[Net Lease]

LEASE AGREEMENT

 

THIS LEASE AGREEMENT is made this _16th_ day of _August__, 2006, between MDN /
JSC - II Limited

("Landlord"), and the Tenant named below.

 

Tenant:

Adams Golf, Ltd.

   

Tenant's Representative,

 

Address, and Telephone:

2800 Technology Drive

 

Suite 300

 

Plano TX 75074

   

Premises:

That portion of the Building, containing approximately 29,136 rentable square
feet, as determined by Landlord, as shown on Exhibit A.

   

Project:

Plano Distribution Center #2

   

Building:

Plano Distribution Center #2

 

2800 Technology Drive

 

Suite 300

 

Plano TX 75074

   

Tenant's Proportionate Share of Project:

18.730%

   

Tenant's Proportionate Share of Building:

18.730%

   

Lease Term:

Beginning on the Commencement Date and ending on the last day of the 26th full
calendar month thereafter.

   

Commencement Date:

August 1, 2006

   

Initial Monthly Base Rent:

See Addendum 1

   

Initial Estimated Monthly Operating Expense Payments:

(estimates only and subject to adjustment to actual costs and expenses according
to the provisions of this Lease)

1. Utilities:

2. Common Area Charges: $679.84

3. Taxes: $2,670.80

4. Insurance: $145.68

5. Others: Mgmt. Fee $364.20

 

Initial Estimated Monthly Operating Expense Payments:

$3,860.52

   

Initial Monthly Base Rent and Operating Expense Payments:

$14,422.32

   

Security Deposit:

$14,422.32

   

Broker:

Dave Anderson (CB Richard Ellis)

   

Addenda:

1. Base Rent Adjustments 2. HVAC Maintenance Contract 3. Move Out Conditions 4.
Contruction (Turnkey) 5 One Renewal Option at Market

   

Exhibits:

A. Site Plan

 

 

Granting Clause

. In consideration of the obligation of Tenant to pay rent as herein provided
and in consideration of the other terms, covenants, and conditions hereof,
Landlord leases to Tenant, and Tenant takes from Landlord, the Premises, to have
and to hold for the Lease Term, subject to the terms, covenants and conditions
of this Lease.

Acceptance of Premises

. Tenant shall accept the Premises in its condition as of the Commencement Date,
subject to all applicable laws, ordinances, regulations, covenants and
restrictions. Landlord has made no representation or warranty as to the
suitability of the Premises for the conduct of Tenant's business, and Tenant
waives any implied warranty that the Premises are suitable for Tenant's intended
purposes. Except as provided in Paragraph 10, in no event shall Landlord have
any obligation for any defects in the Premises or any limitation on its use. The
taking of possession of the Premises shall be conclusive evidence that Tenant
accepts the Premises and that the Premises were in good condition at the time
possession was taken except for items that are Landlord's responsibility under
Paragraph 10 and any punchlist items agreed to in writing by Landlord and
Tenant.

Use

. The Premises shall be used only for the purpose of receiving, storing,
shipping and selling (but limited to wholesale sales) products, materials and
merchandise made and/or distributed by Tenant and for such other lawful purposes
as may be incidental thereto; provided, however, with Landlord's prior written
consent, Tenant may also use the Premises for light manufacturing. Tenant shall
not conduct or give notice of any auction, liquidation, or going out of business
sale on the Premises. Tenant will use the Premises in a careful, safe and proper
manner and will not commit waste, overload the floor or structure of the
Premises or subject the Premises to use that would damage the Premises. Tenant
shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise,
or vibrations to emanate from the Premises, or take any other action that would
constitute a nuisance or would disturb, unreasonably interfere with, or endanger
Landlord or any tenants of the Project. Outside storage, including without
limitation, storage of trucks and other vehicles, is prohibited without
Landlord's prior written consent. Tenant, at its sole expense, shall use and
occupy the Premises in compliance with all laws, including, without limitation,
the Americans With Disabilities Act, orders, judgments, ordinances, regulations,
codes, directives, permits, licenses, covenants and restrictions now or
hereafter applicable to the Premises (collectively, "Legal Requirements"). The
Premises shall not be used as a place of public accommodation under the
Americans with Disabilities Act or similar state statutes or local ordinances or
any regulations promulgated thereunder, all as may be amended from time to time.
Tenant shall, at its expense, make any alterations or modifications, within or
without the Premises, that are required by Legal Requirements related to
Tenant's use or occupation of the Premises. Tenant will not use or permit the
Premises to be used for any purpose or in any manner that would void Tenant's or
Landlord's insurance, increase the insurance risk, or cause the disallowance of
any sprinkler credits. If any increase in the cost of any insurance on the
Premises or the Project is caused by Tenant's use or occupation of the Premises,
or because Tenant vacates the Premises, then Tenant shall pay the amount of such
increase to Landlord. Any occupation of the Premises by Tenant prior to the
Commencement Date shall be subject to all obligations of Tenant under this
Lease.

Base Rent

. Tenant shall pay Base Rent in the amount set forth above. The first month's
Base Rent, the Security Deposit, and the first monthly installment of estimated
Operating Expenses (as hereafter defined) shall be due and payable on the date
hereof, and Tenant promises to pay to Landlord in advance, without demand,
deduction or set-off, monthly installments of Base Rent on or before the first
day of each calendar month succeeding the Commencement Date. Payments of Base
Rent for any fractional calendar month shall be prorated. All payments required
to be made by Tenant to Landlord hereunder (or to such other party as Landlord
may from time to time specify in writing) shall be made by check or Electronic
Fund Transfer ("EFT") of immediately available federal funds before 11:00 a.m.,
Eastern Time, at such place, within the continental United States, as Landlord
may from time to time designate to Tenant in writing. The obligation of Tenant
to pay Base Rent and other sums to Landlord and the obligations of Landlord
under this Lease are independent obligations. Tenant shall have no right at any
time to abate, reduce, or set-off any rent due hereunder except as may be
expressly provided in this Lease. If Tenant is delinquent in any monthly
installment of Base Rent or of estimated Operating Expenses for more than 5

business days, Tenant shall pay to Landlord on demand a late charge equal to 8
five (5) percent of such delinquent sum. 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 a penalty, provided however, Tenant shall
be allowed one (1) grace period per year.

Security Deposit

. The Security Deposit shall be held by Landlord as security for the performance
of Tenant's obligations under this Lease. The Security Deposit is not an advance
rental deposit or a measure of Landlord's damages in case of Tenant's default.
Upon each occurrence of an Event of Default (hereinafter defined), Landlord may
use all or part of the Security Deposit to pay delinquent payments due under
this Lease, and the cost of any damage, injury, expense or liability caused by
such Event of Default, without prejudice to any other remedy provided herein or
provided by law. Tenant shall pay Landlord on demand the amount that will
restore the Security Deposit to its original amount. Landlord's obligation
respecting the Security Deposit is that of a debtor, not a trustee; no interest
shall accrue thereon. The Security Deposit shall be the property of Landlord,
but shall be paid to Tenant when Tenant's obligations under this Lease have been
completely fulfilled. Landlord shall be released from any obligation with
respect to the Security Deposit upon transfer of this Lease and the Premises to
a person or entity assuming Landlord's obligations under this Paragraph 5.

Operating Expense Payments

. During each month of the Lease Term, on the same date that Base Rent is due,
Tenant shall pay Landlord an amount equal to 1/12 of the annual cost, as
estimated by Landlord from time to time, of Tenant's Proportionate Share
(hereinafter defined) of Operating Expenses for the Project. Payments thereof
for any fractional calendar month shall be prorated. The term "Operating
Expenses" means all costs and expenses incurred by Landlord with respect to the
ownership, maintenance, and operation of the Project including, but not limited
to costs of: Taxes (hereinafter defined) and fees payable to tax consultants and
attorneys for consultation and contesting taxes; insurance; utilities;
maintenance, repair and replacement of all portions of the Project, including
without limitation, paving and parking areas, roads, roofs (including the roof
membrane), alleys, and driveways, mowing, landscaping, snow removal, exterior
painting, utility lines, heating, ventilation and air conditioning systems,
lighting, electrical systems and other mechanical and building systems; amounts
paid to contractors and subcontractors for work or services performed in
connection with any of the foregoing; charges or assessments of any association
to which the Project is subject; property management fees payable to a property
manager, including any affiliate of Landlord, or if there is no property
manager, an administration fee of 15 percent of Operating Expenses payable to
Landlord; security services, if any; trash collection, sweeping and removal; and
additions or alterations made by Landlord to the Project or the Building in
order to comply with Legal Requirements (other than those expressly required
herein to be made by Tenant) or that are appropriate to the continued operation
of the Project or the Building as a bulk warehouse facility in the market area,
provided that the cost of additions or alterations that are required to be
capitalized for federal income tax purposes shall be amortized on a straight
line basis over a period equal to the lesser of the useful life thereof for
federal income tax purposes or 10 years. Operating Expenses do not include
costs, expenses, depreciation or amortization for capital repairs and capital
replacements required to be made by Landlord under Paragraph 10 of this Lease,
debt service under mortgages or ground rent under ground leases, costs of
restoration to the extent of net insurance proceeds received by Landlord with
respect thereto, leasing commissions, or the costs of renovating space for
tenants. Notwithstanding the foregoing, Landlord will reimburse Tenant any
overpayment of Operating Expenses from the prior year within a reasonable time
following final year-end reconciliations.

If Tenant's total payments of Operating Expenses for any year are less than
Tenant's Proportionate Share of actual Operating Expenses for such year, then
Tenant shall pay the difference to Landlord within 30 days after demand, and if
more, then Landlord shall retain such excess and credit it against Tenant's next
payments.

Notwithstanding the foregoing, provided Tenant is not in default under the
current Lease, Landlord will reimburse Tenant for any overpayment of Operating
Expenses from prior year within a reasonable time following final year-end
reconciliations. For purposes of calculating Tenant's Proportionate Share of
Operating Expenses, a year shall mean a calendar year except the first year,
which shall begin on the Commencement Date, and the last year, which shall end
on the expiration of this Lease. With respect to Operating Expenses which
Landlord allocates to the entire Project, Tenant's "Proportionate Share" shall
be the percentage set forth on the first page of this Lease as Tenant's
Proportionate Share of the Project as reasonably adjusted by Landlord in the
future for changes in the physical size of the Premises or the Project; and,
with respect to Operating Expenses which Landlord allocates only to the
Building, Tenant's "Proportionate Share" shall be the percentage set forth on
the first page of this Lease as Tenant's Proportionate Share of the Building as
reasonably adjusted by Landlord in the future for changes in the physical size
of the Premises or the Building. Landlord may equitably increase Tenant's
Proportionate Share for any item of expense or cost reimbursable by Tenant that
relates to a repair, replacement, or service that benefits only the Premises or
only a portion of the Project or Building that includes the Premises or that
varies with occupancy or use. The estimated Operating Expenses for the Premises
set forth on the first page of this Lease are only estimates, and Landlord makes
no guaranty or warranty that such estimates will be accurate.

Utilities

. Tenant shall pay for all water, gas, electricity, heat, light, power,
telephone, sewer, sprinkler services, refuse and trash collection, and other
utilities and services used on the Premises, all maintenance charges for
utilities, and any storm sewer charges or other similar charges for utilities
imposed by any governmental entity or utility provider, together with any taxes,
penalties, surcharges or the like pertaining to Tenant's use of the Premises.
Landlord may cause at Tenant's expense any utilities to be separately metered or
charged directly to Tenant by the provider. Tenant shall pay its share of all
charges for jointly metered utilities based upon consumption, as reasonably
determined by Landlord. No interruption or failure of utilities shall result in
the termination of this Lease or the abatement of rent. Tenant agrees to limit
use of water and sewer for normal restroom use.

Taxes

. Landlord shall pay all taxes, assessments and governmental charges
(collectively referred to as "Taxes") that accrue against the Project during the
Lease Term, which shall be included as part of the Operating Expenses charged to
Tenant. Landlord may contest by appropriate legal proceedings the amount,
validity, or application of any Taxes or liens thereof. All capital levies or
other taxes assessed or imposed on Landlord upon the rents payable to Landlord
under this Lease and any franchise tax, any excise, transaction, sales or
privilege tax, assessment, levy or charge measured by or based, in whole or in
part, upon such rents from the Premises and/or the Project or any portion
thereof shall be paid by Tenant to Landlord monthly in estimated installments or
upon demand, at the option of Landlord, as additional rent; provided, however,
in no event shall Tenant be liable for any net income taxes imposed on Landlord
unless such net income taxes are in substitution for any Taxes payable
hereunder. If any such tax or excise is levied or assessed directly against
Tenant, then Tenant shall be responsible for and shall pay the same at such
times and in such manner as the taxing authority shall require. Tenant shall be
liable for all taxes levied or assessed against any personal property or
fixtures placed in the Premises, whether levied or assessed against Landlord or
Tenant.

Insurance

. Landlord shall maintain all risk property insurance covering the full
replacement cost of the Building. Landlord may, but is not obligated to,
maintain such other insurance and additional coverages as it may deem necessary,
including, but not limited to, commercial liability insurance and rent loss
insurance. All such insurance shall be included as part of the Operating
Expenses charged to Tenant. The Project or Building may be included in a blanket
policy (in which case the cost of such insurance allocable to the Project or
Building will be determined by Landlord based upon the insurer's cost
calculations). Tenant shall also reimburse Landlord for any increased premiums
or additional insurance which Landlord reasonably deems necessary as a result of
Tenant's use of the Premises.

Tenant, at its expense, shall maintain during the Lease Term: all risk property
insurance covering the full replacement cost of all property and improvements
installed or placed in the Premises by Tenant at Tenant's expense; worker's
compensation insurance with no less than the minimum limits required by law;
employer's liability insurance with such limits as required by law; and
commercial liability insurance, with a minimum limit of $1,000,000 per
occurrence and a minimum umbrella limit of $1,000,000, for a total minimum
combined general liability and umbrella limit of $2,000,000 (together with such
additional umbrella coverage as Landlord may reasonably require) for property
damage, personal injuries, or deaths of persons occurring in or about the
Premises. Landlord may from time to time require reasonable increases in any
such limits. The commercial liability policies shall name Landlord as an
additional insured, insure on an occurrence and not a claims-made basis, be
issued by insurance companies which are reasonably acceptable to Landlord, not
be cancelable unless 30 days' prior written notice shall have been given to
Landlord, contain a hostile fire endorsement and a contractual liability
endorsement and provide primary coverage to Landlord (any policy issued to
Landlord providing duplicate or similar coverage shall be deemed excess over
Tenant's policies). Such policies or certificates thereof shall be delivered to
Landlord by Tenant upon commencement of the Lease Term and upon each renewal of
said insurance.

The all risk property insurance obtained by Landlord and Tenant shall include a
waiver of subrogation by the insurers and all rights based upon an assignment
from its insured, against Landlord or Tenant, their officers, directors,
employees, managers, agents, invitees and contractors, in connection with any
loss or damage thereby insured against. Neither party nor its officers,
directors, employees, managers, agents, invitees or contractors shall be liable
to the other for loss or damage caused by any risk coverable by all risk
property insurance, and each party waives any claims against the other party,
and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver. Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims against
such parties for, business interruption and losses occasioned thereby sustained
by Tenant or any person claiming through Tenant resulting from any accident or
occurrence in or upon the Premises or the Project from any cause whatsoever,
including without limitation, damage caused in whole or in part, directly or
indirectly, by the negligence of Landlord or its agents, employees or
contractors.

Landlord's Repairs

. Landlord shall maintain, at its expense, the structural soundness of the roof,
foundation, and exterior walls of the Building in good repair, reasonable wear
and tear and uninsured losses and damages caused by Tenant, its agents and
contractors excluded. The term "walls" as used in this Paragraph 10 shall not
include windows, glass or plate glass, doors or overhead doors, special store
fronts, dock bumpers, dock plates or levelers, or office entries. Tenant shall
promptly give Landlord written notice of any repair required by Landlord
pursuant to this Paragraph 10, after which Landlord shall have a reasonable
opportunity to repair.

Tenant's Repairs

. Landlord, at Tenant's expense as provided in Paragraph 6, shall maintain in
good repair and condition the parking areas and other common areas of the
Building, including, but not limited to driveways, alleys, landscape and grounds
surrounding the Premises. Subject to Landlord's obligation in Paragraph 10 and
subject to Paragraphs 9 and 15, Tenant, at its expense, shall repair, replace
and maintain in good condition all portions of the Premises and all areas,
improvements and systems exclusively serving the Premises including, without
limitation, dock and loading areas, truck doors, plumbing, water and sewer lines
up to points of common connection, fire sprinklers and fire protection systems,
entries, doors, ceilings, windows, interior walls, and the interior side of
demising walls, and heating, ventilation and air conditioning systems. Such
repair and replacements include capital expenditures and repairs whose benefit
may extend beyond the Term. Heating, ventilation and air conditioning systems
and other mechanical and building systems serving the Premises shall be
maintained at Tenant's expense pursuant to maintenance service contracts entered
into by Tenant or, at Landlord's election, by Landlord. The scope of services
and contractors under such maintenance contracts shall be reasonably approved by
Landlord. At Landlord's request, Tenant shall enter into a joint maintenance
agreement with any railroad that services the Premises. If Tenant fails to
perform any repair or replacement for which it is responsible, Landlord may
perform such work and be reimbursed by Tenant within 10 days after demand
therefore. Subject to Paragraphs 9 and 15, Tenant shall bear the full cost of
any repair or replacement to any part of the Building or Project that results
from damage caused by Tenant, its agents, contractors, or invitees and any
repair that benefits only the Premises. (See Addendum 2.)

Tenant-Made Alterations and Trade Fixtures.

Any alterations, additions, or improvements made by or on behalf of Tenant to
the Premises ("Tenant-Made Alterations") shall be subject to Landlord's prior
written consent. Tenant shall cause, at its expense, all Tenant-Made Alterations
to comply with insurance requirements and with Legal Requirements and shall
construct at its expense any alteration or modification required by Legal
Requirements as a result of any Tenant-Made Alterations. All Tenant-Made
Alterations shall be constructed in a good and workmanlike manner by contractors
reasonably acceptable to Landlord and only good grades of materials shall be
used. All plans and specifications for any Tenant-Made Alterations shall be
submitted to Landlord for its approval. Landlord may monitor construction of the
Tenant-Made Alterations. Tenant shall reimburse Landlord for its costs in
reviewing plans and specifications and in monitoring construction. Landlord's
right to review plans and specifications and to monitor construction shall be
solely for its own benefit, and Landlord shall have no duty to see that such
plans and specifications or construction comply with applicable laws, codes,
rules and regulations. Tenant shall provide Landlord with the identities and
mailing addresses of all persons performing work or supplying materials, prior
to beginning such construction, and Landlord may post on and about the Premises
notices of non-responsibility pursuant to applicable law. Tenant shall furnish
security or make other arrangements satisfactory to Landlord to assure payment
for the completion of all work free and clear of liens and shall provide
certificates of insurance for worker's compensation and other coverage in
amounts and from an insurance company satisfactory to Landlord protecting
Landlord against liability for personal injury or property damage during
construction. Upon completion of any Tenant-Made Alterations, Tenant shall
deliver to Landlord sworn statements setting forth the names of all contractors
and subcontractors who did work on the Tenant-Made Alterations and final lien
waivers from all such contractors and subcontractors. Upon surrender of the
Premises, all Tenant-Made Alterations and any leasehold improvements constructed
by Landlord or Tenant shall remain on the Premises as Landlord's property,
except to the extent Landlord requires removal at Tenant's expense of any such
items or Landlord and Tenant have otherwise agreed in writing in connection with
Landlord's consent to any Tenant-Made Alterations. Tenant shall repair any
damage caused by such removal.

Tenant, at its own cost and expense and without Landlord's prior approval, may
erect such shelves, bins, machinery and trade fixtures (collectively "Trade
Fixtures") in the ordinary course of its business provided that such items do
not alter the basic character of the Premises, do not overload or damage the
Premises, and may be removed without injury to the Premises, and the
construction, erection, and installation thereof complies with all Legal
Requirements and with Landlord's requirements set forth above. Tenant shall
remove its Trade Fixtures and shall repair any damage caused by such removal.

Signs

. Tenant shall not make any changes to the exterior of the Premises, install any
exterior lights, decorations, balloons, flags, pennants, banners, or painting,
or erect or install any signs, windows or door lettering, placards, decorations,
or advertising media of any type which can be viewed from the exterior of the
Premises, without Landlord's prior written consent. Upon surrender or vacation
of the Premises, Tenant shall have removed all signs and repair, paint, and/or
replace the building facia surface to which its signs are attached. Tenant shall
obtain all applicable governmental permits and approvals for sign and exterior
treatments. All signs, decorations, advertising media, blinds, draperies and
other window treatment or bars or other security installations visible from
outside the Premises shall be subject to Landlord's approval and conform in all
respects to Landlord's requirements.

Parking

. Tenant shall be entitled to park in common with other tenants of the Project
in those areas designated for nonreserved parking. Landlord may allocate parking
spaces among Tenant and other tenants in the Project if Landlord determines that
such parking facilities are becoming crowded. Landlord shall not be responsible
for enforcing Tenant's parking rights against any third parties.

Restoration.

If at any time during the Lease Term the Premises are damaged by a fire or other
casualty, Landlord shall notify Tenant within 60 days after such damage as to
the amount of time Landlord reasonably estimates it will take to restore the
Premises. If the restoration time is estimated to exceed 6 months, either
Landlord or Tenant may elect to terminate this Lease upon notice to the other
party given no later than 30 days after Landlord's notice. If neither party
elects to terminate this Lease or if Landlord estimates that restoration will
take 6 months or less, then, subject to receipt of sufficient insurance
proceeds, Landlord shall promptly restore the Premises excluding the
improvements installed by Tenant or by Landlord and paid by Tenant, subject to
delays arising from the collection of insurance proceeds or from Force Majeure
events. Tenant at Tenant's expense shall promptly perform, subject to delays
arising from the collection of insurance proceeds, or from Force Majeure events,
all repairs or restoration not required to be done by Landlord and shall
promptly re-enter the Premises and commence doing business in accordance with
this Lease. Notwithstanding the foregoing, either party may terminate this Lease
if the Premises are damaged during the last year of the Lease Term and Landlord
reasonably estimates that it will take more than one month to repair such
damage. Base Rent and Operating Expenses shall be abated for the period of
repair and restoration in the proportion which the area of the Premises, if any,
which is not usable by Tenant bears to the total area of the Premises. Such
abatement shall be the sole remedy of Tenant, and except as provided herein,
Tenant waives any right to terminate the Lease by reason of damage or casualty
loss.

Condemnation

. If any part of the Premises or the Project should be taken for any public or
quasi-public use under governmental law, ordinance, or regulation, or by right
of eminent domain, or by private purchase in lieu thereof (a "Taking" or
"Taken"), and the Taking would prevent or materially interfere with Tenant's use
of the Premises or in Landlord's judgment would materially interfere with or
impair its ownership or operation of the Project, then upon written notice by
Landlord this Lease shall terminate and Base Rent shall be apportioned as of
said date. If part of the Premises shall be Taken, and this Lease is not
terminated as provided above, the Base Rent payable hereunder during the
unexpired Lease Term shall be reduced to such extent as may be fair and
reasonable under the circumstances. In the event of any such Taking, Landlord
shall be entitled to receive the entire price or award from any such Taking
without any payment to Tenant, and Tenant hereby assigns to Landlord Tenant's
interest, if any, in such award. Tenant shall have the right, to the extent that
same shall not diminish Landlord's award, to make a separate claim against the
condemning authority (but not Landlord) for such compensation as may be
separately awarded or recoverable by Tenant for moving expenses and damage to
Tenant's Trade Fixtures, if a separate award for such items is made to Tenant.

Assignment and Subletting

. Without Landlord's prior written consent, Tenant shall not assign this Lease
or sublease the Premises or any part thereof or mortgage, pledge, or hypothecate
its leasehold interest or grant any concession or license within the Premises
and any attempt to do any of the foregoing shall be void and of no effect. For
purposes of this paragraph, a transfer of the ownership interests controlling
Tenant shall be deemed an assignment of this Lease unless such ownership
interests are publicly traded. Notwithstanding the above, Tenant may assign or
sublet the Premises, or any part thereof, to any entity controlling Tenant,
controlled by Tenant or under common control with Tenant (a "Tenant Affiliate"),
without the prior written consent of Landlord. Tenant shall reimburse Landlord
for all of Landlord's reasonable out-of-pocket expenses in connection with any
assignment or sublease. Upon Landlord's receipt of Tenant's written notice of a
desire to assign or sublet the Premises, or any part thereof (other than to a
Tenant Affiliate), Landlord may, by giving written notice to Tenant within 30
days after receipt of Tenant's notice, terminate this Lease with respect to the
space described in Tenant's notice, as of the date specified in Tenant's notice
for the commencement of the proposed assignment or sublease.

Notwithstanding any assignment or subletting, Tenant and any guarantor or surety
of Tenant's obligations under this Lease shall at all times remain fully
responsible and liable for the payment of the rent and for compliance with all
of Tenant's other obligations under this Lease (regardless of whether Landlord's
approval has been obtained for any such assignments or sublettings). In the
event that the rent due and payable by a sublessee or assignee (or a combination
of the rental payable under such sublease or assignment plus any bonus or other
consideration therefor or incident thereto) exceeds the rental payable under
this Lease, then Tenant shall be bound and obligated to pay Landlord as
additional rent hereunder all such excess rental and other excess consideration
within 10 days following receipt thereof by Tenant.

If this Lease be assigned or if the Premises be subleased (whether in whole or
in part) or in the event of the mortgage, pledge, or hypothecation of Tenant's
leasehold interest or grant of any concession or license within the Premises or
if the Premises be occupied in whole or in part by anyone other than Tenant,
then upon a default by Tenant hereunder Landlord may collect rent from the
assignee, sublessee, mortgagee, pledgee, party to whom the leasehold interest
was hypothecated, concessionee or licensee or other occupant and, except to the
extent set forth in the preceding paragraph, apply the amount collected to the
next rent payable hereunder; and all such rentals collected by Tenant shall be
held in trust for Landlord and immediately forwarded to Landlord. No such
transaction or collection of rent or application thereof by Landlord, however,
shall be deemed a waiver of these provisions or a release of Tenant from the
further performance by Tenant of its covenants, duties, or obligations
hereunder.

Indemnification

. Except for the negligence of Landlord, its agents, employees or contractors,
and to the extent permitted by law, Tenant agrees to indemnify, defend and hold
harmless Landlord, and Landlord's agents, employees and contractors, from and
against any and all losses, liabilities, damages, costs and expenses (including
attorneys' fees) resulting from claims by third parties for injuries to any
person and damage to or theft or misappropriation or loss of property occurring
in or about the Project and arising from the use and occupancy of the Premises
or from any activity, work, or thing done, permitted or suffered by Tenant in or
about the Premises or due to any other act or omission of Tenant, its
subtenants, assignees, invitees, employees, contractors and agents. The
furnishing of insurance required hereunder shall not be deemed to limit Tenant's
obligations under this Paragraph 18.

Inspection and Access

. Landlord and its agents, representatives, and contractors may enter the
Premises at any reasonable time to inspect the Premises and to make such repairs
as may be required or permitted pursuant to this Lease and for any other
business purpose. Landlord and Landlord's representatives may enter the Premises
during business hours for the purpose of showing the Premises to prospective
purchasers and, during the last year of the Lease Term, to prospective tenants.
Landlord may erect a suitable sign on the Premises stating the Premises are
available to let or that the Project is available for sale. Landlord may grant
easements, make public dedications, designate common areas and create
restrictions on or about the Premises, provided that no such easement,
dedication, designation or restriction materially interferes with Tenant's use
or occupancy of the Premises. At Landlord's request, Tenant shall execute such
instruments as may be necessary for such easements, dedications or restrictions.

Quiet Enjoyment

. If Tenant shall perform all of the covenants and agreements herein required to
be performed by Tenant, Tenant shall, subject to the terms of this Lease, at all
times during the Lease Term, have peaceful and quiet enjoyment of the Premises
against any person claiming by, through or under Landlord.

Surrender

. Upon termination of the Lease Term or earlier termination of Tenant's right of
possession, Tenant shall surrender the Premises to Landlord in the same
condition as received, broom clean, ordinary wear and tear and casualty loss and
condemnation covered by Paragraphs 15 and 16 excepted. Any Trade Fixtures,
Tenant-Made Alterations and property not so removed by Tenant as permitted or
required herein shall be deemed abandoned and may be stored, removed, and
disposed of by Landlord at Tenant's expense, and Tenant waives all claims
against Landlord for any damages resulting from Landlord's retention and
disposition of such property. All obligations of Tenant hereunder not fully
performed as of the termination of the Lease Term shall survive the termination
of the Lease Term, including without limitation, indemnity obligations, payment
obligations with respect to Operating Expenses and obligations concerning the
condition and repair of the Premises.

Holding Over

. If Tenant retains possession of the Premises after the termination of the
Lease Term, unless otherwise agreed in writing, such possession shall be subject
to immediate termination by Landlord at any time, and all of the other terms and
provisions of this Lease (excluding any expansion or renewal option or other
similar right or option) shall be applicable during such holdover period, except
that Tenant shall pay Landlord from time to time, upon demand, as Base Rent for
the holdover period, an amount equal to double 150% of the Base Rent in effect
on the termination date, computed on a monthly basis for each month or part
thereof during such holding over. All other payments shall continue under the
terms of this Lease. In addition, Tenant shall be liable for all damages
incurred by Landlord as a result of such holding over. No holding over by
Tenant, whether with or without consent of Landlord, shall operate to extend
this Lease except as otherwise expressly provided, and this Paragraph 22 shall
not be construed as consent for Tenant to retain possession of the Premises. For
purposes of this Paragraph 22, "possession of the Premises" shall continue
until, among other things, Tenant has delivered all keys to the Premises to
Landlord, Landlord has complete and total dominion and control over the
Premises, and Tenant has completely fulfilled all obligations required of it
upon termination of the Lease as set forth in this Lease, including, without
limitation, those concerning the condition and repair of the Premises.

Events of Default

. Each of the following events shall be an event of default ("Event of Default")
by Tenant under this Lease:

Tenant shall fail to pay any installment of Base Rent or any other payment
required herein when due, and such failure shall continue for a period of 5

business days from the date such payment was due, provided however, Tenant shall
be allowed one (1) grace period per year.

Tenant or any guarantor or surety of Tenant's obligations hereunder shall (A)
make a general assignment for the benefit of creditors; (B) commence any case,
proceeding or other action seeking to have an order for relief entered on its
behalf as a debtor or to adjudicate it as bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or composition
of it or its debts or seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or of any substantial part of its
property (collectively a "proceeding for relief"); (C) become the subject of any
proceeding for relief which is not dismissed within 60 days of its filing or
entry; or (D) die or suffer a legal disability (if Tenant, guarantor, or surety
is an individual) or be dissolved or otherwise fail to maintain its legal
existence (if Tenant, guarantor or surety is a corporation, partnership or other
entity).

Any insurance required to be maintained by Tenant pursuant to this Lease shall
be cancelled or terminated or shall expire or shall be reduced or materially
changed, except, in each case, as permitted in this Lease.

Tenant shall not occupy or shall vacate the Premises or shall fail to
continuously operate its business at the Premises for the permitted use set
forth herein, whether or not Tenant is in monetary or other default under this
Lease.

Tenant shall attempt or there shall occur any assignment, subleasing or other
transfer of Tenant's interest in or with respect to this Lease except as
otherwise permitted in this Lease.

Tenant shall fail to discharge any lien placed upon the Premises in violation of
this Lease within 30 days after any such lien or encumbrance is filed against
the Premises.

Tenant shall fail to comply with any provision of this Lease other than those
specifically referred to in this Paragraph 23, and except as otherwise expressly
provided herein, such default shall continue for more than 30 days after
Landlord shall have given Tenant written notice of such default.

Landlord's Remedies

. Upon each occurrence of an Event of Default and so long as such Event of
Default shall be continuing, Landlord may at any time thereafter at its
election: terminate this Lease or Tenant's right of possession, (but Tenant
shall remain liable as hereinafter provided) and/or pursue any other remedies at
law or in equity. Upon the termination of this Lease or termination of Tenant's
right of possession, it shall be lawful for Landlord, without formal demand or
notice of any kind, to re-enter the Premises by summary dispossession
proceedings or any other action or proceeding authorized by law and to remove
Tenant and all persons and property therefrom. If Landlord re-enters the
Premises, Landlord shall have the right to keep in place and use, or remove and
store, all of the furniture, fixtures and equipment at the Premises.

If Landlord terminates this Lease, Landlord may recover from Tenant the sum of:
all Base Rent and all other amounts accrued hereunder to the date of such
termination; the cost of reletting the whole or any part of the Premises,
including without limitation brokerage fees and/or leasing commissions incurred
by Landlord, and costs of removing and storing Tenant's or any other occupant's
property, repairing, altering, remodeling, or otherwise putting the Premises
into condition acceptable to a new tenant or tenants, and all reasonable
expenses incurred by Landlord in pursuing its remedies, including reasonable
attorneys' fees and court costs; and the excess of the then present value of the
Base Rent and other amounts payable by Tenant under this Lease as would
otherwise have been required to be paid by Tenant to Landlord during the period
following the termination of this Lease measured from the date of such
termination to the expiration date stated in this Lease, over the present value
of any net amounts which Tenant establishes Landlord can reasonably expect to
recover by reletting the Premises for such period, taking into consideration the
availability of acceptable tenants and other market conditions affecting
leasing. Such present values shall be calculated at a discount rate equal to the
90-day U.S. Treasury bill rate at the date of such termination.

If Landlord terminates Tenant's right of possession (but not this Lease),
Landlord may, but shall be under no obligation to, relet the Premises for the
account of Tenant for such rent and upon such terms as shall be satisfactory to
Landlord without thereby releasing Tenant from any liability hereunder and
without demand or notice of any kind to Tenant. For the purpose of such
reletting Landlord is authorized to make any repairs, changes, alterations, or
additions in or to the Premises as Landlord deems reasonably necessary or
desirable. If the Premises are not relet, then Tenant shall pay to Landlord as
damages a sum equal to the amount of the rental reserved in this Lease for such
period or periods, plus the cost of recovering possession of the Premises
(including attorneys' fees and costs of suit), the unpaid Base Rent and other
amounts accrued hereunder at the time of repossession, and the costs incurred in
any attempt by Landlord to relet the Premises. If the Premises are relet and a
sufficient sum shall not be realized from such reletting [after first deducting
therefrom, for retention by Landlord, the unpaid Base Rent and other amounts
accrued hereunder at the time of reletting, the cost of recovering possession
(including attorneys' fees and costs of suit), all of the costs and expense of
repairs, changes, alterations, and additions, the expense of such reletting
(including without limitation brokerage fees and leasing commissions) and the
cost of collection of the rent accruing therefrom] to satisfy the rent provided
for in this Lease to be paid, then Tenant shall immediately satisfy and pay any
such deficiency. Any such payments due Landlord shall be made upon demand
therefor from time to time and Tenant agrees that Landlord may file suit to
recover any sums falling due from time to time. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter elect in
writing to terminate this Lease for such previous breach.

Exercise by Landlord of any one or more remedies hereunder granted or otherwise
available shall not be deemed to be an acceptance of surrender of the Premises
and/or a termination of this Lease by Landlord, whether by agreement or by
operation of law, it being understood that such surrender and/or termination can
be effected only by the written agreement of Landlord and Tenant. Any law,
usage, or custom to the contrary notwithstanding, Landlord shall have the right
at all times to enforce the provisions of this Lease in strict accordance with
the terms hereof; and the failure of Landlord at any time to enforce its rights
under this Lease strictly in accordance with same shall not be construed as
having created a custom in any way or manner contrary to the specific terms,
provisions, and covenants of this Lease or as having modified the same. Tenant
and Landlord further agree that forbearance or waiver by Landlord to enforce its
rights pursuant to this Lease or at law or in equity, shall not be a waiver of
Landlord's right to enforce one or more of its rights in connection with any
subsequent default. A receipt by Landlord of rent or other payment with
knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in writing and signed by Landlord. To
the greatest extent permitted by law, Tenant waives the service of notice of
Landlord's intention to re-enter as provided for in any statute, or to institute
legal proceedings to that end, and also waives all right of redemption in case
Tenant shall be dispossessed by a judgment or by warrant of any court or judge.
The terms "enter," "re-enter," "entry" or "re-entry," as used in this Lease, are
not restricted to their technical legal meanings. Any reletting of the Premises
shall be on such terms and conditions as Landlord in its sole discretion may
determine (including without limitation a term different than the remaining
Lease Term, rental concessions, alterations and repair of the Premises, lease of
less than the entire Premises to any tenant and leasing any or all other
portions of the Project before reletting the Premises). Landlord shall not be
liable, nor shall Tenant's obligations hereunder be diminished because of,
Landlord's failure to relet the Premises or collect rent due in respect of such
reletting.

Tenant's Remedies/Limitation of Liability

. Landlord shall not be in default hereunder unless Landlord fails to perform
any of its obligations hereunder within 30 days after written notice from Tenant
specifying such failure (unless such performance will, due to the nature of the
obligation, require a period of time in excess of 30 days, then after such
period of time as is reasonably necessary). All obligations of Landlord
hereunder shall be construed as covenants, not conditions; and, except as may be
otherwise expressly provided in this Lease, Tenant may not terminate this Lease
for breach of Landlord's obligations hereunder. All obligations of Landlord
under this Lease will be binding upon Landlord only during the period of its
ownership of the Premises and not thereafter. The term "Landlord" in this Lease
shall mean only the owner, for the time being of the Premises, and in the event
of the transfer by such owner of its interest in the Premises, such owner shall
thereupon be released and discharged from all obligations of Landlord thereafter
accruing, but such obligations shall be binding during the Lease Term upon each
new owner for the duration of such owner's ownership. Any liability of Landlord
under this Lease shall be limited solely to its interest in the Project, and in
no event shall any personal liability be asserted against Landlord in connection
with this Lease nor shall any recourse be had to any other property or assets of
Landlord.

Waiver of Jury Trial

. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS LEASE OR ANY OTHER
INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR THE TRANSACTIONS RELATED HERETO.

Subordination

. This Lease and Tenant's interest and rights hereunder are and shall be subject
and subordinate at all times to the lien of any first mortgage, now existing or
hereafter created on or against the Project or the Premises, and all amendments,
restatements, renewals, modifications, consolidations, refinancing, assignments
and extensions thereof, without the necessity of any further instrument or act
on the part of Tenant. Tenant agrees, at the election of the holder of any such
mortgage, to attorn to any such holder. Tenant agrees upon demand to execute,
acknowledge and deliver such instruments, confirming such subordination and such
instruments of attornment as shall be requested by any such holder. Tenant
hereby appoints Landlord attorney in fact for Tenant irrevocably (such power of
attorney being coupled with an interest) to execute, acknowledge and deliver any
such instrument and instruments for and in the name of the Tenant and to cause
any such instrument to be recorded. Notwithstanding the foregoing, any such
holder may at any time subordinate its mortgage to this Lease, without Tenant's
consent, by notice in writing to Tenant, and thereupon this Lease shall be
deemed prior to such mortgage without regard to their respective dates of
execution, delivery or recording and in that event such holder shall have the
same rights with respect to this Lease as though this Lease had been executed
prior to the execution, delivery and recording of such mortgage and had been
assigned to such holder. The term "mortgage" whenever used in this Lease shall
be deemed to include deeds of trust, security assignments and any other
encumbrances, and any reference to the "holder" of a mortgage shall be deemed to
include the beneficiary under a deed of trust.

Mechanic's Liens

. Tenant has no express or implied authority to create or place any lien or
encumbrance of any kind upon, or in any manner to bind the interest of Landlord
or Tenant in, the Premises or to charge the rentals payable hereunder for any
claim in favor of any person dealing with Tenant, including those who may
furnish materials or perform labor for any construction or repairs. Tenant
covenants and agrees that it will pay or cause to be paid all sums legally due
and payable by it on account of any labor performed or materials furnished in
connection with any work performed on the Premises and that it will save and
hold Landlord harmless from all loss, cost or expense based on or arising out of
asserted claims or liens against the leasehold estate or against the interest of
Landlord in the Premises or under this Lease. Tenant shall give Landlord
immediate written notice of the placing of any lien or encumbrance against the
Premises and cause such lien or encumbrance to be discharged within 30 days of
the filing or recording thereof; provided, however, Tenant may contest such
liens or encumbrances as long as such contest prevents foreclosure of the lien
or encumbrance and Tenant causes such lien or encumbrance to be bonded or
insured over in a manner satisfactory to Landlord within such 30 day period.

Estoppel Certificates

. Tenant agrees, from time to time, within 10 days after request of Landlord, to
execute and deliver to Landlord, or Landlord's designee, any estoppel
certificate requested by Landlord, stating that this Lease is in full force and
effect, the date to which rent has been paid, that Landlord is not in default
hereunder (or specifying in detail the nature of Landlord's default), the
termination date of this Lease and such other matters pertaining to this Lease
as may be requested by Landlord. Tenant's obligation to furnish each estoppel
certificate in a timely fashion is a material inducement for Landlord's
execution of this Lease. No cure or grace period provided in this Lease shall
apply to Tenant's obligations to timely deliver an estoppel certificate. Tenant
hereby irrevocably appoints Landlord as its attorney in fact to execute on its
behalf and in its name any such estoppel certificate if Tenant fails to execute
and deliver the estoppel certificate within 10 days after Landlord's written
request thereof.

Environmental Requirements

. Except for Hazardous Material contained in products used by Tenant in de
minimis quantities for ordinary cleaning and office purposes, Tenant shall not
permit or cause any party to bring any Hazardous Material upon the Premises or
transport, store, use, generate, manufacture or release any Hazardous Material
in or about the Premises without Landlord's prior written consent. Tenant, at
its sole cost and expense, shall operate its business in the Premises in strict
compliance with all Environmental Requirements and shall remediate in a manner
satisfactory to Landlord any Hazardous Materials released on or from the Project
by Tenant, its agents, employees, contractors, subtenants or invitees. Tenant
shall complete and certify to disclosure statements as requested by Landlord
from time to time relating to Tenant's transportation, storage, use, generation,
manufacture or release of Hazardous Materials on the Premises. The term
"Environmental Requirements" means all applicable present and future statutes,
regulations, ordinances, rules, codes, judgments, orders or other similar
enactments of any governmental authority or agency regulating or relating to
health, safety, or environmental conditions on, under, or about the Premises or
the environment, including without limitation, the following: the Comprehensive
Environmental Response, Compensation and Liability Act; the Resource
Conservation and Recovery Act; and all state and local counterparts thereto, and
any regulations or policies promulgated or issued thereunder. The term
"Hazardous Materials" means and includes any substance, material, waste,
pollutant, or contaminant listed or defined as hazardous or toxic, under any
Environmental Requirements, asbestos and petroleum, including crude oil or any
fraction thereof, natural gas liquids, liquified natural gas, or synthetic gas
usable for fuel (or mixtures of natural gas and such synthetic gas). As defined
in Environmental Requirements, Tenant is and shall be deemed to be the
"operator" of Tenant's "facility" and the "owner" of all Hazardous Materials
brought on the Premises by Tenant, its agents, employees, contractors or
invitees, and the wastes, by-products, or residues generated, resulting, or
produced therefrom.

Tenant shall indemnify, defend, and hold Landlord harmless from and against any
and all losses (including, without limitation, diminution in value of the
Premises or the Project and loss of rental income from the Project), claims,
demands, actions, suits, damages (including, without limitation, punitive
damages), expenses (including, without limitation, remediation, removal, repair,
corrective action, or cleanup expenses), and costs (including, without
limitation, actual attorneys' fees, consultant fees or expert fees and
including, without limitation, removal or management of any asbestos brought
into the property or disturbed in breach of the requirements of this Paragraph
30, regardless of whether such removal or management is required by law) which
are brought or recoverable against, or suffered or incurred by Landlord as a
result of any release of Hazardous Materials for which Tenant is obligated to
remediate as provided above or any other breach of the requirements under this
Paragraph 30 by Tenant, its agents, employees, contractors, subtenants,
assignees or invitees, regardless of whether Tenant had knowledge of such
noncompliance. The obligations of Tenant under this Paragraph 30 shall survive
any termination of this Lease.

Landlord shall have access to, and a right to perform inspections and tests of,
the Premises to determine Tenant's compliance with Environmental Requirements,
its obligations under this Paragraph 30, or the environmental condition of the
Premises. Access shall be granted to Landlord upon Landlord's prior notice to
Tenant and at such times so as to minimize, so far as may be reasonable under
the circumstances, any disturbance to Tenant's operations. Such inspections and
tests shall be conducted at Landlord's expense, unless such inspections or tests
reveal that Tenant has not complied with any Environmental Requirement, in which
case Tenant shall reimburse Landlord for the reasonable cost of such inspection
and tests. Landlord's receipt of or satisfaction with any environmental
assessment in no way waives any rights that Landlord holds against Tenant.

Rules and Regulations

. Tenant shall, at all times during the Lease Term and any extension thereof,
comply with all reasonable rules and regulations at any time or from time to
time established by Landlord covering use of the Premises and the Project. The
current rules and regulations are attached hereto. In the event of any conflict
between said rules and regulations and other provisions of this Lease, the other
terms and provisions of this Lease shall control. Landlord shall not have any
liability or obligation for the breach of any rules or regulations by other
tenants in the Project.

Security Service

. Tenant acknowledges and agrees that, while Landlord may patrol the Project,
Landlord is not providing any security services with respect to the Premises and
that Landlord shall not be liable to Tenant for, and Tenant waives any claim
against Landlord with respect to, any loss by theft or any other damage suffered
or incurred by Tenant in connection with any unauthorized entry into the
Premises or any other breach of security with respect to the Premises.

Force Majeure

. Landlord shall not be held responsible for delays in the performance of its
obligations hereunder when caused by strikes, lockouts, labor disputes, acts of
God, inability to obtain labor or materials or reasonable substitutes therefor,
governmental restrictions, governmental regulations, governmental controls,
delay in issuance of permits, enemy or hostile governmental action, civil
commotion, fire or other casualty, and other causes beyond the reasonable
control of Landlord ("Force Majeure").

Entire Agreement

. This Lease constitutes the complete agreement of Landlord and Tenant with
respect to the subject matter hereof. No representations, inducements, promises
or agreements, oral or written, have been made by Landlord or Tenant, or anyone
acting on behalf of Landlord or Tenant, which are not contained herein, and any
prior agreements, promises, negotiations, or representations are superseded by
this Lease. This Lease may not be amended except by an instrument in writing
signed by both parties hereto.

Severability

. If any clause or provision of this Lease is illegal, invalid or unenforceable
under present or future laws, then and in that event, it is the intention of the
parties hereto that the remainder of this Lease shall not be affected thereby.
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, 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.

Brokers

. Tenant represents and warrants that it has dealt with no broker, agent or
other person in connection with this transaction and that no broker, agent or
other person brought about this transaction, other than the broker, if any, set
forth on the first page of this Lease, and Tenant agrees to indemnify and hold
Landlord harmless from and against any claims by any other broker, agent or
other person claiming a commission or other form of compensation by virtue of
having dealt with Tenant with regard to this leasing transaction.

Miscellaneous

. (a) Any payments or charges due from Tenant to Landlord hereunder shall be
considered rent for all purposes of this Lease.

If and when included within the term "Tenant," as used in this instrument, there
is more than one person, firm or corporation, each shall be jointly and
severally liable for the obligations of Tenant.

All notices required or permitted to be given under this Lease shall be in
writing and shall be sent by registered or certified mail, return receipt
requested, or by a reputable national overnight courier service, postage
prepaid, or by hand delivery addressed to the parties at their addresses below,
and with a copy sent to Landlord at 4545 Airport Way, Denver, Colorado 80239.
Either party may by notice given aforesaid change its address for all subsequent
notices. Except where otherwise expressly provided to the contrary, notice shall
be deemed given upon delivery.

Except as otherwise expressly provided in this Lease or as otherwise required by
law, Landlord retains the absolute right to withhold any consent or approval.

At Landlord's request from time to time Tenant shall furnish Landlord with true
and complete copies of its most recent annual and quarterly financial statements
prepared by Tenant or Tenant's accountants and any other financial information
or summaries that Tenant typically provides to its lenders or shareholders.

Neither this Lease nor a memorandum of lease shall be filed by or on behalf of
Tenant in any public record. Landlord may prepare and file, and upon request by
Landlord Tenant will execute, a memorandum of lease.

Intentionally Deleted.

The normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Lease or any exhibits or amendments hereto.

The submission by Landlord to Tenant of this Lease shall have no binding force
or effect, shall not constitute an option for the leasing of the Premises, nor
confer any right or impose any obligations upon either party until execution of
this Lease by both parties.

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. 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.

Any amount not paid by Tenant within 5

business days after its due date in accordance with the terms of this Lease
shall bear interest from such due date until paid in full at the lesser of the
highest rate permitted by applicable law or 15 percent per year (does not apply
to grace period). It is expressly the intent of Landlord and Tenant at all times
to comply with applicable law governing the maximum rate or amount of any
interest payable on or in connection with this Lease.  If applicable law is ever
judicially interpreted so as to render usurious any interest called for under
this Lease, or contracted for, charged, taken, reserved, or received with
respect to this Lease, then it is Landlord's and Tenant's express intent that
all excess amounts theretofore collected by Landlord be credited on the
applicable obligation (or, if the obligation has been or would thereby be paid
in full, refunded to Tenant), and the provisions of this Lease immediately shall
be deemed reformed and the amounts thereafter collectible hereunder reduced,
without the necessity of the execution of any new document, so as to comply with
the applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder.

Construction and interpretation of this Lease shall be governed by the laws of
the state in which the Project is located, excluding any principles of conflicts
of laws.

Time is of the essence as to the performance of Tenant's obligations under this
Lease.

All exhibits and addenda attached hereto are hereby incorporated into this Lease
and made a part hereof. In the event of any conflict between such exhibits or
addenda and the terms of this Lease, such exhibits or addenda shall control.

(n) In the event either party hereto initiates litigation to enforce the terms
and provisions of this Lease, the non-prevailing party in such action shall
reimburse the prevailing party for its reasonable attorney's fees, filing fees,
and court costs.

Landlord's Lien/Security Interest

. Tenant hereby grants Landlord a security interest, and this Lease constitutes
a security agreement, within the meaning of and pursuant to the Uniform
Commercial Code of the state in which the Premises are situated as to all of
Tenant's property situated in, or upon, or used in connection with the Premises
(except merchandise sold in the ordinary course of business) as security for all
of Tenant's obligations hereunder, including, without limitation, the obligation
to pay rent. Such personalty thus encumbered includes specifically all trade and
other fixtures for the purpose of this Paragraph and inventory, equipment,
contract rights, accounts receivable and the proceeds thereof. In order to
perfect such security interest, Tenant shall execute such financing statements
and file the same at Tenant's expense at the state and county Uniform Commercial
Code filing offices as often as Landlord in its discretion shall require; and
Tenant hereby irrevocably appoints Landlord its agent for the purpose of
executing and filing such financing statements on Tenant's behalf as Landlord
shall deem necessary.

Limitation of Liability of Trustees, Shareholders, and Officers of ProLogis

. Any obligation or liability whatsoever of ProLogis, a Maryland real estate
investment trust, which may arise at any time under this Lease or any obligation
or liability which may be incurred by it pursuant to any other instrument,
transaction, or undertaking contemplated hereby shall not be personally binding
upon, nor shall resort for the enforcement thereof be had to the property of,
its trustees, directors, shareholders, officers, employees or agents, regardless
of whether such obligation or liability is in the nature of contract, tort, or
otherwise.

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

TENANT:

 

LANDLORD:

     

Adams Golf, Ltd.

 

MDN / JSC - II Limited

By: /S/ Eric Logan

 

By: /S/ Eric Brown

Name: Eric Logan

 

Name: Eric Brown

Title: CFO

 

Title: Senior Vice President

Address:

 

Address:

2800 Technology Dr

 

2310 LBJ Freeway

Suite 300

 

Suite 200

Plano, TX 75074

 

Dallas, TX 75234

     

 

Rules and Regulations

The sidewalk, entries, and driveways of the Project shall not be obstructed by
Tenant, or its agents, or used by them for any purpose other than ingress and
egress to and from the Premises.

Tenant shall not place any objects, including antennas, outdoor furniture, etc.,
in the parking areas, landscaped areas or other areas outside of its Premises,
or on the roof of the Project.

Except for seeing-eye dogs, no animals shall be allowed in the offices, halls,
or corridors in the Project.

Tenant shall not disturb the occupants of the Project or adjoining buildings by
the use of any radio or musical instrument or by the making of loud or improper
noises.

If Tenant desires telegraphic, telephonic or other electric connections in the
Premises, Landlord or its agent will direct the electrician as to where and how
the wires may be introduced; and, without such direction, no boring or cutting
of wires will be permitted. Any such installation or connection shall be made at
Tenant's expense.

Tenant shall not install or operate any steam or gas engine or boiler, or other
mechanical apparatus in the Premises, except as specifically approved in the
Lease. The use of oil, gas or inflammable liquids for heating, lighting or any
other purpose is expressly prohibited. Explosives or other articles deemed extra
hazardous shall not be brought into the Project.

Parking any type of recreational vehicles is specifically prohibited on or about
the Project. Further, parking any type of trucks, trailers or other vehicles in
the Premises is specifically prohibited. Except for the overnight parking of
operative vehicles, no vehicle of any type shall be stored in the parking areas
at any time. In the event that a vehicle is disabled, it shall be removed within
48 hours. There shall be no "For Sale" or other advertising signs on or about
any parked vehicle. All vehicles shall be parked in the designated parking areas
in conformity with all signs and other markings. All parking will be open
parking, and no reserved parking, numbering or lettering of individual spaces
will be permitted except as specified by Landlord.

Tenant shall maintain the Premises free from rodents, insects and other pests.

Landlord reserves the right to exclude or expel from the Project any person who,
in the judgment of Landlord, is intoxicated or under the influence of liquor or
drugs or who shall in any manner do any act in violation of the Rules and
Regulations of the Project.

Tenant shall not cause any unnecessary labor by reason of Tenant's carelessness
or indifference in the preservation of good order and cleanliness. Landlord
shall not be responsible to Tenant for any loss of property on the Premises,
however occurring, or for any damage done to the effects of Tenant by the
janitors or any other employee or person.

Tenant shall give Landlord prompt notice of any defects in the water, lawn
sprinkler, sewage, gas pipes, electrical lights and fixtures, heating apparatus,

HVAC system, or any other service equipment affecting the Premises.

Tenant shall not permit storage outside the Premises, including without
limitation, outside storage of trucks and other vehicles, or dumping of waste or
refuse or permit any harmful materials to be placed in any drainage system or
sanitary system in or about the Premises.

All moveable trash receptacles provided by the trash disposal firm for the
Premises must be kept in the trash enclosure areas, if any, provided for that
purpose.

No auction, public or private, will be permitted on the Premises or the Project.

No awnings shall be placed over the windows in the Premises except with the
prior written consent of Landlord.

The Premises shall not be used for lodging, sleeping or cooking or for any
immoral or illegal purposes or for any purpose other than that specified in the
Lease. No gaming devices shall be operated in the Premises.

Tenant shall ascertain from Landlord the maximum amount of electrical current
which can safely be used in the Premises, taking into account the capacity of
the electrical wiring in the Project and the Premises and the needs of other
tenants, and shall not use more than such safe capacity. Landlord's consent to
the installation of electric equipment shall not relieve Tenant from the
obligation not to use more electricity than such safe capacity.

Tenant assumes full responsibility for protecting the Premises from theft,
robbery and pilferage.

Tenant shall not install or operate on the Premises any machinery or mechanical
devices of a nature not directly related to Tenant's ordinary use of the
Premises and shall keep all such machinery free of vibration, noise and air
waves which may be transmitted beyond the Premises.

ADDENDUM 1

BASE RENT ADJUSTMENTS

ATTACHED TO AND A PART OF THE LEASE AGREEMENT

DATED , BETWEEN

MDN / JSC - II Limited

and

Adams Golf, Ltd.

 

Base Rent shall equal the following amounts for the respective periods set forth
below:

Period

Monthly Base Rent

Months 1-3

$0.00*

Months 4 - 26

$10,561.80

*Tenant to pay Operating Expenses over entire Lease term.

ADDENDUM 2

HVAC MAINTENANCE CONTRACT

ATTACHED TO AND A PART OF THE LEASE AGREEMENT

DATED , BETWEEN

MDN / JSC - II Limited

and

Adams Golf, Ltd.

 

Paragraph 11, captioned "TENANT REPAIRS," is revised to include the following:

Tenant agrees to enter into and maintain through the term of the Lease, a
regularly scheduled preventative maintenance/service contract for servicing all
hot water, heating and air conditioning systems and equipment within the
Premises. Landlord requires a qualified HVAC contractor perform this work. A
certificate must be provided to the Landlord upon occupancy of the leased
Premises.

All electrical, plumbing, and mechanical systems will be delivered in good
working order to the Tenant at the time of occupancy. Landlord will warranty the
existing HVAC system for the first 180 days. Furthermore, Landlord will repair
HVAC system per the "TMAC Mechanical" Report dated as of August 8, 2006. After
the first 180 days of the primary lease term, in the event that an HVAC system
repair is necessary, Tenant will pay an HVAC Repair Deductible of $1,000.00
$800.00 per occurrence. Any charges beyond the $1,000.00 $800.00 Deductible will
be paid by Landlord.

The service contract must become effective within thirty (30) days of occupancy,
and service visits should be performed on a quarterly basis. Landlord suggests
that Tenant send the following list to a qualified HVAC contractor to be assured
that these items are included in the maintenance contract:

1. Adjust belt tension;

2. Lubricate all moving parts, as necessary;

3. Inspect and adjust all temperature and safety controls;

4. Check refrigeration system for leaks and operation;

5. Check refrigeration system for moisture;

6. Inspect compressor oil level and crank case heaters;

7. Check head pressure, suction pressure and oil pressure;

8. Inspect air filters and replace when necessary;

9. Check space conditions;

10. Check condensate drains and drain pans and clean, if necessary;

11. Inspect and adjust all valves;

12. Check and adjust dampers;

13. Run machine through complete cycle.

 

 

ADDENDUM 3

MOVE-OUT CONDITIONS

ATTACHED TO AND A PART OF THE LEASE AGREEMENT

DATED , BETWEEN

MDN / JSC - II Limited

and

Adams Golf, Ltd.

 

Per Paragraph 21, Tenant is obligated to check and address prior to move-out of
the Premises the following items. Landlord expects to receive the Premises in a
well maintained condition, with normal wear and tear of certain areas
acceptable. The following list is designed to assist Tenant in the move-out
procedures but is not intended to be all inclusive.

1. All lighting is to be placed into good working order. This includes
replacement of bulbs, ballasts, and lenses as needed.

2. All truck doors and dock levelers should be serviced and placed in good
operating order. This would include the necessary replacement of any dented
truck door panels and adjustment of door tension to insure proper operation. All
door panels which are replaced need to be painted to match the Building
standard.

3. All structural steel columns in the warehouse and office should be inspected
for damage. Repairs of this nature should be pre-approved by the Landlord prior
to implementation.

4. Heating/air-conditioning systems should be placed in good working order,
including the necessary replacement of any parts to return the unit to a well
maintained condition. This includes warehouse heaters and exhaust fans. Upon
move-out, Landlord will have an exit inspection performed by a certified
mechanical contractor to determine the condition.

5. All holes in the sheet rock walls should be repaired prior to move-out.

6. The carpets and vinyl tiles should be in a clean condition and should not
have any holes or chips in them. Landlord will accept normal wear on these items
provided they appear to be in a maintained condition.

7. Facilities should be returned in a clean condition which would include
cleaning of the coffee bar, restroom areas, windows, and other portions of the
space.

8. The warehouse should be in broom clean condition with all inventory and
racking removed. There should be no protrusion of anchors from the warehouse
floor and all holes should be appropriately patched. If machinery/equipment is
removed, the electrical lines should be properly terminated at the nearest
junction box.

9. All exterior windows with cracks or breakage should be replaced.

10. The Tenant shall provide keys for all locks on the Premises, including front
doors, rear doors, and interior doors.

11. Items that have been added by the Tenant and affixed to the Building will
remain the property of Landlord, unless agreed otherwise. This would include but
is not limited to mini-blinds, air conditioners, electrical, water heaters,
cabinets, flooring, etc. Please note that if modifications have been made to the
space, such as the addition of office areas, Landlord retains the right to have
the Tenant remove these at Tenant's expense.

12. All electrical systems should be left in a safe condition that conforms to
code. Bare wires and dangerous installations should be corrected prior to
move-out.

13. All plumbing fixtures should be in good working order, including the water
heater. Faucets and toilets should not leak.

14. All dock bumpers must be left in place and well secured.

ADDENDUM 4

CONSTRUCTION

(TURNKEY)

ATTACHED TO AND A PART OF THE LEASE AGREEMENT

DATED , BETWEEN

MDN / JSC - II Limited

and

Adams Golf, Ltd.

 

Landlord agrees to furnish or perform at Landlord's sole cost and expense those
items of construction and those improvements (the "Initial Improvements")
specified below:

One (1) ramp to warehouse

Two (2) cased openings from office area to warehouse

Landlord may collect a construction management fee, payable by Tenant within 30
days following receipt of Landlord's invoice from time to time throughout the
period of construction of the Initial Improvements, which such fee shall be
calculated based upon the scope of work of the Initial Improvements as described
herein, taking into account costs generally payable for similar services within
the market area in which the Project is located.

(b) If Tenant shall desire any changes, Tenant shall so advise Landlord in
writing and Landlord shall determine whether such changes can be made in a
reasonable and feasible manner. Any and all costs of reviewing any requested
changes, and any and all costs of making any changes to the Initial Improvements
which Tenant may request and which Landlord may agree to shall be at Tenant's
sole cost and expense and shall be paid to Landlord upon demand and before
execution of the change order.

(c) Landlord shall proceed with and complete the construction of the Initial
Improvements. As soon as such improvements have been Substantially Completed,
Landlord shall notify Tenant in writing of the date that the Initial
Improvements were Substantially Completed. Such date, unless an earlier date is
specified as the Commencement Date in this Lease or otherwise agreed to in
writing between Landlord and Tenant, shall be the "Commencement Date," unless
the completion of such improvements was delayed due to any act or omission of,
or delay caused by, Tenant including, without limitation, Tenant's failure to
approve plans, complete submittals or obtain permits within the time periods
agreed to by the parties or as reasonably required by Landlord, in which case
the Commencement Date shall be the date such improvements would have been
completed but for the delays caused by Tenant. The Initial Improvements shall be
deemed substantially completed ("Substantially Completed") when, in the opinion
of the construction manager (whether an employee or agent of Landlord or a third
party construction manager) ("Construction Manager"), the Premises are
substantially completed except for punch list items which do not prevent in any
material way the use of the Premises for the purposes for which they were
intended. In the event Tenant, its employees, agents, or contractors cause
construction of such improvements to be delayed, the date of Substantial
Completion shall be deemed to be the date that, in the opinion of the
Construction Manager, Substantial Completion would have occurred if such delays
had not taken place. Without limiting the foregoing, Tenant shall be solely
responsible for delays caused by Tenant's request for any changes in the plans,
Tenant's request for long lead items or Tenant's interference with the
construction of the Initial Improvements, and such delays shall not cause a
deferral of the Commencement Date beyond what it otherwise would have been.
After the Commencement Date Tenant shall, upon demand, execute and deliver to
Landlord a letter of acceptance of delivery of the Premises. In the event of any
dispute as to the Initial Improvements, including the Commencement Date, the
certificate of the Construction Manager shall be conclusive absent manifest
error.

(d) The failure of Tenant to take possession of or to occupy the Premises shall
not serve to relieve Tenant of obligations arising on the Commencement Date or
delay the payment of rent by Tenant. Subject to applicable ordinances and
building codes governing Tenant's right to occupy or perform in the Premises,
Tenant shall be allowed to install its tenant improvements, machinery,
equipment, fixtures, or other property on the Premises during the final stages
of completion of construction provided that Tenant does not thereby interfere
with the completion of construction or cause any labor dispute as a result of
such installations, and provided further that Tenant does hereby agree to
indemnify, defend, and hold Landlord harmless from any loss or damage to such
property, and all liability, loss, or damage arising from any injury to the
Project or the property of Landlord, its contractors, subcontractors, or
materialmen, and any death or personal injury to any person or persons arising
out of such installations, unless any such loss, damage, liability, death, or
personal injury was caused by Landlord's negligence. Any such occupancy or
performance in the Premises shall be in accordance with the provisions governing
Tenant-Made Alterations and Trade Fixtures in the Lease, and shall be subject to
Tenant providing to Landlord satisfactory evidence of insurance for personal
injury and property damage related to such installations and satisfactory
payment arrangements with respect to installations permitted hereunder. Delay in
putting Tenant in possession of the Premises shall not serve to extend the term
of this Lease or to make Landlord liable for any damages arising therefrom.

 

 

 

ADDENDUM

ONE RENEWAL OPTION AT MARKET

ATTACHED TO AND A PART OF THE LEASE AGREEMENT

DATED , BETWEEN

MDN / JSC - II Limited

and

Adams Golf, Ltd.

Provided that as of the time of the giving of the Extension Notice and the
Commencement Date of the Extension Term, (x) Tenant is the Tenant originally
named herein, (y) Tenant actually occupies all of the Premises initially demised
under this Lease and any space added to the Premises, and (z) no Event of
Default exists or would exist but for the passage of time or the giving of
notice, or both; then Tenant shall have the right to extend the Lease Term for
an additional term of years (such additional term is hereinafter called the
"Extension Term") commencing on the day following the expiration of the Lease
Term (hereinafter referred to as the "Commencement Date of the Extension Term").
Tenant shall give Landlord notice (hereinafter called the "Extension Notice") of
its election to extend the term of the Lease Term at least months, but not more
than months, prior to the scheduled expiration date of the Lease Term.

The Base Rent payable by Tenant to Landlord during the Extension Term shall be
the greater of (i) the Base Rent applicable to the last year of the initial
Lease term and (ii) the then prevailing market rate for comparable space in the
Project and comparable buildings in the vicinity of the Project, taking into
account the size of the Lease, the length of the renewal term, market
escalations and the credit of Tenant. The Base Rent shall not be reduced by
reason of any costs or expenses saved by Landlord by reason of Landlord's not
having to find a new tenant for such premises (including, without limitation,
brokerage commissions, costs of improvements, rent concessions or lost rental
income during any vacancy period). In the event Landlord and Tenant fail to
reach an agreement on such rental rate and execute the Amendment (defined below)
at least months prior to the expiration of the Lease, then Tenant's exercise of
the renewal option shall be deemed withdrawn and the Lease shall terminate on
its original expiration date.

The determination of Base Rent does not reduce the Tenant's obligation to pay or
reimburse Landlord for Operating Expenses and other reimbursable items as set
forth in the Lease, and Tenant shall reimburse and pay Landlord as set forth in
the Lease with respect to such Operating Expenses and other items with respect
to the Premises during the Extension Term without regard to any cap on such
expenses set forth in the Lease.

Except for the Base Rent as determined above, Tenant's occupancy of the Premises
during the Extension Term shall be on the same terms and conditions as are in
effect immediately prior to the expiration of the initial Lease Term; provided,
however, Tenant shall have no further right to any allowances, credits or
abatements or any options to expand, contract, renew or extend the Lease.

If Tenant does not give the Extension Notice within the period set forth in
paragraph (a) above, Tenant's right to extend the Lease Term shall automatically
terminate. Time is of the essence as to the giving of the Extension Notice.

Landlord shall have no obligation to refurbish or otherwise improve the Premises
for the Extension Term. The Premises shall be tendered on the Commencement Date
of the Extension Term in "as-is" condition.

If the Lease is extended for the Extension Term, then Landlord shall prepare and
Tenant shall execute an amendment to the Lease confirming the extension of the
Lease Term and the other provisions applicable thereto (the "Amendment").

If Tenant exercises its right to extend the term of the Lease for the Extension
Term pursuant to this Addendum, the term "Lease Term" as used in the Lease,
shall be construed to include, when practicable, the Extension Term except as
provided in (d) above.

 

EXHIBIT A

SITE PLAN

ATTACHED TO AND A PART OF THE LEASE AGREEMENT

DATED, BETWEEN

MDN / JSC - II Limited

and

Adams Golf, Ltd.