Exhibit 10.72

 

REAL ESTATE LEASE

 

This Lease Agreement (this “Lease”) is dated June 14, 2003, by and between
Petro-Chem Engineering, Inc., Joe Urbanovsky (“Landlord”), and ENGlobal
Engineering, Inc. (“Tenant”). The parties agree as follows:

 

PREMISES. Landlord, in consideration of the lease payments provided in this
Lease, leases to Tenant any and all office space, not under lease, of 23,000
square foot building (the “Premises”) together with adjacent vacant lots located
at or near 1201 North Avenue H, Freeport, TX 77541-3967.

 

LEGAL DESCRIPTION. A Floor Plan of the Premises and description of adjacent lots
subject to this Lease are attached as an exhibit.

 

TERM. The lease term will being on June 30, 2003 and will terminate on June 30,
2007.

 

LEASE PAYMENTS. Tenant shall pay to Landlord monthly Cost and Expenses less any
collected lease payment payable within 15 calendar days of Tenant’s receipt of
Landlord’s invoice each month. Cost and Expenses Ledger along with reasonable
back-up tickets or receipts shall be prepared by landlord and presented at close
of each month. Lease payments shall be made to the Landlord at 1201 North Avenue
H, Freeport, TX 77541-3967, which address may be changed from time to time by
the Landlord.

 

COSTS AND EXPENSES SHALL INCLUDE

 

Monthly Property Note, not to exceed the amount of $ 3,541.40

Property Insurance

Property Taxes

Routine Maintenance:

    Elevator Service & Cert.

    Janitor Service                                         -

    Yard Service

Non-routine Maintenance & Repairs arising out of day to day operation of the
building. Excluding any items which would be considered a capital expenditure,
such as without limitation, re-roofing, structural repairs to the exterior of
the building or foundation, resurfacing of any parking areas or repairs covered
by insurance.

All Utilities

    Power

    Water

    Dumpster

Janitorial Supplies

 

Landlord and Tenant shall cooperate and use their good faith efforts to reduce
operating costs.

 

Exhibit “D”

 

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POSSESSION. Tenant shall be entitled to possession on the first day of the term
of this Lease, and shall yield possession to Landlord on the last day of the
term of this Lease, unless otherwise agreed by both parties in writing. At the
expiration of the term, Tenant shall remove its goods and effects and peaceably
yield up the Premises to Landlord in as good a condition as when delivered to
Tenant, ordinary wear and tear excepted.

 

USE OF PREMISES. Tenant may use the Premises only for Engineering, Design or
Business Office. The Premises may be used for any other purpose only with the
prior Written consent of Landlord, which shall not be unreasonably withheld.

 

PROPERTY INSURANCE. Landlord shall maintain appropriate insurance for Premises
and property located on the Premises and Tenant shall reimburse Landlord the
cost thereof. Landlord shall be named as an additional insured in such policies
furnished by Tenant. Tenant shall deliver appropriate evidence to Landlord as
proof that adequate insurance is in force issued by companies reasonably
satisfactory to Landlord. Landlord shall receive advance written notice from the
insurer prior to any termination of such insurance policies. Tenant shall also
maintain any other insurance which Landlord may reasonably require for the
protection of Landlord’s interest in the Premises. Tenant with the Landlord is
responsible for maintaining casualty insurance on its own property. Tenant, at
its option, may provide such insurance in satisfaction of its obligations
pursuant to this paragraph.

 

TAXES. Taxes attributable to the Premises or the use of the Premises shall be
allocated as follows:

 

REAL ESTATE TAXES. Tenant shall pay all real estate taxes and assessments which
are assessed against the Premises during the time of this Lease.

 

PERSONAL TAXES. Tenant shall pay all personal taxes and any other charges which
may be levied against the Premises and which are attributable to Tenant’s use of
the Premises, along with all sales and/or use taxes (if any) that may be due in
connection with lease payments.

 

TERMINATION UPON SALE OF PREMISES. Notwithstanding any other provision of this
Lease, either party may terminate this lease upon 120 days’ written notice to
the other if the Premises are sold.

 

TERMINATION BY TENANT. This lease is executed in conjunction with an Asset
Purchase Agreement and Employment Agreement of even date herewith between
Tenant, Landlord and Joe Urbanovsky.

 

Notwithstanding anything to the contrary contained herein, Tenant may terminate
this lease at anytime if its Freeport staff (office and in-plant) falls below 30
billable employees for a period of 60 days or more. In the event Tenant elects
to terminate under this paragraph, Tenant shall notify landlord in writing of
such election and specify an effective termination date. After the effective
termination date, Tenant agrees upon request of Landlord to advance an amount
equal to the monthly lease payment for a period of up to six months following
the effective

 

Exhibit “D”

 

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termination date. Any sums so advances shall bear interest at 12% per annum
shall be reimbursed to Tenant upon the earlier of (i) sale of the building or
(ii) 1 year after the effective termination date.

 

DESTRUCTION OR CONDEMNATION OF PREMISES. If the Premises are partially destroyed
by fire or other casualty to an extent that prevents the conducting of Tenant’s
use of the Premises in a normal manner, and if the damage is reasonably
repairable within ninety days after the occurrence of the destruction, Landlord
shall repair the Premises. However, if the damage is not repairable or if the
cost of repair is more than building pre-damage value, or if Landlord is
prevented from repairing the damage by forces beyond Landlord’s control, or if
the property is condemned, this Lease shall terminate upon twenty days’ written
notice of such event or condition by either party and any unearned rent paid in
advance by Tenant shall be apportioned and refunded to it.

 

DEFAULTS. Tenant shall be in default of this Lease if Tenant fails to fulfill
any lease obligation or term by which Tenant is bound. Subject to any governing
provisions of law to the contrary, if Tenant fails to cure any financial
obligation within 10 days (or any other obligation within 15 days) after written
notice of such default is provided by Landlord to Tenant, Landlord may take
possession of the Premises without further notice (to the extent permitted by
law), and without prejudicing Landlord’s rights to damages. Landlord shall
recover damages available under the law. In the alternative, Landlord may elect
to cure any default and the cost of such action shall be added to Tenant’s
financial obligations under this Lease. Tenant shall pay all costs, damages, and
expenses (including reasonable attorney fees and expenses) suffered by Landlord
by reason of Tenant’s defaults. All sums of money or charges required to be paid
by Tenant under this Lease shall be additional rent, whether or not such sums or
charges are designated as “additional rent”. The rights provided by this
paragraph are cumulative in nature and are in addition to any other rights
afforded by law.

 

LATE PAYMENTS. Payments not paid by due date shall bear $50.00 per day late
penalty until payment is made.

 

HOLDOVER. If Tenant maintains possession of the Premises for any period after
the termination of this Lease (“Holdover Period”), Tenant shall pay to Landlord
lease payment(s) during the Holdover Period at a rate equal to the most recent
rate preceding the Holdover Period. Such holdover shall constitute a
month-to-month extension of this Lease.

 

CUMULATIVE RIGHTS. The rights of the parties under this Lease are cumulative,
and shall not be construed as exclusive unless otherwise required by law.

 

REMODELING OR STRUCTURAL IMPROVEMENTS. Tenant shall have the obligation to
conduct any construction or remodeling (at Tenant’s expense) that may be
required to use the Premises as specified above. Tenant may also construct such
fixtures on the Premises (at Tenant’s expense) that appropriately facilitate its
use for such purposes. Such construction shall be undertaken and such fixtures
may be erected only with the prior written consent of the Landlord which shall
not be unreasonably withheld. Tenant shall not install awnings or advertisements
on any part of the Premises without Landlord’s prior written

 

Exhibit “D”

 

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consent. At the end of the lease term, Tenant shall be entitled to remove (or at
the request of Landlord shall remove) such fixtures, and shall restore the
Premises to substantially the same condition of the Premises at the commencement
of this Lease.

 

ACCESS BY LANDLORD TO PREMISES. Subject to Tenant’s consent (which shall not be
unreasonably withheld), Landlord shall have the right to enter the Premises to
make inspections, provide necessary services, or show the unit to prospective
buyers, mortgagees, tenants or workers. As provided by law, in the case of an
emergency, Landlord may enter the Premises without Tenant’s consent. During the
last three months of this Lease, or any extension of this Lease, Landlord shall
be allowed to display the usual “To Let” signs and show the Premises to
prospective tenants.

 

INDEMNITY REGARDING USE OF PREMISES. To the extent permitted by law, Tenant
agrees to indemnify, hold harmless, and defend Landlord from and against any and
all losses, claims, liabilities, and expenses, including reasonable attorney
fees, if any, which Landlord may suffer or incur in connection with Tenant’s
possession, use or misuse of the Premises, except Landlord’s act of negligence.

 

DANGEROUS MATERIALS. Tenant shall not keep or have on the Premises any article
or thing of a dangerous, flammable, or explosive character that might
substantially increase the danger of fire on the Premises, or that might be
considered hazardous by a responsible insurance company, unless the prior
written consent of Landlord is obtained and proof of adequate insurance
protection is provided by Tenant to Landlord.

 

COMPLIANCE WITH REGULATIONS. Tenant shall promptly comply with all laws,
ordinances, requirements and regulations of the federal, state, county,
municipal and other authorities, and the fire insurance underwriters. However,
Tenant shall not by this provision be required to make alterations to the
exterior of the building or alterations of a structural nature.

 

MECHANICS LIENS. Neither the Tenant nor anyone claiming through the Tenant shall
have the right to file mechanics liens or any other kind of lien on the Premises
and the filing of this Lease constitute notice that such liens are invalid.
Further, Tenant agrees to (1) give actual advance notice to any contractors,
subcontractors or suppliers of goods, labor, or services that such liens will
not be valid, and (2) take whatever additional steps that are necessary in order
to keep the premises free of all liens resulting from construction done by or
for the Tenant.

 

ARBITRATION. Any controversy or claim relating to this contract, including the
construction or application of this contract, will be settled by binding
arbitration under the rules of the American Arbitration Association, and any
judgment granted by the arbitrator(s) may be enforced in any court of proper
jurisdiction.

 

SUBORDINATION OF LEASE. This Lease is subordinate to any mortgage that now
exists, or may be given later by Landlord, with respect to the Premises.

 

Exhibit “D”

 

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NOTICE. Notices under this Lease shall not be deemed valid unless given or
served in writing and forwarded by mail, postage prepaid, addressed as follows:

 

LANDLORD:

 

Petro-Chem Engineering, Inc., Joe Urbanovsky

1201 North Avenue H

Freeport, TX 77541-3967

 

TENANT:

 

ENGlobal Engineering, Inc. Jimmie Carpenter, PE

3155 Executive Blvd., Suite #200

Beaumont, Texas 77705

 

Such addresses may be changed from time to time by either party by providing
notice as set forth above. Notices mailed in accordance with the above
provisions shall be deemed received on the third day after posting.

 

GOVERNING LAW AND VENUE. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas without reference to principles
governing choice or conflicts of law. Venue shall exclusively lie in the state
and federal courts of Harris County, Texas.

 

AMENDMENT. This Lease may be modified or amended in writing, if the writing is
signed by the party obligated under the amendment.

 

SEVERABILITY. If any portion of this Lease shall be held to be invalid or
unenforceable for any reason, the remaining provisions shall continue to be
valid and enforceable. If a court finds that any provision of this Lease is
invalid or unenforceable, but that by limiting such provision, it would become
valid and enforceable, then such provision shall be deemed to be written,
construed, and enforced as so limited.

 

WAIVER. The failure of either party to enforce any provisions of this Lease
shall not be construed as a waiver or limitation of that party’s right to
subsequently enforce and compel strict compliance with every provision of this
Lease.

 

Exhibit “D”

 

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BINDING EFFECT. The provisions of this Lease shall be binding upon and inure to
benefit of both parties and their respective legal representatives, successors
and assigns.

 

LANDLORD:

Petro-Chem Engineering, Inc., Joe Urbanovsky

 

By:

 

/s/ Joe Urbanovsky

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Date: June     , 2003

   

Joe Urbanovsky,

President

           

 

TENANT:

ENGlobal Engineering, Inc.

 

By:

 

/s/ William A. Coskey

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Date: June     , 2003

   

William A. Coskey

Chief Executive Officer

           

 

Exhibit “D”

 

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