Exhibit 10.2

LEASE AGREEMENT
(triple net lease)

STATE OF TEXAS

COUNTY OF HARRIS

This lease agreement ("Lease"), made and entered into as of the 30th day of
January, 2009, by and between ____ _____ INDUSTRIAL, L.L.C., a Texas limited
liability company ("Landlord"), and SHARPS COMPLIANCE INC. OF TEXAS, a Texas
corporation ("Tenant"), upon the following terms and conditions:

AGREEMENT

1.
Leased Premises

In consideration of the rents reserved and the covenants and agreements herein
contained on the part of Tenant to be observed and performed, Landlord hereby
demises, lets and leases unto Tenant, and Tenant hereby rents from Landlord,
those certain premises consisting of a space containing an area of approximately
54,783 square feet (the "Leased Premises") shown on Exhibit "A" attached hereto
and constituting a part of the office/warehouse building, located at________,
which Building is located upon the lot, tract or parcel of land more
particularly described on Exhibit "A-2" attached hereto and made a part hereof
for all purposes.  If the Building is in a development containing one or more
other buildings, such buildings together with all related site land,
improvements, parking facilities, common areas, driveways and landscaping,
together with the Building shall be referred to as the "Project".

Effective as of the first day of the 11th Lease Month (hereinafter defined)
(such date, the "Mandatory Expansion Space Commencement Date"), Landlord shall
lease to Tenant, and Tenant shall lease from Landlord, that certain space
containing 10,588 square feet (the "Mandatory Expansion Space") identified on
Exhibit "A-1" attached hereto.  Effective as of the Mandatory Expansion Space
Commencement Date, the term "Leased Premises" as used herein shall mean the
initial Leased Premises and the Mandatory Expansion Space, and the size of the
Leased Premises shall be 65,371 square feet.  Notwithstanding the foregoing,
Tenant may take possession of the Mandatory Expansion Space on the Commencement
Date without accelerating the Mandatory Expansion Space Commencement Date.  Such
possession of the Mandatory Expansion Space 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 Mandatory Expansion Space
Commencement Date.

The purpose of the site plans attached as Exhibit "A" and Exhibit "A-1" is to
show the approximate location of the Leased Premises (i.e., the initial Leased
Premises and the Mandatory Expansion Space).  Landlord reserves the right at any
time to relocate, vary and adjust the size of the various buildings, covenants,
automobile parking areas, and other common areas as shown on said site plan;
provided that Landlord shall not relocate the Leased Premises.  The use and
occupancy by Tenant of the Leased Premises shall include the use, in common with
others entitled thereto, of the common service areas, pedestrian walks,
automobile driveways and parking areas, all as shown on the site plan attached
hereto as Exhibit "A".

In determining the number of square feet of area of the Leased Premises, Tenant
acknowledges that the Leased Premises includes the usable area, without
deduction for columns or projections, multiplied by a load factor to reflect a
share of certain areas, which may include mechanical and service rooms and
closets in the Building.

Prior to the Commencement Date and subject to and in accordance with the terms
set forth in Section II of Addendum I attached to this Lease, Tenant may use the
remaining leasable area of the Building for (i) the storage of raw materials,
finished goods and equipment, and (ii) subject to compliance with all applicable
laws, light product assembly.

2.
Term

To have and to hold the Leased Premises for a period of sixty-three (63) months
commencing on the later to occur of (a) April 1, 2009 (the "Target Commencement
Date") and (b) the date upon which the Work (as defined in Exhibit "C" attached
hereto) in the initial Leased Premises has been substantially completed, as such
date is determined pursuant to the Work Letter Agreement attached hereto as
Exhibit "C" (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 Month 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.  "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.  Upon the determination of the actual
Commencement Date and the actual Expiration Date, Landlord and Tenant shall
execute a Memorandum of Acceptance of Leased Premises ("Memorandum of
Acceptance") in substantially the form attached hereto as Exhibit "D".  If
Tenant occupies the initial Leased Premises without executing a Memorandum of
Acceptance, Tenant shall be deemed to have accepted the initial Leased Premises
for all purposes and the Commencement Date shall be deemed to be the date set
forth in the Memorandum of Acceptance delivered by Landlord.  If Tenant occupies
the initial Leased Premises prior to the Commencement Date for any reason other
than construction of improvements therein, such occupancy shall be upon all of
the terms and conditions contained herein, including, without limitation, the
obligation to pay Rent, but shall not advance the Expiration Date, and Tenant
shall indemnify and hold Landlord harmless from any liability as a result of
Tenant's early occupancy of the Leased Premises, EVEN IF THE SAME RESULTS FROM
THE NEGLIGENCE (BUT NOT THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF LANDLORD
OR LANDLORD'S EMPLOYEES, AGENTS OR CONTRACTORS.  Tenant shall have the option to
renew the Lease term as set forth in Section I of Addendum I attached to this
Lease.

 
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3.
Acceptance of Leased Premises

Tenant acknowledges that Landlord has not made any representations or warranty
with respect to the condition or quality of the Leased Premises or the
Building.  Tenant has inspected and accepts the Leased Premises and the Building
in their present "AS IS" condition as suitable for the purpose for which the
Leased Premises are leased.  Taking of possession by Tenant shall be deemed
conclusively to establish that the Leased Premises, the Building and the Common
Areas (hereinafter defined) are in good and satisfactory condition as of when
possession was taken.  Tenant further acknowledges that no representations as to
the repair of the Leased Premises or Building nor promises to alter, remodel or
improve the Leased Premises or Building have been made by Landlord, unless such
are expressly set forth in this Lease.  After the Commencement Date Tenant
shall, upon demand, execute and deliver to Landlord a letter of acceptance of
delivery of the Leased Premises.

4.
Base Rent and Security Deposit

(a)           Base Rent.  With respect to the initial Leased Premises, Tenant
agrees to pay to Landlord as base rent (the "Base Rent") the following amounts
during the periods set forth below:

Period
 
Annual Base Rent
   
Monthly Installment
of Base Rent
 
Lease Months 1 – 3
  $ 0.00     $ 0.00  
Lease Months 4 – 15
  $ 249,810.48     $ 20,817.54  
Lease Months 16 – 37
  $ 256,384.44     $ 21,365.37  
Lease Months 38 – 63
  $ 262,958.40     $ 21,913.20  

In addition to the Base Rent payable with respect to the initial Leased
Premises, with respect to the Mandatory Expansion Space, Tenant agrees to pay to
Landlord as Base Rent the following amounts during the periods set forth below:

Period
 
Annual Base Rent
   
Monthly Installment
of Base Rent
 
Mandatory Expansion Space Commencement Date – Lease Month 15
  $ 48,281.28     $ 4,023.44  
Lease Months 16 – 37
  $ 49,551.84     $ 4,129.32  
Lease Months 38 – 63
  $ 50,822.40     $ 4,235.20  

Base Rent shall for the Leased Premises shall be paid in advance, without
demand, deduction or set off, for the entire term hereof.  A monthly installment
of $27,528.46 (representing Base Rent for Lease Month 4 for the initial Leased
Premises together with Tenant's Pro Rata Share of Building Costs for the first
Lease Month with respect to the initial Leased Premises) shall be due and
payable on the date hereof and the remaining installments of Base Rent shall be
due and payable on or before the first day of each calendar month succeeding the
Commencement Date during the hereby demised term, except that the rental payment
for any fractional calendar month at the commencement or end of the Lease period
shall be prorated.

(b)  Security Deposit.  In addition, Tenant agrees to deposit with Landlord on
the date hereof the sum of $34,156.35 (the "Security Deposit"), which sum shall
be held by Landlord, without obligation for interest, as security for the
performance of Tenant's covenants and obligations under this Lease, it being
expressly understood and agreed that such deposit is not an advance rental
deposit or a measure of Landlord's damages in case of Tenant's
default.  Landlord shall not be required to keep the Security Deposit separate
from its other accounts and no trust relationship is created with respect to the
Security Deposit.  Upon the occurrence of any event of default by Tenant,
Landlord may, from time to time, without prejudice to any other remedy provided
herein or provided by law, use such Security Deposit to the extent necessary to
make good any arrears of rent or other payments due Landlord hereunder, and any
other damage, injury, expense or liability caused by such event of default; and
Tenant shall pay to Landlord on demand the amount so applied in order to restore
the Security Deposit to its original amount.  Although the Security Deposit
shall be deemed the property of Landlord, any remaining balance of such deposit
shall be returned by Landlord to Tenant within sixty (60) days after Tenant's
obligations under this Lease have been fulfilled, and Tenant has provided
Landlord with Tenant's forwarding address.

5.
Tenant's Pro Rata Share of Building Costs

Subject to all of the provisions of this Lease relevant hereto, Tenant promises
and agrees to pay, as additional rent hereunder and as provided herein, at the
office of the Landlord or at such other place designated by Landlord, without
any prior demand therefor and without any deduction or set-off throughout the
term of this Lease, Tenant's Pro Rata Share (hereinafter defined) of certain
Project expenditures made by Landlord, as follows:

(1)  Real Estate Taxes, as defined in Paragraph 6;

 
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(2)  Common Area Maintenance Costs, as defined in Paragraph 7; and
(3)  Building Insurance Costs, as defined in Paragraph 8.

"Tenant's Pro Rata Share" as used in this Lease shall be obtained by multiplying
the expense in question by a fraction, the numerator of which shall be the
rentable square footage area of the Leased Premises and the denominator of which
shall be the rentable square footage area of the Building.  If a particular
expense is incurred or charged to more than one building in the Project rather
than solely to the Building, then, for the purposes of calculating Tenant's Pro
Rata Share with respect to the Building, such multi-building expense shall be
allocated to the Building by multiplying the expense in question by a fraction,
the numerator of which shall be the rentable square footage of the Building and
the denominator of which shall be the rentable square footage area of the
buildings for which the expense was incurred or otherwise allocated to, with the
resulting number being used to calculate Tenant's Pro Rata Share as to the
Leased Premises.  The amounts due from Tenant as Tenant's Pro Rata Share of Real
Estate Taxes, Common Area Maintenance Costs and Building Insurance Costs
(sometimes herein collectively called "Building Costs") shall be estimated by
Landlord for each calendar year and paid by Tenant in equal installments of
one-twelfth (1/12) of such estimated amount, monthly in advance, upon the first
day of each calendar month provided, however, if the term shall commence upon a
day other than the first day of the calendar month, Tenant shall pay upon the
commencement date of this Lease a portion of Tenant's Pro Rata Share of Building
Costs calculated on a per diem basis with respect to the fractional month
preceding the commencement of the first full calendar month of the term of this
Lease.  Said amounts shall be adjusted between Landlord and Tenant annually and
at the expiration or earlier termination of this Lease as set forth below.  The
term "Rent" shall mean Base Rent, Tenant's Pro Rata Share of Real Estate Taxes,
Common Area Maintenance Costs and Building Insurance Costs and all other sums
payable by Tenant to Landlord hereunder.

Tenant will pay Landlord the sum of the following per month, in advance, payable
at the same time and place as the Base Rent is payable, as estimated charges for
Tenant's Pro Rata Share of Real Estate Taxes, Common Area Maintenance Costs and
Building Insurance Costs with respect to the initial Leased Premises:

(1) Real Estate Taxes
  $ 4,245.68  
(2) Common Area Maintenance Costs
  $ 2,008.71  
(3) Building Insurance Costs
  $ 456.53  
Total:
  $ 6,710.92  

Effective as of the Mandatory Expansion Space Commencement Date, in addition to
the estimated charges for Tenant's Pro Rata Share of Real Estate Taxes, Common
Area Maintenance Costs and Building Insurance Costs with respect to the initial
Leased Premises, Tenant will pay Landlord the sum of the following per month, in
advance, payable at the same time and place as the Base Rent is payable, as
estimated charges for Tenant's Pro Rata Share of Real Estate Taxes, Common Area
Maintenance Costs and Building Insurance Costs with respect to the Mandatory
Expansion Space:

(1) Real Estate Taxes
  $ 820.57  
(4) Common Area Maintenance Costs
  $ 388.23  
(5) Building Insurance Costs
  $ 88.23  
Total:
  $ 1,297.03  

The estimated charges as set out above are subject to changes from time to time
throughout the Lease term.

6.
Taxes

(a)          Definitions.  For purposes of this Lease, the following definitions
shall apply:

(1)           "Tax Year" means the calendar and/or fiscal year basis upon which
taxes and/or special assessments are assessed upon the Project throughout the
term of this Lease.

(2)           "Real Estate Taxes" means (a) all real estate taxes and
assessments on the Project, the Building or the Leased Premises, and taxes and
assessments levied in substitution or supplementation in whole or in part of
such taxes, (b) all personal property taxes for the Building’s personal
property, including license expenses, (c) all taxes imposed on services of
Landlord’s agents and employees, (d) all sales, use, franchise, or other tax now
or hereafter imposed by any governmental authority upon Rent received by
Landlord or on revenue of Landlord from the Project, excluding state and federal
income taxes, (e) 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 (f)
all 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, but excluding income taxes, estate
or death, and succession taxes.

(b)           Landlord's Payment.  Subject to the limitations, conditions and
agreements contained in this Paragraph, Landlord shall pay annually, all Real
Estate Taxes.

(c)           Annual Adjustment.  On or before one hundred eighty (180) days
after the end of each Tax Year during the term of this Lease, Landlord shall
render a statement showing the actual Real Estate Taxes for the applicable Tax
Year and the total of Tenant's estimated payments of Tenant's Pro Rata Share of
Real Estate Taxes paid during the preceding Tax Year, and the balance, if any,
then due from Tenant.  Real Estate Taxes for a fractional year, if any, shall be
prorated.  Landlord's failure to provide the statements shall not relieve Tenant
of any liability hereunder.  Within ten (10) days after the receipt of
Landlord's statement showing the total amount paid in advance by Tenant and the
actual Real Estate Taxes paid or to be paid by Landlord, there shall be an
adjustment between Landlord and Tenant. Tenant shall pay to Landlord on demand
the difference between the amount paid by Tenant and the actual amount due.  If
the total amount paid by Tenant hereunder for any such calendar year shall
exceed such actual amount due from Tenant for such calendar year, the excess
shall be credited by Landlord against any amounts then due and owing by Tenant
to Landlord, and any remaining net surplus shall then be refunded by Landlord to
Tenant.

 
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7.
Common Area Maintenance

(a)           Landlord's Maintenance Obligation.  Landlord agrees to maintain
and repair throughout the term hereof the Common Areas and facilities of the
Project, including, without limitation, the automobile entrances, exits,
driveways, parking areas, pedestrian walks, landscaped areas, lighting
facilities, service areas and Project signs not otherwise the responsibility of
Tenant as set out in this Lease (said areas hereinafter called the "Common
Areas"). Landlord's maintenance and repairs shall include all repairs and
replacements and the supplies and materials therefor, which consistent with
industry standards for space comparable to the Leased Premises in the Project
and other projects comparable to the Project in the vicinity of the Project, are
necessary to preserve the utility of the Common Area and facilities in the
condition same were in at the time of completion, reasonable wear and tear only
excepted.

(b)           Common Area Maintenance Costs.  As used herein, the term "Common
Area Maintenance Costs" shall mean all costs and expenses of every kind paid or
incurred during the term of this Lease in connection with the operation and
upkeep of the Common Areas and facilities within the Project, and where
necessary, the cost of replacing any of said common facilities and the cost of
policing and protecting same.  In addition to the foregoing, the Common Area
Maintenance Costs may include a reserve fund of ten percent (10%) of the
aggregate Common Area Maintenance Costs, which reserve fund will be put into an
escrow account and accrue interest until such time as a major repair such as
resurfacing the parking lot or major concrete drive replacement, where it shall
be applied against such cost.  Also, in addition to the foregoing, the Common
Area Maintenance Costs shall include but not limited to, maintenance and repair
costs, management fees (not to exceed 3% of Landlord's gross revenue from the
Project), wages and fringe benefits payable to employees of Landlord whose
duties are connected with the operation and maintenance of the Project and
Common Areas, all services, supplies, repairs, replacements or other expenses
for maintaining and operating the Building.  Common Area Maintenance Costs shall
not include Real Estate Taxes or Building Insurance Costs.

(c)           Annual Adjustment.  On or before one hundred eighty (180) days
after the end of each calendar year during the term of this Lease, Landlord
shall render a statement showing the actual Common Area Maintenance Costs for
the applicable calendar year and the total of Tenant's estimated payments of
Tenant's Pro Rata Share of Common Area Maintenance Costs paid during the
preceding calendar year, and the balance, if any, then due from Tenant.  Common
Area Maintenance Costs for a fractional year, if any, shall be prorated.  Within
ten (10) days after the receipt of Landlord's statement showing the total amount
paid in advance by Tenant and the total Common Area Maintenance Costs paid or to
be paid by Landlord, there shall be an adjustment between Landlord and Tenant.
Tenant shall pay to Landlord on demand the difference between the amount paid by
Tenant and the actual amount due.  If the total amount paid by Tenant hereunder
for any such calendar year shall exceed such actual amount due from Tenant for
such calendar year, the excess shall be credited by Landlord against any amounts
then due and owing by Tenant to Landlord and any remaining net surplus shall
then be refunded by Landlord to Tenant.  Landlord's failure to provide the
statements shall not relieve Tenant of any liability hereunder.

8.
Insurance

(a)           Tenant's Liability and Property Insurance.  Effective as of the
earlier of: (1) the date Tenant enters or occupies the Leased Premises; or
(2) the Commencement Date, and continuing throughout the term, Tenant shall
maintain the following insurance policies: (A) commercial general liability
insurance on the most current ISO Form CG 00 01 or equivalent in amounts of
$1,000,000 per occurrence and $3,000,000 in the aggregate, which shall apply on
a per location basis and which shall afford, at the minimum, the following
limits: (i) products/completed operations aggregate limit of $1,000,000, (ii)
personal and advertising injury liability limit of $1,000,000, (iii) fire damage
legal liability limit of $100,000, and (iv) medical payments limit of $5,000;
or, following the expiration of the initial term, such other amounts as Landlord
may from time to time reasonably require (and, if the use and occupancy of the
Leased Premises include any activity or matter that is or may be excluded from
coverage under a commercial general liability policy [e.g., the sale, service or
consumption of alcoholic beverages], Tenant shall obtain such endorsements to
the commercial general liability policy or otherwise obtain insurance to insure
all liability arising from such activity or matter [including liquor liability,
if applicable] in such amounts as Landlord may reasonably require), insuring
Tenant, Landlord and Landlord’s property management company against all
liability for occurrences on or about the Leased Premises and acts of Tenant or
any assignees claiming by, through, or under Tenant or any subtenants claiming
by, through, or under Tenant and any of their respective agents, contractors,
employees, and invitees (collectively, "Tenant Parties") on or about the
Project, without modification to the separation of insureds provision, and
(without implying any consent by Landlord to the installation thereof) the
installation, operation, maintenance, repair or removal of Tenant’s Off-Premises
Equipment, with an additional insured endorsement in form CG 20 26 11 85; (B)
Business Automobile Liability covering any owned, non-owned, leased, rented or
borrowed vehicles of Tenant with limits no less than $1,000,000 per occurrence;
(C) causes of loss – special form property insurance on ISO Form CP 10 30 or
equivalent covering the full replacement cost on an agreed value basis of all
Alterations and improvements and betterments in the Leased Premises, extending
to Landlord and Landlord’s mortgagee as insureds as their interests may appear,
and containing ordinance or law coverage; (D) causes of loss – special form
property insurance on ISO Form CP 10 30 or equivalent covering the full
replacement cost on an agreed value basis of all furniture, trade fixtures and
personal property (including property of Tenant or others) in the Leased
Premises or otherwise placed in the Project by or on behalf of Tenant or any
Tenant Parties (including Tenant’s Off-Premises Equipment) it being understood
that no lack or inadequacy of insurance by Tenant shall in any event make
Landlord subject to any claim by virtue of any theft of or loss or damage to any
uninsured or inadequately insured property; (E) contractual liability insurance
sufficient to cover Tenant’s indemnity obligations hereunder (but only if such
contractual liability insurance is not already included in Tenant’s commercial
general liability insurance policy); (F) workers' compensation insurance in
amounts not less than statutorily required, and Employers’ Liability insurance
with limits of not less than $1,000,000; (G) intentionally omitted; (H) in the
event Tenant performs any alterations or repairs in, on, or to the Leased
Premises, Builder’s Risk Insurance on an All Risk basis (including collapse) on
a completed value (non-reporting) form, or by endorsement including such
coverage pursuant to Paragraph 8(a)(2)(C) hereinabove, for full replacement
value covering all work incorporated in the Building and all materials and
equipment in or about the Leased Premises; and (I) such other insurance or any
changes or endorsements to the insurance required herein, including increased
limits of coverage, as Landlord, or any mortgagee or lessor of Landlord, may
reasonably require from time to time.  Tenant’s insurance shall provide primary
coverage to Landlord, Landlord's mortgagee, and any other additional insureds
and shall not require contribution by any insurance maintained by such parties,
when any policy issued to such parties provides duplicate or similar coverage,
and in such circumstance such policy will be excess over Tenant’s
policy.  Tenant shall furnish to Landlord certificates of such insurance, with
an additional insured endorsement in form CG 20 26 11 85, and such other
evidence satisfactory to Landlord of the maintenance of all insurance coverages
required hereunder at least ten (10) days prior to the earlier of the
Commencement Date or the date Tenant enters or occupies the Leased Premises, and
at least fifteen (15) days prior to each renewal of said insurance, and Tenant
shall obtain a written obligation on the part of each insurance company to
notify Landlord at least thirty (30) days before cancellation or a material
change of any such insurance policies.  All such insurance policies shall be in
form, and issued by companies with a Best’s rating of A:VII or better,
reasonably satisfactory to Landlord.  Landlord must give its prior written
approval to all deductibles and self-insured retentions under Tenant's policies.
No insurance policy will contain endorsements that restrict, limit, or exclude
coverage in a manner that is inconsistent with the requirements set forth in
this Paragraph 8(a).  If Tenant fails to comply with the foregoing insurance
requirements or to deliver to Landlord the certificates or evidence of coverage
required herein, Landlord, in addition to any other remedy available pursuant to
this Lease or otherwise, may, but shall not be obligated to, obtain such
insurance and Tenant shall pay to Landlord on demand the premium costs thereof,
plus an administrative fee of fifteen percent (15%) of such cost.  It is
expressly understood and agreed that the foregoing minimum limits of insurance
coverage shall not limit the liability of Tenant for its acts or omissions as
provided in this Lease.

 
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(b)           Landlord's Liability Insurance.  Landlord agrees to maintain in
force during the term of this Lease a policy or policies of commercial general
liability insurance, including property damage, written by one or more
responsible insurance companies approved by Landlord and licensed to do business
in Texas insuring Landlord against loss of life, bodily injury and/or property
damage with respect to the Common Areas of the Project and the operation of the
Project, in which the limit of public liability shall be not less than
$3,000,000 single limit bodily injury and in which the limit of property damage
liability shall be not less than $100,000.  In addition, Landlord may maintain
in force such umbrella policy or policies of general liability insurance as
Landlord, in its sole discretion, may deem appropriate.

(c)           Landlord's Property Insurance.  Landlord agrees to procure and
keep in effect during the term of this Lease, a policy or policies of causes of
loss – special form property insurance covering the Building and other
improvements in the Project, or separate fire rating division as determined by
the State Board of Insurance which includes the Leased Premises, and business
income/rental value insurance, written by an insurance company authorized to do
business within the State of Texas, and in an amount equal to not less than
eighty percent (80%) of the replacement cost of the premises covered.  Such
insurance shall provide protection against losses so insured against for the
benefit of Landlord and any first mortgagee of Landlord, subject to the terms
and provisions of this Lease and any first mortgage; provided, however, that all
proceeds payable by any insurance company under such policy or policies shall be
payable to such mortgagee, if any, and shall be applied in accordance with the
terms of such mortgage; or, if there is no mortgage, the full amount of such
proceeds shall be payable to Landlord, and Tenant shall not be entitled to, and
shall have no interest in, such proceeds or any part thereof.  Such policy or
policies shall contain a provision or endorsement with respect to mutual waiver
of right of subrogation.

(d)           Building Insurance Costs.  As used herein, the term "Building
Insurance Costs" shall mean the actual premium costs of commercial general
liability, property insurance, business income/rental value insurance, and other
insurance maintained by Landlord with respect to the Project, including without
limitation, terrorism insurance, and any deductible incurred in any loss.

(e)           Annual Adjustment. On or before one hundred eighty (180) days
after the end of each calendar year during the term of this Lease, Landlord
shall furnish Tenant a statement showing the actual Building Insurance Costs
paid by Landlord during the preceding calendar year and the total of Tenant's
estimated payments of Tenant's Pro Rata Share of Building Insurance Costs paid
during the preceding calendar year, and the balance, if any, then due from
Tenant.  Landlord's failure to provide the statement shall not relieve Tenant of
any liability hereunder.  Within ten (10) days after the receipt of Landlord's
statement showing the total amount paid in advance by Tenant and the actual
Building Insurance Costs paid or to be paid by Landlord, there shall be an
adjustment between Landlord and Tenant.  Tenant shall pay to Landlord on demand
the difference between the amount paid by Tenant and the actual amount due. If
the total amount paid by Tenant hereunder for any such calendar year shall
exceed such actual amount due from Tenant for such calendar year, the excess
shall be credited by Landlord against any amounts then due and owing by Tenant
to Landlord and any remaining net surplus shall then be refunded by Landlord to
Tenant.

(f)           Mutual Waiver of Subrogation.  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 Leased 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.

 
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9.
Use

The Leased Premises shall be used only for the purpose of receiving, storing,
shipping and selling (other than retail) products, materials and merchandise
made and/or distributed by Tenant and assembly of raw materials to form
completed products made and/or distributed by Tenant, and for such other lawful
purposes as may be incidental thereto.  Outside storage, including, without
limitation, trucks and other vehicles, is prohibited without Landlord's prior
written consent.  Tenant shall at its own costs and expense obtain any and all
licenses and permits necessary for any use of the Leased Premises.  Tenant shall
comply with all governmental orders and directives for the correction,
prevention and abatement of nuisances in or upon, or connected with, the Leased
Premises all at Tenant's sole expense.  Tenant shall not permit any
objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to
emanate from the Leased Premises, nor take any other action which would
constitute a nuisance or would disturb or endanger any other tenants of the
Building or Project or unreasonably interfere with the use of their respective
premises.  Without Landlord's prior written consent, Tenant shall not receive,
store or otherwise handle any product, material or merchandise which is
explosive or highly inflammable.  Tenant will not permit the Leased Premises to
be used for any purpose or in any manner (including, without limitation, any
method of storage) which would render the insurance thereon void or the
insurance risk more hazardous or cause the State Board of Insurance or other
insurance authority to disallow any sprinkler credits.  Tenant shall faithfully
observe and comply with the rules and regulations attached to this Lease as
Exhibit "B", as well as all modifications thereof and additions thereto as are
from time to time promulgated by Landlord.

10.
Landlord's Repairs

Landlord shall, subject to inclusion in Common Area Maintenance Costs, maintain
only the roof, foundation, the structural soundness of the exterior walls of the
Building, and the sprinkler loop serving the Leased Premises in good repair,
reasonable wear and tear excepted.  Tenant shall repair and pay for any damage
caused by Tenant, or Tenant's employees agents or invitee, or caused by Tenant's
default hereunder.  The term "walls" as used herein shall not include windows,
glass or plate glass, doors, special storefronts or office entries.  Tenant
shall immediately give Landlord written notice of defect or need for repairs,
after which Landlord shall have reasonable opportunity to repair same or cure
such defect.  Landlord's liability with respect to any defects, repairs or
maintenance for which Landlord is responsible under any of the provisions of
this Lease shall be limited to the cost of such repairs or maintenance or the
curing of such defect.

Further, Landlord shall maintain and repair, subject to inclusion in Common Area
Maintenance Costs, the Common Areas of the Project, including, the parking
areas, driveways, landscaping, and exterior utility lines.  However, if Tenant
or any other particular tenant of the Building can be clearly identified as
being responsible for obstructions or stoppage of the common sanitary sewage
line, then Tenant, if Tenant is responsible, or such other responsible tenant,
shall pay the entire cost thereof, upon demand, as additional rent.

11.
Tenant's Repairs

(a)           Tenant shall at its own cost and expense keep and maintain all
parts of the Leased Premises (except those for which Landlord is expressly
responsible under the terms of this Lease) in good condition, promptly making
all necessary repairs and replacements, including but not limited to, windows,
glass, plate glass doors, any special office entry, interior walls and finish
work, floors and floor covering, downspout, gutters, heating and air
conditioning systems, lighting, electrical systems, dock boards, truck doors,
door bumpers, paving, plumbing lines, equipment, and fixtures, termite and pest
extermination, regular removal of trash and debris, keeping the whole of the
Leased Premises in a clean and sanitary condition.

(b)           Tenant shall not damage any demising wall or disturb the integrity
and support provided by any demising wall and shall, at its sole cost and
expense, promptly repair any damage or injury to any demising wall caused by
Tenant or its employees, agents or invitee.

(c)           Tenant and its employees, customers and licensees shall have the
non-exclusive right to use the parking areas, if any, as may be designated by
Landlord in writing, subject to such reasonable rules and regulations as
Landlord may from time to time prescribe and subject to rights of ingress and
egress of other tenants.  Landlord shall not be responsible for enforcing
Tenant's parking rights against any third parties.  Tenant shall be entitled to
use the ten (10) parking spaces shown on Exhibit "F" attached hereto.

(d)           Tenant shall, at its own cost and expense, enter into a regularly
scheduled preventive maintenance/service contract with a maintenance contractor
for servicing all hot water, heating and air conditioning systems and equipment
within or exclusively serving the Leased Premises.  The maintenance contractor
and the contract must be approved by Landlord.  The service contract must
include all services suggested by the equipment manufacturer within the
operation/maintenance manual and must become effective (and a copy thereof
delivered to Landlord) within thirty (30) days of the date Tenant takes
possession of the Leased Premises and provide for service not less than a
quarterly basis.  Within ten (10) days after receipt of a request from Landlord,
Tenant shall deliver to Landlord copies of all maintenance or service reports
performed in connection with or pursuant to such maintenance/service contract.

 
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12.
Tenant Improvements and Alterations

Tenant shall not make any alterations, additions or improvements to the Leased
Premises (including but not limited to roof and wall penetrations) or the
Building without the prior written consent of Landlord.  All Tenant alterations,
additions and/or improvements shall comply with insurance requirements and with
all applicable laws, ordinances, and regulations, including without limitation,
the provisions of Tex. Rev. Civ. Stat. Ann. art. 9102 and the provisions of the
Americans With Disabilities Act of 1990, 42 U.S.C. §§12101-12213 (collectively,
the "Disability Acts").  Additionally, all Tenant alterations, additions and/or
improvements shall be in accordance with specifications approved by
Landlord.  All Tenant alterations, additions and/or improvements shall be
constructed in a good and workmanlike manner.  All plans and specifications for
Tenant's alterations, additions and/or improvements shall be submitted to
Landlord for Landlord's written approval.  Tenant agrees that Landlord may
monitor all phases of Tenant's construction.  Tenant shall reimburse Landlord
for Landlord's reasonable expenses for reviewing plans and documents and in
monitoring construction.  Landlord's review of plans and monitoring construction
shall be solely for Landlord's own benefit and shall impose no duty or
obligation on Landlord to confirm that the plans and specifications and/or
construction comply with applicable laws, codes, rules, or regulations.  At
Landlord's request, Tenant shall obtain payment and performance bonds approved
by Landlord, for any Tenant construction which bonds shall be delivered to
Landlord prior to commencement of construction.  Upon completion of Tenant's
construction, Tenant shall deliver to Landlord sworn statements setting forth
the names of all contractors and subcontractors who performed work along with
final lien waivers from such contractors and subcontractors.  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 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, additions, improvements
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, additions, improvements
and partitions erected by Tenant and restore the Leased Premises to its original
condition by the date of termination of this Lease or upon earlier vacating of
the Leased Premises; provided, however, that if Landlord so elects prior to
termination of this Lease or upon earlier vacating of the Leased Premises, such
alterations, additions, improvements  and partitions shall become the property
of Landlord as of the date of termination of this Lease or upon earlier vacating
of the Leased Premises and shall be delivered up to the Landlord with the Leased
Premises.  All shelves, bins, machinery and trade fixtures installed by Tenant
may be removed by Tenant prior to the termination of this Lease, after written
notice to Landlord of Tenant's intentions, and shall be removed by the date of
termination of this Lease or upon earlier vacating of the Leased 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 buildings and
other improvements situated on the Leased Premises.

13.
Signs

(a)           Tenant shall have the right to install signs upon the Leased
Premises only when first approved in writing by Landlord and subject to any
applicable governmental laws, ordinances, regulations, Landlord's or other
architectural controls, and other requirements.  Tenant shall maintain all signs
upon the Leased Premises in good condition.  Tenant shall remove all such signs
by the termination of this Lease.  Such installations and removals shall be made
in such manner as to avoid injury or defacement of the Building and other
improvements, and Tenant shall repair any injury or defacement, including,
without limitation, discoloration, caused by such installation and/or removal.

(b)           Notwithstanding the foregoing and so long as (i) Tenant is not in
default under the terms of the Lease beyond the expiration of any applicable
notice and cure periods; (ii) Tenant is in occupancy of the Leased Premises; and
(iii) Tenant has not assigned the Lease or sublet any part of the Leased
Premises, Tenant shall have the right, at Tenant's expense, to install a
corporate identification sign on the Building above the entry to the Leased
Premises __________(the "Building Sign"); provided that (i) Tenant obtains all
necessary approvals from any governmental authorities having jurisdiction over
Tenant, the Project, or the Building Sign), (ii) the Building Sign conforms to
all applicable laws, rules and regulations of any governmental authorities
having jurisdiction over the Building Sign or the Project and all restrictive
covenants applicable to the Project, and (iii) the Building Sign conforms to the
signage specifications for the Project, and (iv) Tenant obtains Landlord's
written consent to any proposed signage and lettering prior to its fabrication
and installation.  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.  Tenant shall pay all costs associated
with the Building Sign, including without limitation, installation expenses,
maintenance and repair costs, utilities and insurance.  Tenant agrees that,
subject to inclusion in Common Area Maintenance Costs, Landlord shall have the
right, after notice to Tenant, to temporarily remove and replace the Building
Sign in connection with and during the course of any repairs, changes,
alterations, modifications, renovations or additions to the Building.  Tenant
shall maintain the Building Sign in good condition.  Upon expiration or earlier
termination of the Lease, Tenant shall, at its sole cost and expense, remove the
Building Sign and repair all damage caused by such removal.  If during the term
of this Lease (and any extensions thereof) (a) Tenant is in default under the
terms of the Lease after the expiration of applicable cure periods; or (b)
Tenant vacates the Leased Premises for a period of ninety (90) or more
consecutive days; or (c) Tenant assigns the Lease or subleases any part of the
Leased Premises, then Tenant's rights granted herein with respect to the
Building Sign will terminate and Landlord may remove the Building Sign at
Tenant's sole cost and expense.

 
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14.
Inspection

Landlord and Landlord's agents and representatives shall have the right to enter
and inspect the Leased Premises and Building at any reasonable time during
business hours, for the purpose of ascertaining the condition of the Leased
Premises or in order to made such repairs as may be required or permitted to be
made by Landlord under the terms of this Lease.  During the period that is nine
(9) months prior to the end of the term hereof, Landlord and Landlord's agents
and representatives shall have the right to enter the Leased Premises at any
reasonable time during business hours for the purpose of showing the Leased
Premises and shall have the right to erect on the Leased Premises a suitable
sign indicating the Leased Premises are available.  Tenant shall give written
notice to Landlord at least thirty (30) days prior to vacating the Leased
Premises and shall arrange to meet with Landlord for a joint inspection of the
Leased Premises prior to vacating.  In the event of Tenant's failure to give
such notice or arrange to meet with Landlord for a joint inspection of the
Leased Premises prior to vacating, Landlord's inspection at or after Tenant's
vacating the Leased Premises shall be conclusively deemed correct for purposes
of determining Tenant's responsibility for repairs and restoration.

15.
Utilities

Landlord agrees to provide water, electricity and telephone service connections
to the Building.  Tenant shall pay to bring such utilities to the Leased
Premises and for all water, gas, heat, light, power, telephone, sewer, sprinkler
charges and other utilities and services used on or from the Leased Premises,
together with any taxes, penalties, surcharges or the like pertaining thereto
and any maintenance changes for utilities, as well as shall furnish all electric
light bulbs and tubes.  If any such services are not separately metered to
Tenant, Tenant shall pay Tenant's reasonable proportion, as determined by
Landlord, of all charges jointly metered with other premises.  Tenant's use of
electrical services shall not exceed in voltage, rated capacity, or overall load
Tenant's Pro Rata Share of electricity for the Building.  In the event Tenant
shall request that it be allowed to consume electrical services in excess of
Tenant's Pro Rata Share of electricity for the Building, Tenant shall be
responsible for all costs and expenses in connection with obtaining additional
power capacity, including the cost of all equipment and connection and
distribution charges.  Landlord shall in no event be liable for any interruption
or failure of utility services on the Leased Premises.

16.
Assignment and Subletting

(a)           Tenant will not assign this Lease, or allow same to be assigned by
operation of law or otherwise, or sublet the Leased Premises or any part thereof
without the prior written consent of Landlord, which consent to an assignment
(other than a collateral assignment) or sublease shall not be unreasonably
withheld.  Without limitation, it is agreed that Landlord's consent shall not be
considered unreasonably withheld if: (1) the proposed transferee's use of the
Leased Premises is more hazardous that Tenant's with reference to the risk of
fire or other hazards; (2) the proposed transferee's occupancy will result in
additional environmental risk for the Project; or (3) the transferee is an
occupant of the Project.  Notwithstanding any permitted assignment or
subletting, Tenant shall at all times remain directly, primarily and fully
responsible and liable for the payment of the rent herein specified and for
compliance with all of its other obligations under the terms, provisions and
covenants of this Lease.  If the Leased Premises or any part thereof are then
assigned or sublet, Landlord, in addition to any other remedies herein provided
or provided by law, may at its option collect directly from such assignee or
subtenant all rents becoming due to Tenant under such assignment or sublease and
apply such rent against any sums due to Landlord from Tenant hereunder, and no
such collection shall be construed to constitute a novation or a release of
Tenant from the further performance of Tenant's obligations hereunder. For
purpose of this Lease a transfer of more than fifty percent (50%) of the
beneficial interest in Tenant or of the control of Tenant (if Tenant is a
partnership, corporation, limited liability, company, trust, or other type of
business, organization or entity) shall constitute an assignment of this
Lease.  Any attempted assignment or sublease in violation of this Paragraph 16,
shall, exercisable in Landlord's sole and absolute discretion, be void.  Consent
by Landlord to one or more proposed assignments or subleases shall not operate
as a waiver of Landlord's rights to approve any subsequent assignment or
sublease.

(b)           If Tenant requests Landlord's consent to a proposed assignment or
sublease, 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.  After
Landlord's receipt of the required information and documentation, Landlord shall
either: (1) consent or reasonably refuse consent to the proposed assignment or
sublease in writing; (2) in the event of a proposed assignment of this Lease,
terminate this Lease as set forth in section (c) below; and (3) in the event of
a proposed subletting, terminate this Lease with respect to the portion of the
Leased Premises which Tenant proposes to sublease as set forth in section (c)
below.  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 assignment or
sublease or Permitted Transfer.

(c)           Landlord shall have the option, in the event of any proposed
assignment or subletting, to cancel this Lease as of the date the subletting or
assignment described in Tenant's notice is to be effective.  The option shall be
exercised, if at all, by Landlord's giving Tenant written notice thereof within
twenty (20) days following Landlord's receipt of Tenant's written request.  Upon
cancellation, Tenant shall pay to Landlord all costs or charges which are the
responsibility of Tenant hereunder through the date of cancellation, and Tenant
shall, at Tenant's own cost and expense, discharge in full any outstanding
commission obligation on the part of Landlord with respect to this
Lease.  Further, upon any such cancellation Landlord and Tenant shall have no
further obligations or liabilities to each other under this Lease, except with
respect to obligations or liabilities which accrue hereunder as of the
cancellation date in the same manner as if such cancellation date were the date
originally fixed for the expiration of the term hereof.  Without limitation,
Landlord may lease the Leased Premises to the prospective subtenant or assignee,
without liability to the Tenant.  Landlord's failure to exercise any right
hereunder shall not waive Landlord's right as to any subsequent proposed
sublease or assignment, nor shall any such failure be deemed to constitute
Landlord's right as to any subsequent proposed sublease or assignment, nor shall
any such failure be deemed to constitute Landlord's approval of the proposed
sublease or assignment.

 
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(d)           Notwithstanding the foregoing, Tenant may assign its entire
interest under this Lease or sublet the Leased Premises to any successor to
Tenant by purchase, merger, consolidation or reorganization (collectively
referred to as "Permitted Transfer") without the consent of Landlord, provided:
(1) Tenant is not in default under this Lease; (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) 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.

(e)           Tenant shall pay to Landlord fifty percent (50%) of all cash and
other consideration which Tenant receives as a result of any assignment or
sublease, after deducting all actual out-of-pocket third party expenses paid by
Tenant in connection with such assignment or sublease, that is in excess of the
rent payable to Landlord hereunder for the portion of the Leased Premises and
Lease term covered by the assignment or sublease within ten (10) days following
receipt thereof by Tenant.

(f)           Landlord shall have the right to transfer and assign, in whole or
in part, any of its rights under this Lease, and in the Building or Project
referred to herein; and to the extent that such assignee assumes Landlord's
obligations hereunder, Landlord shall by virtue of such assignment be released
from such obligation.

17.
Fire and Casualty Damage

(a)           If the Building should be damaged or destroyed by fire, tornado or
other casualty, Tenant shall give immediate written notice thereof to Landlord.

(b)           If the Building should be totally destroyed by fire, tornado or
other casualty, or if it should be so damaged, thereby that rebuilding or
repairs cannot in Landlord's estimation be completed within two hundred (200)
days after the date upon which Landlord is notified by Tenant of such damage,
this Lease shall terminate and the Rent shall be abated during the unexpired
portion of this Lease, effective upon the date of the occurrence of such damage.

(c)           If the Building should be damaged by any peril covered by the
insurance to be provided by Landlord under this Lease, but only to such extent
that rebuilding or repairs can in Landlord's estimation be completed within two
hundred (200) days after the date upon which Landlord is notified by Tenant of
such damage, this Lease shall not terminate, and Landlord shall at its sole
costs and expense thereupon proceed with reasonable diligence to rebuild and
repair the Building to substantially the condition in which it existed prior to
such damage, except that Landlord shall not be required to rebuild, repair or
replace any part of the partitions, fixtures, additions and other improvements
which may have been placed in, on or about the Leased Premises by Tenant.  If
the Leased Premises are untenantable, the Rent owed by Tenant shall not be
abated but shall be reduced to such extent as may be fair and reasonable under
all of the circumstances.  In the event that Landlord shall fail to complete
such repairs and rebuilding within two hundred (200) days after the date upon
which Landlord is notified by Tenant of such damage, Tenant may at its option
terminate this Lease by delivering written notice of termination to Landlord
within ten (10) days after expiration of such two hundred (200) day period as
Tenant's exclusive remedy, whereupon all rights and obligations hereunder shall
cease and terminate.  Failure by Tenant to timely terminate this Lease as set
forth in the preceding sentence shall be deemed a waiver by Tenant of its right
to do so.

(d)           Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a mortgage or deed of trust covering the
Leased Premises requires that the insurance proceeds be applied to such
indebtedness, then Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is made by any such holder, whereupon all rights and
obligations hereunder shall cease and terminate.

18.
Condemnation

(a)           If the whole or any substantial part of the Leased Premises should
be taken from 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 and the taking would prevent or materially interfere with the use of the
Leased Premises for the purposes for which they are being used, this Lease shall
terminate and the Rent shall be abated during the unexpired portion of this
Lease, effective when the physical taking of the Leased Premises shall occur.

(b)           If part of the Leased Premises shall be taken for any public or
quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain, or by private purchase in lieu thereof, and this Lease
is not terminated as provided in the subparagraph above, this Lease shall not
terminate but the Rent payable hereunder during the unexpired portion of this
Lease shall be reduced to such extent as may be fair and reasonable under all of
the circumstances.

(c)           In the event of any such taking or private purchase in lieu
thereof, all compensation awarded for any such 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, which Tenant specifically reserves to itself.

 
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19.
Holding Over

Tenant agrees that at the termination of this Lease by lapse of time or
otherwise, to yield up immediate possession to Landlord.  If Tenant holds over
after the expiration or termination of this Lease, unless the parties hereto
otherwise agree in writing on the terms of such holding over, occupancy of the
Leased Premises subsequent to such termination or expiration shall be that of a
tenancy at sufferance and in no event for month-to-month or
year-to-year.  During the holdover, all of the other terms and provisions of
this Lease shall be applicable during that period, except that Tenant shall pay
Landlord from time to time upon demand, as Rent for the period of any holdover,
an amount equal to one hundred fifty percent (150%) of the Rent in effect on the
termination date, computed on a monthly basis for each month of the holdover
period (without proration for partial months).  No holding over by Tenant,
whether with or without consent of Landlord, shall operate to extend this Lease
except as otherwise expressly provided.  The preceding provisions of this
paragraph shall not be construed as Landlord's consent for Tenant to holdover.

20.
Quiet Enjoyment

Landlord covenants that it now has, or will acquire before Tenant takes
possession of the Leased Premises, good title to the Leased Premises, free and
clear of all liens and encumbrances, excepting only the lien for current taxes
not yet due, such mortgage or mortgages as are permitted by the terms of this
Lease, zoning ordinances and other building and fire ordinances and governmental
regulations relating to the use of such property, and easements, restrictions
and other conditions of record.  In the event this Lease is a sublease, then
Tenant agrees to take the Leased Premises subject to the provisions of the prior
leases.  Landlord represents and warrants that it has full right and authority
to enter into this Lease and that Tenant, upon paying the rentals herein set
forth and performing its other covenants and agreements herein set forth, shall
peaceably and quietly have, hold and enjoy the Leased Premises for the term
hereof without hindrance or molestation from Landlord, subject to the terms and
provisions of this Lease.

21.
Tenant's Events of Default

The following events shall be deemed to be events of default by Tenant under
this Lease:

(a)           Tenant shall fail to pay any installment of the Rent herein
reserved when due (including, without limitation, any payment with respect to
Tenant's Pro Rata Share of Building Costs hereunder when due), or any other
payment or reimbursement to Landlord required herein when, due, and such failure
shall continue for a period of five (5) days from the date such payment was due.

(b)           Tenant shall become insolvent, or shall make a transfer in fraud
of creditors, or shall make an assignment for the benefit of creditors.

(c)           Tenant shall be adjudged bankrupt or insolvent in proceedings
filed against Tenant.

(d)           A receiver or trustee shall be appointed for all or substantially
all of the assets of Tenant.

(e)           Tenant shall desert or vacate any substantial portion of the
Leased Premises.

(f)           Tenant shall fail to comply with any term, provision or covenant
of this Lease (other than the foregoing in this Paragraph), and shall not cure
such failure within thirty (30) days after written notice thereof to Tenant.

(g)           If the term of any lease, other than this Lease, heretofore or
hereafter made by Tenant for any space in the Building or any other building
owned by Landlord, if applicable, shall be terminated or terminable after the
making of this Lease because of any default by Tenant under such other lease.

22.
Landlord's Remedies

Upon the occurrence of any such events of default described in Paragraph 21
hereof, Landlord shall have the option to pursue any one or more of the
following remedies without any notice or demand whatsoever:

(a)           Terminate this Lease, or terminate Tenant's rights to possession
of the Leased Premises under this Lease (but not the Lease, itself), and in
either event Landlord shall have the right to immediate possession of the Leased
Premises and may reenter the Leased Premises, change the locks and remove all
persons and property there from using all force necessary for this purpose
without being guilty in any manner of trespass or otherwise; and any and all
damages to Tenant, or persons holding under Tenant, by reason of such re-entry
are hereby expressly waived; and any such termination or re-entry on the part of
Landlord shall be without prejudice to any remedy available to Landlord for
arrears of Rent, breach of contract, damages or otherwise, nor shall the
termination of this Lease or of Tenant's rights of possession under this Lease
by Landlord acting under this subparagraph be deemed in any manner to relieve
Tenant from the obligation to pay the Rent and all other amounts due or to
become due as provided in this Lease for and during the entire unexpired portion
then remaining of the Lease term.  In the event of termination of this Lease or
of Tenant's rights of possession under this Lease by Landlord as provided in
this subparagraph, Landlord shall have the further right to relet the Leased
Premises upon such terms, conditions and covenants as are deemed proper by
Landlord for the account of Tenant as set forth below, and in such event, Tenant
shall pay to Landlord all costs of renovating and altering the Leased Premises
for a new tenant or tenants in addition to all brokerage and/or legal fees
incurred in connection therewith.  Landlord shall credit Tenant only for such
amounts as are actually received from such reletting during the then remaining
Lease term.  Alternatively, at the election of Landlord, Tenant covenants and
agrees to pay as damages to Landlord, upon any such termination by Landlord of
this Lease or of Tenant's rights of possession under this Lease, such sum as at
the time of such termination equals the amount of the excess, if any, of the
then present value of all the Rent which would have been due and payable
hereunder during the remainder of the full Lease term (had Tenant kept and
performed all agreements and covenants of Tenant set forth in this Lease) over
and above the then present rental value of the Leased Premises for said
remainder of the Lease term.  For purposes of present value calculations,
Landlord and Tenant stipulate and agree to a discount rate of six percent (6%)
per annum.

 
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(b)           Without terminating this Lease, to enter upon the Leased Premises
and without being guilty in any manner of trespass or otherwise and without
liability for any damage to Tenant or persons holding under Tenant by reason of
such re-entry, all of which are hereby expressly waived, and to do or perform
whatever Tenant is obligated hereunder to do or perform under the terms of this
Lease; and Tenant shall reimburse Landlord on demand for any expenses or other
sums which Landlord may incur or expend plus fifteen percent (15% ) thereof to
cover Landlord's overhead and administrative cost, pursuant  to this
subparagraph, and Landlord shall not be liable for any damages resulting to
Tenant from such action, whether caused by the negligence of Landlord or
otherwise; provided, however, nothing in this subparagraph shall be deemed an
obligation or undertaking by Landlord to remedy any such defaults of Tenant.

(c)           Without waiving such event of default, apply all or any part of
the Security Deposit to cure the event of default or to any damages suffered as
a result of the event of default to the extent of the amount of damages
suffered.  Tenant shall reimburse Landlord for the amount of such depletion of
the Security Deposit on demand.

(d)           In addition to any of the remedies noted above or hereinafter,
Landlord is entitled and authorized to enter upon and take possession of the
Leased Premises and remove any property that may be found within the Leased
Premises.  Landlord shall have the right to change any and all locks and other
security devices restricting access to the Leased Premises.  Landlord shall have
no obligation to provide Tenant a key to new locks installed in the Leased
Premises or grant Tenant access to the Leased Premises.  Tenant shall not be
entitled to recover possession of the Leased 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
Leased Premises of the Tenant or Tenant's agents, servants, employees,
customers, licensees, invitees or any other persons from the Leased Premises.
Such lock-out should not be deemed to be a termination of this Lease unless
Landlord gives a written notice of termination to Tenant.  It is agreed that if
Tenant abandons or vacates the Leased Premises, Landlord may take such steps as
Landlord deems necessary, appropriate, or desirable to protect the Leased
Premises and the property therein from deterioration, including but not limited
to, the lock-out of Tenant as described herein.  To the extent permitted by law,
Tenant hereby waives: (i) any notices of Landlord's intent to re-enter or
re-take possession of the Leased Premises;  (ii) any notice provided by statute
or otherwise of such re-entry or repossession or changing of locks; (iii) any
claim or cause of action, whether based on trespass, conversion, or otherwise,
against Landlord or Landlord's agents, employees, officers, or contractors for
any damages caused by the alteration of any locks or re-entry or repossession by
Landlord, whether or not caused by the negligence of Landlord or otherwise; and
(iv) any right of redemption, re-entry, or repossession of Tenant and any notice
of legal proceeding for re-entry, including actions for forcible detainer and
entry.

All property of Tenant removed from the Leased 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
Leased Premises or retaken from storage by Tenant within thirty (30) days after
the end of the Lease term or the termination of Tenant’s right to possession of
the Leased Premises, however terminated, at Landlord's option, shall be
conclusively deemed to have been conveyed by Tenant to Landlord as by bill of
sale without further payment or credit by Landlord to Tenant.

In the event Tenant fails to pay any installment of Rent or any reimbursement,
additional rent, or any other payment hereunder as and when such payment is due,
to help defray the additional cost to Landlord for processing such late payments
Tenant shall pay to Landlord on demand a late charge in an amount equal to five
percent (5%) of such installment, reimbursement, additional rent or any other
payment and the failure to pay such late charge within ten (10) days after
demand therefor shall be an event of default hereunder.  The provision for such
late charge shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner.

Pursuit of any of the forgoing remedies shall not preclude pursuit of any of the
other remedies herein provided or any other remedies provided by law, nor shall
pursuit of any remedy herein provided constitute a forfeiture or waiver of any
Rent due to Landlord hereunder or of any damages accruing to Landlord by reason
of the violation of any of the terms, provisions and covenants herein
contained.  No act or thing done by the Landlord or its agents during the term
hereby granted shall be deemed a termination of this Lease or an acceptance of
the surrender of the Leased Premises, and no agreement to terminate this Lease
or accept a surrender of the Leased Premises shall be valid unless in writing
signed by Landlord. No waiver by Landlord of any violation or breach of any of
the terms, provisions and covenants herein contained shall constitute a waiver
by Landlord of any of its rights with respect to any future violation or breach
thereof. Landlord's acceptance of the payment of Rent or other payments
hereunder after the occurrence of an event of default shall not be construed as
a waiver of such default, unless Landlord so notifies Tenant in
writing.  Forbearance by Landlord to enforce one or more of the remedies herein
provided upon an event of default shall not be deemed or construed to constitute
a waiver of such default or of Landlord's right to enforce any such remedies
with respect to such default or any subsequent default.  If, on account of any
breach or default by Tenant in Tenant's obligations under the terms and
conditions of this Lease, it shall become necessary or appropriate for Landlord
to employ or consult with any attorney concerning or to enforce or defend any of
Landlord's rights or remedies hereunder, Tenant agrees to pay any reasonable
attorney's fees so incurred.

 
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All sums due and owing by Tenant to Landlord under this Lease shall bear
interest from the date due until paid at the lesser of (a) the maximum
non-usurious rate permitted by law or (b) the greater of (i) two percent (2%)
above the "prime rate" per annum of JPMorgan Chase Bank, N.A. or its successor
in effect on said due date or (ii) twelve percent (12%) per annum.  In either
case, such interest to be compounded daily; provided, however, in no event shall
the rate of interests hereunder exceed the maximum non-usurious rate of interest
(hereinafter called the "Maximum Rate") permitted by the applicable laws of the
State of Texas or the United States of America, whichever shall permit the
higher non-usurious rate, and as to which Tenant could not successfully assert a
claim or defense of usury.  To the extent that the Maximum Rate is determined by
reference to the laws of the State of Texas, the Maximum Rate shall be the
indicated rate ceiling (as defined and described in Credit Title of the Texas
Finance Code, as amended at the applicable time in effect).

23.
Landlord's Lien

In addition to any statutory lien for Rent in Landlord's favor, Landlord shall
have and Tenant hereby grants to Landlord a continuing security interest for all
rentals and other sums of money becoming due hereunder from Tenant, upon all
goods, wares, equipment, fixtures, furniture, inventory, accounts, contract
rights, receivables, chattel paper and other personal property of Tenant
situated on the Leased Premises, and such property shall not be removed there
from without the consent of Landlord until all arrearage in Rent as well as any
and all other sums of money then due to Landlord hereunder shall first have been
paid and discharged.  In the event of a default under this Lease, Landlord shall
have, in addition to any other remedies provided herein or by law, all rights
and remedies under the Texas Business and Commerce Code, including without
limitation the right to sell the property described in this paragraph at public
or private sale upon ten (10) days notice to Tenant.  Tenant hereby authorizes
Landlord to file financing statement(s) in form sufficient to perfect the
security interest granted hereunder.  Landlord shall have all the rights and
remedies of a secured party under the Texas Business and Commerce Code and this
lien and security interest may be foreclosed by process of law.  The requirement
of reasonable notice prior to any sale under Article 9 of the Texas Business and
Commerce Code shall be met if such notice is given in the manner prescribed
herein at least ten (10) days before the day of sale.  Any sale made pursuant to
the provisions of this Paragraph shall be deemed to have been a public sale
conducted in a commercially reasonable manner if held in the Leased Premises
after the time, place and method of sale and a general description of the types
of property to be sold have been advertised for ten (10) consecutive days prior
to the date of sale in a daily newspaper published in the county in Texas where
the Building is located. Any statutory lien for Rent is not hereby waived, the
express contractual lien herein granted being in addition and supplementary
thereto.

24.
Subordination

This Lease and all rights of Tenant hereunder are subject and subordinate (i) to
any mortgage or deed of trust, blanket or otherwise, which does now or may
hereafter affect the Building (and which may also affect other properties) and
(ii) to any and all increases, renewals, modifications, consolidations,
replacements and extensions of any such mortgage or deed of trust.  This
provision is hereby declared by Landlord and Tenant to be self-operative and no
further instruments shall be required to effect such subordination of this
Lease.  Tenant shall, however, upon demand at any time or times execute,
acknowledge and deliver to Landlord any and all instruments and certificates
that may be necessary or proper to more effectively subordinate this Lease and
all rights of Tenant hereunder to any such mortgage or deed of trust or to
confirm or evidence such subordination.  In the event Tenant shall fail or
neglect to execute, acknowledge and deliver any subordination agreement or
certificate, Landlord in addition to any other remedies it may have, as the
agent and attorney in fact of Tenant, execute, acknowledge and deliver the same
and Tenant hereby irrevocably nominates, constitutes and appoints Landlord
Tenant's proper and legal agent and attorney in fact for such purposes.  Such
power of attorney shall not terminate on disability of the principal.  Tenant
covenants and agrees, in the event any proceedings are brought for the
foreclosure of any such mortgage or deed of trust, or if the Building is sold to
any purchaser, to attorn to and recognize such purchaser as the Landlord under
this Lease.  Tenant expressly recognizes and agrees that the holder of any
mortgage or deed of trust or any of their successors or assigns or any other
holder of such instrument may sell the Project or the Building in the manner
provided for by law in such instrument; and further, such sale may be made
subject to this Lease.  In the event of the enforcement by the grantee under any
such mortgage or deed of trust of the remedies provided for by law or by such
mortgage or deed of trust, Tenant will, upon request of any person or party
succeeding to the interest of said lessor or grantee, as a result of such
enforcement, automatically become Tenant of such successor in interest without
change in the terms or provisions of this Lease; provided, however, that such
successor in interest shall not be bound by (i) any payment of rent for more
than one month in advance except prepayments in the nature of security for the
performance by Tenant of its obligations under this Lease, (ii) any assignment,
subletting, amendment or modification of this Lease made without the written
consent of such lessor or grantee or such successor in interest if such lessor,
grantee or successor in interest is a grantee of a mortgage or beneficiary of a
deed of trust in the real property records where the Property is located on the
date of this Lease, or had previously notified Tenant in writing of its interest
or (iii) any offsets against or liabilities of Landlord, except to the extent
they accrue after such lessor, grantee or successor in interest obtains
possession of the Property.  Notwithstanding anything contained in this Lease to
the contrary, in the event of any default by Landlord in performing its
covenants or obligations hereunder which would give Tenant the right to
terminate this Lease, Tenant shall not exercise such right unless and until (i)
Tenant gives written notice of such default (which notice shall specify the
exact nature of said default) to any holder(s) of any mortgage or deed of trust
where such holder is a grantee of a mortgage or beneficiary of a deed of trust
in the real property records where the Property is located on the date of this
Lease, or who has heretofore notified Tenant in writing of its interest and the
address to which notices are to be sent, and (ii) said holder(s) fail to cure
said default within thirty (30) days (or such longer period of time as may be
reasonably necessary) after the expiration of Landlord's cure period under this
Lease. The provisions of Paragraph 27 below shall govern the manner and
effective date of any notice to be given by Tenant to any such parties.  Tenant
agrees to execute and deliver at any time and from time to time, upon the
request of Landlord or of any holder(s) of any of the indebtedness or other
obligations secured by any of the mortgages or deeds of trust be necessary or
appropriate in any such foreclosure proceeding or otherwise to evidence such
attornment.  Tenant hereby irrevocably appoints Landlord and the holders of the
indebtedness or other obligations secured by the aforesaid mortgages and/or
deeds of trust jointly and severally the agent and attorney shall not terminate
on disability of the principal.  Tenant further waives the provisions of any
statute or rule of law, now or hereafter in effect, which may give or purport to
give Tenant any right or election to terminate or otherwise adversely affect
this Lease and the obligation of Tenant hereunder in the event any such
foreclosure proceedings is brought or trustee's sale occurs and agrees that this
Lease shall not be affected in any way whatsoever by any such foreclosure
proceeding or trustee's sale unless the holder(s) of the indebtedness or other
obligations secured by said mortgages and/or deeds of trust shall declare
otherwise.

 
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25.
Landlord's Default

Landlord shall only be deemed to be in default on the terms of this Lease in the
event Landlord shall violate, neglect, or fail to observe, keep or perform any
covenant or agreement which is not observed, kept, or performed by Landlord
within thirty (30) days after the receipt by Landlord of Tenant's written notice
of such breach which notice shall specifically set out the breach.  Landlord
shall not be considered in default so long as Landlord commences to cure the
breach in a diligent and prudent manner and is allowed such additional time as
reasonably necessary to correct the breach.  Notwithstanding any provisions to
the contrary contained in this Lease, no personal liability of any kind or
character whatsoever shall attach or at any time hereafter attach under any
conditions to Landlord or any subsidiary, affiliate or partner of Landlord or
their respective officers, directors, shareholders, or employees for payments of
any amounts due under this Lease or for the performance of any obligation under
this Lease.  The exclusive remedy of Tenant for failure of Landlord to perform
any of its obligations under this Lease shall be an action for damages against
Landlord, it being understood that in no event shall a judgment for any
deficiency or monetary claim be sought, obtained or enforced against Landlord or
any subsidiary, affiliate or partner of Landlord or their respective officers,
directors, shareholders or employees and such judgment shall be satisfied solely
against the interest of Landlord in the Leased Premises.  In no event shall
Landlord be liable for any consequential, special, punitive or exemplary
damages.  TENANT HEREBY WAIVES ITS STATUTORY LIEN UNDER SECTION 91.004 OF THE
TEXAS PROPERTY CODE.

26.
Mechanic's Liens

Tenant shall have no authority, express or implied, to create or place any lien
or encumbrance of any kind or nature whatsoever upon, or in any manner to bind,
the interest of Landlord in the Leased Premises 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, and each such claim shall affect and each such lien shall attach to, if
it all, only the leasehold interest granted to Tenant by this
instrument.  Tenant covenants and agrees that it will pay or cause to be paid
all sums legally due and payable by it on account of any labor performed or
materials furnished in connection with any work performed on the Leased Premises
on which any lien is or can be validly and legally asserted against its
leasehold interest in the Leased Premises or the improvements thereon and that
it will indemnify, defend and save and hold Landlord harmless from any and all
loss, cost or expense based on or arising out of asserted claims or liens
against the leasehold estate or against the right, title and interest of the
Landlord in the Leased Premises or under the terms of this Lease.  In the event
any such lien is attached to the Leased Premises, the Building, or the Project,
Tenant shall discharge the same of record (by bonding or otherwise) within ten
(10) days after receiving notice thereof.  Tenant’s failure to comply with the
provisions of the foregoing sentence shall be deemed an event of default under
Paragraph 22 hereof entitling Landlord to exercise all of its remedies therefor
without the requirement of any additional notice or cure period. If Tenant fails
to discharge such lien of record with such ten (10) day period, 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 promptly on demand as additional Rent.

27.
Notices

Each provision of this instrument or of any applicable governmental laws,
ordinances, regulations and other requirements with reference to the sending,
mailing or delivery of any notice or the making of any payment by Landlord to
Tenant or with reference to the sending, mailing or delivery of any notice or
the making of any payment by Tenant to Landlord shall be deemed to be complied
with when and if the following steps are taken:

(a)           All Rent and other payments required to be made by Tenant to
Landlord hereunder shall be payable to Landlord c/o ______,  Texas  ___,
Attention:  Property Manager, or at such other address as Landlord may specify
from time to time by written notice delivered in accordance herewith.  Tenant's
obligation to pay Rent and any other amounts to Landlord under the terms of this
Lease shall not be deemed satisfied until such Rent and other amounts have been
actually received by Landlord.

(b)           All payments required to be made by Landlord to Tenant hereunder
shall be payable to Tenant at the address hereinbelow set forth, or at such
other address within the continental United States as Tenant may specify from
time to time by written notice delivered in accordance herewith.

(c)           Any notice or document required or permitted to be delivered
hereunder shall be deemed to be delivered whether actually received or not, when
deposited in the United States Mail, postage prepaid, Certified or Registered
Mail, or on the next business day following deposit with a nationally recognized
overnight delivery service, addressed to the parties hereto at the respective
addresses set out below, or at such other address as they have heretofore
specified by written notice delivered in accordance herewith:

 
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Landlord:
Tenant:
   
____ ___ Industrial, L.L.C.
Sharps Compliance Inc. of Texas
_____________________
9220 Kirby Drive, Suite 500
_____________________
Houston, Texas 77054
_____________________
Attention: Chief Financial Officer
_____________________
Phone: 713-660-3514
 
Fax: 713-838-0508 

If and when included within the term "Landlord", as used in this instrument,
there are more than one person, firm or corporation, all shall jointly arrange
among themselves for their joint execution of such a notice specifying some
individual at some specific address for their receipt of notices and payments to
Landlord; if and when included within the term "Tenant" as used in this
instrument, there are more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of such a notice
specifying some individual at some specific address within the continental
United States for the receipt of notices and payments to Tenant.  All parties
included within the terms "Landlord" and "Tenant", respectively, shall be bound
by notices given in accordance with the provisions of this paragraph to the same
effect as if each had received such notice.

28.           Miscellaneous

(a)           Words of any gender used in this Lease shall be held and construed
to include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires.

(b)           The terms, provisions and covenants and conditions contained in
this Lease shall apply to, inure to the benefit of, and be binding upon, the
parties hereto and upon their respective heirs, legal representatives,
successors and permitted assigns, except as otherwise herein expressly
provided.  Each party agrees to furnish to the other, promptly upon demand, a
corporate resolution, proof of due authorization by partners, or other
appropriate documentation evidencing the due authorization of such party to
enter into this Lease.

(c)           The captions inserted in this Lease are for convenience only and
in no way define, limit or otherwise describe the scope or intent of this Lease,
or any provision hereof, or in any way affect the interpretation of this Lease.

(d)           Tenant agrees from time to time within ten (10) days after request
of Landlord to deliver to Landlord, or Landlord's designee, an estoppel
certificate stating that this Lease is in full force and effect, the date to
which Rent has been paid, the unexpired term of this Lease and such other
matters pertaining to this Lease as may be requested by Landlord.  It is
understood and agreed that Tenant's obligation to furnish such estoppel
certificates in a timely fashion is a material inducement for Landlord's
execution of this Lease.

(e)           This Lease may not be altered, changed or amended except by an
instrument in writing signed by both parties hereto.

(f)           All obligations of Tenant hereunder not fully performed as of the
expiration or earlier termination of the term of this Lease shall survive the
expiration or earlier termination of the term hereof, including, without
limitation, all payments obligations with respect to Real Estate Taxes, Common
Area Maintenance Costs and Building Insurance Costs, all obligations concerning
the condition of the Leased Premises and all indemnity obligations
hereunder.  Upon the expiration or earlier termination of the term hereof, and
prior to Tenant vacating the Leased Premises, Tenant shall pay to Landlord any
amount reasonably estimated by Landlord as necessary to put the Leased Premises,
including without limitation all heating and air conditioning systems and
equipment therein, in good condition and working order.  Tenant shall also,
prior to vacating the Leased Premises, pay to Landlord the amount, as estimated
by Landlord, of Tenant's obligation hereunder for Tenant's pro rata share of
Building Costs for the year in which the Lease expires or terminates.  All such
amounts shall be used and held by Landlord for payment of such obligations of
Tenant hereunder, with Tenant being liable for any additional costs therefor
upon demand by Landlord, or with any excess to be returned to Tenant after all
such obligations have been determined and satisfied, as the case may be.  Any
Security Deposit held by Landlord shall be credited against the amount payable
by Tenant under this Paragraph.

(g)           If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws effective during the term of this
Lease, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby, and it is also the
intention of the parties to this Lease that in lieu of each clause or provision
of this Lease that is illegal, invalid or unenforceable, there be added as a
part of this Lease contract a clause or provision as similar in terms to such
illegal, invalid or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.

(h)           Because the Leased Premises are on the open market and are
presently being shown, this Lease shall be treated as an offer with the Leased
Premises being subject to prior lease and such offer to withdrawal or
non-acceptance by Landlord or to other use of the Leased Premises without
notice, and this Lease shall not be valid or binding unless and until accepted
by Landlord in writing.

(i)           All references in this Lease to the "date hereof" or similar
references shall be deemed to refer to the last date, in point of time, on which
all parties hereto have executed this Lease.

(j)           It is expressly stipulated and agreed that none of the obligations
to be undertaken by Landlord hereunder shall constitute any form of warranty,
express or implied, all such obligations being contractual covenants of
performance.  Without limiting the generality of the foregoing, THERE IS NO
WARRANTY AS TO SUITABILITY, HABITABILITY, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE GIVEN IN CONNECTION WITH THIS LEASE.

 
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(k)           TENANT HEREBY WAIVES ALL RIGHTS TO PROTEST THE APPRAISED VALUE OF
THE PROJECT OR APPEAL THE SAME AND ALL RIGHTS TO RECEIVE NOTICES OF REAPPRAISALS
SET FORTH IN SECTIONS 41.413 AND 42.015 OF THE TEXAS TAX CODE

(l)           TENANT HEREBY WAIVES ALL ITS RIGHTS UNDER THE TEXAS DECEPTIVE
TRADE PRACTICES - CONSUMER PROTECTION ACT, SECTION 17.41 ET. SEQ. OF THE TEXAS
BUSINESS AND COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS
AND  PROTECTIONS.  AFTER CONSULTATION WITH AN ATTORNEY OF TENANT'S OWN
SELECTION, TENANT VOLUNTARILY CONSENTS TO THIS WAIVER.

(m)           Landlord and Tenant agree that each provision of this Lease for
determining charges, amounts and additional rent payments by Tenant (including
without limitation, Paragraph 5 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 acknowledges that it has provided Landlord with its
financial statement(s) as a primary inducement to Landlord's agreement to lease
the Leased Premises to Tenant, and that Landlord has relied on the accuracy of
said financial statement(s) in entering into this Lease.  Tenant represents and
warrants that the information contained in said financial statement(s) is true,
complete and correct in all material aspects, and agrees that the foregoing
representations shall be a precondition to this Lease.  At the request of
Landlord, Tenant shall, not later than ninety (90) days following the close of
each fiscal year of Tenant during the term of this Lease, furnish to Landlord a
balance sheet of Tenant as of the end of such fiscal year and a statement of
income and expense for the year then ended, together with an opinion of an
independent certified public accountant satisfactory to Landlord or, at the
election of Landlord, a certificate of the chief financial officer, owner or
partner of Tenant to the effect that the financial statements have been prepared
in conformity with generally accepted accounting principles consistently applied
and which fairly present the financial condition and results of operations of
Tenant as of and for the periods covered.

(o)           This Lease has been negotiated through the agency of
_____________________.  Tenant warrants and represents to Landlord that no
broker other than Tenant's Broker was involved with the leasing of the Leased
Premises or the negotiation of this Lease on behalf of Tenant or is entitled to
any commission in connection herewith by, through or under Tenant.  Tenant
agrees to indemnify and hold Landlord harmless against any other claims
(including court costs and attorneys fees) for commissions by any broker other
than Tenant's Broker claiming by, through or under Tenant or Tenant's
Broker.  Landlord warrants and represents to Tenant that no brokers other than
Landlord's Broker was involved with the leasing of the Leased Premises or the
negotiation of this Lease on behalf of Landlord is entitled to any commission in
connection herewith by, through or under Landlord.  Landlord agrees to indemnify
and hold Tenant harmless against any other claims (including court costs and
attorneys fees) for commissions by any broker other than Landlord's Broker
claiming by, through or under Landlord or Landlord's Broker.

29.
Exhibits and Attachment

All Exhibits, attachments, riders and addenda referred to in this Lease are
incorporated in this Lease and made a part hereof for all intents and purposes.

30.
Tenant's Indemnity

Landlord shall not be liable to Tenant or Tenant's employees, agents, patrons or
visitors, or to any other person whomsoever, for any injury to person or damage
to property on or about the Leased Premises and/or Building, resulting from
and/or caused in part or whole by the negligence or misconduct of Tenant, its
agents, servants or employees, or of any other person entering upon the Leased
Premises, or caused by the Building or buildings and improvements located on the
Leased Premises becoming out of repair, or caused by leakage of gas, oil, water
or steam or by electricity emanating from the Leased Premises.   IN THOSE
REGARDS, TENANT HEREBY COVENANTS AND AGREES THAT IT WILL AT ALL TIMES INDEMNIFY
AND HOLD SAFE AND HARMLESS LANDLORD (INCLUDING WITHOUT LIMITATION THE TRUSTEE
AND BENEFICIARIES IF LANDLORD IS A TRUST), LANDLORD'S AGENTS AND EMPLOYEES FROM
ANY LOSS, LIABILITY, CLAIMS, SUITS, COSTS, EXPENSES, INCLUDING WITHOUT
LIMITATION ATTORNEY'S FEES AND DAMAGES, BOTH REAL AND ALLEGED, ARISING OUT OF
ANY SUCH DAMAGE OR INJURY FROM THE OCCUPANCY OR USE OF THE LEASED PREMISES BY
TENANT, INCLUDING, WITHOUT LIMITATION, TENANT'S CUSTOMERS, INVITEES, AGENTS,
CONTRACTORS, EMPLOYEES, SERVANTS, SUBTENANTS, ASSIGNEES, LICENSEES OR
CONCESSIONAIRES OR BY ANY PERSON OR  PERSONS HOLDING THERE UNDER, OR BY REASON
OF THE USE OR MISUSE OF THE PARKING AREA OR ANY PART THEREOF AND/OR FOR ANY
CLAIMS THAT MAY ARISE IN CONNECTION WITH THE NEGLIGENCE OR WILLFUL MISCONDUCT OF
TENANT OR ANY OF TENANT'S EMPLOYEES, AGENTS, CONTRACTORS, INVITEES, SERVANTS,
SUBTENANTS, ASSIGNEES, LICENSEES OR CONCESSIONAIRES; EXCEPT INJURY TO PERSONS OR
DAMAGE TO THE BUILDING, THE SOLE CAUSE OF WHICH IS THE NEGLIGENCE OF LANDLORD OR
THE FAILURE OF LANDLORD TO REPAIR ANY PART OF THE BUILDING WHICH LANDLORD IS
OBLIGATED TO REPAIR AND MAINTAIN HEREUNDER WITHIN A REASONABLE TIME AFTER THE
RECEIPT OF WRITTEN NOTICE FROM TENANT OF NEEDED REPAIRS.  THIS INDEMNITY IS IN
ADDITION TO THE INDEMNITY SET FORTH BELOW.

 
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31.
Hazardous Materials

(a)           Tenant shall not, without Landlord's prior written consent, cause
or permit any Hazardous Materials (hereinafter defined) to be stored, used or
disposed of in or about the Leased Premises or Project by Tenant, its agents,
employees, contractors or invitees, nor shall the use which Tenant makes of the
Leased Premises result in any Hazardous Materials Contamination (hereinafter
defined).  For purposes of this Lease, the following terms shall have the
meanings herein specified:

(1)  "Hazardous Materials" shall mean (i) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act of 1976 (42 U.S.C.A. §§6901 et seq.),
as amended from time to time, and regulations promulgated thereunder ("RCRA");
(ii) any "hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C.A. §§9601 et seq.),
as amended from time to time, and regulations promulgated thereunder ("CERCLA");
(iii) any hazardous substances as defined by the Texas Commission on
Environmental Quality ("TCEQ"); (iv) asbestos, polychlorinated biphenyls or
other substances specifically regulated under the Toxic Substances Control Act
(15 U.S.C. §§2601 et seq.), as amended from time to time, and regulations
promulgated thereunder ("TSCA"); (v) pesticides specifically regulated under the
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.A. §§135 et seq.),
as amended from time to time, and regulations promulgated thereunder ("FIFRA");
(vi) storage tanks, whether or not underground and whether empty, filled or
partially filled with any substance; (vii) the presence of oil, petroleum
products, and their by-products; (viii) any substance the presence of which in
or about the Property is prohibited by any governmental authority or which is
hereafter classified by any governmental authority as a hazardous or toxic
waste, material, substance or similar phraseology; and (ix) any other substance
which by any governmental authority requires special handling or notification of
any governmental authority in its collection, storage, treatment, or disposal.

(2)  "Hazardous Materials Contamination" shall mean the spillage, leakage,
emission or disposal of Hazardous Materials (whether presently existing or
hereafter occurring) in or about the buildings, facilities, soil, groundwater,
air or other elements in or about the Property or any other property as a result
of Hazardous Materials at any time emanating from the Leased Premises.

(b)  Notwithstanding the foregoing, Tenant shall be permitted to store, use and
dispose of deminimis amounts of Hazardous Materials which are incidental to
Tenant's business so long as such amounts does not increase the Landlord's
insurance or change the occupancy class of the Building.  Such Hazardous
Materials and all containers therefor, shall be stored, used and disposed of in
a manner that complies with all federal, state and local laws or regulations
applicable to such Hazardous Materials.  Tenant shall be liable for all costs
and expenses related to the storage, use and disposal of such deminimis amounts
of Hazardous Materials incidental to Tenant's business and shall indemnify,
defend and hold Landlord harmless from any claims or liabilities relating
thereto.

(c)  At the commencement of each "Lease Year" (the term "Lease Year" as used in
this Lease shall mean any twelve (12) month period beginning with the
Commencement Date and each twelve (12) month period beginning on any anniversary
date thereof), Tenant shall disclose to Landlord the names and approximate
amounts of all Hazardous Materials which Tenant intends to store, use or dispose
of in or about the Leased Premises in the coming Lease Year.  In addition, at
the commencement of each Lease Year (beginning with the second Lease Year),
Tenant shall disclose to Landlord the names and amounts of all Hazardous
Materials that to Tenant's knowledge were actually stored, used or disposed of
in or about the Leased Premises, if such materials were not previously
identified to Landlord at the commencement of the previous Lease Years.

(d)  Tenant shall give written notice to Landlord immediately upon Tenant's
acquiring knowledge of the presence of any Hazardous Materials in or about the
Leased Premises (subject to the provisions of paragraph b. hereof) or of any
Hazardous Materials Contamination with a full description thereof.  Landlord
shall have the right, but not the obligation, without in any way limiting
Landlord's other rights and remedies under the Lease, to enter onto the Leased
Premises or to take such other actions as it deems necessary or advisable to
cleanup, remove, resolve or minimize the impact of, or otherwise deal with, any
Hazardous Materials or Hazardous Materials Contamination on the Project
following receipt of any notice from any person or entity asserting the
existence of any Hazardous Materials or Hazardous Materials Contamination
pertaining to the Leased Premises or any part of the Project which, if true,
could result in an order, suit, imposition of a lien on the Project, or other
action and/or which, in Landlord's sole opinion, could jeopardize Landlord's
security under the Lease.

(e)  TENANT HEREBY AGREES THAT TENANT SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS
LANDLORD, ITS AGENTS AND EMPLOYEES FROM AND AGAINST ANY CLAIMS, DEMANDS,
PENALTIES, FINES, LIABILITIES, SETTLEMENTS, DAMAGES, COSTS OR EXPENSES
(INCLUDING WITHOUT LIMITATION, ATTORNEYS' AND CONSULTANTS' FEES, COURT COSTS AND
LITIGATION EXPENSES) OF WHATEVER KIND OR NATURE, KNOWN OR UNKNOWN, CONTINGENT OR
OTHERWISE, ARISING OUT OF OR IN ANY WAY RELATED TO (A) THE PRESENCE, DISPOSAL,
RELEASE OR THREATENED RELEASE AND SUBSEQUENT REMEDIATION OF ANY HAZARDOUS
MATERIALS OR ANY HAZARDOUS MATERIALS CONTAMINATION FROM THE LEASED PREMISES
(OTHER THAN HAZARDOUS MATERIALS INTRODUCED BY LANDLORD); (B) ANY PERSONAL INJURY
(INCLUDING WRONGFUL DEATH) OR PROPERTY DAMAGE (REAL OR PERSONAL) ARISING OUT OF
OR RELATED TO SUCH HAZARDOUS MATERIALS OR HAZARDOUS MATERIALS CONTAMINATION FROM
THE LEASED PREMISES; OR (C) HAZARDOUS MATERIALS ON THE PROJECT INTRODUCED BY OR
CAUSED BY TENANT OR ANY OF TENANT'S EMPLOYEES, AGENTS, CONTRACTORS, INVITEES,
SERVANTS, SUBTENANTS, ASSIGNEES, LICENSEES OR CONCESSIONAIRES.  THE PROVISIONS
OF THIS PARAGRAPH (e) SHALL BE IN ADDITION TO ANY OTHER OBLIGATIONS AND
LIABILITIES TENANT MAY HAVE TO LANDLORD AT LAW OR IN EQUITY AND SHALL SURVIVE
THE EXPIRATION OF THIS LEASE OR THE TERMINATION THEREOF.

 
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32.
Mitigation of Damages

(a)  General Duty to Mitigate.  Both Landlord and Tenant shall each use
commercially reasonable efforts to mitigate any damages resulting from a default
of the other party under this Lease.

(b)  Landlord's Duty to Mitigate Damages.  Landlord's obligation to mitigate
damages after a default by Tenant under this Lease shall be satisfied in full if
Landlord undertakes to lease the Leased Premises to another tenant (a
"Substitute Tenant") in accordance with the following criteria:

(i)           Landlord shall have no obligation to solicit or entertain
negotiations with any other prospective tenants for the Leased Premises until
Landlord obtains full and complete possession of the Leased Premises including,
without limitation, the final and unappealable legal right to relet the Leased
Premises free of any claim of Tenant.

(ii)          Landlord shall not be obligated to offer the Leased Premises to a
prospective tenant when other premises in the Project suitable for that
prospective tenant's use are (or soon will be) available.

(iii)         Landlord shall not be obligated to lease the Leased Premises to a
Substitute Tenant for a rental less than the current fair market rental then
prevailing for similar office space in comparable office/warehouse buildings in
the same market area as the Project, 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.

(iv)         Landlord shall not be obligated to enter into a lease with any
proposed tenant whose use would:

a.           Violate any restriction, covenant, or requirement contained in the
lease of another tenant of the Project;

b.           Adversely affect the reputation of the Project; or

c.           Be incompatible with the operation of the Project as a first-class
office/warehouse building.

(v)         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 or operating experience to operate the
Leased Premises in a first-class manner.

(vi)        Landlord shall not be required to expend any amount of money to
alter, remodel, or otherwise make the Leased Premises suitable for uses by a
proposed Substitute Tenant unless:

a.           Tenant pays any such sum to Landlord in advance of Landlord's
execution of a Substitute Lease with such Substitute Tenant (which payment shall
not be in lieu of any damages or other sums to which Landlord may be entitled as
a result of Tenant's default under this Lease); or

b.           Landlord, in Landlord's sole discretion, determines that any such
expenditure is financially justified in connection with entering into any such
Substitute Lease.

(c)          Effect of Releasing.  Upon compliance with the above criteria
regarding the releasing of the Leased Premises after a default by Tenant,
Landlord shall be deemed to have fully satisfied Landlord's obligation to
mitigate damages under this Lease and under any law or judicial ruling in effect
on the date of this Lease or at the time of Tenant's default, and Tenant waives
and releases, to the fullest extent legally permissible, any right to assert in
any action by Landlord to enforce the terms of this Lease, any defense,
counterclaim, or rights of set off or recoupment respecting the mitigation of
damages by Landlord, unless and to the extent Landlord maliciously or in bad
faith fails to act in accordance with the requirements of this Paragraph 32.

(d)          Tenant's Rights.  Tenant's right to seek damages from Landlord as a
result of a default by Landlord under this Lease, shall be conditioned on Tenant
taking all actions reasonably required, under the circumstances, to minimize any
loss or damage to Tenant's property or business, or to any of Tenant's officers,
employees, agents, invitees, or other third parties that may be caused by any
such default of Landlord.

33.
Relocation

Intentionally omitted.

 
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34.
Mold

It is agreed and understood that mold spores are present essentially everywhere.
Tenant acknowledges and understands that mold can grow in most any moist
location including within the Leased Premises.  Landlord places the burden on
Tenant to properly prevent moisture in the Leased Premises, and on good
housekeeping and ventilation practices. Tenant acknowledges the necessity of
housekeeping, ventilation, and moisture control (especially in kitchens,
bathrooms, beneath cabinets and around outside walls) for mold prevention. In
signing this Lease, Tenant has first inspected the aforementioned Leased
Premises, and certifies that Tenant has not observed mold, mildew or moisture
within the Leased Premises. Tenant agrees to immediately notify Landlord if
Tenant observes mold/mildew and/or moisture conditions (from any source,
including leaks), and allow Landlord to evaluate and make recommendations and/or
take appropriate corrective action. Tenant relieves Landlord from any liability
for any personal injury or damages to property caused by or associated with
moisture or the growth of or occurrence of mold or mildew on or in the Leased
Premises.

35.
Tenant Representation

Tenant represents and warrants to, and covenants with, Landlord that neither
Tenant nor any of its respective constituent owners or affiliates currently are,
or shall be at any time during the Term hereof, in violation of any laws
relating to terrorism or money laundering (collectively, the "Anti-Terrorism
Laws"), including without limitation Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001 and relating to Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (the "Executive Order") and/or the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 (Public Law 107-56) (the "USA Patriot Act"). Tenant covenants with
Landlord that neither Tenant nor any of its respective constituent owners or
affiliates is or shall be during the Term hereof a "Prohibited Person," which is
defined as follows:  (A) a person or entity that is listed in the Annex to, or
is otherwise subject to, the provisions of the Executive Order; (B) a person or
entity owned or controlled by, or acting for or on behalf of, any person or
entity that is listed in the Annex to, or is otherwise subject to the provisions
of, the Executive Order; (C) a person or entity with whom Landlord is prohibited
from dealing with or otherwise engaging in any transaction by any Anti-Terrorism
Law, including without limitation the Executive Order and the USA Patriot Act;
(D) a person or entity who commits, threatens or conspires to commit or support
"terrorism" as defined in Section 3(d) of the Executive Order; (E) a person or
entity that is named as a "specially designated national and blocked person" on
the then-most current list published by the U.S. Treasury Department Office of
Foreign Assets Control at its official website,
http://www.treas.gov/offices/eotffc/ofac/sdn/t11sdn.pdf, or at any replacement
website or other replacement official publication of such list; and (F) a person
or entity who is affiliated with a person or entity listed in items (A) through
(E), above.  At any time and from time-to-time during the Term, Tenant shall
deliver to Landlord, within ten (10) days after receipt of a written request
therefor, a written certification or such other evidence reasonably acceptable
to Landlord evidencing and confirming Tenant's compliance with this Paragraph
35.

THE PARTIES EXECUTING this Lease represent and warrant that each such party
possesses all lawful rights and authority to enter into this Lease; that there
are no judgments, decrees, or outstanding orders of any court prohibiting the
execution of this Lease; and that all required approvals, consents and
resolutions necessary to effectuate the terms and provisions of this Lease have
been obtained.  Submission by Landlord of this instrument to Tenant for
examination or signature does not constitute a reservation of or option for
lease.  This Lease will be effective as a lease or otherwise only upon execution
by and delivery of this Lease by Landlord and Tenant and delivery to Landlord of
a Continuing Lease Guaranty in the form attached hereto as Exhibit "E", executed
on behalf of Sharps Compliance Corp., a Delaware corporation (the "Guaranty").

[Signature Page Follows.]

 
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Executed in multiple counterparts, each of which shall have the full force and
effect of any original, on the latter of the dates indicated below.

LANDLORD:

____ ___ INDUSTRIAL, L.L.C., a Texas limited liability company

By:
             
By:  
 
 

By:
 
Name: 
 
Title:
 
Date:
 

TENANT:

SHARPS COMPLIANCE INC. OF TEXAS,
a Texas corporation

By:
 
Name: 
 
Title:
 
Date:
 

 
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