**Exhibit 10.7**

 

**BASIC LEASE INFORMATION**

 
| Lease Date:                                          |   | September 22, 2003                                                                                                                                                                                                                                                                                                                                |
|------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| Tenant:                                              |   | Victor Equipment Company                                                                                                                                                                                                                                                                                                                               |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| Tenant’s Address:                               |   | 16052 Swingley Ridge Rd., Suite 300  St. Louis, Missouri 63017                                                                                                                                                                                                                                                                                         |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| Contact:                                             |   | Harry BrownTelephone: (940)-381-1226                                                                                                                                                                                                                                                                                                                   |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| Landlord:                                            |   | Alliance Gateway No. 58, Ltd.                                                                                                                                                                                                                                                                                                                          |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| Landlord’s Address:                             |   | C/O Hillwood Development Company, LLC  13600 Heritage Parkway, Suite 200  Fort Worth, Texas 76177  Attn: Bill Burton                                                                                                                                                                                                                                   |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| With copy to:                                        |   | Hillwood Development Company, LLC  Three Lincoln Centre  5430 LBJ Freeway, Suite 800  Dallas, Texas 75240  Attn: Tom Mason                                                                                                                                                                                                                             |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| Contact:                                             |   | Bill BurtonTelephone: (817)-224-6000                                                                                                                                                                                                                                                                                                                   |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| Premises:                                            |   | As indicated by the cross-hatched area on Exhibit "A"  attached to the Lease, situated in the building commonly known, or to be  known, as Alliance Gateway 58 (the "Building") located or to  be located on the land more particularly described on Exhibit "B"  attached to the Lease (the "Land") |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| Project:                                             |   | Collectively, the Land, the Building and  all other buildings, structures and improvements situated on the Land at any  time during the Term.                                                                                                                                                                                                          |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| Term:                                                |   | Sixty-three (63) months, commencing on the  Commencement Date (which is estimated to be December 11, 2003) and  ending at 5:00 p.m.  on the last day of  the sixty-third (63rd) full month following the Commencement Date,  subject to adjustment and earlier termination as provided in the Lease.                                         |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| Base Rent:                                           |   | **Months**                                                                                                                                                                                                                                                                                                                                             | ** ** | **Monthly  Base Rent** | ** ** | **Annual  Base Rent** | ** ** | **Per Square  Foot Per Annum** | ** ** |
|                                                 |   | 1 – 3                                                                                                                                                                                                                                                                                                                                             |   | $ | 0.00 |   | $ | 0.00 |   | $ | 0.00 |   |
|                                                 |   | 4 - 63                                                                                                                                                                                                                                                                                                                                                 |   | $ | 42,184.17 |   | *$ | 506,210.00 |   | $ | 4.46 |   |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
|                                                 |   | (Subject to  adjustment as provided in the Lease)                                                                                                                                                                                                                                                                                                      |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
|                                                      |
|                                                 |   | *Annual Base Rent for the first year of the  Term of this Lease shall be $379,657.49                                                                                                                                                                                                                                                                   |
|                                                 |   |                                                                                                                                                                                                                                                                                                                                                   |
| Initial Tenant’s Proportionate Share of  Taxes: |   | $7,945.00 per month                                                                                                                                                                                                                                                                                                                                    |

 

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| Share of Taxes:                                                                      |   |                                                                                                                                                               |
|--------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                 |   |                                                                                                                                                               |
| Initial Tenant’s Proportionate Share of  Cost of Insurance under Paragraph 10A: |   | $662.08 per month                                                                                                                                                  |
|                                                                                 |   |                                                                                                                                                               |
| Initial Tenant’s Proportionate Share of  Common Area Charges:                   |   | $3,026.67 per month                                                                                                                                                |
|                                                                                 |   |                                                                                                                                                               |
| Security Deposit:                                                                    |   | $53,817.91 and the Letter of Credit (as  defined in Paragraph 2B)                                                                                                  |
|                                                                                 |   |                                                                                                                                                               |
| Tenant’s Proportionate Share:                                                   |   | 40.79% which is the percentage obtained by  dividing (i) the 113,500 square feet of area in the Premises by (ii) the  278,333 square feet of area in the Building. |
|                                                                                 |   |                                                                                                                                                               |
| Broker or Agent:                                                                     |   | Daniel  Spika, Henry S. Miller                                                                                                                                |

 

The foregoing Basic Lease Information isincorporated into and made a part of this Lease identified above.  If any conflict exists between any BasicLease Information and this Lease, then the Lease shall control.

 
|       | **LANDLORD:**                                               |                                                                                        |
|------------|-------------------------------------------------------------|---------------------------------------------------------------------------------------------|
| ** ** | ** **                                                  | ** **                                                                                  |
| ** ** | ALLIANCE GATEWAY NO. 58, LTD.,  a Texas limited partnership |
| ** ** | ** **                                                  | ** **                                                                                  |
|       | By:                                                         | Hillwood Alliance Management, L.P.,  a Texas limited partnership,  its general partner |
|       |                                                        |                                                                                        |
|       |                                                        | By:                                                                                         | Hillwood Alliance GP, LLC  a Texas limited liability company,  its general partner |
|       |                                                        |                                                                                        |   |
|       |                                                        |                                                                                        |   |
|       |                                                        |                                                                                        | By: | \s\ Michael K. Berry |   |
|       |                                                        |                                                                                        |   |   |
|       |                                                        |                                                                                        | Name: | Michael K. Berry |   |
|       |                                                        |                                                                                        |   |   |
|       |                                                        |                                                                                        | Its: | Executive Vice President |   |
|       |                                                        |                                                                                        |   |
|       | **TENANT:**                                                 |
|       |                                                        |                                                                                        |   |
|       | VICTOR EQUIPMENT COMPANY,  a Delaware corporation           |
|       |                                                        |                                                                                        |
|       |                                                        |                                                                                        |
|       | By:                                                         | \s\ James H. Tate                                                                           |   |
|       |                                                        |                                                                                        |
|       | Name:                                                       | James H. Tate                                                                               |   |
|       |                                                        |                                                                                        |
|       | Its:                                                        | Senior  V.P. and CFO                                                                        |   |
|            |                                                             |                                                                                             |  |  |  |  |  |  |  |  |  |  |

 

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**LEASE AGREEMENT**

 

THIS LEASEAGREEMENT, made and entered into by Alliance Gateway No. 58, Ltd., a Texaslimited partnership (“Landlord”) and Victor Equipment Company, aDelaware corporation (“Tenant”);

 

**WITNESSETH:**

 

# 1.             PREMISESAND TERM.

#  

Inconsideration of the mutual obligations of Landlord and Tenant set forthherein, Landlord leases to Tenant, and Tenant hereby takes from Landlord, the Premisessituated within the County of Denton, State of Texas, more particularlydescribed and indicated by the cross-hatched area on Exhibit "A"attached hereto and incorporated herein by reference (the “Premises”)which Premises are to constitute a portion of the Building to be constructedpursuant to the terms hereof, togetherwith all rights, privileges, easements,appurtenances and annuities belonging to or in any way pertaining to thePremises, to have and to hold subject to the terms, covenants and conditions inthis Lease.  Tenant’s rights under thisLease shall be subject to all matters of public record, including, withoutlimitation, all easements, deed restrictions, covenants, conditions andrestriction, as may exist from time to time. The term of this Lease (“Term”) shall commence on theCommencement Date (hereinafter defined) and shall end on the last day of themonth that is sixty-three (63) months after the Commencement Date.  The Premises are to be situated on the Landdescribed on Exhibit ”B” attached hereto and made a part hereof.

 

## A.            The“Commencement Date” shall be the date that is the earlier of (i) thedate on which Tenant first occupies the Premises for the purpose of conductingits business, or (ii) the date upon which the Leasehold Improvements(hereinafter defined) to be erected in accordance with the Working Drawings(hereinafter defined) described on Exhibit "C" attachedhereto and incorporated herein by reference have been substantiallycompleted.  As used herein, the term “substantiallycompleted” shall mean that, in the reasonable opinion of Landlord, (i) such improvements have been completed in accordancewith the Working Drawings; (ii) the Premises are in good and satisfactorycondition, subject only to completion of minor punch list items; and (iii) acertificate of occupancy (the “CO”) has been issued for the Premises,provided, however, if the CO has not been issued due to the non-completion ofwork which is required to be done by Tenant in order to obtain the issuance ofthe CO, then the Leasehold Improvements shall be deemed to be “substantiallycompleted” upon satisfaction of the conditions in the immediately precedingclauses (i) and (ii).  As soon as suchimprovements have been substantially completed, Landlord shall notify Tenant inwriting that the Commencement Date has occurred.  Within ten (10) days thereafter, Tenant shallsubmit to Landlord in writing a punch list of items needing completion orcorrection.  Landlord shall complete suchitems within thirty (30) days after the receipt of such notice.  In the event Tenant, its employees, agents orcontractors cause construction of such improvements to be delayed, Landlordshall notify Tenant in writing of such delay and the Commencement Date shall bedeemed to be the date that, in the opinion of Landlord, substantial completionwould have occurred if such delays had not taken place.  Landlord’s approval of any plans,specifications or working drawings for the Premises shall create noresponsibility of liability on the part of Landlord for their completeness,design, sufficiency or compliance with any laws, rules, or regulations ofgovernmental agencies or authorities. After the Commencement Date, Tenant shall, upon demand, execute anddeliver to Landlord a memorandum of acceptance of delivery of the Premises inthe form attached hereto as Exhibit "D".

##  

## B.            Ifthe Commencement Date has not occurred by the date that is seventy (70) daysafter the date Landlord receives a building permit for the Work (as hereinafterdefined) (which

 

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## seventy (70) day period shall be extended (i) byone day for each day constituting a Force Majeure Delay, and (ii) by one dayfor each day constituting a Tenant Delay, and which date, as so extended shallbe referred to herein as the “First Deadline Date”), then Tenant shallbe entitled to receive, as its sole and exclusive remedy, a credit against thefirst Base Rent due hereunder in an amount equal to $2,340.00 per day for eachday that shall elapse from the First Deadline Date until the earlier to occurof the Second Deadline Date (hereinafter defined) or the CommencementDate.  If the Commencement Date has notoccurred by the date that is one hundred thirty (130) days after the dateLandlord receives a building permit for the Work (which one hundred thirty (130) day period shall be extended (i) by one day for each dayconstituting a Force Majeure Delay, and (ii) by one day for each dayconstituting a Tenant Delay, and which date, as so extended, shall be referredto herein as the “Second Deadline Date”, then Tenant shall be entitled to receive, as its sole andexclusive remedy, a credit against the firstBase Rent due hereunder in an amount equal to $4,680.00 per day for each daythat shall elapse from the Second Deadline Date until the Commencement Date.

##  

## C.            Notwithstandingthe fact that the Term of this Lease and Tenant’s obligation to pay rent doesnot commence until the Commencement Date, this Lease shall nevertheless bebinding upon the parties in accordance with its terms when executed by Landlordand Tenant.

##  

# 2.             BASERENT, SECURITY DEPOSIT AND ESCROW PAYMENTS.

#  

## A.            Tenantagrees to pay to Landlord base rent (“Base Rent”) for the Premises, inadvance, without demand, deduction or set off, at the following rates andamounts during the Term hereof:

 
| **Months** | ** ** | **Monthly  Base Rent** | ** ** | **Annual  Base Rent** | ** ** | **Per Square  Foot Per Annum** | ** ** |
|------------|------------|------------------------|------------|-----------------------|------------|--------------------------------|------------|
| 1 – 3 |       | $                      | 0.00       |                  | $          | 0.00                           |       | $ | 0.00 |   |
| 4 - 63     |       | $                      | 42,184.17  |                  | *$         | 506,210.00                     |       | $ | 4.46 |   |
|            |            |                        |            |                       |            |                                |            |  |  |  |  |  |

 

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*Annual Base Rent for the first year of theTerm of this Lease shall be $379,657.49.

 

The firstmonthly installment of Base Rent, plus the other monthly charges set forth in Paragraph 2C below, shall be due andpayable on the date hereof and subsequent monthly installments shall be due andpayable on or before the first day of each calendar month succeeding theCommencement Date, except that (i) all payments due hereunder for anyfractional calendar month shall be prorated and (ii) no Base Rent is due during the first three months of the Term.

 

## B.            Inaddition, Tenant agrees to deposit with Landlord on the date hereof (i) the sumof Fifty-Three Thousand Eight Hundred Seventeen and 91/100 Dollars ($53,817.91)in cash (“Cash Security Deposit”), and (ii) a letter of credit (“Letterof Credit”) in the sum of One Hundred Seventy-Five Thousand and 00/100Dollars ($175,000.00) and in the form attached hereto as Exhibit "I"and made a part hereof issued by a financial institution reasonably acceptableto Landlord, provided the Letter of Credit is payable upon presentation forcollection at a branch location within the continental United States.  A Letter of Credit shall be maintained infull force and effect at all times during the Term of this Lease.  The Letter of Credit shall have an expirationdate no earlier than the last day of the twelfth (12th) full monthfollowing the Commencement Date and shall be renewed for successive one-yearterms during the Term of this Lease.  Allrenewals of the Letter of Credit must be delivered to Landlord at least thirty(30) days prior to the expiration of the Letter of Credit then in effect and,if such renewals are not so timely

 

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## delivered to Landlord, Landlordshall have the right to present and receive payment on the then current Letterof Credit.  The Cash Security Deposit andthe Letter of Credit are collectively referred to herein as the “Security Deposit”.  The Security Deposit shall be held byLandlord as security for the performance of Tenant’s obligations under thisLease, it being expressly understood and agreed that this Security Deposit isnot an advance rental deposit or a measure of Landlord’s damages in case ofTenant’s default.  Upon each occurrenceof an Event of Default (hereinafter defined), Landlord may draw upon the Letterof Credit and use all or part of the proceeds thereof and/or use any portion ofthe Cash Security Deposit to pay past due rent or other payments due Landlordunder this Lease, and the cost of any other damage, injury, expense or liabilitycaused by such Event of Default without prejudice in any other remedy providedherein or provided by law.  On demand,Tenant shall pay Landlord the amount that will restore the Security Deposit toits original amount.  The SecurityDeposit shall be deemed the property of Landlord, but any remaining balance ofsuch Security Deposit shall be returned by Landlord to Tenant when Tenant’sobligations under this Lease have been fulfilled.

##  

## C.            Inaddition to Base Rent and Tenant’s other obligations hereunder, Tenant agreesto pay its proportionate share (as defined in the Basic Lease Information) ofthe following costs and expenses (collectively, the “Reimbursable Expenses”):  (i) Taxes (hereinafter defined) payable byLandlord pursuant to Paragraph 4A below, (ii) the cost of jointlymetered utilities payable pursuant to Paragraph 9 below, (iii) thecost of maintaining insurance pursuant to Paragraph 10A below, (iv)Common Area Charges (hereinafter defined) payable by Tenant in accordance with Paragraph 3below, (v) the cost of any repair, replacement, or capital expendituresrequired under any governmental law or regulation that was not applicable inthe Building at time of original construction, and (vi) replacement reservesfor capital items and other operating expenses required by this Lease.  During each month of the Term of this Lease,on the same day that Base Rent is due hereunder.  Tenant shall escrow with Landlord an amountequal to 1/12th of the Tenant’s proportionate share of such Reimbursable Expenses asestimated by Landlord in good faith. Tenant authorizes Landlord to use the funds deposited with Landlordunder this Paragraph 2C to pay such Reimbursable Expenses.  Landlord shall be entitled to revise itsprojection in good faith of such Reimbursable Expenses at any time and ifLandlord so revises such projection, Tenant shall pay to Landlord, on the sameday as Base Rent is due hereunder, an amount equal to 1/12th ofTenant’s proportionate share of such Reimbursable Expenses pursuant to Landlord’sgood faith revised estimate thereof.  By April 30of each calendar year (or as soon thereafter as may be practicable) during theTerm hereof Landlord shall determine the actual Reimbursable Expenses for thepreceding calendar year and shall notify Tenant thereof and provide Tenant witha copy of the accounting and detail of the Reimbursable Expenses.  If Tenant’s total escrow payments are less than Tenant’s actual proportionateshare of all such Reimbursable Expenses, Tenant shall pay the difference toLandlord within twenty (20) days after demand. If the total escrow payments of Tenant are more than Tenant’s actual proportionate share of allsuch Reimbursable Expenses, Landlord shall retain such excess and credit itagainst Tenant’s next annual escrow payments.

 

# 3.             COMMONAREA CHARGES.

#  

## A.            Inaddition to other amounts required to be paid by Tenant hereunder, Tenant shallpay to Landlord Tenant’s proportionate share of the following costs andexpenses (collectively, the “Common Area Charges”):

##  

### i.              Thecost of repair, maintenance and replacement of: (i) the exterior of theBuilding (including painting), other than those structural repairs andreplacements for which Landlord is responsible pursuant to Paragraph 5;(ii) all mechanical, electrical,

 

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### plumbing, sewer, sprinkler andother life-safety equipment and systems forming a part of the Building or theProject of which the Building forms a part (other than the cost of repair,replacement and maintenance of the items which are the Tenant’s responsibilitypursuant to Paragraph 6 which shall be paid entirely by Tenant asprovided in Paragraph 6); and (iii) all other common areas andfacilities constituting a partof the Building or the Project of which the Building forms a part (including,but not limited to, all paved areas in and about the Building).

###  

### ii.             Thecost of maintenance and replacement of the grass, shrubbery and otherlandscaping in and about the Building and/or the Project.

###  

### iii.            Thecost of operating and maintainingin a good, neat, clean and sanitary condition all parking areas, driveways,alleys and grounds in and about the Building (including trash removal).

###  

### iv.            Thecost of assessments under any applicable Declaration of Covenants, Restrictionsand Easements (as may be amended from time to time) which are assessed by theapplicable property owners association.

###  

### v.             Securityservices (if furnished by Landlord), and the cost of operating and maintainingany property, facilities orservices provided for the common use of Tenant and other lessees of theBuilding or the Project, which costs shall include, without limitation,management fees (or if no management company is engaged by Landlord for themanagement of the Project, wages and employee benefits payable to employees ofLandlord or affiliates of Landlord whose duties are connected with theoperation and maintenance of the Building); provided, however, such managementfees (or if no management company is engaged by Landlord, such wages andbenefits) shall not exceed an amount equal to three percent (3%) of the BaseRent payable under this Lease.

###  

## B.            Notwithstandingthe foregoing, it is agreed that with regard to Controllable Expenses(hereinafter defined), Tenant’s obligation to pay any increases in ControllableExpenses for any year of the Term of this Lease following the first year of theTerm of this Lease, shall be limited to an increase of six percent (6%) (the “Cap”)from the amount paid with respect to Controllable Expenses for the immediatelypreceding year; provided, however, that if any such increase in ControllableExpenses is less than the maximum amount that Controllable Expenses could haveincreased pursuant to the foregoing applicable Cap (the difference between themaximum amount that such Controllable Expenses could have increased and theamount that they did in fact increase is referred to herein as the “UnusedCap”), then the Unused Cap shall be applied to increase the Cap that isapplicable to the year in question and for all subsequent years until allUnused Cap amounts are exhausted. Furthermore, the Unused Cap for all years shall be cumulated and beapplied to increase the Caps applicable to all subsequent years in the Term ofthis Lease.  It is the intention of thisprovision that the Cap provided with respect to Controllable Expense be a “cumulativecap”.  The term “Controllable Expenses”shall mean all Common Area Charges, except for costs described in Paragraph 3A(i)above.

##  

# 4.             TAXES.

#  

## A.            Landlordagrees to pay all taxes, assessments and governmental charges of any kind andnature(collectively referred to herein as “Taxes”) that accrue againstthe Premises, and/or the land and/or improvements of which the Premises are apart.  (For purposes of this Lease, theterm “Taxes” shall include the amount of any taxes that would otherwise beimposed

 

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## but for the provisions of anytax abatement agreement with respect to which Landlord is a party which isentered into pursuant to Chapter 312 of the Texas Tax Code; and for purposes ofthis Lease, such abated taxes shall be deemed to be payable by Landlord.) If at any time during the Term of this Lease, there shall be levied,assessed or imposed on Landlord a capital levy or other tax directly on therents received herefrom and/or a franchise tax, assessment, levy or chargemeasured by or based, in whole or in part, upon such rents from the Premisesand/or the Land and improvements of which the Premises are a part, then allsuch taxes, assessments, levies or charges, or the part thereof so measured orbased, shall be deemed to be included within the term “Taxes” for the purposehereof.  Landlord shall have the right toemploy a tax consulting firm to attempt to assure a fair tax burden on thebuilding and grounds within the applicable taxing jurisdiction.  Tenant agrees to pay its proportionate shareof the cost of such consultant which cost shall be allocated on a fair andequitable basis.

##  

## B.            Tenantshall be liable for all taxes levies or assessed against any personal propertyor fixtures placed in the Premises.  Ifany such taxes are levied or assessed against Landlord or Landlord’s propertyand (i) Landlord pays the same or (ii) the assessed value of Landlord’sproperty is increased by inclusion of such personal property and fixtures andLandlord pays the increased taxes, then, upon demand Tenant shall pay toLandlord such taxes.  In addition, if theBuilding is a multiple occupancy building and the cost of any improvementsconstructed to Tenant’s Premises is disproportionately higher than the cost ofimprovements constructed to the premises of other tenants of the Building, thenupon demand Tenant shall pay the amount of Taxes attributable to suchdisproportionately more expensive improvements, in addition to Tenant’sproportionate share of Taxes.

##  

## Tenant herebywaives any right it may have under Section 41.413 of the Texas Tax Code to protestthe appraised value of all or any portion of the Premises and the Building, andany right it may have under Section 42.015 of the Texas Tax Code to appealan order of the appraisalreview board with respect to all or any portion of the Premises and/or theBuilding.  Tenant agrees that Landlordshall have the sole right to protest any appraisals of the Premises and theBuilding.  Tenant also hereby waives anyright it may have to receive a copy of any notice received by Landlord ofreappraisal of all or any portion of the Premises and/or the Building,including without limitation any notice required under Section 41.413(d) of the Texas Tax Code.  Tenant agrees that Landlord shall not beliable to Tenant for any damages for Landlord’s failure to send to Tenant acopy of any notice of reappraisal concerning the Premises and/or the Building,irrespective of any obligation under applicable law of Landlord to provide suchnotice.  Notwithstanding the foregoing,if Tenant protests, challenges or appeals any valuation for property taxpurposes of all or any portion of the Premises and/or the Building, and suchvaluation increases from the value protested, appealed or challenged, Tenantagrees to indemnify Landlord on an after-tax basis for any property taxes dueas a result of such increase.

##  

## C.            Tenantshall have the right (unless Landlord shall in good faith agree to contest, atTenant’s sole expense, such tax increase) to contest or resist in good faith,diligently and by appropriate proceeding, the validity of the amount or rate ofany increase or proposed increase in the Taxes, all at Tenant’s soleexpense.  If Landlord shall agree tocontest such Taxes, Landlord shall do so at Tenant’s expense (the cost of whichcontest, if involving theproperty of Landlord in addition to the Premises, shall be allocated to Tenanton a reasonable and equitable basis), under the direction and control ofLandlord (which shall make all decisions in connection therewith, subject toTenant’s right to monitor Landlord’s conduct of such contest proceeding); ifLandlord elects not to contest such Taxes or, having elected to contest suchTaxes, fails to contest suchTaxes diligently and in good faith, and such failure continues uncured beyond areasonable time following written notice from Tenant to Landlord, or if Tenantreasonably determines that

 

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## Landlord is not pursuing anadequately aggressive position with respect to such tax contest and Landlordfails to comply with Tenant’s reasonable request with respect thereto, Tenantshall have the right to itself contest such Taxes.  It shall be a condition precedent to Tenant’sright to contest any such Taxes that Tenant provide Landlord with security (ina form reasonably acceptable to Landlord and Landlord’s mortgagee) in an amountreasonably necessary to assure full payment of such Taxes being contested,together with all penalties, fines and interest and other fees and amounts thatcould be collected by the taxing authority in case the contest is unsuccessful(but in any event not less than the amount reasonably required by Landlord’smortgagee in connection with such contest of Taxes).  In determining the security required pursuantto the immediately preceding sentence, due regard shall be given to tenant’scontractual obligations with respect to Taxes pursuant to Paragraph 2Cabove.  Tenant shall in all events payall such contested Taxes (together with all penalties, fines, interest and suchother fees and amounts) at least thirty (30) days prior to the date on whichthe Premises (or any portion thereof) are scheduled for any unstayed foreclosureon account of nonpayment thereof.  Tenantshall indemnify and hold harmless Landlord from and against any and allexpenses, liabilities, and claims (including but not limited to attorneys’fees) incurred by or asserted against Landlord or the Project arising as aresult of any such contest by Tenant. Landlord and Tenant agree to reasonably cooperate with one another inconnection with all contests of Taxes under this Lease.

##  

# 5.             LANDLORD’SREPAIRS.

#  

Tenantunderstands and agrees that Landlord’s maintenance, repair and replacementobligations are limited to those expressly set forth in this Paragraph 5.  Landlord, at its own cost and expense, shallbe responsible only for repair and replacement of the roof, the foundation andthe structural members of the exterior walls of the Building, reasonable wearand tear excluded.  The term “walls” asused herein shall not include windows, glass or plate glass, doors, specialstore fronts or office entries.  Tenantshall immediately give Landlord written notice of defect or need for repairsafter which Landlord shall have reasonable opportunity to repair same or curesuch defect.

 

# 6.             TENANT’SREPAIRS AND MAINTENANCE.

#  

## A.            Tenant,at its own cost and expense, shall (i) maintain all parts of the Premises(including, but not limited to, the floor slab of the Premises and themechanical, electrical, plumbing, sewer, sprinkler and other life-safetyequipment, fixtures and systems forming a part of the Premises), in good, neat,clean, sanitary and operable condition and (ii) promptly make all necessaryrepairs and replacement to the Premises in a good and workmanlike manner.  In addition to the foregoing, Tenant shall,at its sole expense, repair any damage to the Premises of the Building causedby the negligent or intentional acts or omissions of Tenant or Tenant’semployees, agents or invitees, or caused by Tenant’s default hereunder.

##  

## B.            Inaddition to Tenant’s other obligations hereunder, Tenant, at its own cost andexpense, shall enter into a regularly scheduled preventive maintenance/service contract with a maintenancecontractor approved by Landlord (such approval not to be unreasonably withheld)for servicing, all hot water, heating and air conditioning and elevator systemsand equipment within or serving the Premises. The service contract must include all services suggested by theequipment manufacturer in its operations/maintenancemanual and an executed copy of such contract must be provided to Landlord priorto the date Tenant takes possession of the Premises.

 

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# 7.             ALTERATIONS.

#  

Tenant shallnot make any alterations, additions or improvements to the Premises without theprior written consent of Landlord. Tenant, at is own cost and expense, may erect such shelves, bins, machineryand tradefixtures as it desires provided that: (i) such items do not alter the basiccharacter of the Premises or the Building and/or improvements of which thePremises are a part; (ii) such items do not overload or damage the Premises,the Building or such improvements; (iii) such items may be removed withoutinjury to the Premises; and(iv) the construction, erection or installation thereof complies with allapplicable governmental laws, ordinances, regulations and with Landlord’sspecifications and requirements.  Allalterations, additions, improvements and partitions erected by Tenant shall be and remain the property of Tenantduring the Term of this Lease.  Allshelves, bins, machinery and trade fixtures installed by Tenant shall beremoved on or before the earlier to occur of the date of termination of thisLease or vacating of the Premises by Tenant, at which time Tenant shall restorethe Premises to their original condition except for reasonable wear and tear.  All alterations, installations, removals andrestoration shall be performed in a good and workmanlike manner so as not todamage or alter the primary structure or structure qualities of the Buildingand other improvements situated on the Premises or of which the Premises are apart.  Notwithstanding anything to thecontrary contained herein, it is agreed that the use of and access to the roofof the Building is expressly reserved to Landlord and is expressly denied toTenant.  Tenant shall not penetrate the roof of the Building inany manner, nor install or construct any alterations, additions or improvementsthereon, nor otherwise use oroccupy the roof at any time during the Term hereof.

 

# 8.             SIGNS.

#  

Any signage,decorations, advertising media, blinds, draperies, window treatments, bars, andsecurity installations Tenant desires for the Premises shall be subject inLandlord’s written consent (not to be unreasonable withheld) and shall besubmitted to Landlord prior to installation of such items.  Tenant shall repair, paint, and/or replacethe Building fascia surface to which its signs are attached upon vacation of the Premises, or the removal or alteration of itssignage, all at Tenant’s solecost and expense.  Tenant shall not (i)make any changes to the exterior of the Premises; (ii) install any exteriorlights, decorations, balloons, flags, pennants, banners or paintings; or (iii)erect or install any signs, windows or door lettering, placards, decorations oradvertising media of any type which can be viewed from the exterior of the Premises,without Landlord’s prior written consent. Notwithstanding anything to the contrary contained herein, all signs,decorations, advertising media, blinds, draperies and other window treatment orbars or other security installations visible from outside the Premises shallconform in all respects to the criteria established by Landlord and to therequirements of all covenants, conditions and restrictions applicable to thePremises and the Building (including, but not limited to, approval by theDevelopment Review Board).

 

# 9.             UTILITIES.

#  

Tenant shalltimely pay for all water, gas, heat, light, power, telephone, sewer, sprinklercharges and other utilities and services used on or at the Premises, together with anytaxes, penalties, deposits, surcharges or the like pertaining to Tenant’s useof the Premises, and any maintenance charges for utilities.  Tenant shall pay all impact or other feesassociated with utility hook-ups, meter installations or services to thePremises.  Landlord shall have the rightto cause any of said services to be separately metered to tenant, provided thecost of such separate metering is allocated on a fair and equitable basis amongall tenants of the Building benefiting from the separate metering.  Notwithstanding anything to the contrarycontained herein, if Tenant requests separate metering for the Premises,Landlord shall cause such separate metering at Tenant’s sole cost andexpense.  Tenant shall pay itsproportionate share of all charges for jointly metered utilities (including,but not limited to the cost of utilities consumed in

 

7

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connection with providing electrical power for the Building’s canopylighting, the lighting of the parking facilities and other common areas and facilitiesassociated with the Building.  TheBuilding’s fire pump room and irrigation system, as well as other electricitygauged by the “house meter”).  Landlordshall no be liable for any interruption or failure of utility service on thePremises.

 

# 10.           INSURANCE.

#  

## A.            Landlordshall maintain insurance covering the Building of which the Premises are a partin an amount not less than the “replacement cost” thereof insuring against theperils and costs of Fire, Lighting, Extended Coverage, Vandalism and MaliciousMischief and such other insurance as Landlord shall deem necessary.

##  

## B.            Tenant,at its own expense, shall maintain during the Term of this Lease a policy orpolicies of worker’s compensation and comprehensive general liabilityinsurance, including personal injury and property damage, with contractualliability endorsement, in the amount of Two Million Dollars ($2,000,000.00) forproperty damage and Two Million Dollars ($2,000,000.00) per occurrence forpersonal injuries or deaths of persons occurring in or about the Premises.  Tenant, at its own expense, also shallmaintain during the Term of this Lease (i) fire and extended coverage insurancecovering the replacement cost of all alterations, additions, partitions andimprovements installed or placed on the Premises by Tenant or by Landlord onbehalf of Tenant, and all of Tenant’s personal property contained within thePremises and (ii) business interruption insurance insuring loss of profits inthe event of an insured peril damaging the Premises.  Said policies shall (i) name Landlord as anadditional insured and insure Landlord’s contingent liability under this Lease(except for the worker’s compensation policy, which instead shall include awaiver of subrogation endorsement in favor of Landlord;) (ii) be issued by an insurance company which is licensed to dobusiness in the State of Texas, and which has a Best’s Rating of A/VII orbetter, and (iii) provide that said insurance shall not be cancelled unlessthirty (30) days prior written notice shall have been given to Landlord.  In addition, such insurance provided byTenant shall be primary coverage for Landlord when any policy issued toLandlord is similar or duplicate in coverage, and Landlord’s policy shall beexcess over Tenant’s policies.  Allinsurance policies carried by Tenant hereunder shall expressly provide (byendorsement or otherwise) that Landlord’s rights thereunder shall be assignableto Landlord’s mortgagee who shall be shown as an additional insuredthereon.  Said policy or policies or certificatesthereof shall be delivered to Landlord by Tenant upon commencement of the Termof the Lease and upon each renewal of said insurance.

##  

## C.            Tenantwill not permit the Premises to be used for any purpose or in any manner thatwould (i) void the insurance thereon, (ii) increase the insurance risk, or(iii) cause the disallowance of any sprinkler credits, including withoutlimitation, use of the Premises for the receipt, storage or handling of anyproduct, material or merchandise that is explosive or highly inflammable.  In any increase in the cost of any insuranceon the Premises or the Building of which the Premises are a part is caused byTenant’s use of the premises, or because Tenant vacates the Premises, thenTenant shall pay the amount of such increase to Landlord.

##  

# 11.           FIREAND CASUALTY DAMAGE.

#  

## A.            Ifthe Premises or the Building of which the Premises are a part should be damagedor destroyed by fire or other peril, Tenant immediately shall give writtennotice to Landlord.  If the Building ofwhich the Premises are a part should be totally destroyed by any peril whichwould be covered by the insurance which Landlord is required to maintain under Paragraph 10Aabove, or if they should be so damaged thereby that, in Landlord’s estimation,

 

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## rebuilding or repairs cannot becompleted within one hundred eighty (180) days after Landlord’s receipt of allinsurance proceeds with respect to such damage, this Lease shall terminate andthe rent shall be abated during the unexpired portion of this Lease, effectiveupon the date of the occurrence of such damage.

##  

## B.            Ifthe Building of which the Premises are apart should be damaged by any perilwhich would be covered by the insurance which Landlord is required to maintainunder Paragraph 10A above, and in Landlord’s reasonable estimation,rebuilding or repairs can be substantially completed within one hundred eighty(180) days alter the date of such damage, this Lease shall not terminate, andLandlord shall restore the Premises to substantially its previous condition,except that Landlord shill not be required to rebuild, repair or replace anypart of the partitions, fixtures, additions and other improvements that mayhave been constructed, erected or installed in, of about the Premises for thebenefit of, or by or for Tenant. Effective upon the date of the occurrence of such damage and ending uponsubstantial completion, if the Premises are untenantable in whole or partduring such period, the rent shall be reduced to such extent as may be fair andreasonable under all of the circumstances. If such repairs and rebuilding have not been substantially completedwithin one hundred eighty (180) days after the date of such damage (subject toForce Majeure Delays [hereinafter defined] and any delays caused by Tenant orits employees, agents or contractors), Tenant, as Tenant’s exclusive remedy,may terminate this Lease by delivering written notice of termination toLandlord in which event the rights and obligations hereunder shall cease andterminate (except as expressly provided to the contrary herein.)

##  

## C.            Notwithstandinganything herein to the contrary if the holder of any indebtedness secured by amortgage or deed of trust covering the Premises requires that the insuranceproceeds be applied to such indebtedness, then Landlord shall have the right toterminate this Lease by delivering written notice of termination to Tenantwithin fifteen (15) days after such requirement is made known by any suchholder, whereupon all rights and obligations hereunder shall cease andterminate (except as expressly provided to the contrary herein).

##  

## D.            Landlord and Tenant hereby waive andrelease each other (but only to the extent of the insurance coverage requiredto be maintained by the respective parties hereunder) of and from any and allrights of recovery, claim, action or cause of action, against each other, theiragents, officers and employees, for any liability, loss or damage that mayoccur to the Premises, improvements or the Building of which the Premises are apart, or personal property (building contents) within the Building and orPremises as the result of any fire or other casualty required to be insuredagainst under this Lease.  Each party tothis Lease agrees immediately after execution of this Lease to give eachinsurance company, which has issued to it policies of fire and extendedcoverage insurance, written notice of the terms of the mutual waivers containedin this subparagraph and to have the insurance policies properly endorsed toreflect such waivers.

##  

# 12.           LIABILITYAND INDEMNIFICATION.

#  

EXCEPT FOR ANYCLAIMS, RIGHTS OF RECOVERY AND CAUSES OF ACTION THAT TENANT HAS RELEASED,LANDLORD SHALL HOLD TENANT HARMLESS AND DEFEND TENANT AGAINST ANY AND ALLCLAIMS OR LIABILITY FOR ANY INJURY OR DAMAGE TO ANY PERSON IN, ON OR ABOUT THEPREMISES OR ANY PART THEREOF AND/OR THE BUILDING OF WHICH THE PREMISES ARE APART, WHEN SUCH INJURY OR DAMAGE SHALL BE CAUSED BY THE ACT, NEGLECT, FAULT, OROMISSION OF ANY DUTY WITH RESPECT TO THE SAME BY LANDLORD, ITS AGENTS, SERVANTSAND EMPLOYEES (UNLESS THE INDEMNIFIED LOSS IS CAUSED WHOLLY OR IN PART BYTENANT’S

 

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NEGLIGENCE OR INTENTIONAL ACTS IN WHICH EVENT THIS INDEMNITY SHALL NOTAPPLY TO THE ALLOCABLE SHARE OF SUCH LOSS RESULTING FROM TENANT’S NEGLIGENCE ORINTENTIONAL ACTS).  EXCEPT FOR ANYCLAIMS, RIGHTS OF RECOVERY AND CAUSES OF ACTION THAT LANDLORD HAS RELEASED,TENANT SHALL INDEMNIFY, PROTECT, HOLD HARMLESS AND DEFEND LANDLORD, ITS AGENTS,EMPLOYEES, CONTRACTORS, PARTNERS, DIRECTORS, OFFICERS AND ANY AFFILIATES OF THEABOVE-MENTIONED PARTIES (COLLECTIVELY THE “LANDLORD AFFILIATES”) FROMAND AGAINST ANY AND ALL OBLIGATIONS, SUITS, LOSSES, JUDGMENTS, ACTIONS,DAMAGES, CLAIMS OR LIABILITY (INCLUD1NG, WITHOUT LIMITATION, ALL COSTS,ATTORNEYS’ FEES, AND EXPENSES INCURRED IN CONNECTION THEREWITH) IN CONNECTIONWITH ANY LOSS, INJURY OR DAMAGE (I) TO ANY PERSON OR PROPERTY WHATSOEVEROCCURRING IN, ON OR ABOUT THE PREMISES OR ANY PART THEREOF AND/OR OF THEBUILDING OF WHICH THE PREMISES ARE A PART, INCLUDING WITHOUT LIMITATIONELEVATORS, STAIRWAYS, PASSAGE WAYS OR HALLWAYS, THE USE OF WHICH TENANT MAYHAVE IN ACCORDANCE WITH THIS LEASE, TO THE EXTENT SUCH INJURY OR DAMAGE SHALLBE CAUSED BY THE ACT, NEGLECT, FAULT OF, OR OMISSION OF ANY DUTY WITH RESPECTTO THE SAME BY TENANT, ITS AGENTS, SERVANTS, EMPLOYEES, OR INVITEES (II)ARISING FROM THE CONDUCT OF MANAGEMENT OF ANY WORK DONE BY TENANT IN OR ABOUTTHE PREMISES, (III) ARISING FROM TRANSACTIONS OF TENANT, OR (IV) ARISING FROM ABREACH, VIOLATION OR NON-PERFORMANCE OF ANY TERM, PROVISION, COVENANT ORAGREEMENT OF TENANT HEREUNDER, OR A BREACH OR VIOLATION BY TENANT OP ANY COURTORDER OR ANY LAW, REGULATION, OR ORDINANCE OF ANY FEDERAL, STATE OR LOCALAUTHORITY (COLLECTIVELY, THE “LOSSES” EVEN IF THE LOSSES ARE CAUSEDWHOLLY OR IN PART BY THE NEGLIGENCE OF LANDLORD AND/OR LANDLORDAFFILIATES.  IF ANY CLAIM IS MADE AGAINSTLANDLORD OR LANDLORD AFFILIATES, TENANT, AT IT’S SOLE COST AND EXPENSE, SHALLDEFEND ANY SUCH CLAIM, SUIT OR PROCEEDING BY OR THROUGH ATTORNEYS SATISFACTORYTO TENANT.  THE PROVISIONS OF THIS PARAGRAPH 12SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE WITH RESPECT TO ANYCLAIMS OR LIABILITY OCCURRING PRIOR TO SUCH EXPIRATION OR TERMINATION.

 

# 13.           USE.

#  

The Premisesshall be used only for the purpose of receiving, storing, light manufacturing,shipping and selling (other than retail) products, materials and merchandisemade and/or distributed by Tenant and for such other lawful purposes as may beincidental thereto.  Tenant acknowledgesthat it does not intend to use the Premises to serve the public.  Outside storage, including withoutlimitation, storage of trucks and other vehicles, is prohibited withoutLandlord’s prior written consent.  Tenantshall comply with (i) all governmental laws, ordinances and regulationsapplicable to the use and occupancy of the Premises, and promptly shall complywith all governmental orders and directives for the correction, prevention andabatement of nuisances in or upon, or connected with, the Premises, all atTenant’s sole expense, (ii) the requirements of all deed restrictions,restrictive covenants and other covenants, conditions and restrictionsaffecting the Building and/or the Land, and (iii) the requirements of “AllianceDevelopment Guidelines” as may exist from time to time, and all amendmentsthereto.  Tenant shall not permit anyobjectionable or unpleasant odors, smoke, dust, gas, noise or vibrations toemanate from the Premises, nor take any other action that would constitute anuisance or would disturb, unreasonably interfere with, or endanger Landlord orany other lessees of the Building of which the Premises are a part.

 

Landlordrepresents that, to its current actual knowledge, the Land is currently zoned “M-1Light” industrial pursuant to the zoning ordinance of the City of Roanoke,Texas.

 

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# 14.           INSPECTION.

#  

Landlord andLandlord’s agents and representatives shall have the right to enter thePremises at any time, upon prior reasonable notice, to (i) inspect thePremises, (ii) make such repairs as may be required or permitted pursuant tothis Lease, and (iii) show the Premises to prospective purchasers of, orparties who are anticipated to provide financing with respect to, theBuilding.  Notwithstanding the foregoing,Landlord shall have the right to enter the Premises at any time, without noticeto Tenant incase of an emergency posing a threat to persons or property.  During the period that is six (6) monthsprior to the end of the Term of this Lease, upon telephonic notice to Tenant,Landlord and Landlord’s representatives may enter the Premises during businesshours for the purpose of showing the Premises. In addition, Landlord shall have the right to erect a suitable sign onthe Premises stating the Premises are available.  Tenant shall notify Landlord in writing atleast thirty (30) days prior to vacating the Premises and shall arrange to meetwith Landlord for a joint inspection of the Premises prior to vacating.  If Tenant fails to give such notice or toarrange for such inspection, then Landlord’s inspection of the Premises shallbe deemed correct for the purpose of determining Tenant’s responsibility forrepairs and restoration of the Premises.

 

# 15.           ASSIGNMENTAND SUBLETTING.

#  

## A.            Tenantshall not assign (either voluntarily, nor permit assignment by operation oflaw), sublet, transfer or encumber this Lease, or any interest therein, to anythird party without the prior written consent of Landlord (such consent not tobe unreasonably withheld); provided however, Tenant may assign this Lease orsublet the Premises to any entity that controls, is controlled by, or is undercommon control with Tenant (individually, an “Affiliate”).  Any attempted assignment, subletting,transfer or encumbrance by Tenant in violation of the terms and covenants ofthis Paragraph shall be void.  Noassignment, subletting or other transfer, whether consented to by Landlord ornot, shall relieve Tenant of its liability hereunder.  In the event Tenant desires to sublet thePremises, or any portion thereof, or assign this Lease, Tenant shall givewritten notice thereof to Landlord within a reasonable time prior to theproposed commencement date of such subletting or assignment, which notice shallset forth the name of the proposed sublessee or assignee, the relevant terms ofany sublease or assignment and copies of financial reports and other relevantfinancial information of the proposed sublessee or assignee.  Tenant shall reimburse Landlord for Landlord’sactual reasonable out-of-pocket expenses and attorneys’ fees for processing andreviewing Tenant’s request for any subletting or assignment.

##  

## B.            Inaddition to, but not in limitation of, Landlord’s right to approve of anysublessee or assignee, Landlord shall have the option, in its sole discretion,in the event of any subletting or assignment (other than to an Affiliate), toterminate this Lease, or in case of a subletting of less than the entire Premises(other than to an Affiliate), to recapture the portion of the Premises to besublet, as of the date the subletting or assignment is to be effective.  The option shall be exercised, if at all, byLandlord giving Tenant written notice thereof within sixty (60) days followingLandlord’s receipt of Tenant’s written notice as required above.  If this Lease shall be terminated withrespect to the entire Premises pursuant to this Paragraph, the Term of thisLease shall end on the date stated in Landlord’s notice as the effective dateof the sublease or assignment as if that date had been originally fixed in thisLease for the expiration of the Term hereof; provided, however, that effectiveon such date Tenant shall pay Landlord all amounts, as estimated by Landlord,payable by Tenant to such date with respect to taxes, insurance, repairs,maintenance, restoration and other obligations, costs or charges which are theresponsibility of Tenant hereunder. Further, upon any such cancellation Landlord and Tenant shall have nofurther obligations or Liabilities to each other under this Lease, except withrespect to obligations or liabilities which have accrued hereunder as of suchcancellation date (in the same manner as if

 

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## such cancellation date were thedate originally fixed in this Lease for the expiration of the Term hereof) andexcept for those obligations and liabilities which, by the express terms ofthis Lease, are to survive any expiration or termination hereof.  If Landlord recaptures only a portion of thePremises under this Paragraph, the Base Rent during the unexpired Term hereofshall abate proportionately based on the rent per square foot contained in thisLease as of the date immediately prior to such recapture.  Tenant shall, at Tenant’s own cost andexpense, discharge in full any outstanding commission obligation on the part ofLandlord with respect to this Lease, and any commissions which may be due andowing as a result of any proposed assignment or subletting, whether or not thePremises are recaptured pursuant hereto and rented by Landlord to the proposedtenant or any other tenant.

##  

## C.            Uponthe occurrence of an assignment or subletting, whether or not consented to byLandlord, or mandated by judicial intervention, Tenant hereby assigns,transfers and conveys to Landlord all rents or other sums received orreceivable by Tenant under any such assignment or sublease, which are in excessof the rents and other sums payable by Tenant under this Lease (or in case of asublease, which are in excess of the rents and other sums payable by Tenantwith respect to the portion of the Premises that is subleased), and agrees topay such amounts to Landlord within ten (10) days after receipt.

##  

## D.            Ifthis Lease is assigned to any person or entity pursuant to the provisions ofthe United States Bankruptcy Code, 11 U.S.C. § 101 et. seq. (the “BankruptcyCode”), any and all monies or other consideration payable or otherwise tobe delivered in connection with such assignment shall be paid or delivered toLandlord, shall be and remain the exclusive property of Landlord and shall notconstitute property of Tenant or of the estate of Tenant within the meaning ofthe Bankruptcy Code.  Any and all moniesor other considerations constituting Landlord’s property under the precedingsentence not paid or delivered to Landlord shall be held in trust for thebenefit of Landlord and be promptly paid or delivered to Landlord.  Any person or entity to which this Lease isassigned pursuant to the provisions of the Bankruptcy Code, shall be deemed,without further act or deed, to have assumed all of the obligations arisingunder this Lease on and after the date of such assignment.  Any such assignee shall upon demand executeand deliver to Landlord an instrument confirming such assumption.

##  

## E.             Anyassignee, sublessee or transferee of Tenant’s interest in this Lease (all suchassignees, sublessees and transferees being hereinafter referred to as “Transferees”),by accepting any such assignment, sublease or transfer shall be deemed to haveassumed Tenant’s obligations hereunder, and shall be deemed to have assumedliability to Landlord for all amounts paid to persons other than Landlord bysuch Transferees.  No assignment,subletting or other transfer, whether consented to by Landlord or not orpermitted hereunder, shall relieve Tenant of its liability hereunder.  If an Event of Default occurs while thePremises or any part thereof are assigned or sublet, then Landlord, in additionto any other remedies herein provided, or provided by law, may collect directlyfrom such Transferee all rents payable to Tenant and apply such rent againstany sums due Landlord hereunder.  No suchcollection shall be construed to constitute a novation or a release of Tenantfrom the further performance of Tenant’s obligations hereunder.

##  

# 16.           CONDEMNATION.

#  

If more thanfifty percent (50%) of the Premises are taken for any public or quasi-publicuse under governmental law, ordinance or regulation, or by right of eminent domain,or by a conveyance in lien thereof, and the taking prevents or materiallyinterferes with the use of the Premises for the purpose for which they wereleased to Tenant, this Lease shall terminate and the rent shall be abatedduring the unexpired portion of this Lease, effective on the date of suchtaking.  If lets than fifty patent (50%)of the

 

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Premises are taken for any public or quasi-public use under anygovernmental law, ordinance or regulation, or by right of eminent domain, or bya conveyance in lieu thereof, this Lease shall not terminate, but the rent payable hereunderduring the unexpired portion of this Lease shall be reduced to such extent asmay be fair and reasonable under all of the circumstances.  All compensation awarded in connection withor as a result of any of the foregoing proceedings shall be the property ofLandlord; and Tenant hereby assigns any interest in any such award to Landlord;provided, however, Landlord shall have no interest in any award made to Tenantfor loss of business or goodwill or for the taking of Tenant’s fixtures andimprovements, if a separate award for such items is made to Tenant.

 

# 17.           HOLDINGOVER.

#  

At thetermination of this Lease by its expiration or otherwise, Tenant immediatelyshall deliver possession of the Premises to Landlord.  If, for any reason, Tenant retains possessionof the Premises or any part thereof alter such termination, then Landlord may,at its option, serve written notice upon Tenant that such holding overconstitutes either (i) the creation of a month to month tenancy, upon the termsand conditions set forth in this Lease, or (ii) creation of a tenancy atsufferance, in any case upon the terms and conditions set forth in this Lease;provided, however, that the monthly rental (or daily rental under (ii)) shall,in addition to all other sums which are to be paid by Tenant hereunder, whether or not asadditional rent, be equal to double the rental being paid monthly to Landlordunder this Lease immediately prior to such termination (prorated in the case of(ii) on the basis of a 365-day year for each day Tenant remains inpossession).  If no such notice isserved, then a tenancy at sufferance shall be deemed to be created at the rentin the preceding sentence.  Tenant shallalso pay to Landlord all damages sustained by Landlord resulting from retentionof possession by Tenant, including the loss of any proposed subsequent tenantfor any portion of the Premises.  Theprovisions of this paragraph shall not constitute a waiver by Landlord of anyright of re-entry as herein set forth; nor shall receipt of any rent or anyother act in apparent affirmance of the tenancy operate as a waiver of theright to terminate this Lease for a breach of any of the terms, covenants; orobligations herein on Tenant’s part to be performed.  No holding over by Tenant, whether with orwithout consent of Landlord, shall operate to extend this Lease except asotherwise expressly provided.  The precedingprovisions of this Paragraph 17 shall not be construed as consentfor Tenant to retain possession of the Premises in the absence of writtenconsent thereto by Landlord.

 

# 18.           QUIETENJOYMENT.

#  

Landlord hasthe authority to enter into this Lease and so long as Tenant pays all amountsdue hereunder and performs all other covenants and agreements herein set forth,Tenant shall peaceably and quietly have, hold and enjoy the Premises for theTerm hereof without hindrance from Landlord subject to the terms and provisionsof this Lease.  If this Lease is asublease, then Tenant agrees to take the Premises subject to the provisions ofthe prior leases.

 

# 19.           EVENTSOF DEFAULT.

#  

The followingevents (herein individually referred to as an “Event of Default”) eachshall be deemed to be an event of default by Tenant under this Lease:

 

## A.            Tenantshall fail to pay any installment of the Base Rent herein reserved when due, orany other payment or reimbursement to Landlord required herein when due, andsuch failure shall continue for a period of five (5) days after written noticeto Tenant.

##  

## B.            Tenantshall: (i) become insolvent(ii) admit in writing its inability to pay its debts; (iii) make a generalassignment for the benefit of creditors; (iv) commence any case,

 

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## proceeding or other actionseeking to have an order for relief entered on its behalf as a debtor or toadjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,adjustment, liquidation, dissolution or composition of it or its debts underany law relating to bankruptcy, insolvency, reorganization or relief ofdebtors, or seeking appointment of a receiver, trustee, custodian or othersimilar official for it or for all or of any substantial part of its property;or (v) take any action to authorize or in contemplation of any of theactions set forth above in this Paragraph.

##  

## C.            Anycase, proceeding or other action against Tenant or any guarantor of Tenant’sobligations hereunder shall be commenced seeking: (i) to have an order for relief entered againstit as debtor or to adjudicate it a bankrupt or insolvent (ii) reorganization,arrangement, adjustment, liquidation, dissolution or composition of it or itsdebts under any law relating to bankruptcy, insolvency, reorganization orrelief of debtors; (iii) appointment of a receiver, trustee, custodian or othersimilar official for it or for all or any substantial part of its property, andsuch case, proceeding or other action (a) results in the entry of an order forrelief against it which is not fully stayed within seven (7) business daysafter the entry thereof or (b) shall remain undismissed for a period offorty-five (45) days.

##  

## D.            Tenantshall (i) fail to takepossession of the Premises within thirty (30) days of substantial completion ofthe Leasehold Improvements, (ii) vacate, desert, or abandon all or asubstantial portion of the Premises, or threaten to do so or (iii) fail tocontinuously operate its business at the Premises for the permitted use setforth herein, whether or not Tenant is in default in payment of the rentalpayments due under this Lease.

##  

## E.             Tenantshall fail to promptly discharge any lien placed upon the Premises in violationof Paragraph 22 hereof.

##  

## F.             Tenantshall fail to comply with any term, provision or covenant of this Lease (otherthan those listed above in this Paragraph 19), and shall not cure suchfailure within twenty (20) days after written notice thereof to Tenantprovided, however, if such failure cannot through the exercise of reasonablediligence be cured within such twenty (20) days, an Event of Default shall notbe deemed to have occurred under this Paragraph 19F so long asTenant commences it curative efforts within such twenty (20)-day period anddiligently prosecutes same to completion.

##  

## G.            Tenant,its bankruptcy trustee, or any entity authorized by court order to act onbehalf of Tenant, shall reject this Lease under 11 U.S.C. sec. 365(a) or anyother provision of Title 11 of the United States Code, or the deemed rejectionof this Lease by operation of law under 11 U.S.C. sec. 365(d)(4).  Any such rejection of this Lease terminatesthis Lease, without notice of any kind to Tenant, effective on the later of:(1) the date Tenant vacates the Premises following such rejection; (2) the datethe Bankruptcy Court with jurisdiction over Tenant’s bankruptcy case enters anorder on its docket authorizing Tenant to reject this Lease; or (3) the datethis Lease is deemed rejected under 11 U.S.C. sec. 365(d)(4).

##  

# 20.           REMEDIES.

#  

## A.            Uponeach occurrence of an Event of Default, Landlord shall have the option topursue, without any notice or demand, (except as expressly provided otherwiseherein) any one or more of the following remedies and/or any other remedies towhich Landlord is entitled at law or in equity:

 

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### i.              Terminatethis Lease, in which event Tenant shall immediately surrender the Premises toLandlord.  If Tenant fails to do so,Landlord may, without any further notice and without prejudice to any otherremedy Landlord may have for possession or arrearages in rental, enter upon andtake possession of the Premises and remove Tenant and its effects without beingliable for prosecution or any claim for damages therefor, and Tenant shall indemnifyLandlord for all loss and damage which Landlord may suffer by reason of suchtermination, whether through inability to relet the Premises or otherwise,including any loss of rental for the remainder of the Term.

###  

### ii.             Ifthe Event of Default relates to nonpayment of Base Rent or any other monetarysum due hereunder, or the desertion, vacation or abandonment of the Premises,terminate this Lease, in which event Tenant’s default shall be deemed a totaland entire breach of Tenant’s obligations under this Lease and Tenantimmediately shall become liable for damages in an amount equal to the excess of(i) the total rental for the remainder of the Term, discounted at the PrimeRate (hereinafter defined) to the then present value, together with all other actualand reasonable expenses incurred by Landlord in connection with Tenant’sdefault, all sums due pursuant to Paragraph 20B below, and theunpaid rental due as of the date of termination, over (ii) the fair marketrental value of the Premises for the balance of the Term, discounted at thePrime Rate to the then present value. For the purposes of clause (i) above, the components of monthly rent(other than Base Rent) for the remainder of the Term shall be deemed to beequal to the respective monthly amounts thereof as were due and payable duringthe month in which the Lease was terminated. It is acknowledged intended and agreed that the amounts which Landlordis entitled to recover under this Paragraph 20A(ii) constituteliquidated damages and not a penalty for Tenant’s defaults related tononpayment of rental, or the desertion, vacation or abandonment of thePremises.  Such amounts constitute theparties’ best, good faith, and reasonable estimate of the damages which wouldbe suffered by Landlord in the event any such default occurs, the exact amountof such damages being difficult or impractical to calculate.

###  

### iii.            Enterupon and take possession of the Premises as Tenant’s agent without terminatingthis Lease and without being liable for prosecution or any claim for damagestherefor, and Landlord may reletthe Premises as Tenant’s agent and receive the rental therefor, in which eventTenant shall pay to Landlord on demand all sums due pursuant to Paragraph 20Bbelow, together with any deficiency that may arise by reason of such reletting.

###  

### iv.            Dowhatever Tenant is obligated to do under this Lease and enter the Premises,without being liable for prosecution or any claim for damages therefor, toaccomplish such purpose.  Tenant shallreimburse Landlord immediately upon demand for any expenses which Landlordincurs in thus effecting compliance with this Lease on Tenant’s behalf,together with interest thereon at the highest lawful rate from the dateLandlord incurs the expense in question until Landlord is reimbursed therefor.

###  

### v.             RequireTenant to pay any rental in quarterly installments in advance of’ each calendarquarter during the Tam by certified or cashier’s check.

###  

### vi.            Withtwenty-four (24) hours prior notice, alter the locks and any other security deviceor devices which allow Tenant access to the Premises or the Building of whichthe Premises form a part, and Landlord shall not be required to provide a newkey or right of access to Tenant, and restrict or terminate any right to useparking facilities

 

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### associated with the Building aswell as utility services to the Premises. This Paragraph 20A(vi) is intended to and shall supersedethe provisions of Section 93.002 of the Texas Property Code.

 

## B.            Uponthe occurrence of an Event of Default, in addition to any other sum provided tobe paid herein, Tenant also shall be liable for and shall pay to Landlord: (i)brokers’ fees incurred by Landlord in connection with reletting the whole orany part of the Premises to the extent such brokers’ fees (if calculated basedon the term of the lease for the reletting) are attributable to the remainderof the Term of this Lease; (ii) the costs of removing and storing Tenant’s orother occupant’s property; (iii) the costs of repairing, altering, remodelingor otherwise putting the Premises into condition acceptable to a new tenant ortenants; (iv) all reasonable expenses incurred in marketing the Premises and(v) all reasonable expenses incurred by Landlord in enforcing or defendingLandlord’s rights and/or remedies.  Ifeither party hereto institutes any action or proceeding to enforce anyprovision hereof by reason of any alleged breach of any provision of thisLease, the prevailing party shall be entitled to receive from the losing partyall actual and reasonable attorneys’ fees and all court costs in connectionwith such proceeding.  If Tenant files avoluntary petition under any chapter of Title 11 of the United Stales Code, orif an involuntary petition is filed against Tenant seeking relief under anychapter of Title 11 of the United States Code, Tenant acknowledges thatLandlord may, at its option, retain an attorney to represent Landlord in suchbankruptcy case and all attorneys’ fees and expenses (including expenses ofconsulting or testifying expert witnesses) incurred by Landlord in connectionwith such bankruptcy case shall be recoverable by Landlord as additional rentunder this Lease and shall constitute pars of the cure required under 11 U.S.C.sec. 365(b)(1)(A) if Tenant seeks to assume or assume and assign this Lease.

##  

## C.            Inthe event Tenant fails to make any payment due hereunder when payment is due, to help defray the additional costto Landlord for processing such late payments, Tenant shall pay to Landlord ondemand a late charge in an amount equal to five percent (5%) of such payment;and the failure to pay such amount within five (5) days after demand thereforshall be an additional Event of Default hereunder.  The provision for such late charge shall bein addition to all of Landlord’s other rights and remedies hereunder or at lawand shall not be construed as liquidated damages or as limiting Landlord’sremedies in any manner.

##  

## D.            Exerciseby Landlord of any one or more remedies hereunder granted or otherwiseavailable shall not be deemed to be an acceptance of surrender of the Premisesby Landlord, whether by agreement or by operation of law, it being understoodthat such surrender can be effected only by the written agreement of Landlordand Tenant.  Tenant and Landlord furtheragree that forbearance by Landlord to enforce its rights pursuant to thisLease, at law or in equity, shall not be a waiver of Landlord’s right toenforce one or inert of its rights in connection with that or any subsequentdefault.

##  

## E.             Theterm “Prime Rate” as used herein shall mean the per annum “prime rate”of interest as published, on the date on which this Lease is terminated inaccordance with this Paragraph 20, by The Wall Street Journal, SouthwestEdition, in its listing of “Money Rates”, or if The Wall Street Journal is notpublished on the date on which this Lease is terminated, then the “prime rate”of interest as published in The Wall Street Journal on the most recent dateprior to the date on which this Lease is so terminated or, if The Wall StreetJournal has ceased publication and does not have a comparable successor as ofthe date on which this Lease is terminated, then the “Prime Rate” asused herein shall mean the prime rate of interest announced from time to time byBank One Texas, N.A.

 

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## F.             IfLandlord fails to perform any of its obligations hereunder within thirty (30)days after written notice from Tenant specifying in detail such failure (or ifthe failure cannot be corrected, through the exercise of reasonable diligence,within such thirty (30)-day period, if Landlord does not commence to correctsame within such thirty (30)-day period and thereafter diligently prosecutesame to completion), Tenant’s sole and exclusive remedy shall be an action fordamages.  Unless and until Landlord failsto so cure any default after such notice, Tenant shall not have any remedy orcause of action by reason thereof.  Allobligations of Landlord hereunder will be construed as covenants, notconditions; and all such obligations will be binding upon Landlord only duringthe period of its possession of the Premises and not thereafter.  The term “Landlord” shall mean only theowner, for the time being of the Premises, and in the event of the transfer bysuch owner of its interest in the Premises, such owner shall thereupon bereleased and discharged from all covenants and obligations of Landlordthereafter accruing but such covenants and obligations shall be binding duringthe Term of this Lease upon each new owner for the duration of such owner’sownership.  Notwithstanding any otherprovision hereof, Landlord shall not have any personal liabilityhereunder.  In the event of any breach ordefault by Landlord of any term or provision of this Lease, Tenant agrees tolook solely to the equity or interest then owned by Landlord in the Premises orof the Building of which the Premises are a part; however, in no event, shallany deficiency judgment of any kind be sought or obtained against Landlord.

##  

## G.            IfLandlord repossesses the Premises pursuant to the authority herein granted,then Landlord shall have the right to (i) keep in place and use or (ii) removeand store, all of the furniture, fixtures and equipment at the Premises,including that which is owned by or leased to Tenant at all times prior to anyforeclosure thereon by Landlord or repossession thereof by any landlord thereofor third party having a lien thereon. Landlord also shall have the right to relinquish possession of all or any portion of such furniture,fixtures, equipment and other property to any person (“Claimant”) whopresents to Landlord a copy of any instrument represented by Claimant to havebeen executed by Tenant (or any predecessor of Tenant) granting Claimant the rightunder various circumstances to take possession of such furniture, fixtures,equipment or other property, without the necessity on the part of Landlord toinquire into the authenticity or legality of said instrument.  The rights of Landlord herein stated shall bein addition to any and all other rights that Landlord has or may hereafter haveat law or in equity; and Tenant stipulates and agrees that the rights hereingranted Landlord are commercially reasonable.

##  

## H.            Notwithstandinganything in this Lease to the contrary, all amounts payable by Tenant to or onbehalf of Landlord under this Lease, whether or not expressly denominated asrent, shall constitute rent.

##  

## I.              Thisis a contract under which applicable law excuses Landlord from acceptingperformance from (or rendering performance to) any person or entity other thanTenant.

##  

# 21.           MORTGAGES.

#  

Tenant acceptsthis Lease subject and subordinate to any mortgages and/or deeds of trust nowor at any time hereafter constituting a lien or charge, upon the Premises orthe improvements situated thereon or the Building of which the Premises are apart; provided, however, that if the mortgagee, trustee, or holder of any suchmortgage or deed of trust elects to have Tenant’s interest in this Leasesuperior to any such instrument, then by notice to Tenant from such mortgagee,trustee or holder, this Lease shall be deemed superior to such lien, whetherthis Lease was executed before or after said mortgage or deed of trust.  Tenant, at any time hereafter on demand, shallexecute any instruments, releases or other documents that may be reasonablyrequired by any mortgagee, trustee or holder for the

 

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purpose of subjecting and subordinating this Lease to the lien of any suchmortgage or deed of trust (Tenant hereby agreeing that an instrument in theform of Exhibit ”H” attached hereto and made a part hereof isacceptable to Tenant for such purpose). If any futuremortgagee or beneficiary under a mortgage or deed of trust hereafter placedupon the Building desires to subordinate its mortgage or deed of trust to thisLease, Tenant agrees that it shall promptly execute such instruments as may bereasonably required by such mortgagee or beneficiary in order to effect such subordination.

 

# 22.           MECHANICSLIENS.

#  

Tenant has noauthority, express or implied, to create or place any lien or encumbrance ofany kind or nature whatsoever upon, or in any manner to bind, the interest ofLandlord or Tenant in the Premise or to charge the rentals payable hereunderfor any claim in favor of any person dealing with Tenant, including those whomay furnish materials or perform labor for any construction or repairs.  Tenant covenants and agrees that it will payor cause to be paid all sums legally due and payable by it on account of anylabor performed or materials furnished in connection with any work performed onthe Premises and that it will save and hold Landlord harmless from any and allloss, cost or expense based on or arising out of asserted claims or liensagainst the leasehold estate or against the right, title and interest ofLandlord in the Premises or under the terms of this Lease.  Tenant agrees to give Landlord immediatewritten notice of the placing of any lien or encumbrance against the Premises.

 

# 23.           HAZARDOUSMATERIALS.

#  

## A.            Tenantshall never incorporate into, or dispose of, at, in or under the Premises, theBuilding or the Land any toxic or hazardous materials.  Tenant further agrees not to use at, placein, or store at the Premises any toxic or hazardous materials, except for thosetoxic or hazardous materials that are either (a) office supplies or (b) kitchencleaning materials that are generally considered to be a household cleaner andare purchased in a container not larger than one (1) gallon and then only if(i) all such toxic or hazardous materials, supplies and materials are properlylabeled and contained, (ii) all such toxic or hazardous materials are stored,handled, transported and disposed of in accordance with highest acceptedindustry standards and all applicable laws, rules and regulations, and (iii) ifa material safety data sheet is required under applicable laws to accompany thetoxic or hazardous materials, supplies or materials, a copy of such currentmaterial safety data sheet is provided to Landlord.  For purposes of this Lease, “toxic orhazardous materials” shall mean hazardous or toxic chemicals or any materialscontaining hazardous or toxic chemicals at levels or content which cause suchmaterials to be classified as hazardous or toxic as then prescribed by thehighest industry standards or by the then current levels or content as set fromtime to time by the U.S. Environmental Protection Agency (“EPA”) or theU.S. Occupational Safety and Health Administration (“OSHA”) or asdefined under 29 CFR 1910 or 29 CFR 1925 or other applicable governmentallaws, rules or regulations.  In the eventthere is a spill of toxic orhazardous materials (other than permitted office supplies and kitchen cleaningsupplies) at the Premises, the Building or the Land, Tenant shall notifyLandlord of the method, time and procedure for any clean-up and removal of suchtoxic or hazardous materials; and, Landlord shall have the right to requirereasonable changes in such method, time or procedure.  In the event there is a spill of a toxic orhazardous material that comes from office supplies in the Premises, Tenantshall notify Landlord if the spill would in any way endanger or pose a threatto Tenant’s employees, Building maintenance or custodial personnel, otherBuilding tenants or the general public. In the event of any breath of this provision by Tenant or anycontamination of the Premises, the Building or the Land, by Tenant, Tenantshall pay all costs for the removal or abatement or clean-up of any toxic orhazardous materials at the Premises, the Building and the Land.  If any lender or governmental agency shallever require testing to ascertain whether or nor there has been any release ofhazardous materials caused by Tenant, then

 

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## the reasonable costs thereofshall be reimbursed by Tenant to Landlord upon demand as additional charges,unless the testing determines the hazardous material was not caused by Tenantor persons acting under Tenant.  Inaddition, Tenant shall execute affidavits, representations and the like fromtime to time at Landlord’s reasonable request concerning Tenant’s bestknowledge and belief regarding the presence of hazardous substances ormaterials on the Premises.  In allevents, Tenant shall indemnify Landlord in the manner elsewhere provided inthis Lease from any release of hazardous materials on the Premises occurringwhile Tenant is in possession or elsewhere if caused by Tenant or personsacting under Tenant.

##  

## B.            Landlordrepresents and warrants to Tenant as of the date hereof that to Landlord’scurrent actual knowledge there is no environmental contamination of the Landother than as disclosed in the Phase I Environmental Site Assessment datedJuly 22, 2002, prepared by HBC Engineering (“Environmental Report”)a copy of which Environmental Report has been provided to Tenant; provided,however, Landlord makes no representation or warranty regarding the accuracy ofthe findings, conclusions or recommendations contained in the EnvironmentalReport or the qualifications of the consultant who prepared the EnvironmentalReport.  The term “Landlord’s currentactual knowledge” and terms of similar import shall he construed to mean theactual knowledge (and not constructive knowledge) of Robert Alter and TonyCreme.

##  

## C.            ThisParagraph 23 shall survive the expiration or any termination orthis Lease.

##  

# 24.           MISCELLANEOUS.

#  

## A.            Wordsof any gender used in this Lease shall be held and construed to include anyother gender, and words in the singular number shall be held to include theplural, unless the context otherwise requires. The captions inserted in this Lease are for convenience only and in noway define, limit or otherwise describe the scope or intent of this Lease, orany provision hereof, or in any way affect the interpretation of this Lease.

##  

## B.            Theterms, provisions aid covenants contained in this Lease shall run with the landand shall apply to, inure to the benefit of, and be binding upon, the partieshereto and upon their respective heirs, executors, personal representatives,legal representatives, successors and assigns, except as otherwise hereinexpressly provided.  Landlord shall havethe right to transfer and assign, in whole or in part, its rights and obligationsin the Building and property that are the subject of this Lease.  Upon any Landlord’s conveyance of theBuilding or the Land, and the assignment of its rights under this Lease, toanother party (“Successor”) such Landlord shall be released from itsobligations hereunder and the Successor shall become the “Landlord” hereunderfrom and after the date of any such conveyance and assignment and shallthereafter have all of the rights and obligations of Landlord hereunder, inaccordance with the terms hereof, during the period of its ownership of theBuilding.  Each party agrees to furnishto the other, promptly upon demand, a corporate resolution, proof of dueauthorization by partners, or other appropriate documentation evidencing thedue authorization of such party to enter into this Lease.

##  

## C.            NeitherTenant nor Landlord shall be held responsible for delays in the performance oftheir respective obligations hereunder when such delays are caused by material shortages,weather, acts of God, labor disputes or other causes beyond the reasonablecontrol of Tenant or Landlord, as the case may be (collectively, the “ForceMajeure Delays”); provided.  however,the foregoing shall be inapplicable to and shall not in any way excuse Tenant’s or Landlord’s failure to timely pay BaseRent, other rent or other monetary amount, as applicable, due hereunder fromone party to the other at the lime such payments are due.

 

19

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## D.            Tenantagrees, from time to time, within ten (10) days after request by Landlord, todeliver to Landlord or Landlord’s designee, a certificate of occupancy,financial statements and an estoppel certificate stating (1) that this Lease isin full force and effect, (2)the date to which rent is paid, (3) that there is no default on the part ofLandlord or Tenant under this Lease, (4) that Tenant does not have any right ofoffset, claims or defenses to the performance of its obligations under thisLease, and (5) such other factual matters pertaining to this Lease as may bereasonably requested by Landlord.  Tenanthereby irrevocably appoints Landlord as attorney-in-fact for Tenant with full power and authority to executeand deliver in the name of Tenant such estoppel certificate if Tenant fails to deliver the samewithin such ten (10) day periodand such certificate as signed by Landlord or Landlord’s designee, as the casemay be, shall be fully binding on Tenant, if Tenant fails to deliver a contrarycertificate within five (5) days after receipt by Tenant of a copy of thecertificate executed by Landlord or Landlord’s designee, as the case may be, onbehalf of Tenant.

##  

## E.             ThisLease constitutes the entire understanding and agreement of Landlord and Tenantwith respect to the subject matter of this Lease, and contains all of thecovenants and agreements of Landlord and Tenant with respect thereto.  Landlord and Tenant each acknowledge that norepresentations, inducements, promises or agreements, oral or written, havebeen made by Landlord or Tenant, or anyone acting on behalf of Landlord orTenant, which are not contained herein, and any prior agreements, promises,negotiations, or representations not expressly set forth in this Lease are ofno force or effect.  This Lease may notbe altered, changed or amended except by art instrument in writing signed byboth parties hereto.

##  

## F.             Allobligations of Tenant hereunder not fully performed as of the expiration orearlier termination of the Term ofthis Lease shall survive the expiration or earlier termination of the Termhereof, including without limitation, all payment obligation with respect totaxes and insurance and all obligations concerning the condition and repair ofthe Premises.  Upon the expiration orearlier termination of the Term hereof, Tenant shall pay to Landlord any amountreasonably estimated by Landlord as necessary to put the Premises, includingwithout limitation, all heating and air conditioning systems and equipmentthereon, in good condition and repair, reasonable wear and tear excluded.  Tenant shall also, prior to vacating thePremises, pay to Landlord the amount, as estimated by Landlord, of Tenant’sobligation hereunder for real estate taxes and insurance premiums, common areamaintenance, utility and other charges for the year in which the Lease expiresor terminates.  All such amounts shall beused and held by Landlord forpayment of such obligations of Tenant hereunder, with Tenant being liable forany additional costs therefor upon demand by Landlord, or with any excess to bereturned to Tenant after all such obligations have been determined andsatisfied as the case may be.  Anysecurity deposit held by Landlord shall be credited against the amounts duefrom Tenant under this Paragraph 24F.

##  

## G.            Ifany clause or provision of this Lease is illegal, invalid or unenforceableunder present or future laws effective during the Term of this Lease, then and in that event, it is the intention ofthe parties hereto that the remainder of this Lease shall not be affectedthereby, and it is also the intention of the parties to this Lease that in lieuof each clause or provision of this Lease that is illegal, invalid orunenforceable, there be added, as a part of this Lease, a clause or provisionas similar in terms to such illegal, invalid or unenforceable clause orprovision as may be possible and be legal, valid and enforceable.

##  

## H.            Allreferences in this Lease to “the date hereof” or similar references shall bedeemed to refer to the last date, in point of time, on which all parties heretohave executed this Lease.

 

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## I.              Tenantrepresents and warrants that it has dealt with no broker, agent or other personin connection with this transaction and that no broker, agent or other personbrought about this transaction, other than the broker or agent identified inthe Basic Lease Information, and Tenant agrees to indemnify and hold Landlordharmless from and against any claims by any other broker, agent or other personclaiming a commission or other form of compensation by virtue of having dealtwith Tenant with regard to this leasing transaction.

##  

## J.             Ifand when included within the term “Landlord”, as used in this instrument, thereis more than one person, firm or corporation, all shall jointly arrange amongthemselves for their joint execution of a notion specifying some individual atsome specific address for the receipt of notices and payments to Landlord.  If and when included within the term “Tenant”,as used in this instrument, there is more than one person, firm or corporation,all shall jointly arrange among themselves for their joint execution at anotice specifying some individual at some specific address within thecontinental United States for the receipt of notices and payments to Tenant.  All parties included within the terms “Landlord”and “Tenant”, respectively, shall be bound by notices given in accordance withthe provisions of Paragraph 25 hereof to the same effect as if eachhad received such notice.

##  

## K.            Bytaking possession of the Premises, Tenant shall be deemed to have:(a) acknowledged that the Premises and the improvements to be constructedpursuant to Exhibit ”C” attached hereto are substantially completeexcept for “punch list” items (if any) and are accepted “as is” and “with allfaults”; (b) accepted the Premises as suitable for the purposes for which thePremises are leased, and (c) acknowledged that the Premises are in a good andsatisfactory condition.  Landlordexpressly disclaims, and Tenant hereby waives to the full extent permitted bylaw, any implied warranty that the Premises or the Building are suitable forTenant’s intended commercial purpose, and any and all other implied warranties(whether arising by virtue of statute, case law or otherwise).  The foregoing shall not be construed torelieve Landlord from its obligations which ass expressly set forth in thisLease.

##  

## L.             Submissionof this Lease shall not be deemed to be a reservation of the Premises.  Landlord shall not be bound hereby until itsdelivery to Tenant of an executed copy hereof signed by Landlord, alreadyhaving been signed by Tenant, and until such delivery Landlord reserves theright to exhibit and lease the Premises to other prospective tenants.  Notwithstanding anything contained herein tothe contrary, Landlord may withhold delivery or possession of the Premises fromTenant with such time as Tenant has paid to Landlord the security depositrequired by Paragraph 2B hereof and one month’s rent as set forthin Paragraph 2A hereof.

##  

## M.           Landlordand Tenant agree that the terms and conditions of this Lease are confidentialand the parties hereto agree not to disclose the terms of this Lease to anythird party (other than to its attorneys and accountants and other than toparties who propose to purchase or finance the Building, or the Project ofwhich the Building forms a part, or who propose to become investors inLandlord) except as may he required by law or by the order of a court ofcompetent jurisdiction.

##  

## N.            [IntentionallyOmitted]

##  

## O.            Tenantagrees that Landlord or an affiliate of Landlord may include Tenant’s name andlogo in marketing literature for the Alliance development, the Circle Tdevelopment, and other developments owned and/or operated by Landlord or anaffiliate of Landlord, for the limited purpose of informing third parties thatTenant is occupying the Project or the larger development of which the Projectis a part.

 

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# 25.           NOTICES.

#  

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

 

## A.            Allrent and other payments required to be made by tenant to Landlord hereundershall be payable to Landlord at the address for Landlord set forth in the BasicLease Information or at such other address as Landlord may specify from time totime by written notice delivered in accordance herewith.  Tenant’s obligation to pay rent and any otheramounts to Landlord under the terms of this Lease shall not be deemed satisfieduntil such rent and other amounts have been actually received by Landlord. In addition to Base Rent duehereunder, all sums of money and all payments due Landlord hereunder shall bedeemed to be additional rental owed to Landlord.

##  

## B.            Allpayments required to be made by Landlord to Tenant hereunder shall be payableto Tenant at the address set forth in the Basic Lease Information, or at suchother address within the continental United States as Tenant may specify fromtime to time by written notice delivered in accordance herewith.

##  

## C.            Anywritten notice or document required or permitted to be delivered hereundershall be deemed to be delivered, whether actually received or not, whendeposited in the United States Mail, postage prepaid, Certified or RegisteredMail, addressed to the parties hereto at the respective addresses set out inthe Basic Lease Information, or at such other address as they have theretoforespecified by written notice delivered in accordance herewith.

##  

# 26.           LANDLORD’SLIEN.

#  

In addition toany statutory lien for rent in Landlord’s favor, Landlord shall have and Tenanthereby grants to Landlord, subject to any existing liens, a continuing securityinterest, to secure payment at all rentals and other sums of money becoming duehereunder from Tenant and for the performance of all of its other obligationshereunder, upon all equipment, fixtures, and furniture now or hereaftersituated at the Premises, and such property shall not be removed therefromwithout the consent of Landlord until all arrearages in rent as well as any andall other sums of money then due to Landlord hereunder shall first have beenpaid and discharged and all other obligations of Tenant have been fullyperformed and discharged.  In the event any of the foregoingdescribed property is removed from the Premises in violation of the covenant inthe preceding sentence, the security interest shall continue in such propertyand all proceeds and products, regardless of location.  Upon the occurrence of an Event of Defaulthereunder, or upon Tenant’s threatened breach of its obligations hereunder(including, without limitation, any threatened vacation or abandonment of thePremises), in addition to all other rights and remedies Landlord shall have allrights and remedies under the Uniform Commercial Code, including withoutlimitation, the right to sell the property described in this Paragraph atpublic or private sale upon five (5) days’ notice by Landlord.  Tenant hereby agrees to execute such otherinstruments, necessary or desirable under applicable law, to perfect thesecurity interest hereby created. Landlord and Tenant agree that this Lease and security agreement servesas a financing statement and that a copy, photographic or other reproduction ofthis portion of this Lease may be filed of record by Landlord and have the sameforce and effect as the original.  Thissecurity agreement and financing statement also coven fixtures located at thePremises subject to this Lease and legally described in Exhibit "A"attached hereto and incorporated herein by reference and is to be filed lotrecord in the real estate records.  Therecord owner of this

 

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property is Landlord. Concurrently with the execution hereof, Tenant shall execute and deliverto Landlord a financing statement in the form attached hereto as Exhibit "E".

 

# 27.           PARKING.

#  

Landlord shallprovide Tenant approximately one hundred twenty (120) vehicular parking spaceson the surface parking lot (the “Parking Lot”) constructed on the Landin front of the Building as generally depicted on Exhibit "A"attached hereto and incorporated herein by reference.  Additional parking will be available toTenant at the rear of the Building as generally shown on Exhibit "A".  During the Term of this Lease, Tenant shallbe permitted to use all of the vehicular parking spaces located on the ParkingLot, subject to such terms, conditions and regulations as are from time to timeapplicable to patrons of the Parking Lot. The parking spaces in the Parking Lot shall be made available to Tenanton a first-come first-served basis, it being agreed that Landlord shall have noobligation to patrol, police, or monitor the Parking Lot or to take any otheractions to ensure that Tenant has the use of all such parking spaces

 

# 28.           ADDITIONALPROVISIONS.

#  

See Exhibit "A"— “I” attached hereto and incorporated by reference herein.

 

EXECUTED BYLANDLORD, this 22nd day of September, 2003.

 
| ** **                                                  | ALLIANCE GATEWAY NO. 58, LTD.,  a Texas limited partnership |
|-------------------------------------------------------------|-------------------------------------------------------------|
| ** **                                                  | ** **                                                  | ** ** |
|                                                        | By:                                                         | Hillwood Alliance Management, L.P.,  a Texas limited partnership,  its general partner |
|                                                        |                                                        |   |
|                                                        |                                                        | By: | Hillwood Alliance GP, LLC  a Texas limited liability company,  its general partner |
|                                                        |                                                        |   |   |
|                                                        |                                                        |   |   |
|                                                        |                                                        |   | By: | \s\ Michael K. Berry |   |
|                                                        |                                                        |   |   |   |
|                                                        |                                                        |   | Name: | Michael K. Berry |   |
|                                                        |                                                        |   |   |   |
|                                                        |                                                        |   | Title: | Executive Vice President |   |
|                                                        |                                                        |   |   |
| EXECUTED BY  TENANT, this 22nd day of September, 2003. |
|                                                        |                                                        |   |   |
|                                                        | VICTOR EQUIPMENT COMPANY,  a Delaware corporation           |
|                                                        |                                                        |   |
|                                                        |                                                        |   |
|                                                        | By:                                                         | \s\ James H. Tate |   |
|                                                        |                                                        |   |
|                                                        | Name:                                                       | James H. Tate |   |
|                                                        |                                                        |   |
|                                                        | Title:                                                      | Senior  V.P. and CFO |   |
|                                                             |                                                             |  |  |  |  |  |  |  |  |  |  |  |

 

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