Exhibit 10.50
STANDARD COMMERCIAL LEASE
 
ARTICLE 1.00 BASIC LEASE TERMS
 
1.01   Parties.   This lease agreement ("Lease") is entered into by and between
the following Landlord and Tenant:
 
Vantage Development #21, Inc., a Texas corporation ("Landlord").
 I-Sector, a Delaware corporation ("Tenant").
 
1.02   Leased Premises.   In consideration of the rents, terms, provisions and
covenants of this Lease, Landlord hereby leases, lets and demises to the Tenant
the following described premises ("Leased Premises") as shown on Exhibit A
attached hereto, located within the Building or Project referenced below and
located on the Land as described on Exhibit B attached hereto (the "Land");
 
"Building" or "Project":
Building or Project Square Footage:
"Leased Premises":
Leased Premises Square Footage:
City, State, Zip Code:
Waters Ridge Tech Center I
227,495
1955 Lakeway Drive,
Suite 220 24,081
Lewisville, Texas 75057,

 
together with the right to use, in common with others the Common Areas (as
defined in Section 2.06), for the Term specified herein, all upon and subject to
the terms and conditions set forth herein.
 
Landlord and Tenant acknowledge that the square footage of the Leased Premises
and Building are as set forth above.
 
1.03  Term.   The term (the "Term") of this Lease shall commence on the date
Landlord delivers the Leased Premises to Tenant with the Landlord Improvements
(as defined in Section 6.01) complete in accordance with the Plans (as defined
in Section 6.01) (the ''Commencement Date") and terminate seventy two (72)
months thereafter (the "Termination Date"). For purposes of this Section 1.03,
complete means a condition that allows Tenant to occupy the Leased Premises and
conduct its business therein. Tenant agrees that Landlord will not be liable to
Tenant if Landlord does not deliver possession of the Leased Premises to Tenant
on the Commencement Date and Landlord's non-delivery of the Leased Premises to
Tenant on the Commencement Date will not change the terms of this Lease or the
obligations of Tenant hereunder. If delivery of the Leased Premises is delayed,
Landlord and Tenant agree that the Commencement Date will be delayed until
possession of the Leased Premises is delivered to Tenant, in which event the
Term will be automatically extended for a period of time equal to the delay in
delivery of possession of the Leased Premises to Tenant. If delivery of
possession of the Leased Premises is delayed, Landlord and Tenant shall, upon
such delivery, execute an amendment to this Lease setting forth the actual
Commencement Date and Termination Date. Any occupancy of the Leased Premises by
Tenant prior to the Commencement Date shall be subject to all obligations of
Tenant under this Lease. If the Termination Date falls on a day other than the
last day of a month, the parties agree that the Term shall be automatically
extended by the number of days necessary to cause the Term to end on the last
day of a month.
 
Notwithstanding the foregoing, if Landlord fails to deliver the Leased Premises
to Tenant on or before July 1, 2004, and such failure does not result from an
event of force majeure, act of God or any act or omission of Tenant, Tenant may
terminate the Lease upon written notice to Landlord.
 
1.04  Base Rent and Security Deposit.
 
a)  Base Rent for the Leased Premises shall be:
Months 1-7: Abated
Months 8-24: $13,048
Months 25-48: $20,068
Months 49-72: $22,074
b)  The Security Deposit to be deposited by Tenant shall be: $14,786.00
 
 
 
 
 
 
 
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1.05 Addresses.
 

 Landlord'sAddress:     Tenant's Address:  

 
Vantage Companies
2911 Turtle Creek Blvd.
Suite 500
Dallas, Texas 75219
Prior to Commencement Date:
15960 Midway Road, Suite 101
Addison, Texas 75001
Attn.: Mr. Paul Klotz
 
After Commencement Date:
@ The Leased Premises
Mr. Paul Klotz
 

1.06   Permitted Use. Tenant shall use the Leased Premises for general office,
laboratory and research and development uses , warehousing, equipment
configuration, staging, shipping, receiving, remote network monitoring services,
help desk services and other matters related or incident to Tenant's primary
business and for no other purpose.
 
ARTICLE 2.00 RENT
 
2.01  Base Rent.   Tenant agrees to pay monthly as Base Rent during the Term
without notice, demand, deduction, counter-claim, set-off or abatement, the sum
of money set forth in Section 1.04 of this Lease. Tenant shall pay one monthly
installment of Base Rent on the date of execution of this Lease by Tenant for
the eighth month's Base Rent and a like monthly installment shall be due and
must be paid on or before the first day of the ninth calendar month and each
month thereafter during the Term; provided, if the Commencement Date is a date
other than the first day of a calendar month, the Base Rent set forth above will
be prorated to the end of that calendar month, and all succeeding installments
of Base Rent shall be payable on or before the first day of each succeeding
calendar month during the Term. No payment by Tenant or receipt by Landlord of a
lesser amount than the amount of Base Rent due will be deemed to be other than
on account of the earliest past due installment of Base Rent required to be paid
hereunder. Tenant agrees that no endorsement or statement on any check or in any
letter accompanying any check or payment of Base Rent constitutes an accord and
satisfaction and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of Base Rent then due or to pursue any
remedy available under this Lease, at law or in equity.
 
2.02  Security Deposit.   Tenant shall deliver the Security Deposit to Landlord
on the date of execution of the Lease by Tenant. The Security Deposit will be
held by Landlord without liability for interest and as security for the
performance of Tenant's covenants and obligations under this Lease, it being
expressly understood that it is not an advance payment of Base Rent, Taxes and
Insurance (as defined in Section 2.04), Operating Expenses (as defined in
Section 2.06) or a measure of Landlord's damage upon an Event of Default (as
defined in Section 11.01). Landlord may commingle the Security Deposit with its
other funds. During the continuance of an Event of Default (as defined in
Section 11.01), Landlord may, from time to time, without prejudice to any other
remedy, use the Security Deposit, to the extent necessary, to make good any
arrears of Base Rent, Taxes and Insurance, Operating Expenses, or pay any
expense or liability incurred by Landlord as a result of the Event of Default.
Provided Tenant delivers the Leased Premises to Landlord as required herein upon
expiration or earlier termination of this Lease, Landlord shall return any
remaining balance of the Security Deposit to Tenant within sixty (60) days
following such expiration or termination of this Lease. If any portion of the
Security Deposit is so used or applied, Tenant shall upon ten (10) days written
notice from Landlord, deposit with Landlord by cash or cashier's check an amount
sufficient to restore the Security Deposit to its original amount. If Landlord
transfers its interest in the Leased Premises during the Term, Landlord shall
assign the Security Deposit to the transferee and, upon delivery to Tenant of a
copy of an assumption of Landlord's obligations hereunder, have no further
liability for the return of or any matter relating to, such Security Deposit.
 
2.03  Definitions.   For purposes of this Lease, (i) Tenant's Pro Rata Share
shall be a fraction, the numerator of which is the number of square feet of
floor area in the Leased Premises set forth in Section 1.02 and the denominator
of which is the number of square feet of floor area in the Building or Project
set forth in Section 1.02, provided, if the Project contains multiple buildings,
and expenses (i.e. Taxes, Insurance and Operating Expenses) associated with
operating such buildings can be directly attributed to a building, Landlord may
utilize the square feet of floor area in such building as the denominator.
Tenant's Pro Rata Share may be adjusted by Landlord in the future for changes in
the physical size of the Leased Premises, Building or Project, and (ii)
Additional Rent shall include (x) Taxes and Insurance, (y) Operating Expenses,
and (z) all other amounts due Landlord from Tenant pursuant to the terms of this
Lease.
 
 
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2.04  Taxes and Insurance.   Tenant agrees to pay without notice, demand,
counter-claim, deduction, set-off or abatement of any kind Tenant's Pro Rata
Share of all real property taxes and installments of special assessments
(including dues and assessments by means of deed restrictions and/or owner's
associations) lawfully levied or assessed against the Building and/or Project,
and any and all insurance required herein or as Landlord deems reasonably
necessary (specifically including fire and casualty, commercial general
liability and rent loss [a/k/a business income] insurance) (collectively "Taxes
and Insurance"). Landlord shall invoice Tenant monthly (in advance) for Tenant's
Pro Rata Share of Taxes and Insurance commencing on the Commencement Date.
Tenant's Pro Rata Share will be based upon Landlord's estimate of Taxes and
Insurance for the current calendar year, provided, that in the event Landlord is
required under a mortgage, deed of trust, underlying lease or loan agreement
covering the Building or Project to escrow Taxes and Insurance, Landlord may but
will not be obligated, to use the amount required to be escrowed as a basis for
its estimate. To the extent the Commencement Date or Termination Date of the
Lease is not on the first day of the calendar year or last day of the calendar
year respectively, Tenant's liability for Taxes and Insurance is subject to a
pro rata adjustment based on the number of days of any such year during which
the Term is in effect. Tenant is not entitled to contest or appeal any value
assessment rendered by applicable taxing authorities and waives all rights to
receive notices of reappraisals. In no event shall Tenant be liable for any
income or franchise taxes imposed upon Landlord unless such taxes are in
substitution of the taxes set forth above.
 
2.05  Operating Expenses.   Tenant agrees to pay without notice, demand,
deduction, counterclaim, set-off or abatement of any kind, Tenant's Pro Rata
Share of Landlord's operating expenses for the Building and/or Project as set
forth in Section 2.06 ("Operating Expenses"). Landlord shall invoice Tenant
monthly for Tenant's Pro Rata Share of the estimated Operating Expenses for each
calendar year commencing on the Commencement Date and may adjust such share each
subsequent year based upon anticipated Operating Expenses. Twice yearly Landlord
is entitled to adjust the estimated Operating Expenses to reflect current or
anticipated Operating Expenses.
 
Notwithstanding anything to the contrary set forth in this Section 2.05, when
determining Tenant's Pro Rata Share of Operating Expenses for calendar years
subsequent to the first full calendar year of the Term, Tenant's Pro Rata Share
of Operating Expenses for such calendar years shall not increase more than five
percent (5%) from the immediately preceding calendar year. Calculation of
increases in Tenant's Pro Rata Share of Operating Expenses subsequent to the
first full calendar year of the Term shall be on a cumulative basis, i.e. if
Tenant's Pro Rata Share of Operating Expenses increases three percent (3%) from
the immediately preceding calendar year, then Tenant's Pro Rata Share of
Operating Expenses may increase seven percent (7%) for the immediately following
calendar year. Provided, the foregoing cap on Tenant's Pro Rata Share of
Operating Expenses shall not apply to utilities (water, sewer, gas, electricity
and telephone) for the Common Areas and trash removal. Tenant's Pro Rata Share
of such Operating Expenses (water, sewer, gas, electricity and telephone) shall
always be based upon the actual amount of such expenses. Provided further, if
the Building or Project is not fully leased, with respect to calculating the
foregoing cap, Landlord will be entitled to gross-up management fees as if the
Building or Project had been fully leased and fully assessed by all taxing
authorities for the previous calendar year.
 
Provided no Event of Default exists, Tenant may, at its own expense (except as
set forth below), audit Landlord's books relevant to the Operating Expenses.
With respect to such audit, Tenant 1) may review Landlord's books during office
hours, 2) must perform such audit at the location of Landlord's books, 3) must
request such audit within sixty (60) days of receipt of its annual
reconciliation of Operating Expenses, 4) must deliver to Landlord a copy of the
results of such audit within fifteen (15) days of its completion, and 5) may not
audit the same calendar year more than one time. Assignees of Tenant may only
audit periods for which they occupy the Leased Premises and subtenants of Tenant
are not entitled to any audit rights.
 
If an audit reveals that Landlord has over charged Tenant for its Pro Rata Share
of Operating Expenses by 3% or more Landlord shall reimburse Tenant its
reasonable documented out-of-pocket expenses associated with such audit along
with the amount by which Tenant overpaid.
 
2.06  Definition of Operating Expenses.   The term "Operating Expenses" includes
all commercially reasonable expenses incurred by Landlord with respect to the
operation, maintenance, repair and replacement of the Common Areas (as defined
below), including, but not limited to maintenance, repair and replacement costs
necessary for upkeep (including materials and supplies necessary therefore);
 
 
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charges for water, sewer, gas, electricity and telephone; cleaning, including
janitorial services and supplies; landscape maintenance; painting (within the
Common Areas and the exterior of the Building); trash collection; pest control;
security; licenses, permits and inspection fees; contractor's fees; professional
service and management fees; the cost of equipping and maintaining a management
office; wages and benefits payable to employees of Landlord whose duties are
directly connected with the operation of the Building or Project; personal
property taxes for Landlord's personal property within the Common Areas; fees
payable to tax consultants and/or attorneys for contesting taxes; the cost,
including interest, amortized over its useful life, of any capital improvement
made to the Common Areas by Landlord (i) pursuant to its obligations hereunder,
or (ii) after the date of this Lease which is required by any Legal Requirement
(as defined in Section 3.03) that was not applicable at the time the Building or
Project was constructed; the cost including interest, amortized over the period
of time necessary for such device or equipment to pay for itself, of
installation of any device or other equipment which improves the operating
efficiency of any system within the Common Areas and thereby reduces Operating
Expenses.
 
The term Operating Expenses does not include the following: Taxes and Insurance,
repairs, restoration or other work occasioned by fire, wind, the elements or
other casualty; expenses incurred in leasing to or procuring of tenants, leasing
commissions, advertising expenses and expenses for the renovating of space for
new tenants; interest or principal payments on any mortgage or other
indebtedness of Landlord; ground rent; compensation paid to any employee of
Landlord other than maintenance and property management personnel directly
associated with the operation and maintenance of the Building or Project; any
depreciation allowance or expense (except for depreciation of capital
improvements and equipment specifically included within the definition of
Operating Expenses); operating expenses which are the responsibility of Tenant
or any other tenant of the Building or Project; or expenses which are for the
benefit of a specific tenant and not all tenants of the Building or Project.
 
        For purposes of this Lease "Common Areas" mean those areas within the
Building or Project provided for the common use or benefit of all tenants
generally and/or the public, such as parking areas, interior roads, sidewalks,
landscaped areas, detention or retention ponds, common office facilities or
meeting rooms, common equipment rooms, common satellite or antenna facilities,
common mail rooms, corridors, restrooms, vending areas, lobby areas, and other
Common Areas not included in or as shown as being part of the Leased Premises on
Exhibit A.
 
2.07  Reconciliation.   Within four (4) months following the close of each
calendar year, Landlord shall provide Tenant an accounting showing in reasonable
detail all computations of Taxes and Insurance and Operating Expenses due under
Sections 2.04 and 2.05. If the accounting shows that the total of the monthly
payments made by Tenant exceeds the amount of Taxes and Insurance and Operating
Expenses due by Tenant, such amount will be credited against the next required
payment of Taxes and Insurance and Operating Expenses. If the accounting shows
that the total of the monthly payments made by Tenant is less than the amount
due by Tenant, such accounting will be accompanied by an invoice for the
additional amount. Notwithstanding any other provision in this Lease, during the
year in which the Lease terminates, Landlord, prior to the Termination Date, is
entitled to invoice Tenant for Tenant's Pro Rata Share of the excess Operating
Expenses based upon the previous year's Operating Expenses. If this Lease
terminates on a day other than the last day of a calendar year, the amount of
any Taxes and Insurance and Operating Expenses payable by Tenant applicable to
the year in which such termination occurs will be prorated on the ratio that the
number of days from the commencement of the calendar year to and including the
Termination Date bears to 365.
 
2.08  Late Payment Charge.   Other remedies for nonpayment of Base Rent
notwithstanding, if the monthly Base Rent payment is not in Landlord's
possession on or before the tenth (10th) day of the month for which the Base
Rent is due, or if any payment of Additional Rent due Landlord by Tenant is not
received by Landlord on or before the tenth (10th) day of the month next
following the month in which Tenant was invoiced, such amount shall bear
interest at the lesser of (i) the highest lawful rate per annum or (ii) the rate
of one percent (1%) per month until paid for each late payment that occurs more
than once in any twelve (12) month period during the Term. In addition, Landlord
is entitled to charge one hundred dollars ($100.00) for each check or payment,
which is not honored by Tenant's bank. Said charge to be in addition to any
other amounts owed under this Lease.
 
2.09  Holding Over.   If Tenant does not vacate the Leased Premises upon the
expiration or termination of this Lease, such holding over shall constitute, and
be construed as, a tenancy at will at a daily rental equal to one-thirtieth
(1/30th) of an amount equal to, in addition to Additional Rent, one and one-half
(1 1/2 ) times the Base Rent being paid by Tenant immediately prior to the
expiration or termination of the Lease, and all other terms and provisions of
this Lease shall apply during such holdover period (with
 
 
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the exclusion of any expansion or renewal options). During such holdover period,
Tenant agrees to vacate and deliver the Leased Premises to Landlord within ten
(10) days of Tenant's receipt of notice from Landlord to vacate. Landlord may
give such notice pursuant to the notice provisions of Section 14.07 herein or by
facsimile transmission. Tenant agrees to pay the rental payable during the
holdover period to Landlord on demand. No holding over by Tenant, whether with
or without the consent of Landlord and notwithstanding receipt by Tenant of an
invoice from Landlord for holdover rent, will operate to extend the Term.
Additionally, Tenant shall pay to Landlord all damages sustained by Landlord as
a result of such holding over by Tenant.
 
ARTICLE 3.00 OCCUPANCY AND USE
 
3.01 Use.   The Leased Premises shall be used and occupied only for the purpose
set forth in Section 1.06 and for no other purpose without the consent of
Landlord, such consent not to be unreasonably withheld, conditioned or delayed.
Tenant shall occupy the Leased Premises, conduct its business and control its
agents, employees, invitees and visitors in such a manner as is lawful,
reputable, will not create a nuisance, interfere with Building and/or Project
operations, or affect the structural integrity or design capabilities of the
Building. Tenant shall not conduct any auction, liquidation or going out of
business sale. Outside storage including storage of trucks and other vehicles is
prohibited unless approved by Landlord. Tenant shall neither permit any waste on
the Leased Premises nor allow the Leased Premises to be used in any way which
would, in the opinion of Landlord, be extra hazardous on account of fire or
which would in any way increase or render void the fire insurance on the
Building. If at any time during the Term the State Board of Insurance or other
insurance authority disallows any of Landlord's sprinkler credits or imposes an
additional penalty or surcharge in Landlord's insurance premiums because of
Tenant's original or subsequent placement or use of storage racks or bins,
method of storage or nature of Tenant's inventory or any other act of Tenant,
Tenant agrees to pay as additional rent the increase in Landlord's insurance
premiums directly attributable to the acts of Tenant. Notwithstanding anything
set forth in this Section 3.01, in no way does Landlord warrant or represent,
either expressly or impliedly, that Tenant's use of the Leased Premises is in
accordance with applicable codes or ordinances of the municipality within which
the Building is located.
 
3.02  Signs.   No sign (which shall include balloons, flags, pennants, banners,
etc.) of any type or description visible from outside the Leased Premises may be
erected, placed or painted on or about the Leased Premises or Building by
Tenant, except those signs submitted to Landlord in writing and approved by
Landlord in writing (such approval not to be unreasonably withheld, conditioned
or delayed), and which signs are in conformance with (i) Landlord's sign
criteria established for the Project and (ii) all Legal Requirements. Such
permitted signs shall be installed at Tenant's sole cost and expense by a
contractor reasonably approved by Landlord and must be removed by Tenant in
accordance with the conditions allowing their erection upon expiration or
termination of the Lease. Any damage from such removal shall be repaired at
Tenant's sole cost and expense.
 
3.03  Compliance with Laws, Rules and Regulations.   Tenant, at Tenant's sole
cost and expense, shall comply with all laws, ordinances, orders, rules and
regulations now in effect or enacted subsequent to the date hereof ("Legal
Requirements") of state, federal, municipal or other agencies or bodies having
jurisdiction over Tenant or the use, condition and occupancy of the Leased
Premises. Tenant shall comply with the rules and regulations of the Building and
Project adopted by Landlord which are set forth on Schedule I attached to this
Lease ("Rules and Regulations"). Landlord is entitled, at all times, to change
and amend the Rules and Regulations in any reasonable manner as Landlord deems
advisable for the safety, care, cleanliness, preservation of good order and
operation or use of the Leased Premises, Building or Project. All such changes
and amendments to the Rules and Regulations must be in writing and sent to
Tenant at the Leased Premises and must thereafter be carried out and observed by
Tenant.
 
Landlord, as its sole cost and expense, shall comply with all Legal Requirements
of state, federal, municipal or other agencies or bodies having jurisdiction
over Landlord with respect to operation of the Project. Landlord represents and
warrants that on the Commencement Date, the Leased Premises will be in
compliance with applicable Legal Requirements.
 
3.04  Warranty of Possession.   Landlord warrants that it has the right and
authority to execute this Lease, and Tenant, upon compliance with the terms,
conditions, covenants and agreements contained in this Lease, will be entitled
to possession of the Leased Premises during the Term as well as any extension or
renewal thereof. Tenant agrees that Landlord is not responsible for the acts or
omissions of any other tenant or third party that may interfere with Tenant's
use and enjoyment of the Leased Premises.
 
 
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3.05  Inspection.    Landlord or its authorized agents may, at any and all
reasonable times upon twenty four (24) hour prior notice to Tenant, except in
the event of an emergency, when notice is not required, enter the Leased
Premises to inspect the same, conduct tests, environmental audits or other
procedures to determine Tenant's compliance with the terms hereof; to supply any
other service to be provided by Landlord; to show the Leased Premises to
prospective purchasers, tenants or mortgagees; to alter, improve or repair the
Leased Premises or any other portion of the Building or for any other purpose
Landlord deems necessary. Tenant shall not change Landlord's lock system or in
any other manner prohibit Landlord from entering the Leased Premises. Landlord
is entitled to use any and all means which Landlord may deem proper to open any
door in an emergency without liability therefor. During the final one hundred
eighty (180) days of the Term, Landlord or its authorized agents have the right
to erect or maintain on or about the Leased Premises or the Building customary
signs advertising the Leased Premises for lease.
 
3.06  Hazardous Waste.   The term "Hazardous Substances," as used in this Lease
means pollutants, contaminants, toxic or hazardous wastes, or any other
substances, the presence or use of which is regulated, restricted or prohibited
by any "Environmental Law," which term means any federal, state or local law,
ordinance or other statute of a governmental or quasi-governmental authority
relating to pollution or protection of the environment. Tenant hereby agrees
that (i) no activity will be conducted on the Leased Premises that will produce
any Hazardous Substance, except for such activities that are part of the
ordinary course of Tenant's business activities and of which Landlord has been
notified in writing (the "Permitted Activities"), provided said Permitted
Activities are conducted in accordance with all Environmental Laws; Tenant shall
obtain all required permits and pay all fees and provide any testing required by
any governmental agency; (ii) the Leased Premises will not be used in any manner
for the storage of any Hazardous Substances except for the temporary storage of
such materials that are used in the ordinary course of Tenant's business and of
which Landlord has been notified in writing (the "Permitted Materials"),
provided such Permitted Materials are properly stored in a manner and location
meeting all Environmental Laws; Tenant shall obtain any required permits and pay
any fees and provide any testing required by any governmental agency; (iii) no
portion of the Leased Premises will be used as a landfill or a dump; (iv) Tenant
will not install any underground or above ground tanks of any type; (v) Tenant
will not allow any surface or subsurface conditions to exist or come into
existence that constitute, or with the passage of time may constitute a public
or private nuisance; (vi) Tenant will not permit any Hazardous Substances to be
brought onto the Leased Premises, except for the Permitted Materials, and if so
brought or found located thereon, the same must be immediately removed, with
proper disposal, and all required cleanup procedures must be diligently
undertaken pursuant to all Environmental Laws.
 
Landlord or Landlord's representative have the right but not the obligation to
enter the Leased Premises in accordance with Section 3.05 for the purpose of
inspection to ensure compliance with all Environmental Laws. Should Landlord
determine, in Landlord's commercially reasonable opinion, that any Hazardous
Substances, including Permitted Materials, are being improperly stored, used, or
disposed of, or any Hazardous Activities are being improperly conducted, then
Tenant shall immediately take such corrective action as required by Landlord.
Should Tenant fail to take such corrective action within ten (10) days, or such
shorter period as may be necessary to avoid or prevent damage to the Leased
Premises, Landlord is entitled to perform such work and Tenant shall promptly
reimburse Landlord for any and all commercially reasonable costs associated with
said work. If at any time during or after the Term, the Leased Premises are
found to be so contaminated or subject to said conditions, due to the existence
of Hazardous Substances within the Leased Premises, Tenant shall diligently
institute proper and thorough cleanup procedures at Tenant's sole cost. Before
taking any action to comply with Environmental Laws or to clean up Hazardous
Substances contaminating the Leased Premises, Tenant shall submit to Landlord a
plan of action, including all plans and documents required by any Environmental
Law to be submitted to a governmental authority (collectively a "plan of
action"). Such plan of action must be implemented by a licensed environmental
contractor. Before Tenant begins the actions necessary to comply with
Environmental Laws or to clean up contamination from Hazardous Substances,
Landlord must (1) approve the nature, scope and timing of the plan of action,
and (2) approve any and all covenants and agreements to affect the plan of
action.
 
Tenant represents and warrants to its actual knowledge that it has not been
previously cited for any environmental violations by any applicable governmental
agency.
 
3.07  Parking and Road Use.   Tenant is granted the license and right to use,
for the benefit of Tenant, its employees, customers, invitees and licensees, 1)
the parking areas adjacent to the Building of which the Leased Premises are a
part on an unassigned, unreserved and non-exclusive basis as available on a
first come, first serve basis, and 2) the roadways within the Project, in each
case subject to reasonable regulation by Landlord. Landlord reserves the right
in its sole discretion to designate specific areas within
 
 
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the parking areas for the exclusive use of Tenant, its visitors and invitees to
the Building. In no event shall Tenant use more parking spaces than the minimum
number of parking spaces required by all Legal Requirements for office/warehouse
projects in the municipality in which the Project is located. No parking is
permitted on any common drive areas by Tenant or any of Tenant's employees,
customers, invitees or licensees. No driving or parking of any vehicles on
non-paved areas adjoining the Building or within the Project is permitted.
LANDLORD WILL HAVE NO LIABILITY TO TENANT, ITS EMPLOYEES, AGENTS OR INVITEES FOR
ANY CLAIMS OR LIABILITIES ARISING FROM SUCH PARTIES' USE OF THE PARKING AREAS
AND TENANT WILL INDEMNIFY AND HOLD LANDLORD HARMLESS AGAINST ALL SUCH CLAIMS AND
LIABILITIES UNLESS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
LANDLORD.
 
3.08  Permits.   Tenant shall, at its sole cost, be responsible for all permits
with respect to the operation of its business and use and occupancy of the
Leased Premises and will provide copies of such permits from time to time upon
the written request of Landlord.
 
ARTICLE 4.00 UTILITIES AND SERVICE
 
4.01  Building Services.   Landlord shall provide water, sewer, electricity and
gas service connections to the Leased Premises. Tenant shall arrange for
connection to such services and pay directly to the appropriate supplier all
cost of utility services to the Leased Premises, including, but not limited to,
security deposits, initial connection charges, taxes, penalties, surcharges or
the like, all charges for gas, electricity, telephone, water, sprinkler
monitoring devices, sanitary and storm sewer service, and security systems. If
any services are jointly metered with other premises or property, Landlord shall
make a reasonable determination of Tenant's proportionate share of the cost of
such services and Tenant shall pay such share to Landlord within ten (10) days
of receipt of any invoice thereof. Landlord may cause, at Tenant's expense, any
utility services which are jointly metered to be separately metered. Tenant
shall pay all costs caused by Tenant introducing excessive pollutants or solids
other than ordinary human waste into the sanitary sewer system, including
permits, fees and charges levied by any governmental subdivision for any such
pollutants or solids. Tenant shall be responsible for the installation and
maintenance of any dilution tanks, holding tanks, settling tanks, sewer sampling
devices, sand traps, grease traps or similar devices as may be required by any
governmental subdivision for Tenant's use of the sanitary sewer system. If the
Leased Premises are in a multi-occupancy Building, Tenant shall pay all
surcharges levied due to Tenant's use of sanitary sewer or waste removal
services insofar as such surcharges affect Landlord or other tenants in the
Building. Except as set forth herein, Landlord shall not be required to pay for
any utility services, supplies or upkeep in connection with the Leased Premises.
Utility services for the Common Areas shall be part of Operating Expenses.
 
Tenant agrees that Landlord shall not be liable to Tenant in any respect for
damages to either person, property or business on account of any interruption or
failure of utility services unless resulting from the gross negligence or
willful misconduct of Landlord. No such interruption or failure may be construed
as an eviction of Tenant or entitle Tenant to (i) any abatement of rent, (ii)
terminate the Lease, or (iii) be relieved from fulfilling any covenant or
agreement contained herein, provided, if any interruption or failure of
utilities is the result of the gross negligence or willful misconduct of
Landlord and such condition continues in excess of five (5) business days from
the date Tenant notifies Landlord, Base Rent shall abate until the affected
utilities are restored to the Leased Premises. Should any malfunction of the
improvements or facilities to the Leased Premises or Building (which by
definition do not include any improvements or facilities of Tenant above
Building standard improvements) occur for any reason, Landlord shall use
reasonable diligence to see that such malfunction is corrected promptly, but
Tenant will not be entitled to any claim for rebate or abatement of rent or
damages (except as set forth above) on account of such malfunction or of any
interruptions in service occasioned thereby or resulting therefrom.
 
4.02  Telecommunications.   Tenant, at its sole cost, may order and use
telephone and other wired telecommunications services in accordance with rules
and regulations adopted by Landlord from time to time, but Tenant must obtain
Landlord's prior written consent to Tenant's use of services of a telephone or
telecommunications service provider who is not then providing service to the
Building such consent not to be unreasonably withheld, conditioned or delayed.
Unless Landlord otherwise requests or consents in writing, Tenant's
telecommunications equipment must be located in the Leased Premises. Landlord
has no obligation to maintain Tenant's telecommunications equipment, wiring, or
other infrastructure, and if any such service is interrupted, curtailed, or
discontinued, Landlord will have no obligation or liability to Tenant, unless
such interruption, curtailment or discontinuance results from the gross
negligence or willful misconduct of Landlord.
 
 
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(a)  Upon expiration or termination of this Lease, Tenant, at its sole cost,
will remove all telecommunications equipment and other facilities for
telecommunications transmittal (except wiring) installed in the Leased Premises
or in the Building for Tenant's use.
 
(b)  Tenant will not use any wireless communications equipment (other than
cellular telephones and Tenant's wireless network), antennae, or satellite
receiver dishes within the Leased Premises nor within the Building or Project
without Landlord's prior written consent, such consent not to be unreasonably
withheld, conditioned or delayed.
 
(c)  If Tenant's telecommunications service, transmitters, or receivers
unreasonably interfere with Landlord's or another occupant's telecommunications
services or equipment, Tenant will promptly eliminate any such interference or,
if Tenant cannot eliminate it, stop using the equipment or service causing such
interference. Tenant assumes liability for all claims and liabilities related to
such interference.
 
4.03  Security Service.   Tenant acknowledges and agrees that, while Landlord
may patrol the Project, Landlord is not providing any security services with
respect to the Leased 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 Leased Premises or any other breach of security with
respect to the Leased Premises.
 
ARTICLE 5.00 REPAIRS AND MAINTENANCE
 
5.01  Existing Conditions.     Tenant accepts the Leased Premises as of the date
hereof, subject to all recorded matters, laws, ordinances, and governmental
rules, regulations and orders, Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any warranty or representation of any kind, either
express or implied as to the condition of the Leased Premises or the suitability
of the Leased Premises for Tenant's intended use. The taking of the possession
of the Leased Premises by Tenant will be conclusive evidence that Tenant accepts
the Leased Premises, that the Leased Premises have been completed in accordance
with Section 6.01 and were in good and satisfactory condition at the time such
possession was so taken, subject to latent defects and punch-list items that do
not interfere with the operation of Tenant's business within the Leased
Premises. Prior to taking occupancy of the Leased Premises, Tenant shall sign a
copy of the space plan of the Leased Premises acknowledging its condition on the
date thereof (unless Landlord waives such requirement) and execute Landlord's
Standard Tenant Acceptance of Premises form accepting such condition.
 
5.02  Landlord Repairs And Maintenance.     Landlord is not required to maintain
or make any repairs or replacements of any kind or character to the Leased
Premises or the Building during the Term except as are set forth in this Section
5.02. Landlord shall maintain in good repair and condition, except for
reasonable wear and tear, only the roof, foundation, surfaces and structural
soundness of exterior walls and the Common Areas. Landlord shall not be
responsible for windows, window glass, plate glass, doors, store fronts,
uninsured losses and damages caused by Tenant or any third party, provided,
Landlord shall be responsible for any damage to windows, window glass or plate
glass resulting from improper or defective construction of the Building.
Landlord's costs of maintaining the items set forth in this section are subject
to the Additional Rent provisions in Section 2.03. Tenant is not entitled to any
abatement or reduction of rent by reason of any maintenance, repairs or
replacements made by Landlord under this Lease. Nothing contained herein
entitles Tenant to perform any maintenance or make any repairs or replacements
to the Leased Premises at Landlord's expense or to terminate the Lease based on
the physical condition of the Leased Premises.
 
5.03  Tenant Repairs And Maintenance.   Tenant shall, at its sole cost and
expense, maintain, repair and replace all other parts of the Leased Premises in
good repair and condition (reasonable wear and tear and damages caused by
casualty or condemnation excepted), including, but not limited to windows,
window glass, plate glass, doors, store fronts, floor covering, interior walls,
partitions and finish work, interior side of structural walls, water closets,
kitchens, interior plumbing, electrical systems, heating, ventilating and
air-conditioning systems, down spouts, fire sprinkler system, dock bumpers,
levelers, lights, truck and rail doors, pest control and extermination and trash
pick-up and removal. Tenant shall repair and pay for any damage caused by any
act or omission of Tenant or Tenant's agents, employees, invitees, licensees or
visitors to the Leased Premises, the Building, or the Project. Repairs and
replacements shall be done in a good and workmanlike manner and in accordance
with all Legal Requirements. If Tenant fails to maintain, repair or replace
promptly as required herein, Landlord may, at its option, perform on Tenant's
behalf and charge the cost of such performance to Tenant as Additional Rent
which is due and payable by
 
 
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Tenant within ten (10) days from receipt of Landlord's invoice. Costs under this
section are the total responsibility of Tenant and do not constitute Operating
Expenses under Section 2.03.
 
Landlord agrees that Tenant may receive the benefit of all guaranties and
warranties owned by Landlord on items for which it is responsible for repair and
maintenance, provided it complies with all conditions established in any such
guaranty or warranty.
 
5.04  Request for Repairs.   All requests for repairs or maintenance that are
the responsibility of Landlord pursuant to any provision of this Lease must be
made in writing to Landlord at the address in Section 1.05 and delivered
pursuant to Section 14.07. Notices sent by facsimile transmission are not
considered proper notice for purposes hereof. After receipt of written notice,
Landlord is entitled to a reasonable time within which to perform such repairs
or maintenance.
 
5.05  Tenant Damages.   Tenant shall not allow any damage to be committed to any
portion of the Leased Premises or Building, and at the termination of this Lease
Tenant shall deliver the Leased Premises to Landlord in as good condition as
existed at the Commencement Date of this Lease, ordinary wear and tear excepted.
Tenant shall notify Landlord in writing prior to vacating the Leased Premises
and arrange to meet with Landlord for a joint inspection immediately prior to
evacuation. The cost and expense of any repairs necessary to restore the
condition of the Leased Premises shall be borne by Tenant. Should Landlord be
required to expend any sums to ensure compliance with this Section 5.05, Tenant
shall reimburse Landlord within ten (10) days of receipt of notice from
Landlord.
 
5.06  Maintenance Contract.   Tenant shall, at its sole cost and expense, during
the Term maintain a regularly scheduled preventative maintenance/service
contract on an annual basis with a maintenance contractor for the servicing of
all heating, ventilation and air conditioning systems and equipment within or
servicing the Leased Premises. The maintenance contractor and contract must be
approved by Landlord and must include all services suggested by the equipment
manufacturer. A copy of the service contract shall be provided to Landlord
within sixty (60) days following the Commencement Date. In the event the service
contract is not provided, then Landlord shall have the right, but not the
obligation to have the work done and the cost therefor shall be charged to
Tenant as Additional Rent and shall become payable by Tenant with the payment of
the rent next due hereunder.
 
ARTICLE 6.00 ALTERATIONS AND IMPROVEMENTS
 
6.01  Landlord Improvements.   Landlord will complete the construction of the
improvements to the Leased Premises, including installation of any covered
carports as shown in the Plans (the "Landlord Improvements"), in accordance with
the plans and specifications attached hereto as Exhibit "C", subject to approval
by local regulatory authorities (the "Plans"). Any changes or modifications to
the Plans must be made and accepted by written change order or agreement signed
by Landlord and Tenant and will constitute an amendment to this Lease. Any
Landlord Improvements made by Landlord are the property of Landlord and must be
surrendered to Landlord upon the termination of this Lease without credit to
Tenant. Upon completion of any Landlord Improvements, Landlord shall provide and
Tenant shall acknowledge receipt and acceptance of "as-built plans" of all work
done in accordance with this Section 6.01. Tenant acknowledges that the cost of
any Landlord Improvements shall include the reasonable cost of preparation of
the Plans and a construction management fee payable to Landlord of five percent
(5%) of the total cost of construction of the Landlord Improvements.
 
6.02  Tenant Improvements.    Tenant shall not make or allow to be made any
alterations or physical additions in or to the Leased Premises ("Tenant
Alterations") without complying with all Legal Requirements and without first
obtaining the written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed Consent may be conditioned upon
review and approval of plans and specifications and monitoring of construction
by Landlord. Landlord's review of Tenant's plans and specifications and
monitoring of construction shall be solely for Landlord's benefit and shall
impose no duty or obligation on Landlord to confirm that the plans and
specifications and/or construction comply with any Legal Requirements. Any
Tenant Alterations shall be made or performed at Tenant's sole cost and expense
by a contractor or contractors acceptable to Landlord and in a good, workmanlike
and lien free manner. All Tenant Alterations are the property of Landlord and
must be surrendered to Landlord upon the termination of this Lease without
credit to Tenant; provided, however, Landlord, at its option, may require Tenant
to remove any Tenant Alterations in order to restore the Leased Premises to the
condition existing at the time Tenant took possession, all costs of removal to
be borne by Tenant, provided notice of such requirement is delivered to Tenant
at the time consent for the Tenant Alterations is given. This clause does not
apply to moveable equipment or furniture owned by Tenant, which may be removed
by Tenant at the
 
 
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end of the Term if no Event of Default then exists and if such equipment and
furniture are not then subject to any other rights, liens and interest of
Landlord and such removal can be accomplished without material damage to the
Leased Premises. Upon completion of any Tenant Alterations, Tenant shall provide
Landlord with "as built plans" (on CADD form), copies of all construction
contracts and proof of payment for all labor and materials (including lien
waivers). To defer the cost to Landlord associated with Tenant Alterations and
confirming that such improvements are in accordance with the terms of this Lease
and comply with all Legal Requirements, Tenant shall reimburse Landlord upon
demand, as Additional Rent, any sums expended by Landlord for third party
examination of the architectural, mechanical, electrical and plumbing plans for
any Tenant Alterations.
 
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 Leased Premises, do not overload or damage
the Leased Premises, may be removed without injury to the Leased Premises, and
the construction, erection, and installation thereof complies with all Legal
Requirements and with Landlord's requirements set forth above. Upon expiration
or earlier termination or this Lease, Tenant shall remove its Trade Fixtures and
shall repair any damage caused by such removal.
 
ARTICLE 7.00 CASUALTY AND INSURANCE
 
7.01  Substantial Destruction.   (a)  If the Leased Premises or any part thereof
are damaged by fire or other casualty, Tenant shall give prompt written notice
thereof to Landlord. 1) If the Leased Premises are totally destroyed by fire or
other casualty, 2) if the Leased Premises are damaged so that rebuilding cannot
reasonably be completed within one hundred eighty (180) days after the date of
written notification by Tenant to Landlord of the destruction, 3) if the Leased
Premises are part of a Building which is substantially destroyed (even though
the Leased Premises are not totally or substantially destroyed), 4) if the
Leased Premises or Building is damaged by fire or other casualty and applicable
law would prevent rebuilding to substantially the condition prior to such fire
or casualty, 5) if any mortgagee requires the insurance proceeds payable as a
result of such casualty to be applied to the payment of the mortgage debt, 6)
the Leased Premises are materially damaged and less than two (2) years remain on
the Term on the date of such casualty, or 7) the insurance proceeds are
insufficient to reconstruct the Leased Premises or Building to substantially the
same condition prior to such fire or casualty, Landlord may at its option
terminate this Lease by providing Tenant written notice thereof within sixty
(60) days of such casualty and abate Base Rent and Additional Rent for the
unexpired portion of the Term effective as of the date of the written
notification.
 
(b)  If the Leased Premises or any part thereof are damaged by fire or other
casualty, Tenant shall give prompt written notice thereof to Landlord. (1) If
the Leased Premises are totally destroyed by fire or other casualty, (2) if the
Leased Premises are damaged so that rebuilding cannot reasonably be completed
within one hundred eighty (180) days after the date of written notification by
Tenant to Landlord of the destruction, (3) if the Leased Premises are damaged by
fire or other casualty and applicable law would prevent rebuilding to
substantially the condition prior to such fire or casualty, (4) if the Leased
Premises are materially damaged and less than two (2) years remain on the Term
on the date of such casualty, and in any of the foregoing situations, the damage
is not the result of any act or omission of Tenant, Tenant may at its option
terminate this Lease by providing Landlord written notice thereof within thirty
(30) days of such casualty and Base Rent and Additional Rent shall abate for the
unexpired portion of the Term effective as of the date of the written
notification.
 
7.02  Partial Destruction.   If this Lease is not terminated under Section 7.01,
Landlord shall proceed with reasonable diligence to rebuild or repair the
Building and Landlord Improvements, if applicable, to substantially the same
condition in which they existed prior to the damage, provided, Tenant agrees
that Landlord has no obligation to repair or rebuild any Tenant Alterations or
Tenant's furniture, fixtures or personal property. If the Leased Premises are to
be rebuilt or repaired and are untenantable in whole or in part following the
damage, Landlord and Tenant agree to adjust the Base Rent and Additional Rent
payable under this Lease during the period for which the Leased Premises are
untenantable to such an extent as may be fair and reasonable under the
circumstances. Landlord and Tenant hereby waive the provisions of any law from
time to time in effect during the Term relating to the effect upon leases of
partial or total destruction of leased property and agree that their respective
rights in the event of damage or destruction are those specifically set forth
herein. In no event shall Landlord be required to spend more than the insurance
proceeds received by Landlord.
 
7.03  Property Insurance.   Landlord shall at all times during the Term of this
Lease maintain a
 
 
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Fire and Extended Coverage, Vandalism and Malicious Mischief policy of insurance
with the premiums paid in advance, issued by and binding upon some solvent
insurance company, insuring the Building and Landlord Improvements, if
applicable, in an amount equal to the full replacement cost of the Building and
Landlord Improvements, if applicable, as of the date of the loss (exclusive of
excavation and foundation costs, costs of underground items and costs of parking
lot paving and landscaping); provided, Landlord shall not be obligated in any
way or manner to insure any Tenant Alterations or any personal property
(including, but not limited to, any furniture, machinery, goods or supplies) of
Tenant upon or within the Leased Premises, or any fixtures installed or paid for
by Tenant upon or within the Leased Premises. Tenant shall have no right in or
claim to the proceeds of any policy of insurance maintained by Landlord even if
the cost of such insurance is borne by Tenant as set forth in Article 2.00.
Notwithstanding the foregoing, in the event Landlord has a net worth in excess
of $50,000,000, it shall be entitled to self insure against all risk provided
for in this paragraph in lieu of obtaining the insurance set forth herein.
 
7.04  Waiver of Subrogation.   ANYTHING IN THIS LEASE TO THE CONTRARY NOT
WITHSTANDING, LANDLORD AND TENANT HEREBY WAIVE AND RELEASE EACH OTHER OF AND
FROM ANY AND ALL RIGHT OF RECOVERY, CLAIM, ACTION OR CAUSE OF ACTION, AGAINST
EACH OTHER, THEIR AGENTS, OFFICERS, EMPLOYEES OR ANY PARTY CLAIMING BY, THROUGH
OR UNDER LANDLORD OR TENANT, FOR ANY LOSS OR DAMAGE THAT MAY OCCUR TO THE LEASED
PREMISES, IMPROVEMENTS TO THE BUILDING OF WHICH THE LEASED PREMISES ARE A PART,
OR PERSONAL PROPERTY WITHIN THE BUILDING, BY REASON OF FIRE, EXPLOSION, OR ANY
OTHER OCCURRENCE, REGARDLESS OF CAUSE OR ORIGIN, INCLUDING NEGLIGENCE OF
LANDLORD OR TENANT AND THEIR AGENTS, OFFICERS AND EMPLOYEES WHICH LOSS OR DAMAGE
IS (OR WOULD HAVE BEEN, HAD THE INSURANCE REQUIRED BY THIS LEASE BEEN
MAINTAINED) COVERED BY INSURANCE. LANDLORD AND TENANT AGREE IMMEDIATELY TO GIVE
THEIR RESPECTIVE INSURANCE COMPANIES WHICH HAVE ISSUED POLICIES OF INSURANCE
COVERING ALL RISK OF DIRECT PHYSICAL LOSS, WRITTEN NOTICE OF THE TERMS OF THE
MUTUAL WAIVERS CONTAINED IN THIS SECTION AND TO HAVE THE INSURANCE POLICIES
PROPERLY ENDORSED, IF NECESSARY, TO PREVENT THE INVALIDATION OF THE INSURANCE
COVERAGES BY REASON OF THE MUTUAL WAIVERS.
 
7.05  Hold Harmless.   (a) TENANT AGREES THAT LANDLORD IS NOT, AND DURING THE
TERM HEREOF WILL NOT BE, LIABLE TO TENANT OR TENANT'S EMPLOYEES, AGENTS,
INVITEES, LICENSEES OR VISITORS, OR TO ANY OTHER PERSON, CLAIMING BY, THROUGH OR
UNDER TENANT FOR AN INJURY TO PERSON OR DAMAGE TO PROPERTY ON OR ABOUT THE
LEASED PREMISES OR FOR LOSS OF OR DAMAGE TO TENANT'S BUSINESS CAUSED BY ANY ACT
OR OMISSION OF TENANT OR LANDLORD, THEIR RESPECTIVE AGENTS, SERVANTS OR
EMPLOYEES, ANY TENANT IN THE BUILDING AND/OR PROJECT OF WHICH THE LEASED
PREMISES ARE A PART, OR OF ANY OTHER PERSON ENTERING UPON THE LEASED PREMISES
UNDER EXPRESS OR IMPLIED INVITATION BY TENANT, OR CAUSED BY THE IMPROVEMENTS
LOCATED ON THE LEASED PREMISES BECOMING OUT OF REPAIR, THE FAILURE OR CESSATION
OF ANY SERVICE PROVIDED BY LANDLORD (INCLUDING HEATING, VENTILATING AND AIR
CONDITIONING SYSTEMS, SECURITY SERVICE AND DEVICES) UNLESS CAUSED BY THE GROSSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD. TENANT AGREES TO INDEMNIFY AND
HOLD HARMLESS LANDLORD OF AND FROM ANY LOSS, ATTORNEY'S FEES, EXPENSES OR CLAIMS
ARISING OUT OF ANY SUCH DAMAGE OR INJURY.
 
(b)   LANDLORD AGREES THAT TENANT IS NOT, AND DURING THE TERM HEREOF WILL NOT
BE, LIABLE TO LANDLORD OR LANDLORD'S EMPLOYEES, AGENTS, INVITEES, LICENSEES OR
VISITORS, OR TO ANY OTHER PERSON, CLAIMING BY, THROUGH OR UNDER LANDLORD FOR AN
INJURY TO PERSON OR DAMAGE TO PROPERTY ON OR ABOUT THE PROJECT (EXCLUDING THE
LEASED PREMISES) OR FOR LOSS OF OR DAMAGE TO LANDLORD'S BUSINESS CAUSED BY ANY
ACT OR OMISSION OF LANDLORD OR TENANT, THEIR RESPECTIVE AGENTS, SERVANTS OR
EMPLOYEES, OR OF ANY OTHER PERSON ENTERING UPON THE PROJECT (EXCLUDING THE
LEASED PREMISES) BY EXPRESS OR IMPLIED INVITATION OF LANDLORD, OR CAUSED BY THE
IMPROVEMENTS LOCATED ON THE PROJECT (EXCLUDING THE LEASED PREMISES) BECOMING OUT
OF REPAIR UNLESS CAUSED
 
 
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BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR TENANT. LANDLORD AGREES TO
INDEMNIFY AND HOLD HARMLESS TENANT OF AND FROM ANY LOSS, ATTORNEY'S FEES,
EXPENSES OR CLAIMS ARISING OUT OF ANY SUCH DAMAGE OR INJURY.
 
7.06  Tenant's Insurance.
 
A.  At all times commencing on and after the earlier of the Commencement Date
and the date Tenant or its agents, employees or contractors enters the Leased
Premises for any purpose, Tenant shall carry and maintain, at its sole cost and
expense:
 
1.  Commercial General Liability Insurance applicable to the Leased Premises,
its appurtenances and Tenant's actions within the Building and Common Areas,
providing, on an occurrence basis, a minimum combined single limit of Two
Million Dollars ($2,000,000.00), with a contractual liability endorsement
covering Tenant's indemnity obligations under this Lease;
 
2,  All Risks of Physical Loss Insurance written at full replacement cost value
and with a replacement cost endorsement covering all of Tenant's
personal property and Tenant Alterations in the Leased Premises; and
 
3.  Workers' Compensation Insurance as required by the state in which the Leased
Premises is located and in amounts as may be required by
applicable statute.
 
B.  Before any repairs, alterations, additions, improvements, or construction
are undertaken by or on behalf of Tenant, Tenant shall carry and maintain, at
its expense, or Tenant shall require any contractor performing work on the
Leased Premises to carry and maintain, at no expense to Landlord, in addition to
Workers' Compensation Insurance, All Risk Builder's Risk Insurance in the amount
of the full replacement cost of any alterations, additions or improvements and
Commercial General Liability Insurance (including, without limitation,
Contractor's Liability coverage, Contractual Liability coverage and Completed
Operations coverage,) written on an occurrence basis with a minimum combined
single limit of Two Million Dollars ($2,000,000.00) and adding "the named
Landlord hereunder (or any successor thereto), and its respective members,
principals, beneficiaries, partners, officers, directors, employees, agents and
any Mortgagee(s)", and other designees of Landlord as the interest of such
designees appear, as additional insureds (collectively referred to as the
"Additional Insureds").
 
C.  Any company writing any insurance which Tenant is required to maintain or
cause to be maintained pursuant to the terms of this Lease (all such insurance
as well as any other insurance pertaining to the Leased Premises or the
operation of Tenant's business therein being referred to as "Tenant's
Insurance"), as well as the form of such insurance, are at all times subject to
Landlord's reasonable approval, and each such insurance company must have an
A.M. Best rating of "A-" or better and be licensed and qualified to do business
in the state in which the Leased Premises are located. All policies evidencing
Tenant's Insurance (except for Workers' Compensation Insurance) must specify
Tenant as named insured and the Additional Insureds as additional insureds.
Provided that the coverage afforded Landlord and any designees of Landlord is
not reduced or otherwise adversely affected, all of Tenant's Insurance may be
carried under a blanket policy covering the Leased Premises and any other of
Tenant's locations. All policies of Tenant's Insurance must contain endorsements
requiring that the insurer(s) give Landlord and its designees at least thirty
(30) days' advance written notice of any change, cancellation, termination or
lapse of said insurance. Tenant shall be solely responsible for payment of
premiums for all of Tenant's Insurance. Tenant shall deliver to Landlord at
least fifteen (15) days prior to the time Tenant's Insurance is first required
to be carried by Tenant, and upon renewals at least fifteen (15) days prior to
the expiration of any such insurance coverage, certificates evidencing all
policies procured by Tenant in compliance with its obligations under this Lease.
The limits of Tenant's Insurance do not in any manner limit Tenant's liability
under this Lease.
 
D.  Tenant shall not do or fail to do anything in, upon or about the Leased
Premises which will (1) violate the terms of any of Landlord's insurance
policies; (2) prevent Landlord from obtaining policies of insurance acceptable
to Landlord or any Mortgagees; or (3) result in an increase in the rate of any
insurance on the Leased Premises, the Building, any other property of Landlord
or of others within the Building. In the event of the occurrence of any of the
events set forth in this Section, Tenant shall pay Landlord upon demand, as
Additional Rent, the cost of the amount of any increase in any such insurance
 
 
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premium, provided that the acceptance by Landlord of such payment may not be
construed to be a waiver of any rights by Landlord in connection with a default
by Tenant under the Lease. If Tenant fails to obtain the insurance coverage
required by this Lease, Landlord may, at its option, obtain such insurance for
Tenant, and Tenant shall pay, as Additional Rent, the cost of all premiums
thereon and all of Landlord's costs associated therewith.
 
ARTICLE 8.00 CONDEMNATION
 
8.01  Substantial Taking.   (a) If all or a substantial portion of the Leased
Premises or a substantial portion of the Building (even though the Leased
Premises are not taken) are taken for any public or quasi-public use under any
governmental law, ordinance or regulation, or by right of eminent domain or by
purchase in lieu thereof, and the taking would prevent or materially interfere
with the use of the Leased Premises or the Building for the purpose for which it
is then being used, then Landlord may, but is not required to, terminate this
Lease and abate Base Rent and Additional Rent during the unexpired portion of
this Lease effective on the date title or physical possession is taken by the
condemning authority, whichever occurs first.
 
(b)  If all or a substantial portion of the Leased Premises are taken for any
public or quasi-public use under any governmental law, ordinance or regulation,
or by right or eminent domain or by purchase in lieu thereof, and the taking
would prevent or materially interfere with the use of the Leased Premises for
the purpose for which it is then being used, then Tenant may, but is not
required to, terminate this Lease and Base Rent and Additional Rent shall abate
during the unexpired portion of this Lease effective on the date title or
physical possession is taken by the condemning authority, whichever occurs
first.
 
8.02  Partial Taking.   If a portion of the Leased Premises or a portion of the
Building are taken as set forth in Section 8.01 above and this Lease is not
terminated as provided above, Landlord shall, at Landlord's sole risk and
expense, restore and reconstruct the Leased Premises and Landlord Improvements,
if applicable, to the extent necessary to make it reasonably tenantable,
provided, if the damages received by Landlord are insufficient to cover the
costs of restoration, Landlord may terminate this Lease. Landlord shall have no
obligation to restore any Tenant Alterations. The Base Rent and Additional Rent
payable under this Lease during the unexpired portion of the Term will be
adjusted to such an extent as is fair and reasonable under the circumstances.
 
8.03   In the event of any taking as set forth above, Tenant may seek a separate
award for any loss of improvements made or paid for by Tenant, its personal
property, and its moving expenses (so long as no such claim diminishes
Landlord's claim or award), but all other claims of any nature shall belong to
Landlord. In the event Tenant does not receive such a separate award, Landlord
shall be entitled to receive any and all sums awarded for the taking.
 
8.04   Notwithstanding anything herein to the contrary, if the holder of any
indebtedness secured by a mortgage or deed of trust covering the Building and/or
Project requires that the condemnation proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within fifteen (15) days after such requirement
is imposed.
 
ARTICLE 9.00 ASSIGNMENT OR SUBLEASE
 
9.01  Landlord Assignment.   Landlord is entitled to sell, transfer or assign,
in whole or in part, its rights and obligations under this Lease and in the
Leased Premises. Any such sale, transfer or assignment shall, upon delivery to
Tenant of a written assumption by the transferee of Landlord's obligations
hereunder, release Landlord from all liabilities under this Lease arising after
the date of such sale, assignment or transfer, and Tenant agrees to look solely
to the successor in interest of Landlord for the performance of such obligation.
 
9.02  Tenant Assignment.   Tenant shall not assign, in whole or in part, this
Lease, or allow it to be assigned, in whole or in part, by operation of law or
otherwise (including without limitation, if Tenant's voting securities are not
traded on any national securities exchange, by transfer of more than a fifty
percent (50%) interest in Tenant in a single transaction or in a series of
transactions, which transfer will be deemed an assignment) or mortgage or pledge
the same or sublet the Leased Premises, in whole or in part, without the prior
written consent of Landlord which consent shall not be unreasonably withheld,
conditioned or delayed, In no event will any such assignment or sublease ever
release Tenant or any guarantor from any
 
 
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obligation or liability hereunder.
 
9.03  Conditions of Assignment.   If Tenant desires to assign or sublet all or
any part of the Leased Premises it must so notify Landlord at least thirty (30)
days in advance of the date on which Tenant desires to make such assignment or
sublease. Tenant shall provide Landlord with a copy of the proposed assignment
or sublease and such information as Landlord might request concerning the
proposed subtenant or assignee to allow Landlord to make informed judgments as
to the financial condition, reputation, operations and general desirability of
the proposed subtenant or assignee. Within fifteen (15) days after Landlord's
receipt of Tenant's proposed assignment or sublease and all required information
concerning the proposed subtenant or assignee, Landlord is entitled to exercise
any of the following options: (1) consent to the proposed assignment or
sublease, pursuant to a Consent Agreement on a form approved by Landlord in its
reasonable discretion, and, if the rent due and payable by any assignee or
subtenant under any such permitted assignment or sublease (or a combination of
the rent payable under such assignment or sublease plus any bonus or any other
consideration or any payment incident thereto) exceeds the rent payable under
this Lease for such space, Tenant shall pay to Landlord fifty percent (50%) of
such excess rent and other excess consideration immediately upon receipt thereof
by Tenant, after deducting therefrom all costs and expenses incurred by Tenant
in connection with such assignment or sublease, or (2) refuse, in its reasonable
discretion and judgment, to consent to the proposed assignment or sublease. If
Landlord exercises option (I) above, and thereafter an Event of Default occurs,
Landlord, in addition to any other remedies provided by this Lease or provided
by law, may, at its option, collect directly from the assignee or subtenant all
rents becoming due to Tenant by reason of the assignment or sublease, and
Landlord will be entitled to a security interest in all property located on the
Leased Premises to secure payment of such sums. Tenant agrees that any
collection directly by Landlord from the assignee or subtenant may not be
construed as, or constitute, a novation or a release of Tenant or any guarantor
from the further performance of its obligations under this Lease. As a condition
to a request for Landlord's review of any assignment or sublease, Tenant must
pay Landlord all reasonable out-of-pocket legal fees and expenses incurred by
Landlord in connection with the review by Landlord of Tenant's requested
assignment or sublease together with any reasonable out-of-pocket legal fees and
disbursements incurred in the preparation and/or review of any documentation
required by the requested assignment or sublease within five (5) days of demand
for payment thereof, provided Tenant's responsibilities for such amounts shall
not exceed $1,000.
 
9.04  Subordination.   Tenant accepts this Lease subject and subordinate to any
recorded mortgage or deed of trust lien or assignment of leases and rents
presently existing or hereafter created upon the Building or Project (provided,
however, that any such mortgagee may, at any time, subordinate such mortgage,
deed of trust or other lien or assignment of leases and rents to this Lease) and
to any renewals thereof. Tenant agrees that this clause is self-operative and no
further instrument of subordination is required to effect such subordination.
Tenant also agrees upon demand to execute additional instruments subordinating
this Lease as Landlord may require. If the interests of Landlord under this
Lease are transferred by reason of foreclosure or other proceedings for
enforcement of any first mortgage or deed of trust lien or assignment of leases
and rents on the Leased Premises, Tenant agrees to be bound to the transferee
(sometimes called the "Purchaser"), under the terms, covenants and conditions of
this Lease for the balance of the term remaining, including any extensions or
renewals, with the same force and effect as if the Purchaser were Landlord under
this Lease, and, if requested by the Purchaser, Tenant agrees to attorn to the
Purchaser, including the first mortgagee under any such mortgage if it be the
Purchaser, as its landlord, provided, in either event such Purchaser agrees to
recognize the rights of Tenant hereunder as long as no Event of Default exists.
Upon transfer of Landlord's interest to Purchaser, Purchaser shall not be 1)
subject to any credit, demand, claim, counterclaim, offset or defense which
theretofore accrued to Tenant against Landlord; 2) liable for any previous act
or omission of Landlord, 3) unless consented to by Landlord's lender, bound by
any previous modification of the Lease or prepayment of more than one month's
Base Rent or Additional Rent in advance; 4) required to account for any Security
Deposit unless actually delivered to Landlord's lender by Landlord; 5) bound by
any obligation to make any payment or grant any credit except as specifically
provided for in this Lease; and 6) responsible for any monies owing to Tenant by
Landlord.
 
9.05  Estoppel Certificates.   Tenant agrees to furnish, from time to time,
within five (5) days after receipt of a request from Landlord, Landlord's
mortgagee or any potential purchaser of the Building or Project, a statement
certifying, if applicable, the following (noting any variances): Tenant is in
possession of the Leased Premises; the Leased Premises are acceptable; the Lease
is in full force and effect; the Lease is unmodified; Tenant claims no present
charge, lien, or claim of offset against Base Rent; the Base Rent is paid for
the current month, but is not prepaid for more than one month and will not be
prepaid for more than one month in advance; to Tenant's knowledge, there is no
existing default by reason of some act or omission by Landlord; and such other
matters as may be reasonably required by Landlord, Landlord's
 
 
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mortgagee or any potential purchaser. Any notice and cure provisions set forth
in any other part of this Lease do not apply to a default of this section 9.05.
 
ARTICLE 10.00 LIENS
 
10.01  Landlord's Lien.   As security for payment of Base Rent, Additional Rent
and damages, Tenant hereby grants to Landlord a lien upon all property of Tenant
now or subsequently located upon the Leased Premises and Tenant agrees not
remove such property from the Leased Premises except in the ordinary course of
business, provided at the time of such removal no Event of Default exists. If an
Event of Default exists, Landlord may enter upon the Leased Premises, by picking
or changing locks if necessary, and take possession of all or any part of the
personal property, and may sell all or any part of the personal property at a
public or private sale, in one or successive sales, with or without notice, to
the highest bidder for cash, on behalf of Tenant and convey all of Tenant's
title and interest in the personal property sold. The proceeds of the sale of
the personal property shall be applied by Landlord toward the reasonable costs
and expenses of the sale, including attorney's fees, and then toward the payment
of all sums then due by Tenant to Landlord under the terms of this Lease. Any
excess remaining will be paid to Tenant or any other person entitled thereto by
law.
 
10.02  Uniform Commercial Code.   This Lease is intended as and constitutes a
security agreement within the meaning of the Uniform Commercial Code of the
state in which the Leased Premises are situated. Landlord, in addition to the
rights prescribed in this Lease, is entitled to all of the rights, titles, liens
and interests in and to Tenant's property, now or hereafter located upon the
Leased Premises, which may be granted a secured party, as that term is defined,
under the Uniform Commercial Code to secure to Landlord payment of all sums due
and the full performance of all Tenant's covenants under this Lease. Tenant
shall on request execute and deliver to Landlord a financing statement for the
purpose of perfecting Landlord's security interest under this Lease or Landlord
may file this Lease or a copy thereof as a financing statement. Unless otherwise
provided by law and for the purpose of exercising any right pursuant to this
section, Landlord and Tenant agree that any applicable requirement of reasonable
notice is met if such notice is given by ten (10) days advance written notice,
sent by certified mail, return receipt requested, to Landlord or Tenant at the
addresses specified herein.
 
ARTICLE 11.00 DEFAULT AND REMEDIES
 
11.01  Default by Tenant.   The following events constitute an Event of Default
by Tenant under this Lease:
 
(a)  Tenant fails to pay when due any installment of Base Rent, Taxes and
Insurance, Operating Expenses or Additional Rent within ten (10) days of
delivery of notice of such failure by Landlord;
 
(b)  Tenant fails to comply with any term, provision or covenant of this Lease,
other than the payment of Base Rent or Additional Rent and such failure
continues in excess of thirty (30) days after delivery of notice of failure by
Landlord, or such additional time as may be reasonably necessary provided Tenant
commences and diligently prosecutes cure of such failure, but in no event in
excess of ninety (90) days;
 
(c)  Tenant or any guarantor of Tenant's obligations hereunder files, causes to
be filed or has filed against it a petition in bankruptcy or is adjudged
bankrupt or insolvent under any applicable federal or state bankruptcy or
insolvency law, or admits that it cannot meet its financial obligations as they
become due; or a receiver or trustee is appointed for all or substantially all
of the assets of Tenant or such guarantor; or Tenant or any guarantor of
Tenant's obligations hereunder makes a transfer in fraud of creditors or makes
an assignment for the benefit of creditors; or
 
(d)  Tenant does or permits to be done any act which results in a lien (of any
nature) being filed against the Leased Premises, the Building or Project, and
does not cause such lien to be bonded around or discharged or recode within
thirty (30) days following such filing.
 
11.02  Remedies for Tenant's Default. During the continuation of any Event of
Default, Landlord is entitled to pursue any one or more of the remedies set
forth herein without any notice or demand.
 
(1)  Without declaring the Lease terminated, Landlord may enter upon and take
possession of the Leased Premises, by picking or changing locks if necessary,
and lock out, expel or remove Tenant and any
 
 
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other person who may be occupying all or any part of the Leased Premises without
being liable for any claim for damages, and relet the Leased Premises on behalf
of Tenant and receive the rent directly by reason of the reletting. Tenant
agrees to pay Landlord on demand any deficiency that may arise by reason of any
reletting of the Leased Premises as such deficiencies occur from time to time;
further, Tenant agrees to reimburse Landlord for any expenditures made by it in
order to relet the Leased Premises, including, but not limited to, leasing
commissions, lease incentives, remodeling and repair costs and reasonable
attorney's fees.
 
(2)  Without declaring the Lease terminated, Landlord may enter upon the Leased
Premises, by picking or changing locks if necessary, without being liable for
any claim for damages, and do whatever Tenant is obligated to do under the terms
of this Lease, Tenant agrees to reimburse Landlord on demand for any expenses
which Landlord may incur in effecting compliance with Tenant's obligations under
this Lease including reasonable attorney's fees.
 
(3)  Landlord may terminate this Lease, in which event Tenant shall immediately
surrender the Leased Premises to Landlord, and if Tenant fails to surrender the
Leased Premises, Landlord may, without prejudice to any other remedy which it
may have for possession or arrearage in rent, enter upon and take possession of
the Leased Premises, by picking or changing locks if necessary, and lock out,
expel or remove Tenant and any other person who may be occupying all or any part
of the Leased Premises without being liable for any claim for damages. Tenant
agrees to pay on demand the amount of all loss and damage which Landlord may
suffer by reason of the termination of this Lease under this section, including
without limitation, loss and damage due to the failure of Tenant to maintain and
or repair the Leased Premises as required hereunder and/or due to the inability
to relet the Leased Premises on terms satisfactory to Landlord or otherwise, and
any expenditures made by Landlord in order to relet the Leased Premises,
including, but not limited to, leasing commissions, lease incentives, and
remodeling and repair costs. In addition, upon termination Landlord may collect
from Tenant the value of all future rentals required to be paid under this Lease
from the date Landlord terminates the Lease until the original Termination Date
in accordance with applicable law. Notwithstanding anything contained in this
Lease to the contrary, this Lease may be terminated by Landlord only by mailing
or delivering written notice of such termination to Tenant, and no other act or
omission of Landlord constitutes a termination of this Lease.
 
(4)  If Landlord exercises its remedy to lock out Tenant in accordance with any
provision of this Lease, Tenant agrees that no notice is required to be posted
by Landlord on any door to the Leased Premises (or elsewhere) disclosing the
reason for such action or any other information, and that Landlord is not
obligated to provide a key to the changed lock to Tenant unless Tenant has
first:
 
(I)  brought current all payments due to Landlord under this Lease (unless
Landlord has permanently repossessed the Leased Premises or terminated this
Lease, in which event payment of all past due amounts will not obligated
Landlord to provide a key);
 
(II)  fully cured and remedied to Landlord's satisfaction all other Events of
Default ; and
 
(III)  provided Landlord with additional security deposit and assurances
satisfactory to Landlord that Tenant intends to and is able to meet and comply
with its future obligations under this Lease, both monetary and non-monetary.
 
Upon compliance with the foregoing, Landlord shall, upon written request by
Tenant, at Landlord's convenience, upon receipt by Landlord of an amount
necessary to reimburse itself for time and expense in providing such service,
and upon Tenant's execution and delivery of such waivers and indemnifications as
Landlord may require at Landlord's option either:
 
(i)  escort Tenant or its specifically authorized employees or agents to the
Leased Premises to retrieve personal belongings of Tenant's employees and
property of Tenant that is not subject to a Security Interest provided in this
Lease, or
 
(ii)  obtain from Tenant a list of such property and arrange for such items to
be removed from the Leased Premises and made available to Tenant at such place
at such time as Landlord may designate, provided however, that if Landlord
elects option (ii), then Tenant must pay in cash in advance to Landlord the
estimated costs that Landlord may incur upon moving and storage charges
theretofore incurred by Landlord with respect to such property.
 
(5) THE PROVISIONS OF THIS ARTICLE ARE INTENDED TO OVERRIDE AND
 
 
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SUPERSEDE ANY CONFLICTING PROVISIONS OF THE TEXAS PROPERTY CODE AND ANY
AMENDMENTS OR SUCCESSOR STATUTES THERETO, AND OF ANY OTHER LAW, TO THE MAXIMUM
EXTENT PERMITTED BY THE LAW.
 
(6)  Notwithstanding any other remedy set forth in this Lease, if Landlord has
provided any tenant improvement allowance, and Tenant fails to take possession
of the Leased Premises on the Commencement Date or otherwise allows an Event of
Default to exist at any time during the Term, any unamortized tenant improvement
allowance, will be due and payable immediately.
 
(7)  Tenant hereby expressly waives any and all rights of redemption granted by
or under any present or future laws in the event of Tenant being evicted or
dispossessed for any cause, or in the event of Landlord obtaining possession of
the Leased Premises by reason of the violation by Tenant of any of the covenants
and conditions of this Lease or otherwise.
 
(8)  All of Landlord's rights and remedies set forth herein are cumulative and
pursuit of any remedy specified in this Lease will not constitute an election to
pursue that remedy only, nor preclude Landlord from pursuing any other remedy
available at law or in equity, nor constitute a forfeiture or waiver of any rent
or other amount due to Landlord as described herein.
 
(9)  If Tenant or any guarantor of Tenant's obligations hereunder is the subject
of any insolvency, bankruptcy, receivership, dissolution, reorganization or
similar proceeding, federal or state, voluntary or involuntary, under any
present or future law or act, Landlord is entitled to the automatic and absolute
lifting of any automatic stay as to the enforcement of its remedies under this
Lease, including specifically the stay imposed by Section 362 of the United
States Federal Bankruptcy Code, as amended. Tenant hereby consents to the
immediate lifting of any such automatic stay, and may not contest any motion by
Landlord to lift such stay. Tenant expressly acknowledges that the Leased
Premises is not now and will never be necessary to any plan or reorganization of
any type.
 
(10)     LANDLORD WILL NOT BE LIABLE FOR ANY CLAIMS OR LIABILITIES ARISING FROM
LANDLORD'S EXERCISE OF ITS REMEDIES SET FORTH HEREIN UPON THE OCCURRENCE OF AN
EVENT OF DEFAULT, INCLUDING, WITHOUT LIMITATION, CLAIMS OR LIABILITIES ARISING
FROM LANDLORD'S OWN NEGLIGENCE.
 
11.03  Landlord's Default.   Landlord shall not be in default of this Lease
unless Landlord fails to perform any of its obligations hereunder within thirty
(30) days after receipt of 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 thirty (30) days, then after such period of time as
is reasonably necessary), with notice to Landlord's mortgagee as provided in
Section 14.12. 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. Any liability of Landlord under this Lease shall be
limited solely to its interest in the Building or 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,
its affiliates or any officer, director or employee of the foregoing.
 
ARTICLE 12.00 INDEMNITIES
 
12.01  TENANT'S INDEMNITIES. TO THE FULL EXTENT PERMITTED BY LAW AND THIS LEASE,
TENANT WILL INDEMNIFY AND DEFEND LANDLORD AGAINST ALL LIABILITIES AND CLAIMS AND
THE COSTS AND EXPENSES THEREOF, ARISING OUT OF (I) ANY ACT OR OMISSION OF
TENANT, INCLUDING WITHOUT LIMITATION TENANT'S CONDUCT OF BUSINESS IN THE LEASED
PREMISES OR THE PROJECT, (E) ANY ALLEGED OR ACTUAL VIOLATION OR FAILURE TO
COMPLY WITH ANY LEGAL REQUIREMENT, (III) ANY BREACH, VIOLATION OR
NON-PERFORMANCE OF ANY OBLIGATION OF TENANT UNDER THIS LEASE, OR (IV) ANY
MISREPRESENTATION CONNECTED WITH THE LEASE MADE BY TENANT OR ANY GUARANTOR.
 
12.02   LANDLORD'S INDEMNITIES. TO THE FULL EXTENT PERMITTED BY LAW AND THIS
LEASE (AND EXCEPT TO THE EXTENT WAIVED AND RELEASED BY SECTION 7.04 AND 7.05),
LANDLORD WILL INDEMNIFY AND DEFEND TENANT AGAINST ALL LIABILITIES AND CLAIMS AND
THE COSTS AND EXPENSES THEREOF, ARISING OUT OF (I) ANY ACT OR OMISSION OF
LANDLORD, INCLUDING WITHOUT
 
 
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LIMITATION LANDLORD'S CONDUCT OF BUSINESS IN THE BUILDING OR THE PROJECT, (II)
ANY ACTUAL VIOLATION OR FAILURE TO COMPLY WITH ANY LEGAL REQUIREMENT BY
LANDLORD, (III) ANY BREACH, VIOLATION OR NON­PERFORMANCE OF ANY OBLIGATION OF
LANDLORD UNDER THIS LEASE, OR (IV) ANY MISREPRESENTATION CONNECTED WITH THE
LEASE MADE BY LANDLORD.
 
ARTICLE 13.00
RESERVED
 
ARTICLE 14.00 MISCELLANEOUS
 
14.01 Waiver.   Failure of Landlord to declare an Event of Default immediately
upon its occurrence, or delay in taking any action (including enforcement of
remedies) in connection with an Event of Default, does not constitute and shall
not be deemed a waiver of the Event of Default, and Landlord is entitled to
declare the Event of Default at any time and take such action as is lawful or
authorized under this Lease.
 
No act or thing done by Landlord or its agents during the Term may be deemed an
acceptance of an attempted surrender of the Leased Premises, and no agreement to
accept a surrender of the Leased Premises will be valid unless made in writing
and signed by Landlord. No reentry or taking possession of the Premises by
Landlord may be construed as an election on its part to terminate this Lease,
unless a written notice of such intention, signed by Landlord, is given by
Landlord to Tenant. Notwithstanding any such reletting or reentry or taking
possession, Landlord may at any time thereafter elect to terminate this Lease
for a continuing previous Event of Default. Tenant and Landlord agree that
Landlord's acceptance of rent following an Event of Default hereunder will not
constitute Landlord's waiver of such Event of Default. The failure of Landlord
to enforce any of the Rules and Regulations against Tenant or any other tenant
in the Building will not constitute a waiver of any such Rules and Regulations.
No waiver of any provision of this Lease is effective unless such waiver is in
writing and signed by Landlord.
 
14.02  Act of God or Force Majeure.   An "act of God" or "force majeure" is
defined for purposes of this Lease as strikes, lockouts, sitdowns, material or
labor restrictions by any governmental authority, unusual transportation delays,
riots, floods, washouts, explosions, earthquakes, fire, storms, weather
(including wet grounds or inclement weather which prevents construction), acts
of the public enemy, wars, insurrections and any other cause not reasonably
within the control of a party and which by the exercise of due diligence a party
is unable, wholly or in part, to prevent or overcome. Neither Landlord or Tenant
is required to perform any non-financial covenant or obligation in this Lease,
or be liable in damages to the other party, so long as the performance or
non-performance of the covenant or obligation is delayed, caused or prevented by
an act of God, force majeure or by the other party.
 
14.03  Attorney's Fees.   The prevailing party in any litigation between the
parties with respect to the terms, covenants, agreements or conditions of this
Lease, shall be entitled to recover as part of its judgment, reasonable
attorney's fees and costs and expenses incurred therein.
 
14.04  Successors.   This Lease applies to, is binding upon and inures to the
benefit of Landlord and Tenant and their respective heirs, personal
representatives, successors and assigns.
 
14.05  Rent Tax.   If applicable in the jurisdiction where the Leased Premises
are situated, Tenant shall pay and be liable for all rental, sales and use taxes
or other similar taxes, if any, levied or imposed by any city, state, county or
other governmental body having authority, such payments to be in addition to all
other payments required to be paid to Landlord by Tenant under the terms of this
Lease. Any such payment must be paid concurrently with the payment of the Base
Rent, Taxes and Insurance, Operating Expenses or other charge upon which the tax
is based as set forth above.
 
14.06  Captions.   The captions appearing in this Lease are inserted only as a
matter of convenience and in no way define, limit, construe or describe the
scope or intent of any section.
 
14.07  Notice.   All rent and other payments required to be made by Tenant shall
be paid to Landlord at the address set forth in Section 1.05 or at such other
address as Landlord may specify from time to time by written notice. All
payments required to be made by Landlord to Tenant are payable to Tenant at the
address set forth in Section 1.05 or at any other address within the continental
United States as Tenant may specify from time to time by written notice. For
purposes hereof, any notice or document required or
 
 
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permitted to be delivered by the terms of this Lease (other than delivery of
rental payments) will be deemed to be delivered upon the earlier of actual
receipt or (whether or not actually received) when deposited in the United
States Mail, postage prepaid, certified mail, return receipt requested,
addressed to the parties at the respective addresses set forth in Section 1.05.
Rental payments are deemed received only upon actual receipt. Unless
specifically authorized herein, any notice delivered via facsimile transmission
will not satisfy a requirement to give notice under the terms of this Lease.
 
14.08  Submission of Lease.   Submission of this Lease to Tenant for signature
does not constitute a reservation of space or an option or offer to lease. This
Lease is not deemed effective until execution by and delivery to both Landlord
and Tenant.
 
14.09  Representations, Warranties and Covenants of Tenant.   (a) Tenant
represents, warrants and covenants that it is now in a solvent condition; that
no bankruptcy or insolvency proceedings are pending or contemplated by or
against Tenant or any guarantor of Tenant's obligations under this Lease; that
all reports, statements and other data furnished by Tenant to Landlord in
connection with this Lease are true and correct in all material respects; that
the execution and delivery of this Lease by Tenant does not contravene, result
in a breach of, or constitute a default under any contract or agreement to which
Tenant is a party or by which Tenant may be bound and does not violate or
contravene any law, order, decree, rule or regulation to which Tenant is
subject; and that there are no judicial or administrative actions, suits, or
proceedings pending or threatened against or affecting Tenant or any guarantor
of Tenant's obligations under this lease. If Tenant is a corporation, limited
liability company or partnership, each of the persons executing this lease on
behalf of Tenant represents and warrants that Tenant is duly organized and
existing, is qualified to do business in the state in which the Leased Premises
are located, has full right and authority to enter into this Lease, that the
persons signing on behalf of Tenant are authorized to do so by appropriate
corporate, company or partnership action and that the terms, conditions and
covenants in this Lease are enforceable against Tenant. If Tenant is a
corporation, limited liability company or partnership, Tenant, upon Landlord's
request, will deliver evidence satisfactory to Landlord that the execution and
delivery of this Lease has been duly authorized and properly executed.
 
(b)  Representations, Warranties and Covenants of Landlord. Landlord represents,
warrants and covenants that it is now in a solvent condition; that no bankruptcy
or insolvency proceedings are pending or contemplated by or against Landlord
that all reports, statements and other data furnished by Landlord to Tenant in
connection with this Lease are true and correct in all material respects; that
the execution and delivery of this Lease by Landlord does not contravene, result
in a breach of; or constitute a default under any contract or agreement to which
Landlord is a party or by which Landlord may be bound and does not violate or
contravene any law, order, decree, rule or regulation to which Landlord is
subject; and that there are no judicial or administrative actions, suits, or
proceedings pending or threatened against or affecting Landlord. Landlord
represents and warrants that it is duly organized and existing, is qualified to
do business in the state in which the Leased Premises are located, has full
right and authority to enter into this Lease, that the persons signing on behalf
of Landlord are authorized to do so by appropriate corporate, company or
partnership action and that the terms, conditions and covenants in this Lease
are enforceable against Landlord.
 
14.10  Severability.   If any provision of this Lease or the application thereof
to any person or circumstance is rendered invalid or unenforceable to any
extent, the remainder of this Lease and the application of such provisions to
other persons or circumstances remains unaffected thereby and continues to be
enforced to the greatest extent permitted by law.
 
14.11  Survival.   All obligations of Tenant hereunder not fully performed as of
the expiration or earlier termination of the Term shall survive the expiration
or earlier termination of the Term, including, without limitation, all payment
obligations and all obligations concerning the condition of the Leased Premises.
 
14.12  Notice to Mortgagees.   Tenant shall serve written notice of any claimed
default or breach by Landlord under this Lease upon any such mortgagee, and no
notice to Landlord will be effective unless such notice is served upon said
mortgagee; notwithstanding anything to the contrary contained herein, Tenant
agrees to allow such mortgagee the same period following receipt of such notice
to cure such default or breach as is afforded Landlord; provided, in the event
it is necessary for said such mortgagee to foreclose on the property of which
the Leased Premises are a part in order to cure such default, such mortgagee
will be entitled to such additional time as is necessary to cure such default
provided such default is cured within sixty (60) days of the last day for cure
originally set forth in this Lease.
 
 
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14.13  No Recordation.   Neither Landlord nor Tenant shall record this Lease
without the prior written consent of the other party.
 
14.14  Counterparts.   This Lease may be executed in two or more counterparts,
and it is not necessary that any one of the counterparts be executed by all of
the parties hereto. Each fully or partially executed counterpart constitutes an
original, but all such counterparts taken together constitute but one and the
same instrument.
 
14.15  Governing Law/Venue.   THIS LEASE MUST BE CONSTRUED UNDER AND IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES
OF AMERICA AS APPLICABLE TO TRANSACTIONS WITHIN THE STATE OF TEXAS. TENANT
HEREBY SUBMITS TO THE JURISDICTION OF ANY COURT OF COMPETENT JURISDICTION
SITTING IN DALLAS COUNTY, TEXAS.
 
14.16  Broker.   Tenant represents and warrants that Tenant has dealt with no
broker except Swearingen Realty Group ("Broker"), and that, insofar as Tenant
knows, no other broker negotiated this Lease or is entitled to any commission in
connection herewith. Landlord agrees to indemnify and hold Tenant harmless from
and against any liabilities or claims arising with respect to Broker or any
other broker or similar parties whose claim arises by, through or on behalf of
Landlord. Tenant agrees to indemnify and hold Landlord harmless from and against
any liabilities or claims (and costs of defending against and investigating such
claims) of any other broker or similar parties whose claim arises by, through or
on behalf of Tenant.
 
14.17  Publication.  Tenant hereby agrees that Landlord may, but is not
required, at no cost to Tenant, to publicize and/or advertise the execution of
this Lease and the related transaction. Tenant will not disclose the terms of
this Lease to any other tenants in the Building or Project.
 
14.18  DTPA Waiver.   TENANT WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE
PRACTICES - CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., BUSINESS & COMMERCE
CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER
CONSULTATION WITH AN ATTORNEY OF TENANT'S OWN SELECTION, TENANT VOLUNTARILY
CONSENTS TO THIS WAIVER WITH RESPECT TO THIS LEASE AND THE PROPERTY LEASED UNDER
THIS LEASE. TENANT IS VOLUNTARILY AGREEING TO THE WAIVER OF CONSUMER RIGHTS
PROVISION AND CONSIDERS IT BINDING AND ENFORCEABLE; NO STATEMENT OR
REPRESENTATION BY LANDLORD, OR ANY ATTORNEY OR OTHER REPRESENTATIVE ACTING ON
ITS BEHALF, HAS INFLUENCED OR INDUCED TENANT TO AGREE TO THE WAIVER OF CONSUMER
RIGHTS PROVISION.
 
14.19  Construction of Lease.   Tenant declares that Tenant has read and
understands all parts of this Lease, including all printed parts hereof. It is
agreed that, in the construction and interpretation of the terms of this Lease,
the rule of construction that a document is to be construed most strictly
against the party who prepared the same will not be applied, it being agreed
that both parties hereto have participated in the preparation of the final form
of this Lease. Wherever in this Lease provision is made for liquidated damages,
it is because the parties hereto acknowledge and agree that the determination of
actual damages (of which such liquidated damages are in lieu) is speculative and
difficult to determine; the parties agree that liquidated damages herein are not
a penalty.
 
14.20  Financial Statements.  Tenant acknowledges that it has provided Landlord
with its financial statement(s) as a primary inducement to Landlord's agreement
to lease the Leased Premises to Tenant, and that Landlord has relied on the
accuracy of said financial statement(s) in entering into this Lease. Tenant
represents and warrants that the information contained in said financial
statement(s) is true, complete and correct in all material aspects, and agrees
that the foregoing representations are conditions to all of Landlord's
obligations under this Lease.
 
 
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        At the request of Landlord (only upon the sale or refinancing of the
Building or Project, upon any extension or renewal hereof, or upon any Event of
Default), Tenant shall, not later than thirty (30) days following such request,
furnish to Landlord a financial statement of Tenant as of the end of the prior
fiscal quarter and year accompanied by a statement of income and expense for
such quarter and year then ended, together with a certificate of the chief
financial officer, owner or partner of Tenant to the effect that the financial
statements have been prepared in conformity with accounting principles
consistently applied and fairly present the financial condition and results of
operations of Tenant as of and for the periods covered.
 
14.21  Time of Essence.   With respect to all required acts of Landlord and
Tenant, time is of the essence of this Lease.
 
14.22  Joint and Several Liability.   If there is more than one Tenant, the
obligations hereunder imposed upon Tenant are joint and several. If there is a
guarantor(s) of Tenant's obligations hereunder, the obligations of Tenant are
joint and several obligations of Tenant and each such guarantor, and Landlord
need not first proceed against Tenant hereunder before proceeding against each
such guarantor, nor will any such guarantor be released from its guarantee for
any reason whatsoever, including, without limitation, any amendment of this
Lease, any forbearance by Landlord or waiver of any of Landlord's rights, the
failure to give Tenant or any such guarantor any notices, or the release of any
party liable for the payment or performance of any of Tenant's obligations
hereunder.
 
14.23  Building Name and Address.   Landlord reserves the right at any time to
change the name by which the Building is designated and its address, and
Landlord has no obligation or liability whatsoever for costs or expenses
incurred by Tenant as a result of such name change or address change of the
Building.
 
14.24  Taxes and Tenant's Property.   Tenant is solely liable for all taxes
levied or assessed against personal property, furniture or fixtures placed by
Tenant in the Premises. If any such taxes for which Tenant is liable are levied
or assessed against Landlord or Landlord's property and if Landlord elects to
pay the same or if the assessed value of Landlord's property is increased by
inclusion of personal property, furniture or fixtures placed by Tenant in the
Premises, and Landlord elects to pay the taxes based on such increase, Tenant
shall pay Landlord upon demand that part of such taxes for which Tenant is
primarily liable hereunder.
 
14.25  Constructive Eviction.   Tenant is not entitled to claim a constructive
eviction from the Leased Premises unless Tenant has first notified Landlord in
writing of the condition giving rise thereto, and, if the complaints are
justified, unless Landlord has failed to remedy such conditions within
reasonable time after receipt of said notice.
 
14.26  Exhibits.   All exhibits, attachments, riders and addenda referred to in
this Lease are incorporated herein and made a part hereof for all intents and
purposes.
 
ARTICLE 15.00 AMENDMENT AND LIMITATION OF WARRANTIES
 
15.01  Entire Agreement.   IT IS EXPRESSLY AGREED BY TENANT, AS A MATERIAL
CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE, WITH THE
SPECIFIC REFERENCES TO WRITTEN EXTRINSIC DOCUMENTS, IS THE ENTIRE AGREEMENT OF
THE PARTIES; THAT THERE ARE, AND WERE, NO VERBAL REPRESENTATIONS, WARRANTIES,
UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO THIS LEASE OR
TO THE EXPRESSLY MENTIONED WRITTEN EXTRINSIC DOCUMENTS NOT INCORPORATED IN
WRITING IN THIS LEASE.
 
15.02 Amendment.   THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR EXTENDED
EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LANDLORD AND TENANT AND BY ANY
MORTGAGEE AS TO THE ITEMS DESCRIBED IN SECTION 14.12 .
 
15.03 Limitation of Warranties.   LANDLORD AND TENANT EXPRESSLY AGREE THAT THERE
ARE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND THERE ARE
NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN THIS LEASE.
 
15.04 Waiver of Jury Trial.   LANDLORD AND TENANT HEREBY AGREE NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT NOW OR HEREAFTER EXISTS
WITH REGARD TO THIS LEASE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY LANDLORD AND TENANT, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. LANDLORD OR TENANT IS HEREBY AUTHORIZED TO FILE A
COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.
 
 
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ARTICLE 16.00 OTHER PROVISIONS
 
16.01  Tenant Finish Allowance for Landlord Construction of Landlord
Improvements.   Landlord shall provide Tenant an interior finish allowance (the
"Tenant Finish Allowance") of $ $5.00 per square foot of the Leased Premises for
the Landlord Improvements. Upon, completion and approval by Landlord and Tenant
of the Plans in accordance with Section 6.01 hereof, Landlord shall price the
Plans at the best competitive prices available for projects of similar size,
location and timing. In the event the cost of the Landlord Improvements called
for by the Plans (including the reasonable cost associated with the preparation
of the Plans and Landlord's construction management fee) exceeds $$5.00 per
square foot of the Leased Premises, Landlord shall notify Tenant in writing, at
which point Tenant shall deposit the excess amount with Landlord, who in turn
shall deposit such amount into an interest bearing account with a national
financial association, selected by Landlord. All interest earned on such account
shall be for Tenant's benefit. Funds from this account shall be disbursed
exclusively for the Landlord Improvements, such disbursement to be commenced
once the cost of the Landlord Improvements as constructed have exceeded $$5.00
per square foot of the Leased Premises. Disbursements shall be made from time to
time but at least every two (2) weeks, based on the progress of the work as
certified by Landlord's architect, such certification to be in a form as may be
reasonably required by Landlord. To the extent that all funds in excess of
$$5.00 per square foot of the Leased Premises (including accrued interest
thereon) are not used for the Landlord Improvements, they shall be returned to
Tenant within thirty (30) days following completion of Landlord Improvements.
 
16.02  Renewal Option.   Provided no Event of Default exists either on the date
Tenant gives Landlord the renewal notice required below or at the end of the
Term of this Lease, Tenant, but not any assignee or subtenant of Tenant, shall
have the right to renew this Lease for one (1) additional term of sixty (60)
months, upon the same terms and conditions contained in this Lease except: (i)
the renewal term will contain no further renewal options unless expressly
granted by Landlord in writing; and (ii) the Base Rent for the Leased Premises
shall be equal to the Base Rent for the last month of the Term times 1.15 (i.e.
115%).
 
If Tenant desires to renew this Lease, Tenant will notify Landlord by written
notice of its intention to renew not less than six (6) months prior to the
expiration date of the Term, time being of the essence. Once given, Tenant's
notice to renew shall be irrevocable. If Tenant fails to timely give said
notice, Tenant shall be deemed to have waived Tenant's option to renew. Upon the
valid exercise by Tenant of such option to renew, at the request of either party
hereto and within thirty (30) days after such request, Tenant and Landlord shall
enter into a written supplement to this Lease incorporating the terms,
conditions and provisions applicable to the renewal Term determined in
accordance with the provisions of this Section 16.02.
 
16.03  Right of First Refusal ("Adjacent Space").   Provided no Event of Default
exists on the date Landlord receives a third party offer, Landlord hereby grants
to Tenant, but not any assignee or subtenant of Tenant, a right of first refusal
during the initial Term (but not any renewal Term) to lease all or any part (but
in no event less than 6,000 square feet) of the 39,305 square feet of vacant
space in the Building immediately contiguous to the Leased Premises and as shown
on Exhibit "A" as the "Adjacent Space" (the "Adjacent Space"). If Landlord
receives an offer to lease any portion of the Adjacent Space from a third party,
Landlord shall notify Tenant in writing of its intention to accept the Offer
(the "Offer"). Tenant shall have five (5) business days from receipt of such
notice to notify Landlord in writing, of Tenant's intent to exercise its right
of first refusal with respect to the Adjacent Space which is the subject of the
Offer. If the terms of the Offer include space in addition to the Adjacent
Space, Tenant shall be required to lease all of such space if it desires to
lease the Adjacent Space. If Tenant does not exercise its right of first
refusal, then Landlord may lease such space to the third party, provided if the
third party does not execute a lease or following execution of a lease vacates
the space subject to the Right of First Refusal, Tenant's Right of First Refusal
with respect thereto shall be reinstated.
 
If Tenant elects to exercise its Right of First Refusal to lease the Adjacent
Space which is the subject of the Offer, the terms for the lease of such space
shall be the same as the terms for the Leased Premises, with the following
exceptions: (i) there shall be no abated Base Rent; and (ii) if Tenant's
unencumbered cash and marketable securities are equal to two (2) times the sum
of (a) the tenant finish allowance that Tenant will receive as set forth below,
plus (b) the amount of commission Landlord will be obligated to pay for Tenant's
expansion into the Adjacent Space and Tenant has positive net income for the six
(6) month period immediately preceding Tenant's exercise, Tenant shall be
entitled to a tenant finish
 
 
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allowance as follows:
 
1.  if the Right of First Refusal is exercised within the first twelve (12)
months of the Term, Tenant shall receive a tenant finish allowance equal to
$10.00 psf of the Adjacent Space, the improvements to, and use of such allowance
for the Adjacent Space to be in accordance with Sections 6.01 and 16.01; and
 
2.  if the Right of First Refusal is exercised after the first twelve (12)
months of the Term, Tenant shall have the following options: (aa) receive a
tenant finish allowance equal to $10.00 psf multiplied by a fraction, the
numerator of which is the number of months remaining in the Term and the
denominator of which is 72, or (bb) receive a tenant finish allowance equal to
$10.00 psf and extend the Term for the entire Leased Premises for a period of
sixty (60) months, during which extended time Base Rent shall be equal to Base
Rent for the seventy second (72"d) month of the Term. In either event, the
improvements to, and use of the allowance for the Adjacent Space shall be in
accordance with Sections 6.01 and 16.01.
 
Within thirty (30) days from the date of Tenant's election to exercise its right
of first refusal, Tenant and Landlord will enter into a written supplement to
this Lease to add the Adjacent Space to the Leased Premises and to modify
Tenant's Pro Rata Share of Taxes and Insurance and Operating Expenses as set
forth in Section 2.04 and 2.05 hereof, otherwise Tenant's right of first refusal
shall terminate and Landlord may lease such space to any third party.
 
16.04   Expansion Option.   Provided no Event of Default exists on the date of
exercise of such option, Landlord hereby grants to Tenant, but not any assignee
or subtenant of Tenant, an ongoing right to expand the Leased Premises during
the initial Term (but not any renewal Term) to include all or any part (but in
no event less than 6,000 square feet) of the 39,305 square feet of vacant space
in the Building immediately contiguous to the Leased Premises and as shown on
Exhibit "A" as the "Adjacent Space" (the "Expansion Space"). Tenant shall notify
Landlord in writing of Tenant's intent to exercise its expansion option with
respect to the portion of the Expansion Space specified therein.
 
If Tenant elects to exercise its expansion option to lease any such applicable
portion of the Expansion Space, the terms for the lease of such space shall be
the same as the terms for the Leased Premises, with the following exceptions:
(i) there shall be no abated Base Rent, and (ii)if Tenant's unencumbered cash
and marketable securities are equal to two (2) times the sum of (a) the tenant
finish allowance that Tenant will receive as set forth below, plus (b) the
amount of commission Landlord will be obligated to pay for Tenant's expansion
into the Adjacent Space, and (iii) that Tenant has positive net income for the
six (6) month period immediately preceding Tenant's exercise, Tenant shall be
entitled to a tenant finish allowance as follows:
 
1.      if the expansion option is exercised within the first twelve (12) months
of the Term, Tenant shall receive a tenant finish allowance equal to $10.00 psf
of the applicable portion of the Expansion Space, the improvements to, and use
of such allowance for, the applicable portion of the Expansion Space to be in
accordance with Sections 6.01 and 16.01; and
 
2.      if the expansion option is exercised after the first twelve (12) months
of the Term, Tenant shall have the following options: (a) receive a tenant
finish allowance equal to $10.00 psf multiplied by a fraction, the numerator of
which is the number of months remaining in the Term and the denominator of which
is 72, or (bb) receive a tenant finish allowance equal to $10.00 psf and extend
the Term for the entire Leased Premises for a period of sixty (60) months during
which extended time Base Rent shall be equal to the Base Rent for such
seventy-second (72nd) month of the Term. In either event, the improvements to,
and use of the allowance for the Expansion Space shall be in accordance with
Sections 6.01 and 16.01.
 
Within thirty (30) days from the date of Tenant's election to exercise its
expansion option, Tenant and Landlord will use good faith efforts to enter into
a written supplement to this Lease to add the applicable portion of the
Expansion Space to the Leased Premises and to modify Tenant's Pro Rata Share of
Taxes and Insurance and Operating Expenses as set forth in Section 2.04 and 2.05
hereof.
 
16.05  Existing Furniture.  Tenant may use the existing furniture listed on
Exhibit D attached hereto (the "Furniture") during the Term at no additional
cost. Tenant shall maintain the furniture in good condition and repair during
the Term. Provided no Event of Default exists at the end of the Term, Landlord
shall convey the Furniture to Tenant, without warranty.
 
        Tenant shall be responsible for coordination of and all costs associated
with relocating any of the
 
 
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Furniture to allow contractors access to complete the Landlord Improvements.
Tenant shall also be responsible for coordination of and all costs associated
with setting up the Furniture after construction is completed.
 
16.06  Generator, Uninterrupted Power Supply ("UPS").   Tenant acknowledges that
there is a Generator and UPS system serving the Leased Premises and Adjacent
Space (collectively the "Served Space") the Served Space is connected to such
Generator and UPS system. Tenant shall have the non­exclusive right to the use
of the Generator and UPS system, but acknowledges that other tenants leasing
space within the Adjacent Space will also have access to use of the Generator
and UPS system. Tenant shall, at its sole cost and expense during the Term,
maintain a regularly scheduled preventative maintenance/service contract on the
Generator and UPS system on an annual basis with a maintenance contractor
acceptable to Landlord, such contract to include all services suggested by the
equipment manufacturer. A copy of the service contract shall be provided to
Landlord within sixty (60) days following the Commencement Date. In the event
the service contract is not provided, then Landlord shall have the right, but
not the obligation to have the work done and the cost therefor shall be charged
to Tenant as Additional Rent and shall become payable by Tenant with the payment
of the rent next due hereunder. In the event another tenant occupies space
within the Adjacent Space, such tenant shall be responsible for reimbursing
Tenant for its pro rata share of the costs paid by Tenant for maintaining the
Generator and UPS system. Such pro rata share shall be determined by multiplying
Tenant's costs by a fraction, the numerator of which is the number of square
feet contained within such tenant's space and the denominator of which is the
number of square feet contained in the Served Space. Tenant agrees to provide
documentation to such tenant detailing its costs associated with such
maintenance. Landlord agrees to include language in any lease for any of the
Adjacent Space obligating such tenant for its pro rata share of the costs
associated with Tenant's maintenance of the Generator and UPS system.
 
 
 
[Signature page follows]
 
 
 
 
 
 
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ARTICLE 17.00 SIGNATURES / DATE OF EXECUTION
 
 
SIGNED this       9       day
of            April                                      , 2004.       

 
 
 

Landlord:   Tenant:               VANTAGE DEVELOPMENT #21, INC.    I-SECTOR
CORPORATION                          By:
/s/ Fredrick L. Albrecht  
   By:
/s/ Mark T. Hilz
              Name: Fredrick L. Albrecht   Name: Mark T. Hilz   Title: 
President   Title: President                                    
Tenant Federal Employer
Identification Number:
                       76-0650041                          

 
 
 

Schedule I - Rules and Regulations   Exhibit A - Leased Premises   Exhibit B -
Land   Exhibit C - Plans   Exhibit D Furniture  

 
 
 
 
 

 
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