlord with respect to
such removal and storage so long as the same is in Landlord’s possession or
under Landlord’s control. All such property not removed from the Premises or
retaken from storage by Tenant within thirty (30) days after the end of the
Lease Tern or termination of Tenant’s right to possession of the Premises,
however terminated, at Landlord’s option, shall be conclusively deemed to have
been conveyed by Tenant to Landlord by bill of sale without further payment or
credit by Landlord to Tenant.

 

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18. No Waiver

Failure of either party to declare any default immediately upon its occurrence,
or delay in taking any action in connection with an event of default, shall not
constitute a waiver of such default, nor shall it constitute an estoppel against
the non-defaulting party, but the non-defaulting party shall have the right to
declare the default at any time and take such action as is lawful or authorized
under this Lease. Failure by non-defaulting party to enforce its rights with
respect to anyone default shall not constitute a waiver of its rights with
respect to any subsequent default.

19. Peaceful Enjoyment

Tenant shall, and may peacefully have, hold, and enjoy the Premises, subject to
the other terms hereof, provided that Tenant pays the Rent and other sums herein
recited to be paid by Tenant and timely performs all of Tenant’s covenants and
agreements herein contained.

20. Substitution

Landlord shall not have the right to relocate Tenant to a different premises
within the Building or the Project for any reason.

21. Holding Over

If Tenant continues to occupy the Premises after the expiration or other
termination of this Lease or the termination of Tenant’s right of possession,
such occupancy shall be that of a tenancy at sufferance. Tenant shall,
throughout the entire holdover period, be subject to all the terms and
provisions of this Lease and shall pay for its use and occupancy an amount (on a
per month basis without reduction for any partial months during any such
holdover) equal to one hundred fifty percent (150%) of the Base Rent plus one
hundred percent (100%) of the Additional Rent due under this Lease for the last
full month of the term hereof during such holdover. No holding over by Tenant or
payments of money by Tenant to Landlord after the expiration of the Lease Term
shall be construed to extend the Lease Term or prevent Landlord from recovery of
immediate possession of the Premises by summary proceedings or otherwise Tenant
shall also be liable to Landlord for all direct and consequential damages which
Landlord may suffer by reason of any holding over by Tenant.

 

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22. Subordination to Mortgage; Estoppel Certificate; Collateral Access Agreement

Tenant accepts this Lease subject and subordinate to any ground lease, mortgage,
deed of trust or other lien presently existing or hereafter arising upon the
Premises, or upon the Building or the Project and to any renewals,
modifications, refinancings and extensions thereof, but Tenant agrees that any
such mortgagee shall have the right at any time to subordinate such mortgage,
deed of trust or other lien to this Lease on such terms and subject to such
conditions as such mortgagee may deem appropriate in its discretion. The
provisions of the foregoing sentence shall be self-operative and no further
instrument of subordination shall be required. However, Landlord is hereby
irrevocably vested with full power and authority to subordinate this Lease to
any mortgage, deed of trust or other lien now existing or hereafter placed upon
the Premises, or the Building or the Project and Tenant agrees within ten
(10) Business Days after written demand to execute such further instruments
subordinating this Lease or attorning to the holder of any such liens as
Landlord may request. Tenant agrees that it shall from time-to-time furnish
within ten (10) Business Days after so requested by Landlord, a certificate
signed by Tenant certifying as to such factual matters as may be reasonably
requested by Landlord. Any such certificate may be relied upon by any ground
lessor, prospective purchaser, secured party, mortgagee or any beneficiary under
any mortgage, deed of trust on the Building or the Project or any part thereof
or interest of Landlord therein. Notwithstanding the foregoing, Landlord agrees
to deliver to Tenant concurrently with the execution of this Lease a
subordination, non-disturbance and attornment agreement from Wachovia Bank,
National Association, the current holder of a mortgage on the Building, in the
form of Exhibit I attached hereto. Tenant agrees to execute such subordination,
non-disturbance and attornment agreement concurrently with the execution of this
Lease.

Landlord acknowledges that Tenant is a party to certain credit and security
agreements covering Tenant’s personal property collateral, a part of which will
be stored at the Premises. Landlord agrees that within ten (10) Business Days
after receiving a request from Tenant or Tenant’s lenders, Landlord shall
execute and deliver, at Tenant’s sole cost and expense, a collateral access
agreement or similar agreement requested by Tenant or Tenant’s lender in a form
satisfactory to Landlord, which agreement must include the following provisions:
(i) such lender(s) shall give Landlord notice of any public or private sale by
such lender of Tenant’s property; (ii) no public or private sale by any Lender
shall be held on the Premises; (iii) the lender can enter the Premises for
purpose of removal of Tenant’s property only if the lender agrees to restore or
repair all damage to the Premises caused by such removal, the lender gives
Landlord notice in the event that any of Tenant’s property is removed from the
Premises, and the lender indemnifies Landlord for any claim, liability or
expense (including reasonable attorney’s fees) arising out of or in connection
with the lender’s removal of Tenant’s personal property and the lender’s entry
and activities upon the Premises, EVEN IF THE SAME ARE CAUSED BY THE NEGLIGENCE
OF THE LANDLORD OR ITS AGENTS.

23. Notice

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 mailed by
Registered or Certified mail, postage prepaid, or sent by a nationally
recognized overnight delivery service to the party

 

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who is to receive such notice at the address specified in Section 1 of this
Lease (and, if no address is listed for Tenant, notices to Tenant shall be
delivered to the Premises). When so mailed, the notice shall be deemed to have
been given two (2) Business Days after the date it was mailed. When sent by
overnight delivery service, the notice shall be deemed to have been given on the
next Business Day after deposit with such overnight delivery service. The
address specified in Section 1 of this Lease may be changed from time to time by
giving written notice thereof to the other party.

24. Surrender of Premises

Upon the termination of the Lease Term, or upon any termination of Tenant’s
right to possession of the Premises, Tenant will at once surrender possession of
the Premises to Landlord in good condition and repair, ordinary wear and tear
excepted. Tenant shall surrender to Landlord all keys to the Premises and make
known to Landlord the combination of all combination locks which Tenant is
required to leave on the Premises.

25. Rights Reserved to Landlord

Landlord reserves the following rights, exercisable without notice, except as
provided herein, and without liability to Tenant for damage or injury to
property, person or business and without affecting an eviction or disturbance of
Tenant’s use or possession or giving rise to any claim for setoff or abatement
of rent or affecting any of Tenant’s obligations under this Lease: (1) upon
thirty (30) days’ prior notice to change the name or street address of the
Building; (2) to install and maintain signs on the exterior of the Building;
(3) to designate and approve window coverings to present a uniform exterior
appearance; (4) to retain at all times and to use in appropriate instances, pass
keys to all locks within and to the Premises; (5) to approve the weight, size,
or location of heavy equipment, or articles within the Premises; (6) to change
the arrangement and location of public parts of the Project; (7) to regulate
access to telephone, electrical and other utility closets in the Building, if
any, and to require use of designated contractors for any work involving access
to the same; (8) if Tenant has vacated the Premises during the last nine
(9) months of the Lease Term, to perform additions, alterations and improvements
to the Premises in connection with a reletting or anticipated reletting thereof
without being responsible or liable for the value or preservation of any then
existing improvements to the Premises and without effectuating a surrender or
entitling Tenant to any abatement of Rent; (9) to grant to anyone the exclusive
right to conduct any business or undertaking in the Building provided Landlord’s
exercise of its rights under this clause (9), shall not be deemed to prohibit
Tenant from the operation of its business in the Premises; (10) to enter the
Premises to inspect the same or to show the Premises to prospective purchasers,
mortgagees, tenants (during the last nine (9) months of the Lease Term) or
insurers, or to clean or make repairs, alterations or additions thereto,
provided that, except for any entry in an emergency situation, Landlord shall
provide Tenant with reasonable prior written notice of any entry into the
Premises; and (11) to temporarily close the Premises or the Building to perform
repairs, alterations or additions in the Premises or the Building, provided
that, except in the event of an emergency, Landlord shall perform any such work
requiring the closure of the Premises or the Building after standard business
hours. In exercising its rights under this Section 25, Landlord shall make
commercially reasonable efforts to avoid unreasonably interfering with Tenant’s
business operations in the Premises.

 

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26. Miscellaneous

A. If any term or provision of this Lease, or the application thereof, shall, to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision, shall not be affected thereby, and each
term and provision of this Lease shall be valid and enforced to the fullest
extent permitted by law.

B. Tenant agrees not to record this Lease or any short form or memorandum
hereof.

C. This Lease and the rights and obligations of the parties hereto shall be
interpreted, construed, and enforced in accordance with the laws of the state in
which the Building is located.

D. The term “Force Majeure” shall mean strikes, riots, acts of God, shortages of
labor or materials, war, acts of terrorism, governmental laws, regulations or
restrictions, or any other cause whatsoever beyond the control of Landlord or
Tenant, as the case may be. Whenever a period of time is herein prescribed for
the taking of any action by Landlord or Tenant (other than the payment of Rent
and all other such sums of money as shall become due hereunder), such party
shall not be liable or responsible for, and there shall be excluded from the
computation of such period of time, any delays due to events of Force Majeure.

E. Except as expressly otherwise herein provided, with respect to all required
acts of Tenant, time is of the essence of this Lease.

F. Landlord shall have the right to transfer and assign, in whole or in part,
all of its rights and obligations hereunder and in the Building and Project
referred to herein, and in such event and upon such transfer Landlord shall be
released from any further obligations hereunder, and Tenant agrees to look
solely to such successor in interest of Landlord for the performance of such
obligations.

G. Tenant hereby represents to Landlord that it has dealt directly with and only
with the Broker as a broker in connection with this Lease. Landlord and Tenant
hereby indemnify and hold each other harmless against any loss, claim, expense
or liability with respect to any commissions or brokerage fees claimed by any
broker or finder other than the Broker on account of the execution and/or
renewal of this Lease due to any action of the indemnifying party. Landlord
agrees to pay the commissions due to Providence Commercial Real Estate Services,
Inc. (“Providence”) in connection with this Lease pursuant to the terms of that
certain written agreement by and between Landlord and Providence dated
February 10, 2009. Landlord agrees to pay the commissions due to Landlord’s
broker in connection with this Lease pursuant to a separate written agreement
with such broker.

H. If there is more than one Tenant, or if Tenant as such is comprised of more
than one person or entity, the obligations hereunder imposed upon Tenant shall
be joint and several obligations of all such parties. All notices, payments, and
agreements given or made by, with or to anyone of such persons or entities shall
be deemed to have been given or made by, with or to all of them.

 

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I. Tenant acknowledges that the financial capability of Tenant to perform its
obligations hereunder is material to Landlord and that Landlord would not enter
into this Lease but for its belief, based on its review of Tenant’s financial
statements, that Tenant is capable of performing such financial obligations.
Tenant hereby represents, warrants and certifies to Landlord that its financial
statements previously furnished to Landlord were at the time given true and
correct in all material respects and that there have been no material subsequent
changes thereto as of the date of this Lease. Tenant, within fifteen (15) days
after request, shall provide Landlord with a current financial statement and
such other information as Landlord may reasonably request in order to create a
“business profile” of Tenant and determine Tenant’s ability to fulfill its
obligations under this Lease. Landlord, however, shall not require Tenant to
provide such information unless Landlord requires the information in connection
with a proposed financing or sale of the Building. Any information provided
hereunder by Tenant shall be kept confidential by Landlord; provided that
Landlord shall be entitled to disclose such information to its directors,
officers, employees and advisers (including attorneys, accountants, financial
advisors and property managers), lenders, prospective lenders and prospective
purchasers of the Project, and as required by law.

J. Notwithstanding anything to the contrary contained in this Lease, the
expiration of the Lease Term, whether by lapse of time or otherwise, shall not
relieve Tenant from Tenant’s obligations accruing prior to the expiration of the
Lease Term, and such obligations shall survive any such expiration or other
termination of the Lease Term.

K. Landlord and Tenant understand, agree and acknowledge that (i) this Lease has
been freely negotiated by both parties; and (ii) in any controversy, dispute or
contest over the meaning, interpretation, validity, or enforceability of this
Lease or any of its terms or conditions, there shall be no inference,
presumption, or conclusion drawn whatsoever against either party by virtue of
that party having drafted this Lease or any portion thereof.

L. The headings and titles to the paragraphs of this Lease are for convenience
only and shall have no affect upon the construction or interpretation of any
part hereof. The term “including” shall be deemed to mean “including without
limitation”.

M. Landlord and Tenant agree that each provision of the Lease for determining
charges, amounts and Additional Rent payments by Tenant (including without
limitation, Section 4 of this Lease) is commercially reasonable, and as to each
such charge or amount, constitutes a “method by which the charge is to be
computed” for purposes of Section 93.012 (Assessment of Charges) of the Texas
Property Code, as such section now exists or as it may be hereafter amended or
succeeded.

N. TENANT HEREBY WAIVES ALL RIGHTS TO PROTEST THE APPRAISED VALUE OF THE
PROPERTY OR TO APPEAL THE SAME AND ALL RIGHTS TO RECEIVE NOTICES OF REAPPRAISALS
AS SET FORTH IN SECTIONS 41.413 AND 42.015 OF THE TEXAS TAX CODE. However,
Landlord agrees to take such steps as a reasonably prudent landlord would take
with respect to protesting the appraised value of the Project.

 

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O. WAIVER OF CONSUMER PROTECTION ACT. Intentionally omitted.

P. Landlord hereby waives any Landlord’s lien whether under common law,
constitutional, contractual or statutory, against Tenant’s property.

27. No Offer

Landlord has delivered a copy of this Lease to Tenant for Tenant’s review only,
and the delivery hereof does not constitute an offer to Tenant or an option.
This Lease shall not be effective until an original of this Lease executed by
both Landlord and Tenant and an original Guaranty, if applicable, executed by
each Guarantor is delivered to and accepted by Landlord, and this Lease has been
approved by Landlord’s mortgagee, if required.

28. Entire Agreement

This Lease, including the Exhibits attached hereto, and the Work Letter
constitutes the entire agreement between the parties hereto with respect to the
subject matter of this Lease and supersedes all prior agreements and
understandings between the parties related to the Premises, including all lease
proposals, letters of intent and similar documents. Tenant expressly
acknowledges and agrees that Landlord has not made and is not making, and
Tenant, in executing and delivering this Lease, is not relying upon, any
warranties, representations, promises or statements, except to the extent that
the same are expressly set forth in this Lease. This Lease may be modified only
by a written agreement signed by Landlord and Tenant. Landlord and Tenant
expressly agree that there are and shall be no implied warranties of
merchantability, habitability, suitability, fitness for a particular purpose or
of any other kind arising out of this Lease, all of which are hereby waived by
Tenant, and that there are no warranties which extend beyond those expressly set
forth in this Lease.

29. Limitation of Liability

If Landlord fails to perform any of its obligations hereunder within thirty
(30) days after written notice from Tenant specifying such failure, except as
otherwise set forth herein, Tenant’s exclusive remedy shall be an action for
damages. Except as otherwise set forth in this Section 29, unless Landlord fails
to so cure such default after such notice, Tenant shall not have any remedy or
cause of action by reason thereof. The foregoing notwithstanding, if Landlord
shall exercise in good faith diligent efforts within such thirty (30) day period
to cure the failure specified in the notice but shall not be able to do so
because of acts of God, riots, or labor strikes, then any such failure shall not
be considered a default so long as Landlord shall continue to exercise in good
faith such diligent efforts to cure such failure and shall do so within a
reasonable period of time. Notwithstanding any other provision hereof, if
Landlord fails to perform its maintenance and repair obligations hereunder and
if (i) the lack of such maintenance and repair by Landlord materially impairs
Tenant’s use of the Premises, (ii) the need for such maintenance and repair is
not caused by Tenant or Tenant’s contractors, agents, employees, customers,
licensees or

 

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invitees, and (iii) Landlord fails to make any required repairs within thirty
(30) days after the receipt of Tenant’s written notice or, in the event the
nature of Landlord’s obligation is such that more than thirty (30) days are
required for its performance and Landlord fails to commence performance within
the thirty (30) day period and thereafter diligently pursue the completion of
same using commercially reasonable efforts, Tenant may, at its option, make such
repair or replacement on Landlord’s behalf and recover from Landlord, within
thirty (30) days after Landlord’s receipt of Tenant’s invoice therefor, Tenant’s
reasonable out-of-pocket costs and expenses in connection with the exercise of
such right; provided that if the repair or replacement affects any portion of
the Building which is the subject of any warranty or maintenance/service
agreement (such as, without limitation, the roof), Tenant shall use Landlord’s
designated contractor for such repair and/or replacement so as not to impair or
invalidate the warranty or maintenance/service agreement. In the case of any
damage to such components or systems caused by Tenant or Tenant’s agents,
employees, contractors, customers, licensees or invitees, the cost to repair the
same shall be paid for by Tenant. Any liability of Landlord under this Lease
shall be limited solely to its interest in the Project, and in no event shall
any personal liability be asserted against Landlord, its members, or their
respective members, partners, shareholders, officers, directors, agents or
employees, in connection with this Lease nor shall any recourse be had to any
other property or assets of Landlord, its members, or their respective members,
partners, shareholders, officers, directors, agents or employees. In no event
shall Landlord be liable for consequential or special damages as a result of a
breach or default under this Lease. TENANT HEREBY WAIVES ITS STATUTORY LIEN
UNDER SECTION 91.004 OF THE TEXAS PROPERTY CODE.

30. Hazardous Substances

A. Tenant hereby represents and covenants to Landlord the following: No toxic or
hazardous substances or wastes, pollutants or contaminants (including, without
limitation, asbestos, urea formaldehyde, the group of organic compounds known as
polychlorinated biphenyls, petroleum products including gasoline, fuel oil,
crude oil and various constituents of such products, radon, and any hazardous
substance as defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. 9601-9657, as amended (“CERCLA”)
(collectively, “Environmental Pollutants”) other than customary office supplies
and cleaning supplies stored and handled within the Premises in accordance with
all applicable laws, will be generated, treated, stored, released or disposed
of, or otherwise placed, deposited in or located on the Project, and no activity
shall be taken on the Project, by Tenant, its agents, employees, invitees or
contractors, that would cause or contribute to (i) the Project or any part
thereof to become a generation, treatment, storage or disposal facility within
the meaning of or otherwise bring the Project within the ambit of the Resource
Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C. 5901 et. seq., or any
similar state law or local ordinance, (ii) a release or threatened release of
toxic or hazardous wastes or substances, pollutants or contaminants, from the
Project or any part thereof within the meaning of, or otherwise result in
liability in connection with the Project within the ambit of CERCLA, or any
similar state law or local ordinance, or (iii) the discharge of pollutants or
effluents into any water source or system, the dredging or filling of any
waters, or the discharge into the air of any emissions, that would require a
permit under the Federal Water Pollution Control Act, 33 U.S.C. 1251 et. seq.,
or the Clean Air Act, 42 U.S.C. 7401 et. seq., or any similar state law or local
ordinance.

 

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B. Tenant expressly waives, to the extent allowed by law, any claims under
federal, state or other law that Tenant might otherwise have against Landlord
relating to the condition of such Project or the Premises or the Alterations or
personal property located thereon or the presence in or contamination of the
Project or the Premises by hazardous materials. Tenant agrees to indemnify and
hold Indemnitees (as defined in Section 12) harmless from and against and to
reimburse Indemnitees with respect to, any and all claims, demands, causes of
action, loss, damage, liabilities, costs and expenses (including attorneys’ fees
and court costs) of any and every kind or character, known or unknown, fixed or
contingent, asserted against or incurred by Landlord at any time and from
time-to-time by reason of or arising out of the breach of any representation or
covenant contained in Section 30.A above.

C. Tenant shall immediately notify Landlord in writing of any release or
threatened release of toxic or hazardous wastes or substances, pollutants or
contaminants of which Tenant has knowledge whether or not the release is in
quantities that would require under law the reporting of such release to a
governmental or regulatory agency.

D. Tenant shall also immediately notify Landlord in writing of, and shall
contemporaneously provide Landlord with a copy of:

(1) Any written notice of release of hazardous wastes or substances, pollutants
or contaminants on the Project that is provided by Tenant or any subtenant or
other occupant of the Premises to a governmental or regulatory agency;

(2) Any notice of a violation, or a potential or alleged violation, of any
Environmental Law (hereinafter defined) that is received by Tenant or any
subtenant or other occupant of the Premises from any governmental or regulatory
agency;

(3) Any inquiry, investigation, enforcement, cleanup, removal, or other action
that is instituted or threatened by a governmental or regulatory agency against
Tenant or any subtenant or other occupant of the Premises and that relates to
the release or discharge of hazardous wastes or substances, pollutants or
contaminants on or from the Project;

(4) Any claim that is instituted or threatened by any third-party against Tenant
or any subtenant or other occupant of the Premises and that relates to any
release or discharge of hazardous wastes or substances, pollutants or
contaminants on or from the Project; and

(5) Any notice of the loss of any environmental operating permit by Tenant or
any subtenant or other occupant of the Premises.

E. As used herein “Environmental Laws” mean all present and future federal,
state and municipal laws, ordinances, rules and regulations applicable to
environmental and ecological conditions, and the rules and regulations of the
U.S. Environmental Protection Agency, and any other federal, state or municipal
agency, or governmental board or entity relating to environmental matters.

 

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F. To the best of Landlord’s knowledge, based solely on that certain Phase I
Environmental Site Assessment dated March 29, 2007 prepared by Terracon, as
Project No. 90077073 (the “Phase I Report”), as of the date of this Lease,
except as set forth in the Phase I Report, there are no Environmental Pollutants
in or on the Premises or the Project in violation of applicable environmental
laws.

G. Notwithstanding anything to the contrary set forth above, Tenant shall have
no liability for any Environmental Pollutants located on the Project on or prior
to the Commencement Date unless the same were introduced by Tenant or its
agents, employees or contractors.

SIGNATURE PAGE TO FOLLOW

 

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

 

LANDLORD: TDC PRUE ROAD, L.P., a Delaware limited partnership

By:

  TDC Prue Road GP, L.L.C., a Delaware limited liability company, its general
partner

By:

 

/s/ Kevin Roberts

Name:

  Kevin Roberts

Title:

  President – Central Texas Region

TENANT:

ASSET ACCEPTANCE, LLC, a Delaware limited liability company

By:

 

/s/ Mark A. Redman

Name:

  Mark A. Redman

Title:

 

Senior Vice President and Chief

Financial Officer, Manager

 

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EXHIBIT A-1

LEGAL DESCRIPTION OF LAND

North Tract

Lot 46 and 48, NCB 14862, Replat of Network.Com Subdivision, Volume 9576, Page
212 of the Deed and Plat Records of Bexar County, Texas.

South Tract

Lot 16, Block 5, NCB 14705, Amending Plat of Lots 1, 2, and 3, Block 5 Oakland
Estates Subdivision, Volume 9576, Page 62 of the Deed and Plat Records of Bexar
County, Texas.

 

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EXHIBIT B

RULES AND REGULATIONS

The following rules and regulations shall apply, where applicable, to the
Premises, the Building, the parking areas associated therewith (if any), the
Project and the appurtenances thereto:

1. Sidewalks, entrances, passageways and courts in and about the Project shall
not be obstructed nor shall objects be placed against glass partitions, doors or
windows which would be unsightly from the exterior of the Building.

2. Plumbing, fixtures and appliances shall be used for only the purpose for
which they were designed and no foreign substance of any kind whatsoever shall
be thrown or placed therein. Damage resulting to any such fixtures or appliances
from misuse by Tenant or its agents, employees or invitees, shall be paid for by
Tenant and Landlord shall not in any case be responsible therefor.

3. Any sign, lettering, picture, notice or advertisement installed within the
Premises which is visible from the public corridors within the Building shall be
installed in such manner, and be of such character and style, as Landlord shall
approve, in writing in its reasonable discretion. No sign, lettering, picture,
notice or advertisement shall be placed on any outside window or door or in a
position to be visible from outside the Building.

4. Tenant shall not place any additional lock or locks on any door in the
Premises or Building without Landlord’s prior written consent. A reasonable
number of keys to the locks on the doors in the Premises shall be furnished by
Landlord to Tenant at the cost of Tenant, and Tenant shall not have any
duplicate keys made. All keys and passes shall be returned to Landlord at the
expiration or earlier termination of this Lease.

5. Tenant shall refer all contractors, contractors’ representatives and
installation technicians to Landlord for Landlord’s supervision, approval and
control before the performance of any contractual services. This provision shall
apply to all work performed in the Building including, but not limited to
installation of telephones, electrical devices and attachments, doors,
entranceways, and any and all installations of every nature affecting floors,
walls, window trim, ceilings, equipment and any other physical portion of the
Building.

6. Tenant shall cause all doors to the Premises to be closed and securely locked
before leaving the Building at the end of the day.

7. Tenant shall keep all electrical and mechanical apparatus owned by Tenant
free of vibration, noise and airwaves which may be transmitted beyond the
Premises.

8. Canvassing, soliciting and peddling in or about the Building or Project is
prohibited. Tenant shall cooperate and use its best efforts to prevent the same.

 

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9. Tenant shall not use the Premises in any manner which would overload the
heating, ventilating or air conditioning systems.

10. Tenant shall not utilize any equipment or apparatus in such manner as to
create any magnetic fields or waves which adversely affect or interfere with the
operation of any systems or equipment in the Building or Project.

11. Tenant shall not operate or permit to be operated on the Premises any coin
or token operated vending machine or similar device (including, without
limitation, telephones, lockers, toilets, scales, amusements devices and
machines for sale of beverages, foods, candy, cigarettes or other goods), except
for those vending machines or similar devices which are for the sole and
exclusive use of Tenant’s employees.

12. To the extent permitted by law, Tenant shall not permit picketing or other
union activity involving its employees or agents in the Building or on the
Project, except in those locations and subject to time and other constraints as
to which Landlord may give its prior written consent, which consent may be
withheld in Landlord’ sole discretion.

13. Tenant shall comply with all applicable laws, ordinances, governmental
orders or regulations and applicable orders or directions from any public office
or body having jurisdiction, with respect to the Premises, the Building, the
Project and their respective use or occupancy thereof. Tenant shall not make or
permit any use of the Premises, the Building or the Project, respectively, which
is directly or indirectly forbidden by law, ordinance, governmental regulation
or order, or direction of applicable public authority, or which may be dangerous
to person or property.

14. Tenant shall not use or occupy the Premises in any manner or for any purpose
which would injure the reputation or impair the present or future value of the
Premises, the Building or the Project; without limiting the foregoing, Tenant
shall not use or permit the Premises or any portion thereof to be used for
lodging, sleeping or for any illegal purpose.

15. Tenant shall carry out Tenant’s permitted repair, maintenance, alterations,
and improvements in the Premises in a manner which will not interfere with the
rights of other tenants in the Building.

16. Landlord may from time to time adopt appropriate systems and procedures for
the security or safety of the Building, its occupants, entry and use, or its
contents. Tenant, Tenant’s agents, employees, contractors, guests and invitees
shall comply with Landlord’s reasonable requirements thereto.

17. Landlord shall have the right to prohibit the use of the name of the
Building or any other publicity by Tenant that in Landlord’s opinion may tend to
impair the reputation of the Building or its desirability for Landlord or its
other tenants. Upon written notice from Landlord, Tenant will refrain from
and/or discontinue such publicity immediately.

 

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18. Neither Tenant nor any of its employees, agents, contractors, invitees or
customers shall smoke in any area designated by Landlord (whether through the
posting of a “no smoking” sign or otherwise) as a “no smoking” area. In no event
shall Tenant or any of its employees, agents, contractors, invitees or customers
smoke at the entrances to the Building. Landlord reserves the right to
designate, from time to time, additional areas of the Building and the Project
as “no smoking” areas and to designate the entire Building and the Project as a
“no smoking” area.

19. Tenant, its officers, agents, servants, employees, patrons, licensees,
customers, visitors or invitees shall not bring into the Premises or keep on
Premises any fish, fowl, reptile, insect or animal without the prior written
consent of the Landlord.

20. Neither Tenant nor any officer, agent, employee, servant, patron, customer,
visitor, licensee or invitee of any Tenant shall go upon the roof of the
Building, without the written consent of the Landlord.

21. Tenant shall not maintain armed security in or about the Premises.

22. Upon expiration or earlier termination of this Lease, in addition to the
requirements under the terms the Lease, Tenant shall ensure that:

 

  a. All interior lights and bulbs are operational.

 

  b. All exhaust, ceiling and overhead fans are operational.

 

  c. Floor areas are broom swept and clean of all trash and materials.

 

  d. Intentionally omitted.

 

  e. All telecommunications conduit and wiring installed by or for Tenant
specifically for Tenant’s equipment is removed to the originating panel if
Landlord so requires.

 

  f. All furniture, trash and debris are removed.

 

  g. All signs and pictures, posters, signage, stickers and all similar items of
Tenant and any other occupant of the Premises are removed from all walls,
windows, doors and all other interior and exterior surfaces of the Premises and
other locations of the Project.

 

  h. All carpet areas are vacuumed.

 

  i. All uncarpeted office floors are swept, and any excess wax build-up on tile
and vinyl floors is properly removed.

 

  j. All computer cable and conduit installed by or for Tenant is removed to
point of origin.

 

  k. All windows and miscellaneous hardware are operational and in good
condition.

 

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  l. Ceiling tiles, grid, light lenses, air grills and diffusers are in place
with no holes or stains.

 

  m. There are no broken windows or other glass items.

 

  n. Bathroom walls, floors, and fixtures are clean and in good condition.

 

  o. All plumbing fixtures are intact, operational free of leaks and in good
condition.

 

  p. Intentionally omitted.

 

  r. Walls are clean and any holes are properly and permanently patched.

[END OF EXHIBIT B]

 

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EXHIBIT C

PAYMENT OF BASIC COSTS

A. During each calendar year, or portion thereof, falling within the Lease Term
and beginning on the Commencement Date, Tenant shall pay to Landlord as
Additional Rent hereunder Tenant’s Pro Rata Share of Basic Costs (as defined
below) for the applicable calendar year. Prior to the Commencement Date, or as
soon as practical thereafter, and prior to January 1 of each calendar year
during the Lease Term, or as soon as practical thereafter, Landlord shall make a
good faith estimate of Basic Costs for the applicable full or partial calendar
year and Tenant’s Pro Rata Share thereof. On or before the first day of each
month during such calendar year, Tenant shall pay Landlord, as Additional Rent,
a monthly installment equal to one-twelfth of Tenant’s Pro Rata Share of
Landlord’s estimate of Basic Costs. Landlord shall have the right from time to
time during any such calendar year to reasonably revise the estimate of Basic
Costs for such year and provide Tenant with a revised statement therefor
(provided, however, Landlord agrees that Landlord shall not issue a revised
statement more than twice in any calendar year), and thereafter the amount
Tenant shall pay each month shall be based upon such revised estimate. If
Landlord does not provide Tenant with an estimate of the Basic Costs by
January 1 of any calendar year, Tenant shall continue to pay a monthly
installment based on the previous year’s estimate until such time as Landlord
provides Tenant with an estimate of Basic Costs for the current year. Upon
receipt of such current year’s estimate, an adjustment shall be made for any
month during the current year with respect to which Tenant paid monthly
installments of Additional Rent based on the previous year’s estimate. Tenant
shall pay Landlord for any underpayment within thirty (30) days after Landlord’s
written demand. Any overpayment of Additional Rent shall, at Landlord’s option,
be refunded to Tenant or credited against the installment(s) of Additional Rent
next coming due under the Lease. Any amount paid by Tenant based on any estimate
shall be subject to adjustment pursuant to Paragraph B below.

B. Within ninety (90) days after the end of each calendar year during the Lease
Term, or as soon as is practical thereafter, Landlord shall furnish to Tenant a
statement of Landlord’s actual Basic Costs for the previous calendar year. If
for any calendar year the Additional Rent collected for the prior year, as a
result of Landlord’s estimate of Basic Costs, is in excess of Tenant’s actual
Pro Rata Share of Basic Costs for such prior year, then Landlord shall refund to
Tenant any overpayment (or at Landlord’s option apply such amount against
Additional Rent due or to become due hereunder). Likewise, Tenant shall pay to
Landlord, within thirty (30) days after Landlord’s written demand, any
underpayment with respect to the prior year whether or not the Lease has
terminated prior to receipt by Tenant of a statement for such underpayment, it
being understood that this clause shall survive the expiration of the Lease.

C. “Basic Costs” shall mean all direct and indirect costs, expenses paid and
disbursements of every kind (subject to the limitations set forth below), which
Landlord incurs, pays or becomes obligated to pay in each calendar year in
connection with operating, maintaining, repairing, owning and managing the
Building and the Project. Basic Costs shall include, without limitation,
insurance premiums and deductibles, Taxes and the amortized cost of capital
improvements made to the Building or the Project which are (i) primarily for the
purpose

 

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of reducing operating expense costs or otherwise improving the operating
efficiency of the Project or Building; or (ii) required to comply with any laws,
rules or regulations of any governmental authority not applicable to the Project
or the Building as of the Commencement Date, or a requirement of Landlord’s
insurance carrier; or (iii) primarily for the purpose of improving security at
the Project or the Building. The cost of such capital improvements shall be
amortized over the useful life thereof, as reasonably determined by Landlord,
and shall, at Landlord’s option, include interest at a rate that is reasonably
equivalent to the interest rate that Landlord would be required to pay to
finance the cost of the capital improvement in question as of the date such
capital improvement is performed. If a particular expense is incurred or charged
to more than one building in the Project rather than solely to the Building,
then, at Landlord’s election, for the purposes of calculating Basic Costs, such
multi-building expense shall be equitably allocated to Building and the other
buildings in the Project for which the expense was incurred.

D. Basic Costs shall not include the following: (i) costs of alterations of
tenant spaces (including all tenant improvements to such spaces); (ii) costs of
capital improvements, including capital improvements to the roof, structure or
foundation or the Building, except as provided in Paragraph C above;
(iii) depreciation, interest and principal payments on mortgages, and other debt
costs, if any; (iv) real estate brokers’ leasing commissions or compensation and
advertising and other marketing expenses; (v) costs or other services or work
performed for the singular benefit of another tenant or occupant (other than for
Common Areas); (vi) legal, space planning, construction, and other expenses
incurred in procuring tenants for the Building or renewing or amending leases
with existing tenants or occupants of the Building; (vii) costs of advertising
and public relations and promotional costs and attorneys’ fees associated with
the leasing of the Building; (viii) any expense for which Landlord actually
receives reimbursement from insurance, condemnation awards, other tenants (other
than through the payment of additional rent under such tenants’ leases) or any
other source; (ix) costs incurred in connection with the sale, financing,
refinancing, mortgaging, or other change of ownership of the Building; and
(x) rental under any ground or underlying lease or leases.

E. “Taxes” shall mean (i) all real estate taxes and assessments on the Project,
the Building or the Premises, and taxes and assessments levied in substitution
or supplementation in whole or in part of such taxes, (ii) all personal property
taxes for the Project’s personal property, including license expenses,
(iii) intentionally omitted, (iv) all sales, use, franchise or other tax now or
hereafter imposed by any governmental authority upon rent received by Landlord
or on the revenue of Landlord from the Project, excluding state and/or federal
income tax (v) all other taxes, fees or assessments now or hereafter levied by
any governmental authority on the Project, the Building or its contents or on
the operation and use thereof (except as relate to specific tenants), and
(vi) all reasonable costs and fees incurred in connection with seeking
reductions in or refunds in Taxes including, without limitation, any costs
incurred by Landlord to challenge the tax valuation of the Building or Project,
but excluding income taxes. For purposes of calculating the amount of franchise
taxes to be included in Taxes hereunder, the Project will be treated as if it
were the only project owned by Landlord. Estimates of real estate taxes and
assessments for any calendar year during the Lease Term shall be determined
based on Landlord’s good faith estimate of the real estate taxes and
assessments. Taxes and assessments hereunder are those accrued with respect to
such calendar year, as opposed to the real estate taxes and assessments

 

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paid or payable for such calendar year. In the event Taxes are reduced or a
refund of Taxes is received for any calendar year during the Lease Term, Tenant
shall be entitled to Tenant’s Pro Rata Share of such reduction or refund.

F. If the Building and the other buildings Landlord operates in conjunction
therewith, if any, are not at least ninety-five percent (95%) occupied, in the
aggregate, during any calendar year of the Lease Term, actual Basic Costs which
vary with occupancy for purposes hereof shall, at Landlord’s option, be
determined as if the Building and such other buildings had been ninety-five
percent (95%) occupied during such year.

G. Tenant shall have the right to inspect, at reasonable times and in a
reasonable manner, during the thirty (30) day period following the delivery of
Landlord’s statement of the actual amount of Basic Costs, such of Landlord’s
books of account and records as pertain to and contain information concerning
such costs and expenses in order to verify the amounts thereof. However,
notwithstanding the foregoing, if Landlord and Tenant determine that Tenant’s
Pro Rata Share of Basic Costs and/or Taxes, as applicable, for the year in
question were less than stated by more than five percent (5%), Landlord, within
thirty (30) days after its receipt of paid invoices therefor from Tenant, shall
reimburse Tenant for the reasonable amounts paid by Tenant to third parties in
connection with such audit by Tenant. Tenant agrees that any information
obtained during an inspection by Tenant of Landlord’s books of account and
records shall be kept in confidence by Tenant and its agents and employees and
shall not be disclosed to any other parties, except to Tenant’s attorneys,
accountants and other consultants. Any parties retained by Tenant to inspect
Landlord’s books of account and records shall not be compensated on a
contingency fee basis. If Tenant shall not dispute any item or items included in
the determination of Basic Costs for a particular calendar year by delivering a
written notice to Landlord generally describing in reasonable detail the basis
of such dispute within sixty (60) days after the statement for such year was
delivered to it, Tenant shall be deemed to have approved such statement. During
the pendency of any dispute over Basic Costs, Tenant shall pay, under protest
and without prejudice, Tenant’s Pro Rata Share of Basic Costs as calculated by
Landlord.

[END OF EXHIBIT C]

 

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EXHIBIT D

Intentionally omitted.

 

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EXHIBIT E

ADDITIONAL PROVISIONS

I. Parking.

(a) During the Lease Term (which shall be deemed to include any Renewal Term),
Tenant shall have the right to use, in common with other tenants of the Project,
one hundred and thirty five (135) surface parking spaces located on the Project
at no additional rental charge; provided that one of such one hundred
thirty-five (135) spaces may designated for Tenant’s exclusive use provided that
the same is in a location approved by Landlord and Tenant. If in the reasonable
opinion of Landlord, Tenant and/or its employees, agents, visitors or customers
are using more parking spaces than Tenant is entitled to based on the preceding
sentence, Tenant shall immediately upon written notice from Landlord cause its
employees, agents, visitors or customers to use only the number of parking
spaces allocated to Tenant, and in the event Tenant or its employees, agents,
visitors or customers continue to use more parking spaces than Tenant is
entitled to use after Tenant’s receipt of three (3) of such written notices
within any calendar year, an Event of Default shall be deemed to have occurred
under the Lease. Tenant agrees to cooperate with Landlord in Landlord’s
management of the surface parking at the Project, including without limitation,
providing the license plate numbers of Tenant’s employees parking on the Project
and/or the use of parking stickers.

(b) Landlord shall not be responsible for any loss, theft or damage to any
articles left in any vehicle while in or being driven to or from the parking
area however caused unless due to gross negligence of Landlord, its agents,
servants or employees.

(c) Landlord may designate the area in the parking area within which each
vehicle may be parked and may make, modify and enforce reasonable rules and
regulations relating to the parking of vehicles in the parking area, and Tenant
agrees to abide by such rules and regulations. Overnight parking shall be
restricted to Tenant’s business vehicles parked in Tenant’s designated loading
spaces in the truck court or loading area, unless otherwise approved by
Landlord. To the extent permitted by applicable law, vehicles parking in
violation of this Exhibit or the rules and regulations applicable to parking may
be towed at the vehicle owner’s sole cost and expense.

II. Renewal Option.

(a) Tenant shall have the right to extend the Lease Term with respect to the
entire Premises then existing only (the “Renewal Option”) for two additional
periods of five (5) years each (each, a “Renewal Term”) commencing on the day
following the Expiration Date of the initial Lease Term or the expiration of the
first Renewal Term, as applicable, provided that each of the following occurs:

(i) Landlord receives notice of exercise of the Renewal Option (“Initial Renewal
Notice”) not less than nine (9) full calendar months prior to the expiration of
the initial Lease Term or first Renewal Term, as applicable, and not more than
twelve (12) full calendar months prior to the expiration of the initial Lease
Term or first Renewal Term, as applicable; and

 

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(ii) Tenant is not in default under the Lease beyond any applicable cure periods
at the time that Tenant delivers its Initial Renewal Notice or at the time
Tenant delivers its Binding Renewal Notice (hereinafter defined); and

(iii) No part of the Premises is sublet (other than pursuant to a Permitted
Transfer) at the time that Tenant delivers its Initial Renewal Notice or at the
time Tenant delivers its Binding Renewal Notice; and

(iv) The Lease has not been assigned (other than pursuant to a Permitted
Transfer) prior to the date that Tenant delivers its Initial Renewal Notice or
prior to the date Tenant delivers its Binding Renewal Notice.

(b) The Base Rent rate per rentable square foot for the Premises during the
applicable Renewal Term shall equal the Prevailing Market (hereinafter defined)
rate per rentable square foot for the Premises.

(c) Tenant shall pay Additional Rent (i.e. Basic Costs and Taxes) for the
Premises during the applicable Renewal Term in accordance with Exhibit C to this
Lease.

(d) Within thirty (30) days after receipt of Tenant’s Initial Renewal Notice,
Landlord shall advise Tenant of Landlord’s determination of the applicable Base
Rent rate for the Premises for the Renewal Term. Tenant, within fifteen
(15) days after the date on which Landlord advises Tenant of the applicable Base
Rent rate for the Renewal Term, shall either (i) give Landlord final binding
written notice (“Binding Renewal Notice”) of Tenant’s exercise of its option, or
(ii) if Tenant disagrees with Landlord’s determination, provide Landlord with
written notice of rejection (the “Rejection Notice”). If Tenant fails to provide
Landlord with either a Binding Renewal Notice or Rejection Notice within such
fifteen (15) day period, Tenant’s Renewal Option shall be null and void and of
no further force and effect. If Tenant provides Landlord with a Binding Renewal
Notice, Landlord and Tenant shall enter into the Renewal Amendment (hereinafter
defined) upon the terms and conditions set forth herein. If Tenant provides
Landlord with a Rejection Notice, Landlord and Tenant shall work together to
agree upon the Prevailing Market rate for the Premises during the Renewal Term.
Upon agreement Tenant shall provide Landlord with Binding Renewal Notice and
Landlord and Tenant shall enter into the Renewal Amendment in accordance with
the terms and conditions hereof. Notwithstanding the foregoing, if Landlord and
Tenant are unable to agree upon the Prevailing Market rate for the Premises
within thirty (30) days after the date Tenant provides Landlord with the
Rejection Notice, Tenant, by written notice to Landlord (the “Arbitration
Notice”) within ten (10) days after the expiration of such thirty (30) day
period, shall have the right to have the Prevailing Market rate determined in
accordance with the arbitration procedures described in Paragraph (e) below. If
Landlord and Tenant are unable to agree upon the Prevailing Market rate for the
Premises within the thirty (30) day period described and Tenant fails to timely
exercise its right to arbitrate, Tenant’s Renewal Option shall be deemed to be
null and void and of no further force and effect.

 

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(e) If Tenant provides Landlord with an Arbitration Notice, Landlord and Tenant,
within ten (10) days after the date of the Arbitration Notice, shall each
simultaneously submit to the other its good faith estimate of the Prevailing
Market rate for the Premises during the Renewal Term (collectively referred to
as the “Estimates”) and shall each select a broker (hereinafter, an “appraiser”)
to determine which of the two Estimates most closely reflects the Prevailing
Market rate for the Premises during the Renewal Term. Each appraiser so selected
shall (i) be a licensed commercial real estate broker and (ii) have not less
than ten (10) years’ experience in the field of commercial brokerage in
connection with office buildings comparable to the Building in the San Antonio,
Texas area. Upon selection, Landlord’s and Tenant’s appraisers shall work
together in good faith to agree upon which of the two Estimates most closely
reflects the Prevailing Market rate for the Premises. The Estimate chosen by
such appraisers shall be binding on both Landlord and Tenant as the Base Rent
rate for the Premises during the Renewal Term. If either Landlord or Tenant
fails to appoint an appraiser within the ten (10) day period referred to above,
the appraiser appointed by the other party shall be the sole appraiser for the
purposes hereof. If the two appraisers cannot agree upon which of the two
Estimates most closely reflects the Prevailing Market within thirty (30) days
after their appointment, then, within ten (10) days after the expiration of such
thirty (30) day period, the two appraisers shall select a third appraiser
meeting the aforementioned criteria. Once the third appraiser (i.e. arbitrator)
has been selected as provided for above, then, as soon thereafter as practicable
but in any case within fourteen (14) days, the arbitrator shall make his
determination of which of the two Estimates most closely reflects the Prevailing
Market rate and such Estimate shall be binding on both Landlord and Tenant as
the Base Rent rate for the Premises. The parties shall share equally in the
costs of the arbitrator. Any fees of any appraiser, counsel or experts engaged
directly by Landlord or Tenant shall be borne by the party retaining such
appraiser, counsel or expert.

(f) If the Prevailing Market rate has not been determined by the commencement
date of the Renewal Term, Tenant shall pay Base Rent upon the terms and
conditions in effect during the last month of the initial Term for the Premises
until such time as the Prevailing Market rate has been determined. Upon such
determination, the Base Rent for the Premises shall be retroactively adjusted to
the commencement of the Renewal Term. If such adjustment results in an
underpayment of Base Rent by Tenant, Tenant shall pay Landlord the amount of
such underpayment within thirty (30) days after the determination thereof. If
such adjustment results in an overpayment of Base Rent by Tenant, Landlord shall
credit such overpayment against the next installment of Base Rent due under this
Lease and, to the extent necessary, any subsequent installments, until the
entire amount of such overpayment has been credited against Base Rent.

(g) If Tenant is entitled to and properly exercises its Renewal Option, Landlord
and Tenant shall execute an amendment (the “Renewal Amendment”) to reflect
changes in the Base Rent, Lease Term, Expiration Date and other appropriate
terms; provided that an otherwise valid exercise of the Renewal Option shall be
fully effective whether or not the Renewal Amendment is executed.

(h) For purpose hereof, “Prevailing Market” rate shall mean the arms length fair
market annual rental rate per rentable square foot under new and renewal leases
and amendments entered into on or about the date on which the Prevailing Market
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space comparable to the Premises in the Building and office buildings comparable
to the Building in the Northwest San Antonio submarket. The determination of
Prevailing Market rate shall take into account any material economic differences
between the terms of this Lease and any comparison lease, such as rent
abatements, construction costs and other concessions and the manner, if any, in
which the Landlord under any such lease is reimbursed for operating expenses and
taxes. The determination of Prevailing Market rate shall also take into
consideration any reasonably anticipated changes in the Prevailing Market rate
from the time such Prevailing Market rate is being determined and the time such
Prevailing Market rate will become effective under this Lease.

III. Right of First Refusal.

(a) Tenant shall have the ongoing right of first refusal (the “Right of First
Refusal”) with respect to approximately 10,000 rentable square feet of space
contiguous to the Premises in the Building (such space, the “Refusal Space”).
Tenant’s Right of First Refusal shall be exercised as follows: when Landlord has
a bona fide third party offer from a prospective tenant other than the existing
tenant in the Refusal Space, if any, (the “Prospect”) interested in leasing all
or any portion of the Refusal Space upon terms acceptable to Landlord, Landlord
shall advise Tenant (the “Advice”) of the terms under which Landlord and such
Prospect are prepared to lease the Refusal Space (or applicable portion
thereof). If such Prospect is interested in leasing space in the Building in
addition to the Refusal Space, Landlord shall include such additional space in
the Advice, and such additional space shall be deemed a part of the Refusal
Space. Tenant may lease the Refusal Space described in the Advice under such
terms, by providing Landlord with written notice of exercise (the “Notice of
Exercise”) within ten (10) days after the date of the Advice, except that Tenant
shall have no such Right of First Refusal and Landlord need not provide Tenant
with an Advice if:

(i) Tenant is in default under the Lease beyond any applicable notice and cure
periods at the time that Landlord would otherwise deliver the Advice; or

(ii) more than 25% of the Premises is sublet (other than pursuant to a Permitted
Transfer) at the time Landlord would otherwise deliver the Advice; or

(iii) the Lease has been assigned (other than pursuant to a Permitted Transfer)
prior to the date Landlord would otherwise deliver the Advice; or

(iv) the Tenant is not occupying the Premises on the date Landlord would
otherwise deliver the Advice.

(b) The Term for the Refusal Space shall commence upon the commencement date
stated in the Advice and thereupon such Refusal Space shall be considered a part
of the Premises, provided that all of the terms stated in the Advice, including
the termination date set forth in the Advice, shall govern Tenant’s leasing of
such Refusal Space and only to the extent that they do not conflict with the
Advice, the terms and conditions of the Lease shall apply to such Refusal Space.
Tenant shall pay Base Rent and Additional Rent for such Refusal Space in
accordance with the terms and conditions of the Advice. Notwithstanding anything
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this Section III to the contrary, in the event Base Rent for the Refusal Space
commences within one (1) year after the Commencement Date and the term of the
lease for the Refusal Space set forth in the Advice will expire after the
Expiration Date of the Lease, the term of the Lease with respect to the Refusal
Space shall expire on the Expiration Date of the Lease Term and the allowances,
if any, set forth in the Advice to be provided by Landlord shall be adjusted to
an amount equal to (i) the per rentable square foot of allowance(s) set forth in
the Advice, multiplied by the number of rentable square feet in the Refusal
Space, multiplied by (ii) a fraction, the numerator of which is the number of
full calendar months which remain in the Lease Term from and after the date Base
Rent commences with respect to the Refusal Space and the denominator of which is
the number of calendar months in the term of the lease to the Prospect set forth
in the Advice. In the event Base Rent for the Refusal Space does not commence
within one (1) year after the Commencement Date and the term of the lease for
the Refusal Space set forth in the Advice will expire after the Expiration Date
of the Lease, Tenant shall have the right to extend the Lease Term with respect
to the existing Premises to the date that is coterminous with the expiration
date of the Refusal Space at a Base Rent equal to the rate then payable for the
Refusal Space (and Tenant shall not be entitled to any allowances in connection
with such extension), in which case Tenant shall notify Landlord of such
election in the Notice of Election.

(c) The Refusal Space leased by Tenant hereunder shall be accepted by Tenant in
its “as-is” condition and as-built configuration existing on the earlier of the
date Tenant takes possession of such Refusal Space or the date the term for such
Refusal Space commences, unless the Advice specifies work to be performed by
Landlord in such Refusal Space, in which case Landlord shall perform such work
in such Refusal Space. If Landlord is delayed in delivering possession of such
Refusal Space due to the holdover or unlawful possession of such space by any
party, Landlord shall use reasonable efforts to obtain possession of the space,
and the commencement of the term for such Refusal Space shall be postponed until
the date Landlord delivers possession of such Refusal Space to Tenant free from
occupancy by any party.

(d) The rights of Tenant hereunder with respect to the Refusal Space shall
terminate on the earlier to occur of (i) the expiration of the initial Lease
Term; (ii) Tenant’s failure to exercise its Right of First Refusal within the
ten (10) day period provided in section (a) above; and (iii) the date Landlord
would have provided Tenant an Advice if Tenant had not been in violation of one
or more of the conditions set forth in section (a) above. Notwithstanding the
foregoing, if (i) Tenant was entitled to exercise its Right of First Refusal,
but failed to provide Landlord with a Notice of Exercise within the ten (10) day
period provided in section (a) above, and (ii) Landlord does not enter into a
lease for the Refusal Space with the same Prospect or any other prospect within
a period of six (6) months following the date of the Advice, during the initial
Lease Term, Tenant shall once again have a Right of First Refusal with respect
to such Refusal Space. In addition, Tenant shall once again have the Right of
First Refusal with respect to the Refusal Space if, within such six (6) months
period, Landlord proposes to lease the Refusal Space to the Prospect or any
other Prospect on terms that are substantially different than those set forth in
the Advice. For purposes hereof, the terms offered to a prospect shall be deemed
to be substantially the same as those set forth in the Advice as long as there
is no more than a ten percent (10%) reduction in the “bottom line” cost per
rentable square foot of the

 

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Refusal Space to the Prospect when compared with the “bottom line” cost per
rentable square foot under the Advice, considering all of the economic terms of
the both deals, respective, including, without limitation, the net rent, any tax
or expense escalation or other financial escalation and any financial
concessions. Further, if Landlord does enter into a lease for the Refusal Space,
Tenant shall have a Right of First Refusal on such Refusal Space (subject to the
terms hereof) upon the expiration of the lease with the Prospect.

(e) If Tenant exercises its Right of First Refusal, Landlord and Tenant shall
enter into an amendment (the “Refusal Space Amendment”) adding the Refusal Space
(or applicable portion thereof) to the Premises on the terms set forth in the
Advice and reflecting the changes in the Base Rent, Tenant’s Pro Rata Share,
Rentable Square Footage in the Premises, and other appropriate terms; provided
that an otherwise valid exercise of the Right of First Refusal shall be fully
effective whether or not the Refusal Space Amendment is executed.

(f) Notwithstanding anything herein to the contrary, Tenant’s Right of First
Refusal is subject and subordinate to (i) the renewal and/or expansion rights of
any tenant leasing all or any portion of the Refusal Space, and (ii) the
expansion rights (whether such rights are designated as a right of first offer,
right of first refusal, expansion option or otherwise) of any tenant of the
Building existing on the date hereof.

[END OF EXHIBIT E]

 

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EXHIBIT F

COMMENCEMENT LETTER

Date                         

Asset Acceptance, LLC

5250 Prue Road, Suite 525

San Antonio, Texas 78240

Attn:                                                              

 

Re:

   Commencement Letter with respect to that certain Lease dated
                    , 2009 by and between TDC Prue Road, L.P., a Delaware
limited partnership as Landlord, and Asset Acceptance, LLC, a Delaware limited
liability company, as Tenant, concerning the Premises containing 17,445 rentable
square feet in the building located at 5250 Prue Road, San Antonio, Texas 78240

Dear                     :

In accordance with the terms and conditions of the above referenced Lease,
Tenant hereby accepts possession of the Premises and agrees as follows:

The Commencement Date of the Lease is                                     ;

The Expiration Date of the Lease is                                     .

Landlord agrees to complete the work in the Premises identified in the punch
list jointly prepared by Landlord and Tenant dated                     . Tenant
accepts possession of the Premises subject to Landlord’s obligation to complete
the work identified on the punch list.

Please acknowledge your acceptance of possession and agreement to the terms set
forth above by signing all three (3) copies of this Commencement Letter in the
space provided and returning two (2) fully executed copies of the same to my
attention.

Sincerely,

XXXXXXXXX

Project Manager

Agreed and Accepted:

TENANT:

 

By:

 

 

Name:

 

 

Title:

 

 

 

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EXHIBIT I

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”)
is made and entered into as of                         , 2009, by and among
ASSET ACCEPTANCE, LLC, a Delaware limited liability company (“Tenant”), whose
address is 28405 Van Dyke Avenue, Warren, Michigan 48093, Attention: Mark A.
Redman; TDC PRUE ROAD, L.P., a Delaware limited partnership (“Borrower”), whose
address is c/o Transwestern, 1900 West Loop South, Suite 1300, Houston, Texas
77027, Attention: Harold Prasatik; and WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association (“Lender”), whose address is 2800 Post Oak
Boulevard, Suite 3500, Houston, Texas 77056, Attention: Real Estate Financial
Services.

RECITALS:

Lender has made or may hereafter make a loan or loans to Borrower, which loan or
loans are (or will be) secured by a Deed of Trust (defined below) covering all
of that certain property described in Exhibit A attached hereto and made a part
hereof for all purposes, together with all improvements located thereon (the
“Property”).

Tenant is the owner of a leasehold estate covering the premises (referred to
herein as the “Premises”) located on the Property, which leasehold estate was
created under that certain Lease Agreement (the “Lease Agreement”) dated
April 27, 2009, between Borrower and Tenant. In addition, Borrower and Tenant
have entered into that certain Work Letter Agreement (the “Work Letter
Agreement”) dated as of April 27, 2009 governing the obligations of Borrower and
Tenant with respect to the preparation of the Premises for Tenant’s occupancy.
The Lease Agreement, the Work Letter Agreement, and all renewals, extensions and
modifications thereof are hereinafter collectively called the “Lease”.

Borrower has executed or will execute a Deed of Trust and Security Agreement
(with Assignment of Rents) (the “Deed of Trust”) and any and all papers now or
hereafter governing, evidencing, guaranteeing or securing or otherwise relating
to all or any part of the Borrower’s indebtedness to Lender (collectively, as
may be amended from time to time, the “Security Instruments”) covering the
Property for the benefit of Lender as security for Borrower’s indebtedness to
Lender, which indebtedness is or will be evidenced by one or more promissory
notes by and between Borrower and Lender.

As a condition to its making the loans now or hereafter evidenced or secured by
the Deed of Trust (the “Loans”), Lender has required that Tenant acknowledge
that Tenant’s leasehold interest in the Premises is subordinate to all liens and
security interests securing payment of the Loans and to subordinate such
leasehold interest to the liens and security interests securing payment of the
Loans to the extent they are not already subordinate.

 

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Tenant is willing to acknowledge such subordination and further subordinate its
leasehold interest; provided, however, that as a condition to acknowledging such
subordination and further subordinating its leasehold interest in and to the
Premises to all liens and security interests securing payment of the Loans,
Tenant has required that Tenant’s right of possession to the Premises shall not
be disturbed by Lender or any third party in the exercise of any of Lender’s
rights under the Deed of Trust or any other security instrument securing payment
of the indebtedness secured by the Deed of Trust, which protection Lender is
willing to grant on the terms and conditions contained herein in order to induce
Tenant to acknowledge its subordination and further subordinate the Lease to the
Deed of Trust and all liens and security interests securing payment of the
Loans.

AGREEMENTS:

NOW, THEREFORE, in consideration of the mutual terms and provisions contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

1. Lease Subordinate to Deed of Trust. Tenant covenants and agrees with Lender
that the Lease and all of Tenant’s right, title and interest in and to the
Premises and any lease hereafter executed by Tenant covering any part of the
Property is and shall be subject, subordinate and inferior to (a) the Deed of
Trust and all liens and security interests securing payment of the Loans and all
other security instruments securing payment of any indebtedness of Borrower to
Lender now or hereafter created which cover or affect any part of the Property,
and all renewals, extensions, substitutions, replacements, consolidations and
increases in amount of the indebtedness secured by the Deed of Trust or any
related loan papers, and to (b) all right, title and interest of Lender in the
Property created by the Deed of Trust or any other security instrument held by
Lender in the same manner and to the same extent as if the Lease had been
executed subsequent to the execution, delivery, and recordation of such Deed of
Trust and related loan papers. Borrower and Tenant hereby expressly subordinate
to the Deed of Trust any and all options to purchase the Property contained in
the Lease or in any modification or amendment to the Lease, and further
acknowledge that any such option or right of first refusal pursuant to the Lease
to acquire all or any portion of the Property shall not be applicable to or
effective after Lender’s acquisition of the Property by foreclosure or
otherwise.

2. Non-Disturbance. Lender covenants and agrees with Tenant, for Lender and its
successors and assigns, that so long as Tenant is not then in default under the
Lease (or beyond any grace period), Lender shall not disturb Tenant’s right of
possession to the Premises in the event that Lender or Lender’s successors or
assigns acquire title to all or any part of the Premises pursuant to the
exercise of any remedy provided for in the Security Instruments, nor shall
Tenant be named as a party defendant to any action to foreclose the liens and
security interests securing payment of the Loans.

 

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3. Tenant to Attorn to Lender; Lender’s Liability Limited. Tenant covenants and
agrees to attorn to Lender or any other owner of the Property pursuant to any
foreclosure sale or by deed in lieu of foreclosure, as Tenant’s new landlord,
and agrees that the Lease shall continue in full force and effect as a direct
lease between Tenant and Lender or such other owner upon all of the terms,
covenants, conditions and agreements set forth in the Lease. However, in no
event shall Lender or such other owner be:

 

  (a) liable for any act or omission of any previous landlord (including
Landlord), it being agreed, however, that the Lender or such other owner shall
perform any continuing repair or maintenance obligations expressly provided for
in the Lease in accordance with the Lease after taking title to the Property;

 

  (b) subject to any offset or counterclaim which Tenant might be entitled to
assert against any previous landlord (including Landlord), other than offsets
specifically provided for in the Lease, and only applicable to the period after
Lender or such other owner acquires title to the Property;

 

  (c) bound by any payment of rent or additional rent made by Tenant to any
previous landlord for more than one (1) month in advance;

 

  (d) bound by any amendments or modifications of the Lease hereafter made
without the consent of Lender or such owner other than with respect to the
exercise of rights, options or elections presently contained in the Lease,
including without limitation, options to extend the term of the lease and rights
of first refusal;

 

  (e) in any way responsible for any deposit or security which was not delivered
to Lender or such owner; or

 

  (f) liable with respect to any representations, warranties or indemnities from
Borrower, whether pursuant to the Lease or otherwise, respecting use, compliance
with zoning, landlord’s title, landlord’s authority, habitability or fitness for
purpose or commercial suitability or hazardous wastes, hazardous substances,
toxic materials or similar phraseology relating to the environmental condition
of the Property or any part thereof.

In the event Lender shall acquire title to the Property, Tenant agrees to look
solely to Lender’s interest in the Premises and rent and income derived
therefrom for the recovery of any judgment against Lender, it being agreed that
Lender shall have no obligation nor incur any liability beyond Lender’s then
equity interest, if any, in the Premises, for

 

I-3

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payment and discharge of any obligations imposed upon Lender hereunder or under
the Lease, and Lender is hereby released and relieved of any other obligations
hereunder and under the Lease, and, in such event, Lender’s liability shall be
limited as set forth heron.

4. Rent Payable to Lender upon Borrower Default. Tenant has been advised that
the Security Instruments give Lender the right to collect rent and other sums
payable under the Lease directly from Tenant upon the occurrence of a default
hereunder, and Tenant agrees that upon the receipt from Lender of notice of any
such default, Tenant will thereafter pay all rent and other sums payable under
the Lease directly to Lender (or as Lender shall direct) as they become due and
payable. Notwithstanding anything to the contrary contained in any of the
Security Instruments, Borrower authorizes and directs Tenant to immediately and
continuously make all such payments to the direction of Lender, releases Tenant
of any and all liability to Borrower for any and all payments so made, and
defends, indemnifies and holds Tenant harmless from and against any and all
claims, demands, losses, or liabilities asserted by, through or under Borrower
for any and all payments so made. Subject to any and all rights of Tenant under
the Lease or at law or in equity, Tenant hereafter agrees to pay all monies due
and becoming due from Tenant under the Lease to or at the direction of Lender.
Tenant agrees that neither Borrower’s demanding or receiving any such payments,
nor Lender’s exercising any other right, remedy, privilege, power of immunity
granted by any of the Security Instruments, will operate to impose any liability
upon Lender for performance of any obligation of Borrower under the Lease unless
and until Lender elects otherwise in writing or acquires the Property through
foreclosure of the Deed of Trust or by deed from Borrower in lieu of
foreclosure. Such payments shall continue until Lender directs Tenant otherwise
in writing.

5. Notice of Default or Termination Event. Tenant hereby agrees to give prompt
written notice to Lender of any default of Borrower under the Lease, if such
default is of such a nature as to give Tenant the right to terminate the Lease,
reduce rent or to credit or offset any amounts against future rent. It is
further agreed that such notice will be given to any successor in interest of
Lender under the Deed of Trust, provided that prior to any such default of
Borrower such successor in interest shall have given written notice to Tenant of
its acquisition of Lender’s interest therein, and shall have designated the
address to which such notice is to be directed. Notwithstanding any provisions
of the Lease to the contrary, Tenant may not terminate the Lease without
affording to Lender or its successors a period of time to remedy any such
default by Borrower equal to forty-five (45) days, unless waiting such
additional period of time will have a material adverse effect on Tenant, such
period to commence upon the receipt by Lender or its successors of written
notice of such default. If Lender or such successor commences or institutes
foreclosure proceedings or advertises its intention to exercise the power of
sale under the Deed of Trust within forty-five (45) days after receipt of
written notice of such default and then proceeds diligently to cure Borrower’s
default, the Lease shall not terminate and any purported termination by Tenant
shall be ineffective.

 

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6. Construction of Premises. In the event that the construction of the Premises
has not been substantially completed at the time the Lender or any third party
succeeds to the interest of the Borrower under the Lease by reason of
foreclosure or other proceedings brought by Lender or by any transfer in lieu of
foreclosure, then, in such event, Tenant hereby agrees that the Lender or any
such third party shall have the right to cancel and terminate the Lease upon
written notice to Tenant. Any provision of this Agreement to the contrary
notwithstanding, Lender shall have no obligation, or incur any liability, with
respect to the erection and completion of the building in which the Premises are
located or for the completion of the Premises or any improvements for Tenant’s
use and occupancy.

7. Lease Status. Borrower and Tenant hereby jointly and severally represent and
warrant to Lender as follows regarding the Lease:

 

  (a) The Lease is dated April 27, , and has not been amended. There are no
other agreements, amendments, understandings or the like between Borrower and
Tenant relating to the Premises or the Lease except: None.

 

  (b) The execution of the Lease was duly authorized, the Lease was properly
executed and is in full force and effect and is valid, binding and enforceable
against Tenant and Borrower and there exists no default beyond any applicable
grace period; nor in the actual knowledge of Borrower and Tenant does any state
of facts exist which with notice, the passage of time, or both, could ripen into
a default, on the part of either Tenant or Borrower.

 

  (c) Under the Lease, Tenant is presently obligated, or will be obligated upon
the occurrence of the Rental Commencement Date of the Lease to pay rent pursuant
to the Lease. No rent has been paid more than one (1) month in advance, and
Tenant has no claim against Borrower for any deposits or other sums.

 

  (d) There has not been filed by or against, nor is there threatened against or
contemplated by, Tenant a petition in bankruptcy, petition seeking
reorganization or arrangement under the bankruptcy laws of the United States or
of any state thereof, or any other action brought under said bankruptcy laws.

 

  (e) Tenant is not as of the date of this Agreement entitled to any additional
free rent under the Lease (except as expressly provided for in the Lease), and
to the best of the knowledge and belief of Tenant there has not been any
assignment, hypothecation or pledge of the Lease or rents accruing under the
Lease, other than pursuant to the Security Instruments.

 

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  (f) To Tenant’s actual knowledge, Tenant is in full compliance with all
federal, state and local laws, ordinances, rules and regulations affecting its
use of the Premises including, without limitation, the handling, storage and
disposal of hazardous and/or toxic materials used or generated as a result of
its business conducted on or about the Premises.

8. Amendment, Rent Prepayment or Surrender. Without Lender’s prior written
consent, Tenant will not (i) enter into any agreement amending the rental, lease
term or the Borrower’s obligations provided for in the Lease (except for those
amendments expressly provided for in the Lease relating to the renewal option
set fourth in Section II of Exhibit E to the Lease Agreement or the right of
first refusal set forth in Section III of Exhibit E to the Lease Agreement) or
terminating the Lease, (ii) prepay any of the rents, additional rents or other
sums due under the Lease for more than one (1) month in advance of its accrual
or (iii) voluntarily surrender any portion of the Premises or terminate the
Lease without cause or shorten the Lease term (except as expressly provided for
in the Lease), and no such purported amendment, modification, termination,
prepayment or voluntary surrender made without Lender’s prior written consent
(whose consent shall not be unreasonably withheld, conditioned or delayed) shall
be binding on Lender.

9. Further Assurances. Whenever reasonably requested by Lender, Borrower and
Tenant from time to time shall severally execute and deliver to or at the
direction of Lender, and without charge to Lender, one or more written
certifications of all of the matters set forth above, and as to Tenant’s
occupancy of the Premises, whether Tenant has exercised any renewal or expansion
options and any other information that Lender may reasonably require to confirm
the current status of the Lease, including, without limitation, a confirmation
that the Lease is and remains subordinated as provided in this Agreement.
Borrower and Tenant from time to time shall execute and deliver at Lender’s
request all instruments that may be necessary or appropriate to evidence their
agreements hereunder.

10. Notices. All notices, demands or requests provided for or permitted to be
given pursuant to this Agreement must be in writing and shall be deemed to have
been properly given if it is written and delivered in person or mailed by
Registered or Certified US Mail, postage prepaid, or sent by a nationally
recognized overnight delivery service to the party who is to receive such notice
at the address set forth on the first page hereof. All notices, demands and
requests shall be deemed to have been given two (2) business days after the date
it was mailed. When sent by overnight delivery service, the notice shall be
deemed to have been given on the next business day after deposit with such
overnight delivery service. The time period in which a response to any notice,
demand or request must be given, if any, shall commence to run, however, from
the date of actual receipt of the notice, demand or request by the addressee
thereof. Rejection or other refusal to accept or the inability to deliver
because of changed address of which no notice was given shall be deemed to be
receipt of the notice, demand or request sent. By giving written notice thereof
to the other party, Tenant or Lender shall have the right from

 

I-6

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time to time and at any time during the term of this Agreement to change their
respective addresses and each shall have the right to specify as its address any
other address within the United States of America.

11. Modification or Termination; Multiple Counterparts. This Agreement may not
be discharged or modified orally or in any manner other than by an agreement in
writing specifically referring to this Agreement and signed by the party or
parties to be charged thereby.

12. Agreement Self-Operative. The provisions contained in this Agreement shall
be self-operative and effective without the necessity of execution of any
further instruments on the part of any party hereto or the respective heirs,
legal representatives, successors or assigns of any such party. This Agreement
satisfies any conditions or requirements in the Lease relating to the granting
of a non-disturbance agreement.

13. Binding Effect. This Agreement shall bind and benefit the parties hereto and
their respective heirs, legal representatives, successors and assigns.

14. Attorney’s Fees and Costs. In the event any legal action or proceeding is
commenced to interpret or enforce the terms of or obligations arising out of
this Agreement, or to recover damages arising out of the breach thereof, the
party prevailing in any such action or proceeding shall be entitled to recover
from the non-prevailing party all reasonable attorneys’ fees, costs and expenses
incurred by the prevailing party as shall be pled and awarded by a court of
competent jurisdiction.

15. Texas Law Governs. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas and the United States of America.

[Signature Pages Follow]

 

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IN TESTIMONY WHEREOF, this instrument is executed effective as of the day and
year first above written.

 

TENANT:

 

ASSET ACCEPTANCE, LLC, a Delaware limited liability company

By:  

 

Name:

 

 

Title:

 

 

 

STATE OF                 

   §    §

COUNTY OF                 

   §

This instrument was ACKNOWLEDGED before me on                     , 2009, by
                                        ,                                  of
Asset Acceptance, LLC, a Delaware limited liability company, on behalf of said
limited liability company.

 

 

Notary Public in and for the State of                 

[SEAL]

 

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BORROWER:

 

TDC PRUE ROAD, L.P.,

a Delaware limited partnership

By:  

TDC Prue Road GP, L.L.C., a

Delaware limited liability company,

its general partner

  By:  

 

  Name:  

 

  Title:  

 

 

STATE OF TEXAS

                   §                    §

COUNTY OF BEXAR

                   §

This instrument was ACKNOWLEDGED before me on                     , 2009, by
                                    ,                                  of TDC
Prue Road GP, L.L.C., a Delaware limited liability company, in its capacity as
general partner of TDC Prue Road, L.P., a Delaware limited partnership, on
behalf of said limited partnership.

 

 

Notary Public in and for the State of Texas

[SEAL]

 

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LENDER:

 

WACHOVIA BANK, NATIONAL ASSOCIATION

By:  

 

Name:  

 

Title:  

 

STATE OF TEXAS

                   §                    §

COUNTY OF HARRIS

                   §

This instrument was ACKNOWLEDGED before me on                     , 2009, by
                                    ,                                  of
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, on behalf
of said banking association.

 

 

Notary Public in and for the State of Texas

[SEAL]

Exhibit A – Property

 

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