**Exhibit10.28**

 

**LEASE PACKAGE:**

 

RESPECTING LEASE BYAND BETWEEN

 

PEARSON FUND III,L.P., a Texas limited partnership (“LANDLORD”),

 

And 

 

SONUS NETWORKS, INC,a Delaware corporation (“TENANT”)

 

RESPECTING LEASE OFPREMISES SITUATED AT 1130 EAST ARAPAHO ROAD, RICHARDSON, TEXAS 75081:

 

1.                                       BASIC LEASEINFORMATION

 

2.                                       STANDARD LEASE,INCLUDING EXHIBITS THERETO AS FOLLOWS:

 
| Exhibit A-l | - |     | Legal Description of the Land                           |
|------------------|---|----------|---------------------------------------------------------|
| Exhibit A-2 | - |     | General Depiction of the Premises – 1st  Floor     |
| Exhibit A-3 | - |     | General Depiction of the Premises – 2nd  Floor     |
| Exhibit B   | - |     | Building Rules and Regulations                     |
| Exhibit C   | - |     | Operating Expense Escalator                             |
| Exhibit D   | - |     | Special Provisions                                      |
| Exhibit D-l | - |     | ADA Compliance Matters                                  |
| Exhibit E   | - |     | Parking                                                 |
| Exhibit F   | - | * * | Intentionally Deleted                                   |
| Exhibit G   | - |     | Subordination Non-Disturbance and Attornment  Agreement |
| Exhibit H   | - |     | Intentionally Deleted                                   |
| Exhibit I   | - |     | Janitorial Specifications                               |

 

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**BASIC LEASE INFORMATION**

 
| Lease  Date/Effective Date: |   | Effective,  but not necessarily signed, July 19, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Commencement  Date:         |   | The  earlier of (a) November 15, 2005 (provided that Landlord delivers  possession of the Premises to Tenant on the Lease Date; otherwise, such date  shall be extended one day for each day of delay in delivering possession of  the Premises to Tenant) or (b) the date on which Tenant occupies any  portion of the Premises and begins conducting business therein, as may be  adjusted to the date set forth in that certain letter agreement between  Landlord and Tenant described in Section 3 of this Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| Tenant:                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                        |   | Sonus  Networks, Inc., a Delaware corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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| Tenant’s  Address:     |   | Sonus  Networks, Inc.  1130 East Arapaho Road  Suite 200  Richardson, Texas 75081  Attention: Mike Eastep  Telephone: 972.301.4930  Facsimile: 972.680.6329                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | with  a copy to:

Sonus  Networks, Inc.  250 Apollo Drive  Chelmsford, MA 01824  Attention: General Counsel  Telephone: 978.614.8505  Facsimile: 978.614.8651 |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |
| Landlord:                   |   | Pearson  Fund III, L.P., a Texas limited partnership                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| Landlord’s  Address:   |   | Pearson  Fund III, L.P.  9000 Mountbatten Circle  Austin, TX 78730  Attention: Craig Nemec, President  Telephone: 512.342.1700  Facsimile: 512.233.5280* *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | with  a copy to:

Pearson  Group, Inc.  1130 East Arapaho Road  Suite 190  Attention: Craig Nemec, Pres. Richardson, Texas 75081  Telephone: 972.234.3743

Facsimile:  972.664.1084 |
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| Premises:                   |   | Suite 200,  containing approximately **26,537**  rentable square feet, as outlined on the floor plans attached hereto as Exhibits  A-2 and A-3 (**“Premises”**),  comprising a portion of the 1st and 2nd floors of the six-story  office building (the **“Building”**)  located on that certain real property commonly known as Two Richardson  Center, Richardson, Dallas County, Texas, with a street address of 1130 East  Arapaho Road, Richardson, Texas 75081 (Dallas County, Texas), comprised of a  stipulated **119,169** rentable square feet, as  more particularly described on Exhibit A-l (the **“Land”**), together with the non-exclusive use of the  Common Area of* *the first floor  of the Building, including, without limitation, the loading dock area and the  front lobby (collectively the **“First Floor Common  Area”**). The Premises and the First and Second Floor Common  Areas are generally depicted and shown on Exhibits A-2 and A-3; said  exhibits being attached for identification purposes only, and such depictions  are expressly made WITHOUT WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND. The  First and Second Floor Common Areas do not include the elevator closets and  mechanical rooms on the first and second floors of the Building as depicted  and shown on Exhibit A-2 and A-3. |
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|                        |   | Measurement  and calculation of rentable area has been performed in accordance with                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                             |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |  |  |  |

 

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|   |   | the  Building Owners and Managers Association (**“BOMA”**)  guidelines using no more than a 15.0% load factor with respect to each  multi-tenant floor of the Building and a 8.0% load factor with respect to  each single tenant floor of the Building (i.e., the 2nd floor); it  being agreed that, at no time during the Term, shall such load factors exceed  such percentages. Landlord and Tenant hereby stipulate that notwithstanding  anything herein to the contrary, the Premises shall be deemed to consist of **19,478** rentable square feet on the 2nd Floor  and **7,059**  rentable square feet on the 1st  Floor, and that no shortage or overage in the rentable square feet of the Premises  purported by either party shall be the basis for changing the number of  rentable square feet herein stipulated, other than in the event of Tenant’s  exercise of its Expansion Option, if any, as provided in the Lease. |
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|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Term:  |   | 60  full calendar months, plus any partial month from the Commencement Date to  the end of the month in which the Commencement Date occurs, beginning on the  Commencement Date and ending at 5:00 p.m. local time on the last day of  the 60th full calendar month following the Commencement Date,  subject to adjustment and earlier termination as provided in the Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

 
| Basic  Rental: |   | **LEASE MONTHS:** | ** ** | **ANNUAL BASIC  RENTAL PER  RENTABLE  SQUARE FOOT:** | ** ** | **MONTHLY BASIC RENTAL:** |   |
|----------------|--------|-------------------|------------|------------------------------------------------------|------------|---------------------------|--------|
|           |   | ** **        | ** ** | ** **                                           | ** ** | ** **                |   |
|           |   | 1-3*              |       | $                                                    | 0.00       |                      | $      | 0.00 |   |
|           |   | 4-12              |       | $                                                    | 10.00      |                      | $      | 22,114.17 |   |
|           |   | 13-60             |       | $                                                    | 18.50      |                      | $      | 40,911.21 |   |

 
|   |   | As  used herein, the term **“Lease Month”**  means each calendar month during Term (and if the Commencement Date does not  occur on the first day of the calendar month, the period from the  Commencement Date to the first day of the next calendar month shall be  included in the first Lease Month for purposes of determining the duration of  the Term and the monthly Basic Rental applicable for such partial month. |
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|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |

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|                         |   | *Notwistanding  the foregoing, the Basic Rent shall be $0.00 with respect to the first 92  days of the Term and any remaining portion of the calendar month after such  initial 92-day period expires shall be prorated based on the number of days  remaining in such month, the total number of days in such month and a monthly  Basic Rental of $22,114.17. |
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|                         |   |                                                                                                                                                                                                                                                                                                                                                            |
| Security  Deposit            |   |  **$30,000.00.**                                                                                                                                                                                                                                                                                                                                           |
|                         |   |                                                                                                                                                                                                                                                                                                                                                            |
| Rent:                        |   | Basic  Rental, Electricity Costs, Excess (as defined in Exhibit C), and  all other sums that Tenant may owe to Landlord under the Lease.                                                                                                                                                                                                                   |
|                         |   |                                                                                                                                                                                                                                                                                                                                                            |
| Permitted  Use:              |   | General  business and professional offices, research and development, training,  demonstration and sales and service of telephony equipment.                                                                                                                                                                                                                    |
|                         |   |                                                                                                                                                                                                                                                                                                                                                            |
| Expense  Stop:               |   | Basic  Cost *(*as* *defined in Exhibit C)  per rentable square foot in the Building for calendar year 2006 (the “Base  Stop Year”) as more fully set forth on Exhibit C.                                                                                                                                                               |
|                         |   |                                                                                                                                                                                                                                                                                                                                                            |
| Initial  Liability Insurance |   | $1,000,000.00  per occurrence, and $2,000,000.00 in the aggregate.                                                                                                                                                                                                                                                                                              |

 

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| Amount:                      |   |                                                                                                                                                                                          |
|------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |   |                                                                                                                                                                                          |
| Tenant’s Pro Rata Share |   | 22.27%, being the percentage obtained by dividing (a) the  number of rentable square feet in the Premises as stated above by (b) the  119,169 rentable square feet in the Building. |

 

 

**SIGNATURES ON FOLLOWING PAGE**

 

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The foregoingBasic Lease Information is incorporated into and made a part of the Leaseidentified above.  If any conflict existsbetween any Basic Lease Information (as set forth herein) and the Lease, thenthe Basic Lease Information shall control.

 

 
|   | **LANDLORD:**                          | ** **                                       |
|--------|----------------------------------------|--------------------------------------------------|
|   |                                   |
|   |                                   |
|   | **PEARSON FUND III, L.P.**             |
|   | a Texas limited  partnership           |
|   |                                   |
|   | By:                                    | Pearson Group  Capital Management III, Inc. |
|   |                                   | General Partner                                  |
|   |                                   |
|   |                                   |
|   |                                   | By:                                              | /s/  Craig Nemec |   |
|   |                                   | Name:  Craig Nemec                               |
|   |                                   | Title:  President                                |
|   | Signed  the 31st day of July 2005 |
|   |                                   |
|   |                                   |
|   | **TENANT:**                            | ** **                                       |
|   |                                   |
|   | **SONUS  NETWORK INC.,**               |
|   | a  Delaware corporation                |
|   |                                   |
|   |                                   |
|   | By:                                    |   /s/  Ellen B. Richstone              |   |
|   | Name:                                  |   Ellen  B. Richstone                  |   |
|   | Title:                                 | CFO                                              |   |
|   | Signed  the 29th day of July, 2005     |
|        |                                        |                                                  |  |  |  |  |  |  |  |  |  |

 

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**STANDARD LEASE PROVISIONS**

 
|                                  |   | THIS LEASE (this **“Lease”**)  is entered into effective, but not necessarily signed July 19, 2005, by  and between Pearson Fund III, L.P., a Texas limited partnership (**“Landlord”**), and Sonus Networks, Inc., a Delaware  corporation (**“Tenant”**).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| **DEFINITIONS AND  BASIC PROVISIONS** |   | 1.   The definitions and basic  provisions set forth in the Basic Lease information (the **“Basic  Lease Information”**) executed by Landlord and Tenant  contemporaneously herewith are incorporated herein by reference for all  purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| **LEASE GRANT**                       |   | 2.   Subject to the terms of  this Lease, Landlord leases to Tenant, and Tenant leases from Landlord, the  Premises.  Except as may be expressly provided elsewhere in this  Lease, Tenant hereby accepts the Premises in their **“AS-IS”**  condition.  Landlord shall have no obligation to perform any work  therein (including demolition of any improvements existing therein or  construction of any tenant finish-work or other improvements therein), and  shall not, except as provided in Exhibit D, be obligated to  reimburse Tenant or provide an allowance for any costs related to the  demolition or construction of improvements therein.  Landlord shall  deliver possession and permit early occupancy immediately upon complete  execution hereof and receipt of proof of Tenant’s insurance as required in  this Lease. Occupancy of the Premises by Tenant prior to the Commencement  Date shall be subject to all provisions of this Lease excepting only those  requiring the payment of Basic Rent.  Notwithstanding  anything to the contrary contained in this Lease, if Landlord does not  deliver possession of the Premises to Tenant on or before the later of the  date this Lease is executed by Tenant or August 1, 2005, Tenant may  terminate this Lease by delivering to Landlord written notice thereof.                                                                                                                                    |
| ** **                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **TERM**                              |   | 3.   The Term of the Lease  shall commence as of the Commencement Date.  By occupying the  Premises, Tenant shall be deemed to have accepted the Premises in their  condition as of the date of such occupancy, subject to the performance of  punch-list items that remain to be performed by Landlord pursuant to the  express provisions hereof, if any. Tenant shall execute and deliver to  Landlord, within ten days after Landlord has requested same, a letter  confirming (i) that Tenant has accepted the Premises, and (ii) that  Landlord has performed all of its obligations with respect to the Premises.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| ** **                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **RENT**                              |   | 4.   (a)  **Payment**.  Tenant shall  timely pay to Landlord the Basic Rental without demand and all additional  sums to be paid by Tenant to Landlord under this Lease, including the amounts  set forth in Section 4(b) below (Tenant’s Share of Electricity  Costs) and in Exhibit C (Operating Expense Escalator) after  receipt of a monthly invoice therefor, without further demand, deduction or  set off, at Landlord’s Address (or such other address within the continental  United States as Landlord may from time to time designate in writing to  Tenant). Basic Rental, adjusted as herein provided, shall be payable monthly  in advance.  The first monthly installment of Basic Rental shall be  payable contemporaneously with the Commencement Date of this Lease, which  installment shall be prorated if such date does not fall on the first day of  the month, and thereafter, monthly installments of Basic Rental shall be due  on the first day of the first calendar month immediately following the  Commencement Date.  Monthly installments shall continue on the  first day of each succeeding calendar month during the Term.  Basic  Rental for any fractional month at the beginning of the Term shall be  prorated based on 1/365 of the current annual Basic Rental for each day of  the partial month from the Commencement Date to the first day of the first calendar  month immediately following the Commencement Date. |
| ** **                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                  |   | (b)  **Electricity Costs**.  In addition to Basic Rental and any other amounts to be paid by Tenant to  Landlord under this Lease, Tenant will pay to Landlord, concurrently with  each monthly installment of Basic Rental, Tenant’s Share (as hereinafter  defined) of all electricity (including the cost of electricity for Landlord  to provide HVAC) used by the Building (**“Electricity Costs”**)  the prior month.  The term **“Tenant’s Share”**  shall mean Tenant’s ProRata Share adjusted as reasonably determined by  Landlord to (aa) compensate for the first and final months of the Lease term  and or (bb) reflect any disproportionate utility requirements of any occupant  or tenant of the Building; provided, however, that in the event the Premises  are ever separately metered, Tenant shall directly pay for Electricity Costs  as so metered for the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

 

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|                                       |   | Premises and shall have no further obligation to pay  any other Electricity Costs, other than Tenant’s Share of Electricity Costs  attributable to the Common Area as reasonably determined by Landlord.  Landlord shall use commercially reasonable efforts to cause any tenants of  the Building whose equipment consumes a disproportionate amount of  electricity (relative to other tenants in the Building) to pay their fair  share of Electrical Costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| **DELINQUENT  PAYMENT; HANDLING  CHARGES** |   | 5.   All payments required of  Tenant hereunder shall bear interest from seven (7) days after the date  due until paid at the lower of the Prime Rate (as defined in Section 18(a))  or the maximum lawful rate. Alternatively, Landlord may charge Tenant a fee  equal to 5% of* *any delinquent payment (**“Late  Fee”**) to reimburse Landlord for its cost and inconvenience incurred  as a consequence of Tenant’s delinquency if any payment is not made by Tenant  within seven (7) days of the date due; provided however, such interest  or Late Fee shall not be charged with respect to the first two (2) of  such occasions hereunder during the Term, but not otherwise. In no event  shall the charges permitted under this Section 5 or elsewhere in this  Lease, to the extent the same are considered to be interest under applicable  law, exceed the maximum lawful rate of interest.                                                                                                                                                                                                                                                                                                                                                                                               |
| ** **                                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| **SECURITY DEPOSIT**                       |   | 6.  Within ten (10) business  days of the Effective Date of this Lease, Tenant shall pay to Landlord, in  immediately available funds, the Security Deposit, which shall be held by  Landlord without liability for interest and as security for the performance  by Tenant of its obligations under this Lease. The Security Deposit is not an  advance payment of Rent or a measure or limit of Landlord’s damages upon an  Event of Default (defined below). Landlord may, from time to time and without  prejudice to any other remedy, use all or a part of the Security Deposit to  perform any obligation which Tenant was obligated, but failed, to perform  hereunder. Following any such application of the Security Deposit, Tenant  shall pay to Landlord on demand the amount so applied in order to restore the  Security Deposit to its original amount. Within sixty (60) days after the  Term ends, provided Tenant has performed all of its obligations hereunder,  Landlord shall return to Tenant the balance of the Security Deposit not  applied to satisfy Tenant’s obligations.  If Landlord transfers its  interest in the Premises, then Landlord may assign the Security Deposit to  the transferee and Landlord thereafter shall have no further liability for  the return of the Security Deposit. |
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| **LANDLORD’S  OBLIGATIONS**           |   | 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                       |   | (a)  **Services**.  Subject to the provisions of Section 4(b) (Tenant’s Share of  Electricity Costs) and the Rules and Regulations hereinafter referred  to, and while Tenant is occupying the Premises, Landlord shall furnish to  Tenant:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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|                                       |   | (i)  water (hot and cold) at those points  of supply provided for general use of tenants of the Building;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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|                                       |   | (ii)  heated and refrigerated air  conditioning in season during Building Hours (as set forth in Exhibit B  hereto, the Rules and Regulations) throughout the year other than  holidays, at such temperatures and in such amounts as are standard for  comparable buildings in the vicinity of the Building; provided that Tenant  acknowledges that such service and temperature may be subject to change by local,  county, state or federal regulation; and whenever atypical business use,  machines or equipment that generate abnormal heat are used in the Premises  (excluding the server room on the first floor of the Premises) which affect  the temperature otherwise maintained by the air conditioning system, Landlord  shall have the right to install supplemental air conditioning in the Premises  (excluding the server room on the first floor of the Premises), and the  reasonable cost thereof, including the cost of installation, operation, use  and maintenance, shall be paid by Tenant to Landlord as additional rental  upon demand;                                                                                                                                                                                                                                                                           |
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|                                       |   | (iii)  janitorial service and maintenance,  as set forth in the attached Exhibit I (Janitorial  Specifications) respecting the Building and Parking Facilities (as  hereinafter defined) on weekdays other than holidays for Building-standard  installations (Landlord reserves the right to bill Tenant separately for                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

 

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|   |   | extra  janitorial service required for non-standard installations) and such window  washing as may from time to time in Landlord’s judgment may be reasonably  required (which shall not be less than two times per calendar year);                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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|   |   | (iv)  elevators  for access to the Premises in common with other tenants, if applicable,  provided that Landlord may reasonably limit the number of elevators to be in  operation at times other than during customary business hours and on  holidays,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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|   |   | (v)  replacement  of Building-standard light bulbs and fluorescent tubes; provided that  Landlord’s standard charge for such bulbs and tubes shall be paid by Tenant;  and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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|   |   | (vi)  electrical  current to the Building during all hours for equipment that requires not more  than 110 volts, and whose electrical energy consumption does not exceed  normal office usage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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|   |   | Landlord  shall maintain the Common Area of the Building in reasonably good order and  condition. If Tenant desires any of the services specified in this Section 7  (ii) at any time other than (A) between **7:00 a.m.  and 7:00 p.m.** on weekdays and (B) between **8:00 a.m. and 1:00 p.m. on Saturday**, such  services shall be supplied to Tenant upon the written request of Tenant  delivered to Landlord before 3:00 p.m. on the business day preceding  such extra usage, and Tenant shall pay to Landlord the lesser of (i) the  cost of such services or (ii) $50.00 within 10 days after Landlord has  delivered to Tenant an invoice therefor.                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|   |   | Landlord  shall provide the services referred to in Section 7(a)(i) through  7{a) (v) and shall maintain the Common Area, the Building’s HVAC,  life-safety, plumbing, electrical and mechanical systems at a level  substantially similar to the level of service and maintenance that is typical  in other similar class office buildings located in the submarket in the city  in which the Building is located.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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|   |   | Landlord  shall, at its sole cost and expense, install a separate meter, or separate  sub-meter, for electricity consumption attributable to the server room  located at the first floor of the Premises and Tenant shall pay the  electrical costs attributable to the server room directly to the utility  provider, or to Landlord with the next due Monthly Basic Rental following  receipt of a statement there for, as may be applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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|   |   | (b)  **Discontinuance**.  **[INTENTIONALLY OMITTED]**.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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|   |   | (c)  **Restoration of Services;  Abatement**.  Landlord shall use reasonable efforts to  restore any service that becomes unavailable; provided however, such  unavailability, irrespective of the cause thereof, shall not render Landlord  liable for any damages caused thereby, be a constructive eviction of or  disturbance of Tenant, constitute a breach of any implied warranty, or,  except as provided in the next sentence, entitle Tenant to any abatement of  Tenant’s obligations hereunder.  However, if Tenant is prevented  from making reasonable use of the Premises for more than seven (7) consecutive  days because of the unavailability of any such service, irrespective of the  cause thereof, Tenant shall, as its exclusive remedy therefor, be entitled to  a per diem abatement of Basic Rental for each consecutive day (after such 7-day  period) that Tenant is so prevented from making reasonable use of the  Premises, provided such unavailability is not caused in whole or in part by  Tenant, in which case Tenant shall not be entitled to such abatement. |
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|   |   | (d)  **Landlord’s Obligations**.  Landlord  shall commence making necessary repairs and cure of damage to the Building  corridors, lobby, structural members of the Building and equipment used to  provide the services referred to in sub-section 7(a) hereof within  twenty (20) days of discovering such damage, and shall thereafter diligently  prosecute such repairs at Landlord’s cost (subject to reimbursement to  Landlord by the Building’s tenants, including Tenant, pursuant to a provision  similar to Exhibit C hereto); unless any such damage is caused by  the gross neglidence of Tenant, or Tenant’s agents, employees or invitees, in  which event Tenant shall bear the cost of such repairs.  Tenant  shall promptly give Landlord notice of any damage in the Premises requiring  repair by Landlord, as aforesaid.                                                                                                                                                                                                                              |
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|   |   | (e)  **Access ** Tenant  will be provided access to the Premises 24 hours per day, seven days per                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

 

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|                                                   |   | week. If such access is unavailable due to force  majeure or any other reason beyond Landlord’s control (including construction  performed by parties other than Landlord which prohibits such access),  Landlord shall not be in default under this Section 7(e).  If  reasonable access to the Premises is unavailable preventing Tenant from* *making  reasonable use of any substantial portion of the Premises for its intended  purpose for more than seven (7) consecutive days following written  notice from Tenant to Landlord and such unavailability was not caused in  whole or in part by Tenant, then Tenant shall, as its exclusive remedy  therefor, be entitled to a reasonable abatement of Rent for each consecutive  day (immediately following such 7-day period,) that Tenant is so prevented from  making reasonable use of such portion of the Premises based on the area  thereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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|                                                   |   | (f)  **Self-Help**.  If  at any time following the Commencement Date Landlord fails to deliver  electrical service, elevator service, HVAC service, sewer service or water  service to the Premises (the **“Critical Services”**)  for ten (10) consecutive days after Tenant advises Landlord in writing that  the Critical Services are not being provided to the Premises, and Landlord  has not commenced to cure such cessation of Critical Services within five (5) days  thereafter, has failed to prosecute such cure with reasonable diligence or  has failed to cure same within one hundred fifty (150) days thereafter,  Tenant shall be entitled to restore such service in a commercially reasonable  manner.  Landlord shall reimburse Tenant for its actual and  reasonable, out-of-pocket costs therefor within 30 days after delivery to  Landlord of a reasonably detailed invoice, failing which default interest  shall accrue thereon from the date due until the date paid at the lesser of  the Prime Rate or the maximum lawful rate. If the unavailability of such  Critical Services is caused by a Taking (defined below) or a Casualty  (defined below), then the provisions of this Section shall not be  applicable thereto; rather, the provisions of Section 14* *and 15 (as the case may be) shall  apply.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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| **IMPROVEMENTS;  ALTERATIONS;  REPAIRS;  MAINTENANCE** |   | 8.  (a)(l)  **Improvements; Alterations**.  Improvements  to the Premises (including any signage, antennas, or risers respecting the  Building) may be installed at the expense of Tenant only in accordance with  plans and specifications submitted to and approved in writing by Landlord,  prior to the commencement of any improvements. No alterations or physical  additions in or to the Premises may be made without Landlord’s prior written  consent, which shall not be unreasonably withheld, conditioned or delayed.  Notwithstanding the foregoing, Tenant shall not be required to obtain  Landlord’s consent for repainting, recarpeting, or other cosmetic  alterations, tenant improvements, alterations or physical additions to the  Premises which are cosmetic in nature totaling less than $25,000 in any  single instance or series of related cosmetic alterations performed within a  six-month period (provided that Tenant shall not perform any such cosmetic  improvements, alterations or additions to the Premises in stages as a means  to subvert or circumvent this provision).  Tenant may, subject to  applicable law and Landlord’s prior written approval, not to be unreasonably  withheld, conditioned or delayed, and management, install signage at the  Premises, only as provided herein.  All alterations, additions, or  improvements (whether temporary or permanent in character, and including  without limitation all air-conditioning and all other equipment that is in  any manner connected to the Building’s plumbing system) made in or upon the  Premises, either by Landlord or Tenant, shall be Landlord’s property at the  end of the Term and shall remain on the Premises without compensation to  Tenant.  Approval by Landlord of any of Tenant’s drawings and plans  and specifications prepared in connection with any improvements in the  Premises shall not constitute a representation or warranty of Landlord as to  the adequacy or sufficiency of such drawings, plans and specifications, or  the improvements to which they relate, for any use, purpose, or condition,  but such approval shall merely be the consent of Landlord as required  hereunder. |
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|                                                   |   | (2)  **HVAC**.  Tenant  shall be permitted to use the three existing HVAC units in the server room  located on the first floor of the Premises and, at its sole election, shall  be permitted to install additional HVAC units therein. If Tenant elects to  use the existing HVAC units or to install additional units, Tenant shall, at  its sole cost and expense, maintain the same and any other units installed by  Tenant in the server room; provided, however, Tenant shall have no obligation  to use such units or to replace any HVAC units in the Premises.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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|                                                   |   | Other than as expressly provided in Exhibit D-l  of this Lease, entitled Landlord’s Remedial ADA Compliance Matters,  which Landlord shall effectuate as provided in said Exhibit, Tenant shall be  solely                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

 

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|             |   | responsible for the cost of all work required to  comply with the retrofit requirements of the Americans with Disabilities Act  of 1990 (**“ADA”**), and the Texas  Elimination of Architectural Barriers Act or other applicable laws pertaining  to accessibility of the Premises (but not including the Common Areas or the  Parking Facilities for which Landlord shall be responsible) by* *disabled  or handicapped persons, and all rules, regulations, and guidelines  promulgated thereunder, as the same may be amended from time to time, **necessitated by any installations, additions, or alterations made in  or to the Premises at the request of or by Tenant or by Tenant’s use of the  Premises** (other than retrofit work to the Building that is outside  the Premises whose cost has been particularly identified as being payable by  Landlord in an instrument signed by Landlord and Tenant), regardless of  whether, such cost is incurred in connection with retrofit work required in  the Premises.                                                                                                                                                                                                                                                                                                                                                                                                                             |
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|             |   | (b)  **Repairs;  Maintenance**.  Tenant shall maintain the Premises in  a clean, safe, operable, attractive condition, and shall not permit or allow  to remain any waste or damage to any portion of the Premises.  Landlord shall, at its own expense, maintain  the structure and foundation of the Building and Landlord shall, subject to  reimbursement by Tenant as provided in Exhibit C, reasonably  maintain the roof and structure of the Building and the electrical,  mechanical, plumbing, elevators, and HVAC systems of the Building, unless  such damage is caused in whole or in part by the gross negligence of Tenant,  or Tenant’s agents, employees or invitees, in which event Tenant shall bear  the costs of such repairs. Tenant shall repair or replace, subject to  Landlord’s direction and supervision, any damage to the Building caused by  Tenant or Tenant’s agents, contractors, or invitees. If Tenant fails to  commence to make any repairs or replacements required of Tenant hereunder  within twenty (20) days after written demand therefor or thereafter fails to  diligently pursue completion thereof, then Landlord may make the same at  Tenant’s cost. The reasonable cost of any repair or replacement work  performed by Landlord under this Section 8 shall be paid by Tenant to  Landlord within ten days after Landlord has delivered to Tenant an invoice  therefor. |
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|             |   | This Section 8(b) shall not apply in the  case of damage or destruction by fire or other casualty which is covered by  insurance maintained by Landlord on the Building (as to which Section 15  hereof shall apply), or damage resulting from an eminent domain taking (as to  which Section 14 hereof shall apply).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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|             |   | (c)  **Performance  of Work**.  All work described in this Section 8  shall he performed only by Tenant or by contractors and subcontractors  approved in writing by Landlord, which approval shall not be unreasonably  withheld or delayed. Tenant shall cause all contractors and subcontractors to  procure and maintain insurance coverage against such risks, in such amounts,  and with such companies as Landlord may reasonably require, and to procure  payment and performance bonds reasonably satisfactory to Landlord covering  the cost of the work. All such work shall be performed in accordance with all  legal requirements and in a good and workmanlike manner so as not to damage  the Premises, the primary structure or structural qualities of the Building,  or plumbing, electrical lines, or other utility transmission facility. All  such work which may affect the HVAC, electrical system, or plumbing must be  approved by the Landlord’s engineer, which shall not be unreasonably  withheld, conditioned or delayed.                                                                                                                                                                                                                                                                                                                                                                                            |
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|             |   | (d)  **Mechanic’s  Liens**.  Tenant shall not permit any mechanic’s liens  to be filed against the Premises, Building or any portion thereof for any  work performed, materials furnished, or obligation incurred by or at the  request of Tenant. If such a lien is filed, then Tenant shall, within ten (10) days  after Landlord has delivered notice of the filing to Tenant, either pay the  amount of the lien or diligently contest such lien and deliver to Landlord a  bond or other security reasonably satisfactory to Landlord. If Tenant fails  to timely take either such action, then Landlord may pay the lien claim  without inquiry as to the validity thereof, and any amounts so paid,  including expenses and interest, shall be paid by Tenant to Landlord within  ten (10) days after Landlord has delivered to Tenant an invoice  therefor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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| **USE; SIGNAGE** |   | 9.  Tenant shall continuously occupy and  use the Premises only for the Permitted Use and shall comply with all laws,  orders, rules, and regulations relating to the Permitted Use, condition, and  occupancy of the Premises.  The Premises shall not be used for any  use which is disreputable or creates extraordinary fire hazards or results in  an increased rate of insurance on the Building or its contents or the storage  of any hazardous materials or substances. If, because of Tenant’s acts, the  rate of insurance on the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

 

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|                            |   | Building  or its contents increases, then Tenant shall pay to Landlord the amount of  such increase on demand, and acceptance of such payment shall not constitute  a waiver of any of Landlord’s other rights. Tenant shall conduct its business  and control its agents, employees, and invitees in such a manner as not to  create any nuisance or interfere with other tenants or Landlord in its  management of the Building. Tenant, at Tenant’s own expense, (a) shall  not commit or permit waste in the Premises or the Building, and (b) shall  not paint, erect or display any sign, advertisement, placard or lettering  which is visible in the corridors or lobby of the Building or from the  exterior of the Building without Landlord’s prior written approval, which  shall not be unreasonably withheld, conditioned or delayed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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| **ASSIGNMENT  AND  SUBLETTING** |   | 10.  (a)  **Transfers**.  Except as  provided in Section 10(h) (Permitted Transfers), Tenant shall not,  without the prior written consent of Landlord, (1) assign, transfer, or  encumber this Lease or any estate or interest herein, whether directly or by  operation of law, (2) permit any other entity to become Tenant hereunder  by merger, consolidation, or other reorganization, (3) if Tenant is an  entity other than a corporation whose stock is publicly traded, permit the  transfer of an ownership interest in Tenant so as to result in a change in  the current control of Tenant, (4) sublet any portion of the Premises, (5) grant any license,  concession, or other right of occupancy of any portion of the Premises, or (6) permit  the use of the Premises by any parties other than Tenant (any of the events  listed in Sections 10(a)(1) through 10(a)(6) being a **“Transfer”**), and any attempt to do any of the  foregoing without the prior express written permission of Landlord shall be  void and of no effect.  In the event of any such attempted  assignment or attempted sublease, or should Tenant, in any other nature of  transaction, permit or attempt to permit anyone to occupy the Premises (or  any portion thereof) without the prior express written permission of  Landlord, and provided Tenant fails to affirmatively and effectively rescind  or revoke such attempted assignment, sublease or other transfer *ab initio*within thirty (30) days of  receipt of written notice from Landlord, then Landlord shall thereupon have  the right and option to cancel and terminate this Lease effective upon ten (10) days(1) notice  to Tenant given by Landlord at any time thereafter as to only the portion  thereof which Tenant shall have attempted to assign or sublease or otherwise  permitted some other party’s occupancy without Landlord’s prior express  written permission, and if Landlord elects to cancel and terminate this Lease  as to the aforesaid portion of the Premises, then the rental and other  charges payable hereunder shall thereafter be proportionately reduced. Except  as provided in Section 10(b) (Permitted Transfers), this  prohibition against assignment or subletting shall be construed to include a  prohibition against any assignment or subletting by operation of law. |
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|                            |   | (b)  **Consent Standards**.  Landlord  shall not unreasonably withhold its consent to any assignment or subletting  of the Premises, provided that the proposed transferee (1) is  creditworthy, (2) will use the Premises for the Permitted Use and will  not use the Premises in any manner that would conflict with any exclusive use  agreement or other similar agreement entered into by Landlord with any other  tenant of the Building, (3) will not use any portion of the Premises or  the Building in a manner that would materially increase the pedestrian or  vehicular traffic to the Premises or the Building, (4) is not a  governmental entity, or subdivision or agency thereof, (5) is not  another occupant of the Building, (6) is in compliance with the  regulations of the Office of Foreign Asset Control (**“OFAC”**)  of the Department of the Treasury (including those named on OFAC’s Specially  Designated and Blocked Persons List) and any statute; executive order  (including the September 24, 2001, Executive Order Blocking Property and  Prohibiting Transactions with Persons Who Commit, Threaten to Commit or  Support Terrorism), or other governmental action relating thereto; and (7) is  not a person or entity with whom Landlord is then, or has been within the  six-month period prior to the time Tenant seeks to enter into such assignment  or subletting, negotiating to lease space in the Building or any Affiliate of  any such person or entity; otherwise, Landlord may withhold its consent in  its sole discretion. Additionally, Landlord may withhold its consent in its  sole discretion to any proposed Transfer if any Event of Default by Tenant  then exists.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|                            |   | (c)  **Request for Consent**.  If  Tenant requests Landlord’s consent to a Transfer, then, at least fifteen (15)  business days prior to the effective date of the proposed Transfer, Tenant shall  provide Landlord with a written description of all material terms and  conditions of the proposed Transfer, copies of the proposed transfer  documentation, and the following information about the proposed transferee:  name and address of the proposed transferee and any entities and persons who  own, control or direct the proposed transferee; reasonably satisfactory  information about its business and business history; its                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

 

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|   |   | proposed use of the Premises; banking, financial,  and other credit information; and general references sufficient to enable  Landlord to determine the proposed transferee’s creditworthiness and  character. Concurrently with Tenant’s notice of any request for consent to a  Transfer, Tenant shall pay to Landlord a reasonable allocation of the  expenses incurred by Landlord in reviewing such request (such allocation not  exceed **$500.00**), and Tenant shall also  reimburse Landlord immediately upon request for its reasonable attorneys’ fees  incurred in connection with considering any request for consent to a  Transfer.  No fees shall be payable with regard to a Permitted  Transfer pursuant to Section 10(h).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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|   |   | If Landlord fails to notify Tenant that it approves  or disapproves the requested Transfer within ten (10) business days  after submission to Landlord of all of the items required under this Section 10,  together with a Deemed Approval Notice (defined below), then Landlord shall  be deemed to have **approved** such  Transfer.  A **“Deemed  Approval Notice”** means a written notice from Tenant to  Landlord that **conspicuously**  states in bold, uppercase typeface that the requested transfer shall be  deemed to be approved by Landlord unless Landlord expressly disapproves of  such in a written instrument sent to Tenant within ten (10) business  days of Landlord’s receipt of the requested Transfer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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|   |   | (d)  **Conditions  to Consent**.  If Landlord consents to a proposed  Transfer, then the proposed transferee shall deliver to Landlord a written  agreement whereby it expressly assumes Tenant’s obligations hereunder;  however, any transferee of less than all of the space in the Premises shall  be liable only for obligations under this Lease that are properly allocable  to the space subject to the Transfer for the period of the Transfer.  No Transfer shall release Tenant from its  obligations under this Lease, but rather Tenant and its transferee shall be  jointly and severally liable therefor. Landlord’s consent to any Transfer  shall not waive Landlord’s rights as to any subsequent Transfers.  If  an Event of Default occurs while the Premises or any part thereof are subject  to a Transfer, then Landlord, in addition to its other remedies, may collect  directly from such transferee all rents becoming due to Tenant and apply such  rents against Rent. Tenant authorizes its transferees to make payments of  rent directly to Landlord upon receipt of notice from Landlord to do so  during the continuance of an Event of Default hereunder. Tenant shall pay for  the cost of any demising walls or other improvements necessitated by a  proposed subletting or assignment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|   |   | (e)  **Attornment  by Subtenants**.  Each sublease by Tenant hereunder  shall be subject and subordinate to this Lease and to the matters to which  this Lease is or shall be subordinate, and each subtenant by entering into a  sublease is deemed to have agreed that in the event of termination, re-entry  or dispossession by Landlord under this Lease, Landlord may, at its option,  take over all of the right, title and interest of Tenant, as sublandlord,  under such sublease, and such subtenant shall, at Landlord’s option, attorn  to Landlord pursuant to the then executory provisions of such sublease,  except that Landlord shall not be (1) liable for any previous act or  omission of Tenant under such sublease, (2) subject to any counterclaim,  offset or defense that such subtenant might have against Tenant, (3) bound  by any previous modification of such sublease not approved by Landlord in  writing or by any rent or additional rent or advance rent which such  subtenant might have paid for more than the current month to Tenant, and all  such rent shall remain due and owing, notwithstanding such advance payment, (4) bound  by any security or advance rental deposit made by such subtenant which is not  delivered or paid over to Landlord and with respect to which such subtenant  shall look solely to Tenant for refund or reimbursement, or (5) obligated  to perform any work in the subleased space or to prepare it for occupancy,  and in connection with such attornment, the subtenant shall execute and  deliver to Landlord any instruments Landlord may reasonably request to  evidence and confirm such attornment. Each subtenant or licensee of Tenant  shall be deemed, automatically upon and as a condition of its occupying or  using the Premises or any part thereof, to have agreed to be bound by the  terms and conditions set forth in this Section 10(e).  The  provisions of this Section 10(e) shall be self-operative, and no  further instrument shall be required to give effect to this provision. |
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|   |   | (f)  **Cancellation**.  Landlord  may, within twenty (20) days after submission of Tenant’s written request for  Landlord’s consent to an assignment or subletting, cancel this Lease as to  the portion of the Premises proposed to be sublet or assigned as of the date  the proposed Transfer is to be effective. If Landlord cancels this Lease as  to any portion of the Premises, then this Lease shall cease for such portion  of the Premises and Tenant shall pay to Landlord all Rent accrued through the  cancellation date relating to                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

 

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|   |   | the  portion of the Premises covered by the proposed Transfer.  Thereafter,  Landlord may lease such portion of the Premises to the prospective transferee  (or to any other person) without liability to Tenant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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|   |   | Notwithstanding  the foregoing, if Landlord provides written notification to Tenant of its  election to cancel this Lease as to any portion of the Premises as provided  above, Tenant may rescind its proposed assignment or subletting of all or any  portion of the Premises by notifying Landlord in writing within ten (10) business  days following Landlord’s written cancellation notice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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|   |   | (g)  **Additional  Compensation**.  Tenant shall pay to Landlord,  immediately upon receipt thereof, **fifty percent (50%)**  of the excess of (1) all compensation received by Tenant for a Transfer  less the actual out-of-pocket  costs reasonably incurred by Tenant with unaffiliated third parties (i.e.,  brokerage commissions and tenant finish work) in connection with such  Transfer (such costs shall be amortized on a straight-line basis over the  term of the Transfer in question) over (2) the Rent allocable to the  portion of the Premises covered thereby.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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|   |   | (h)  **Permitted  Transfers**.  Notwithstanding Section 10(a),  Tenant may Transfer all or part of its interest in this Lease or all or part of the Premises (a **“Permitted Transfer”**) to the following types of  entities (a **“Permitted Transferee”**)  without the written consent of Landlord:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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|   |   | (i)  an  Affiliate of Tenant;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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|   |   | (ii)  any  corporation, limited partnership, limited liability partnership, limited  liability company or other business entity in which or with which Tenant, or  its corporate successors or assigns, is merged or consolidated, in accordance  with applicable statutory provisions governing merger and consolidation of  business entities, so long as (A) Tenant’s obligations hereunder are  assumed by the entity surviving such merger or created by such consolidation;  and (B) the Tangible Net Worth of the surviving or created entity is not  less than the Tangible Net Worth of Tenant as of the date hereof; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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|   |   | (iii)  any  corporation, limited partnership, limited liability partnership, limited  liability company or other business entity acquiring all or substantially all  of Tenant’s assets if such entity’s Tangible Net Worth after such acquisition  is not less than the Tangible Net Worth of Tenant as of the date hereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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|   |   | Tenant  shall promptly notify Landlord of any such Permitted Transfer.  Tenant shall remain liable for the  performance of all of the obligations of Tenant hereunder, or if Tenant no  longer exists because of a merger, consolidation, or acquisition, the  surviving or acquiring entity shall expressly assume in writing the  obligations of Tenant hereunder. Additionally, the Permitted Transferee shall  comply with all of the terms and conditions of this Lease, including the  Permitted Use, and the use of the Premises by the Permitted Transferee may  not violate any other agreements affecting the Premises, the Building,  Landlord or other tenants of the Building. No later than forty-five (45) days  after the effective date of any Permitted Transfer, Tenant agrees to furnish  Landlord with (A) copies of the instrument effecting any of the  foregoing Transfers, (B) documentation establishing Tenant’s  satisfaction of the requirements set forth above applicable to any such  Transfer, (C) evidence of insurance as required under this Lease with  respect to the Permitted Transferee, and (D) evidence of compliance with  the regulations of OFAC and any statute, executive order (including the September 24,  2001, Executive Order Blocking Property and Prohibiting Transactions with  Persons Who Commit, Threaten to Commit, or Support Terrorism), or other  governmental action relating thereto, including the name and address of the  Permitted Transferee and any entities and persons who own, control or direct  the Permitted Transferee. The occurrence of a Permitted Transfer shall not  waive Landlord’s rights as to any subsequent Transfers.  **“Tangible Net Worth”**  means the excess of total assets over total liabilities, in each case as  determined in accordance with generally accepted accounting principles consistently  applied (**“GAAP”**) excluding, however,  from the determination of total assets all assets which would be classified  as intangible assets under GAAP including goodwill, licenses, patents,  trademarks, trade names, copyrights, and franchises.  Any  subsequent Transfer by a Permitted Transferee shall be subject to the terms  of this Section 10. |

 

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| **INSURANCE;  WAIVERS;  SUBROGATION;  INDEMNITY** |   | 11.  (a)  **Insurance**. Effective as of the  earlier of (1) the date Tenant enters or occupies the Premises, or (2) the  Commencement Date, and continuing throughout the Term, Tenant shall maintain  the following insurance policies: (i) commercial general liability  insurance in amounts of $1,000,000 per occurrence, and $2,000,000 in the  aggregate or, following the expiration of the initial Term, such other  amounts as Landlord may from time to time reasonably require (and, if the use  and occupancy of the Premises include any activity or matter that is or may  be excluded from coverage under a commercial general liability policy [e.g.,  the sale, service or consumption of alcoholic beverages], Tenant shall obtain  such endorsements to the commercial general liability policy or otherwise  obtain insurance to insure all liability arising from such activity or matter  [including liquor liability, if applicable] in such amounts as Landlord may  reasonably require), insuring Tenant, Landlord, Landlord’s property  management company, Landlord’s asset management company and, if requested in  writing by Landlord, Landlord’s Mortgagee, against all liability for injury  to or death of a person or persons or damage to property arising from the use  and occupancy of the Premises and (without implying any consent by Landlord  to the installation thereof) the installation, operation, maintenance, repair  or removal of Tenant’s Off-Premises Equipment, (ii) insurance covering  the full value of all alterations and improvements and betterments in the  Premises, naming Landlord and Landlord’s Mortgagee as additional loss payees  as their interests may appear, (iii) insurance covering the full value  of all furniture, trade fixtures and personal property (including property of  Tenant or others) in the Premises or otherwise placed in the Building by or  on behalf of Tenant (including Tenant’s Off-Premises Equipment), (iv) contractual  liability insurance sufficient to cover Tenant’s indemnity obligations  hereunder (but only if such contractual liability insurance is not already  included in Tenant’s commercial general liability insurance policy), and (v) worker’s  compensation insurance. Any insurance required to be maintained by Tenant may  be taken out under a blanket insurance policy or policies covering other  premises, property or insured in addition to the Premises and Tenant,  provided such policy or policies otherwise comply with this Section 1l(a).  Tenant’s insurance shall provide primary coverage to Landlord when any policy  issued to Landlord provides duplicate or similar coverage, and in such  circumstance Landlord’s policy will be excess over Tenant’s policy. Tenant  shall furnish to Landlord certificates of such insurance and, if requested by  Landlord, copies of the actual insurance policies at least ten days prior to the  earlier of the Commencement Date or the date Tenant enters or occupies the  Premises, and at least 15 days prior to each renewal of said insurance, and  Tenant shall obtain a written obligation on the part of each insurance  company to notify Landlord at least 15 days before cancellation or a material  change of any such insurance policies.  All such insurance policies  shall be in form, and issued by companies with a Best’s rating of A+:VII or  better, reasonably satisfactory to Landlord. If Tenant fails to comply with  the foregoing insurance requirements or to deliver to Landlord the  certificates or evidence of coverage required herein, Landlord, in addition  to any other remedy available pursuant to this Lease or otherwise, may, but  shall not be obligated to, obtain such insurance and Tenant shall pay to  Landlord on demand the premium costs thereof, plus an administrative fee* *of 15% of such cost. As used hereunder,  the term **“Tenant’s Off-Premises Equipment”**  means any of Tenant’s equipment or other property that may be located on or  about the Building (other than inside the Premises). As used hereunder, the  term **“Tenant Party”** means any of  the following persons: Tenant; any assignees claiming by, through, or under  Tenant; any subtenants claiming by, through, or under Tenant; and any of  their respective agents, contractors, employees and licensees. |
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|                                              |   | (b)  **Landlord’s Insurance**.  Throughout  the Term of this Lease, Landlord shall maintain, as a minimum, the following  insurance policies: (1) property insurance for the Building’s  replacement value (excluding property required to be insured by Tenant), and (2) commercial  general liability insurance in an amount of not less than $1,000,000 per  occurrence, $2,000,000 in the aggregate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|                                              |   | (c)  **Waiver of Negligence  Claims; No Subrogation**.  Landlord and Tenant each  waives any claim it might have against the other for any damage to or theft,  destruction, loss, or loss of use of any property, to the extent the same is  insured against under any insurance policy of Landlord or Tenant that covers  the Building, the Premises, Landlord’s or Tenant’s fixtures, personal  property, leasehold improvements, or business, or is* *required to be insured against under  the terms hereof, **REGARDLESS OF WHETHER  THE NEGLIGENCE OF THE OTHER PARTY CAUSED SUCH LOSS (DEFINED BELOW)**.   Additionally, Tenant waives any claim  it may have against Landlord for any Loss to the extent such Loss is caused  by a terrorist act. Each party shall cause its insurance carrier to endorse                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

 

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|                                                                 |   | all applicable policies waiving the carrier’s rights  of recovery under subrogation or otherwise against the other party.  Notwithstanding any provision in this Lease to the contrary, Landlord, its  agents, employees and contractors shall not be liable to Tenant or to any  party claiming by, through or under Tenant for (and Tenant hereby releases  Landlord and its servants, agents, contractors, employees and invitees from  any claim or responsibility for) any damage to or destruction, loss, or loss  of use, or theft of any property of any Tenant Party located in or about the  Building, caused by casualty, theft, fire, third parties or any other matter  or cause, **REGARDLESS OF WHETHER THE NEGLIGENCE OF ANY  PARTY CAUSED SUCH LOSS IN WHOLE OR IN PART**.  Tenant acknowledges that Landlord shall not  carry insurance on, and shall not be responsible for damage to, any property  of any Tenant Party located in or about the Building.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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|                                                                 |   | (d)  **Indemnity**.  Subject  to Section 1l(c), Tenant shall defend, indemnify, and hold harmless  Landlord and its representatives and agents from and against all claims,  demands, liabilities, causes of action, suits, judgments, damages, and  expenses (including reasonable attorneys’ fees) arising from any injury to or  death of any person or the damage to or theft, destruction, loss, or loss of  use of, any property or inconvenience (a **“Loss”**)  (1) occurring in or on the Building (other than within the Premises) to  the extent caused by the negligence or willful misconduct of any Tenant  Party, (2) occurring in the Premises, or (3) arising out of the  installation, operation, maintenance, repair or removal of any property of  any Tenant Party located in or about the Building, including Tenant’s  Off-Premises Equipment.  **IT BEING AGREED THAT CLAUSES (2) AND (3) OF THIS INDEMNITY  ARE INTENDED TO INDEMNIFY LANDLORD AND ITS AGENTS AGAINST THE CONSEQUENCES OF  THEIR OWN NEGLIGENCE OR FAULT, EVEN WHEN LANDLORD OR ITS AGENTS ARE JOINTLY, COMPARATIVELY,  CONTRIBUTIVELY, OR CONCURRENTLY NEGLIGENT WITH TENANT, AND EVEN THOUGH ANY  SUCH CLAIM, CAUSE OF ACTION OR SUIT IS BASED UPON OR ALLEGED TO BE BASED UPON  THE STRICT LIABILITY OF LANDLORD OR ITS AGENTS; HOWEVER, SUCH INDEMNITY SHALL  NOT APPLY TO THE SOLE OR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD  AND ITS AGENTS.**                                                                                                                   |
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|                                                                 |   | Subject to Section 11(c), Landlord shall  defend, indemnify, and hold harmless Tenant and its agents from and against  all claims, demands, liabilities, causes of action, suits, judgments, damages  and expenses (including reasonable attorneys’ fees) for any Loss arising from  any occurrence* *in or on the  Common Areas to the extent caused by the negligence or willful misconduct of  Landlord or its agents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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|                                                                 |   | The indemnities set forth in this Lease shall  survive termination or expiration of this Lease and shall not terminate or be  waived, diminished or affected in any manner by any abatement or apportionment  of Rent under any provision of this Lease. If any proceeding is filed for  which indemnity is required hereunder, the indemnifying party agrees, upon  request therefor, to defend the indemnified party in such proceeding at its  sole cost utilizing counsel satisfactory to the indemnified party.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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| **SUBORDINATION  ATTORNMENT; NOTICE  TO LANDLORD’S  MORTGAGEE** |   | 12.  (a)  **Subordination**.  This  Lease shall be, and is hereby made subordinate to, and Tenant accepts this  Lease subject and subordinate to any deed of trust, mortgage, or other  security instrument (a **“Mortgage”**),  or any ground lease, master lease, or primary lease (a **“Primary  Lease”**) that may presently or hereafter covers all or any part  of the Premises (the mortgagee under any Mortgage or the lessor under any  Primary Lease is referred to herein as **“Landlord’s Mortgagee”**).  The provisions of this Section 12(a) shall be self-operative  without the necessity of any further instrument of subordination to be  executed by Tenant, provided however, that Tenant covenants and agrees to  execute and deliver to Landlord a subordination non-disturbance and  attornment agreement (**“SNDA”**)  substantially in the form of Exhibit G or such other form of SNDA  as may be from time to time reasonably requested by a Landlord’s Mortgagee  within ten (10) days after requested.  In the event that  Tenant shall fail to execute any such instrument within ten (10) days  after requested, then Tenant hereby irrevocably consents and agrees that  Landlord may file of record in the Real Property Records of the county in  which the Premises is situated an affidavit attaching true and correct copies  of this Section 12(a), together with the signature pages hereto and  a copy of Exhibit G hereto completed in favor of Landlord’s  Mortgagee. |
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|                                                                 |   | (b)  **Attornment**.  Tenant  shall attorn to any party succeeding to Landlord’s interest in the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

 

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|                        |     | Premises, whether by purchase, foreclosure, deed in  lieu of foreclosure, power of sale, termination of lease, or otherwise, upon  such party’s request, and shall execute such agreements confirming such  attornment as such parry may reasonably request.  The current  Landlord’s Mortagee is Bank of Texas, N.A., whose address is set forth on Exhibit G  hereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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|                        |     | (c)  **Notice  to Landlord’s Mortgagee**.  Tenant shall not seek to  enforce any remedy it may have for any default on the part of the Landlord  without first giving written notice by certified mail, return receipt  requested, specifying the default in reasonable detail, to any Landlord’s  Mortgagee whose address has been given to Tenant, and affording such Landlord’s  Mortgagee a reasonable opportunity to perform Landlord’s obligations  hereunder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|                        |     | (d)  **Subordination,  Non-Disturbance and Attornment Agreement**. Landlord shall  obtain a subordination, non-disturbance and attornment agreement from the  current Landlord’s Mortgagee in the form of Exhibit G hereto or  as otherwise reasonably agreed to by Landlord’s Mortgagee, and shall deliver  same to Tenant contemporaneously with Landlord’s execution of this Lease, and  Landlord shall seek to obtain a similar subordination, non-disturbance and  attornment agreement from any future Landlord’s Mortgagee or other  institutional lenders.  The subordination of Tenant’s rights  hereunder to any future Landlord’s Mortgagee under Section 12(a) shall  be conditioned upon such future Landlord’s Mortgagee’s execution and delivery  of a subordination, non-disturbance and attornment agreement in the form of Exhibit G  hereto or another form reasonably acceptable to Tenant and such Landlord’s  Mortgagee or other institutional lenders. |
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| **RULES  AND  REGULATIONS** |     | 13.  Tenant shall comply with the rules and  regulations of the Building which are attached hereto as Exhibit B.  Landlord may, from time to time, change such rules and regulations for  the safety, care, or cleanliness of the Building and related facilities,  provided that such changes are applicable to all tenants of the Building and  will not unreasonably interfere with Tenant’s use of the Premises.  Tenant  shall be responsible for the compliance with such rules and regulations  by its employees, agents, and invitees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ** **                  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| **CONDEMNATION**            |     | 14.  (a)  **Taking -  Termination**.  If the entire Building or Premises are  taken by right of eminent domain or conveyed in lieu thereof (a **“Taking”**), this Lease shall terminate as of the  date of the Taking.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| ** **                  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                        |     | (b)  **Partial  Taking - Tenant’s Rights**.  If any part of the  Premises or material portion of the Building becomes subject to a Taking and  such Taking will prevent Tenant from conducting on a permanent basis its  business in the Premises in a manner reasonably comparable to that conducted  immediately before such Taking, then Tenant may terminate this Lease as of  the date of such Taking by giving written notice to Landlord within thirty  (30) days after the Taking, and Rent shall be apportioned as of the date of  such Taking.  If Tenant does not terminate this Lease, then Rent  shall be abated on a reasonable basis as to that portion of the Premises that  Tenant is prevented from conducting its business in a manner comparable to  that conducted immediately before such taking.                                                                                                                                                                                                         |
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|                        |     | (c)  **Partial  Taking - Landlord’s Rights**.  If any material  portion, but less than all, of the Building becomes subject to a Taking, or  if Landlord is required to pay any of the proceeds arising from a Taking to a  Landlord’s Mortgagee, then Landlord may terminate this Lease by delivering  written notice thereof to Tenant within thirty (30) days after such Taking,  and Rent shall be apportioned as of the date of such Taking. If Landlord does  not so terminate this Lease, then this Lease will continue, but if any  portion of the Premises has been taken, Rent shall abate as provided in the  last sentence of Section 14(b).                                                                                                                                                                                                                                                                                                                                                                        |
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|                        | * * | (d) * ***Temporary Taking**.  If all  or any portion of the Premises becomes subject to a Taking for a limited  period of time, this Lease shall remain in full force and effect and Tenant  shall continue to perform all of the terms, conditions and covenants of this  Lease, including the payment of Basic Rental and all other amounts required  hereunder. If any such temporary Taking terminates prior to the expiration of  the Term, Tenant shall restore the Premises as nearly as possible to the  condition prior to such temporary Taking, at Tenant’s sole cost and expense.  Landlord shall be entitled to receive the entire award for any such temporary  Taking, except that Tenant shall be entitled to receive the portion of such  award which (1) compensates Tenant for its loss of use of the Premises  within the Term and (2) reimburses Tenant for                                                                                                                                                |

 

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|                        |   | the reasonable out-of-pocket costs actually incurred  by Tenant to restore the Premises as required by this Section 14(d).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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|                        |   | (e)  **Award**. If  any Taking occurs, then Landlord shall receive the entire award or other  compensation for the Land, the Building, and other improvements taken;  however, Tenant may separately pursue a claim (to the extent it will not  reduce Landlord’s award) against the condemnor for the value of Tenant’s  personal property which Tenant is entitled to remove under this Lease, moving  costs, loss of business, and other claims it may have.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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|                        |   | (f)  **Restoration**.  In  the event of any Taking of less than the whole of the Premises which does not  result in a termination of this Lease, (1) Landlord, at its expense,  shall proceed with reasonable diligence to repair, alter and restore the  remaining parts of the affected Building and the Premises therein to the  extent practicable, and (2) if requested by either party, Landlord and  Tenant shall promptly execute an amendment to this Lease confirming the  deletion from the Premises of the space subject to the Taking.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| **FIRE OR OTHER  CASUALTY** |   | 15.  (a)  **Repair  Estimate**.  If the Premises or the* *Building are damaged by fire or other  casualty (a **“Casualty”**), Landlord  shall, within sixty (60) days after such Casualty, deliver to Tenant a good  faith estimate (the **“Damage Notice”**  ) of the time needed to repair the damage caused by such Casualty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ** **                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                        |   | (b)  **Tenant’s  Rights**:  If a* *material portion of the Premises  is damaged by Casualty such that Tenant is prevented from conducting its  business in the Premises in a manner reasonably comparable to that conducted  immediately before such Casualty and Landlord estimates that the damage  caused thereby cannot be repaired within two hundred ten (210) days after the  commencement of repairs (the **“Repair Period”**),  then Tenant may terminate this Lease by delivering written notice to Landlord  of its election to terminate within thirty (30) days after the Damage Notice  has been delivered to Tenant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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|                        |   | (c)  **Landlord’s  Rights**.  If a Casualty damages the Premises or a  material portion of the Building and (1) Landlord estimates that the  damage to the Premises cannot be repaired within the Repair Period, (2) the  damage to the Premises exceeds 50% of the replacement cost thereof (excluding  foundations and footings), as estimated by Landlord, and such damage occurs  during the last two years of the Term, and Tenant does not exercise its next  unexercised renewal option (if any) by written notice to Landlord within  fifteen (15) days after the Damage Notice has been delivered to Tenant, (3) regardless  of the extent of damage to the Premises, the damage is not fully covered by  Landlord’s insurance policies or Landlord makes a good faith determination  that restoring the Building would be uneconomical, or (4) Landlord is  required to pay any insurance proceeds arising out of the Casualty to a  Landlord’s Mortgagee, then Landlord may terminate this Lease (provided  Landlord also terminates all leases for space in the Building that is  similarly impacted by such Casualty) by giving written notice of its election  to terminate within thirty (30) days after the Damage Notice has been  delivered to Tenant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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|                        |   | (d)  **Repair  Obligation**.  If neither party elects to* *terminate this Lease* *following a Casualty, then Landlord shall,  within a reasonable time after such Casualty, begin to repair the Premises  and shall proceed with reasonable diligence to restore the Premises to  substantially the same condition as they existed immediately before such  Casualty; however, Landlord shall not be required to repair or replace any  alterations or betterments within the Premises (which shall be promptly and  with due diligence repaired and restored by Tenant at Tenant’s sole cost and  expense) or any furniture, equipment, trade fixtures or personal property of  Tenant or others in the Premises or the Building and Landlord’s obligation to  repair or restore the Premises shall be limited to the extent of the  insurance proceeds actually received by Landlord for the Casualty in question  or proceeds that would have been received had Landlord maintained the  insurance required of Landlord under this Lease, and regardless of the cause  of such Casualty, together with any deductible amounts. If this Lease is  terminated under the provisions of this Section 15, Landlord shall be  entitled to the full proceeds of the insurance policies providing coverage  for all alterations, improvements and betterments in the Premises (and, if  Tenant has failed to maintain insurance on such items as required by this  Lease, Tenant shall pay Landlord an amount equal to the proceeds Landlord  would have received had Tenant maintained insurance on such items as required  by this Lease).  If Landlord does not complete the restoration of  the Premises within ninety (90) days after the time period |

 

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|                   |   | estimated  by Landlord to repair the damage caused by such Casualty as specified in the  Damage Notice, as the same may be extended by force majeure, Tenant may  terminate this Lease by delivering written notice to Landlord and Landlord’s  Mortgagee within ten days following the expiration of such ninety (90)-day  period (as the same may be extended as set forth above) and prior to the date  upon which Landlord substantially completes such restoration. Such  termination shall be effective as of the date specified in Tenant’s  termination notice (but not earlier than 30 days nor later than 90 days after  the date of such notice) as if such date were the date fixed for the  expiration of the Term.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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|                   |   | (e)  **Abatement of Rent**.  If  the Premises are damaged by Casualty, Rent for the portion of the Premises  that Tenant is prevented from conducting its business in a manner comparable  to that conducted immediately before such Casualty shall be abated on a  reasonable basis from the date of damage until the completion of Landlord’s  repairs (or until the date of termination of this Lease by Landlord or Tenant  as provided above, as the case may be).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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| **TAXES**              |   | 16.  Tenant  shall be liable for all taxes levied or assessed against personal property,  furniture, or fixtures placed by Tenant in the Premises. If any taxes for  which Tenant is liable are levied or assessed against Landlord or Landlord’s  property and Landlord elects to pay the same, or if the assessed value of  Landlord’s property is increased by inclusion of such personal property,  furniture or fixtures and Landlord elects to pay the taxes based on such  increase, then Tenant shall pay to Landlord, upon demand, that part of such  taxes for which Tenant is primarily liable hereunder. Tenant has no right to  protest the real estate tax rate assessed against the Building or Land and/or  the appraised value of the Building or Land determined by any appraisal  review board or other taxing entity with authority to determine tax rates  and/or appraised values (each a “Taxing Authority”).  Tenant hereby knowingly, voluntarily and  intentionally waives and releases any right, whether created by law or  otherwise, to (a) file or otherwise protest before any Taxing Authority  any such rate or value determination even though Landlord may elect not to  file any such protest; (b) receive, or otherwise require Landlord to deliver,  a copy of any reappraisal notice received by Landlord from any Taxing  Authority; and (c) appeal any order of a Taxing Authority which  determines any such protest. The foregoing waiver and release covers and  includes any and all rights, remedies and recourse of Tenant, now or at any  time hereafter, under Section 41.413 and Section 42.015 of the  Texas Tax Code (as currently enacted or hereafter modified) together with any  other or further laws, rules or regulations covering the subject matter  thereof. Tenant acknowledges and agrees that the foregoing waiver and release  was bargained for by Landlord and Landlord would not have agreed to enter  into this Lease in the absence of this waiver and release. |
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| **EVENTS OF  DEFAULT** |   | 17.  Each  of the following occurrences shall constitute an **“Event  of Default”:**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                   |   | (a)  Tenant’s failure to pay Rent when due and the  continuance of such failure for a period of ten (10) days after Landlord  has delivered written notice to Tenant that the same is past due;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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|                   |   | (b)  Tenant’s failure to perform, comply with, or observe  any other agreement or obligation of Tenant under this Lease and the  continuance of such failure for a period of thirty (30) days after the date  Landlord delivers to Tenant written notice thereof; however, if such failure  cannot be cured with such 30-day period and Tenant commences to cure such  failure within such 30-day period and thereafter diligently pursues such cure  to completion, then such failure shall not be an Event of Default, unless it  is not fully cured within a reasonable time but in no event later than 150  days following receipt of written notice from Landlord of such failure;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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|                   |   | (c)  the filing of a petition by or against Tenant (the term  “Tenant” shall include, for the purpose of this Section 17(c), any  guarantor of the Tenant’s obligations hereunder) (1) in any bankruptcy  or other insolvency proceeding; (2) seeking any relief under any state  or federal debtor relief law; or (3) for the appointment of a liquidator  or receiver for all or substantially all of Tenant’s property or for Tenant’s  interest in this Lease; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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|                   |   | (d)  [Intentionally Omitted];                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

 

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|                               |     | (e)  the admission in writing by  Tenant that it cannot meet its obligations as they become due or the making  by Tenant of an assignment for the benefit of its creditors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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| **REMEDIES**                       |     | 18.  Upon any Event of Default, Landlord  may, in addition to all other rights and remedies afforded Landlord hereunder  or by law or equity, take any of the following actions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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|                               |     | (a)  Landlord may terminate this  Lease by giving Tenant written notice thereof in which event, Tenant shall  pay to Landlord the sum of (i) all Rent accrued hereunder through the  date of termination, (ii) all amounts due under Section 19(a), and (iii) an  amount equal to (A) the total Rent that Tenant would have been required  to pay for the remainder of the Term discounted to present  value at a per annum rate equal to the “Prime Rate” as published on the date  this Lease is terminated by The Wall Street Journal, Southwest Edition, in  its listing of “Money Rates” minus three percent, minus (B) the then  present fair rental value of the Premises for such period, similarly  discounted; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|                               |     | (b)  Landlord may terminate Tenant’s  right to possession of the Premises without terminating this Lease by giving  written notice thereof to Tenant, in which event Tenant shall pay to Landlord  (i) all Rent and other amounts accrued hereunder to the date of  termination of possession, (ii) all amounts due from time to time under Section 19(a),  and (iii) all Rent and other sums required hereunder to be paid by  Tenant during the remainder of the Term, diminished by any net sums  thereafter received by Landlord through reletting the Premises during such period.  Landlord shall use reasonable efforts to relet the Premises on such terms and  conditions as Landlord in its sole discretion may determine (including a term  different from the Term, rental concessions, and alterations to, and  improvement of, the Premises); however, Landlord shall not be obligated to  relet the Premises before leasing other portions of the Building.  Landlord  shall not be liable for, nor shall Tenant’s obligations hereunder be  diminished because of, Landlord’s failure to relet the Premises or to collect  rent due for such reletting. Tenant shall not be entitled to the excess of  any consideration obtained by reletting over the Rent due hereunder. Reentry  by Landlord in the Premises shall not affect Tenant’s obligations hereunder  for the unexpired Term; rather, Landlord may, from time to time, bring action  against Tenant to collect amounts due by Tenant, without the necessity of  Landlord’s waiting until the expiration of the Term.  Unless Landlord delivers written notice to  Tenant expressly stating that it has elected to terminate this Lease, all  actions taken by Landlord to exclude or dispossess Tenant of the Premises  shall be deemed to he taken under this Section 18(b). If Landlord elects  to proceed under this Section 18(b), it may at any time elect to  terminate this Lease under Section 18(a). |
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|                               |     | **ADDITIONALLY, TO THE EXTENT PERMITTED BY  APPLICABLE LAW, LANDLORD MAY ALTER LOCKS OR OTHER SECURITY DEVICES AT  THE PREMISES TO DEPRIVE TENANT OF ACCESS THERETO; AND EXCEPT AS OTHERWISE PROVIDED  BY APPLICABLE LAW, LANDLORD SHALL NOT BE REQUIRED TO PROVIDE A NEW KEY OR  RIGHT OF ACCESS TO TENANT UNLESS AND UNTIL THE EVENT OF DEFAULT HAS BEEN  CURED.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| **PAYMENT BY TENANT;  NON-WAIVER** |     | 19.  (a)  **Payment  by Tenant**.  Upon any Event of Default, Tenant shall  pay to Landlord all reasonable costs incurred by Landlord (including court  costs and reasonable attorneys’ fees and expenses) in (i) obtaining  possession of the Premises, (ii) removing and storing Tenant’s or any  other occupant’s property, (iii) repairing, restoring, altering,  remodeling, or otherwise putting the Premises into the condition required by  market conditions then prevailing so as to be reasonably acceptable to a new  tenant, (iv) if Tenant is dispossessed of the Premises and this Lease is  not terminated, reletting all or any part of the Premises (including  brokerage commissions, cost of tenant finish work, and other costs incidental  to such reletting), (v) performing Tenant’s obligations which Tenant  failed to perform, and (vi) enforcing, or advising Landlord of, its  rights, remedies, and recourses arising out of the Event of Default. Tenant’s  obligations under this Section 19 shall survive the expiration of the  Term or earlier termination of this Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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|                               | * * | (b) * ***No Waiver**.  Landlord’s  acceptance of Rent following an Event of Default shall not waive Landlord’s  rights regarding such Event of Default. No waiver by Landlord of any  violation or breach of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

 

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|                       |   | any of the terms contained herein shall waive  Landlord’s rights regarding any future violation of such term or violation of  any other term.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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| **COMMON AREA**            |   | 20.  **”Common Area”  **as  used* *herein stall refer to* *that part of the Building and other* *improvements now or hereafter placed,  constructed or erected on the Land designated by  Landlord from time to time for the common use of all tenants, including among  other facilities, sidewalks, service corridors, curbs, truckways, loading  areas, private streets and alleys, lighting facilities, mechanical and  electrical rooms, janitors’ closets, halls, lobbies, delivery passages, elevators,  drinking fountains, meeting rooms, public toilets, parking areas and garages,  decks and other parking facilities, landscaping and other common rooms and  common facilities. The Common Area shall be subject to Landlord’s sole  management and control and shall be operated and  maintained in a manner consistent with similar buildings in the market in  which the Building is located.  Landlord reserves the right to  change from time to time the dimensions and location of the Common Area, to  construct additional stories on the Building and to place, construct or erect  new structures or other improvements on any part of the Land without the consent  of Tenant.  Tenant, and Tenant’s employees  and invitees shall have the nonexclusive right to use the Common Area as  constituted from time to time, such use to be in common with Landlord, other  tenants of the Building and other persons entitled to use the same, and  subject to such reasonable rules and regulations governing use as  Landlord may from time to time prescribe. Tenant shall not solicit business  or display merchandise within the Common Area, or distribute handbills  therein, or take any action which would interfere with the rights of other  persons to use the Common Area. Landlord may temporarily close any part of  the Common Area for such periods of time as may be reasonably necessary to  prevent the public from obtaining prescriptive rights or to make repairs or  alterations, provided Tenant retains reasonable access to the Premises.                                                                                                                                                                                                                                                                                         |
| ** **                 |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **SURRENDER OF  PREMISES** |   | 21.  No act by Landlord shall be deemed an  acceptance of a surrender of the Premises, and no agreement to accept a  surrender of the Premises shall be valid unless the same is made in writing  and signed by Landlord. At the expiration or termination of this Lease,  Tenant shall deliver to Landlord the Premises with all improvements located  thereon in good repair and condition, reasonable wear and tear (and  condemnation and fire or other casualty damage) excepted, and shall deliver  to Landlord all keys to the Premises.  Tenant may remove all  unattached trade fixtures, furniture owned by it, equipment and personal  property placed in the Premises by Tenant (but Tenant shall not remove any  such item which was paid for, in whole or in part, by Landlord, as part of  the Finish Work Allowance or otherwise).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                       |   | Subject to Section 8(a)(2) of this Lease,  all alterations, additions or improvements made in or upon the Premises  shall, at Landlord’s option, (to be exercised pursuant to following  sentence), either be removed by Tenant prior to the end of the Term (and  Tenant shall repair all damage caused thereby), or shall remain in the  Premises at the end of the Term without compensation to Tenant. In connection  with Landlord’s review and approval of any of Tenant’s proposed alterations,  additions or improvements to the Premises, Landlord may notify Tenant in  writing, contemporaneously with Landlord’s notice of approval to Tenant with  respect to the improvements in question, that Landlord will require Tenant to  remove such alterations prior to the expiration of the Term; however, if  Tenant submits plans and specifications to Landlord for proposed alterations,  additions or improvements to the Premises and delivers a Removal Notice  (defined below) to Landlord contemporaneously with such submission by Tenant,  and Landlord fails to notify Tenant that Tenant will be required to remove  such alterations, additions or improvements to the Premises at the expiration  of the Term, Landlord may not request such removal at the expiration of the  Term. A **“Removal Notice”** means a  written notice from Tenant to Landlord that conspicuously states in bold,  uppercase typeface that Tenant will not be required to remove the alterations,  additions or improvements in question at the end of the Term unless,  contemporaneously with Landlord’s notice of approval to Tenant with respect  to the improvements in question, Landlord notifies Tenant in writing that  Landlord will require Tenant to remove such alterations prior to the  expiration of the Term.  Notwithstanding the foregoing, if Tenant  does not obtain Landlord’s prior written consent for any alterations,  additions or improvements to the Premises (whether such approval is required  hereunder or otherwise), Tenant shall, at Landlord’s written request, remove  all such alterations, additions, improvements, trade fixtures, equipment,  wiring, and furniture as Landlord may request; however, Tenant shall not be  required to remove any addition or improvement to the Premises if Landlord  has specifically agreed in writing that the |

 

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|                                    |   | improvement or addition in question need not be  removed.  Tenant shall repair all damage caused by such removal.  All  of the office furniture and equipment and all other items not so removed  shall be deemed to have been abandoned by Tenant and may be appropriated,  sold, stored, destroyed, or otherwise disposed of by Landlord without notice  to Tenant and without any obligation to account for such items.  Notwithstanding  the foregoing, Landlord acknowledges that Landlord will not require the  removal of the initial tenant improvement work performed by Tenant (as  described in Section 3 of Exhibit D hereto) at the  expiration of the Term.  The provisions of this Section 21  shall survive the end of the Term or the earlier termination of this Lease. |
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|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **HOLDING OVER**                        |   | 22.  If Tenant fails to vacate me Premises  at the end of the Term or upon the earlier termination of this Lease, then  Tenant shall be a month-to-month tenant and Tenant shall pay, in addition to  the other Rent, a daily Basic Rental equal to 150% of the daily Basic Rental  payable during the last month of the Term.  The provisions of this Section 22  shall survive the end of the Term or the earlier termination of this Lease.                                                                                                                                                                                                                                                                                                                                                                          |
| ** **                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **CERTAIN RIGHTS RESERVED BY LANDLORD** |   | 23.  Provided that the exercise of such  rights does not unreasonably interfere with Tenant’s permitted use and  occupancy of the Premises, Landlord, its agents, employees, and contractors  shall have the following rights:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ** **                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                    |   | (i)  to decorate or to make inspections,  repairs, alterations, additions, changes, or improvements, whether structural  or otherwise, in and about the Building, or any part thereof as Landlord may  deem necessary or desirable; for such purposes, to enter upon the Premises  (after 24 hours’ advance written notice to Tenant thereof) and, during the  continuance of any such work, to temporarily close doors, entryways, public  space, and corridors in the Building; to interrupt or temporarily suspend  Building services and facilities; and to change the arrangement and location  of entrances or passageways, doors, and doorways, corridors, elevators,  stairs, restrooms, or other public parts of the Building;                                                                                           |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                    |   | (ii)  to take such reasonable measures as  Landlord deems advisable for the security of the Building and its occupants,  including without limitation searching all persons entering or leaving the  Building and requiring that persons entering or leaving the Building, whether  or not during normal business hours, identify themselves to a security  officer by registration or otherwise and that such persons establish their  right to enter or leave the Building; evacuating the Building for cause,  suspected cause, or for drill purposes; temporarily denying access to the  Building;                                                                                                                                                                                                                                 |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                    |   | (iii)  to change the name by which the  Building is designated, provided that Landlord reimburses Tenant the actual  costs of changing Tenant’s stationery (including letterhead, business cards,  envelopes and the like) on hand at the time of such name change; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                    |   | (iv)  to enter the Premises (other than  the raised floor area in the server room or the first floor of the Premises)  at all reasonable hours, upon 24 hours advance written notice, to show the  Premises to prospective purchasers or lenders, or, during the last 12 months  of the Term, to prospective tenants; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                    |   | (v)  to have access to and the right to  enter upon any and all parts of the Premises with 24 hours advance written  notice (except in cases of emergency, defined to be any situation in which  Landlord perceives imminent danger of injury to person and/or damage to or  loss of property, in which case Landlord may enter upon any and all parts of  the Premises at any time) to examine the condition thereof, to clean, to make  any repairs, alterations or additions required to be made by Landlord hereunder,  and for any other purpose deemed reasonably by Landlord, and Tenant shall not  be entitled to any abatement or reduction of rental by reason thereof.                                                                                                                                                      |
|                                    |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **LANDLORD’S LIEN**                |   | 24.  **Waiver of Landlord’s  Lien**.  Landlord waives all contractual, statutory and  constitutional liens held by Landlord on Tenant’s personal property, goods,  equipment, inventory, furnishings, chattels, accounts and assets to secure  the obligations of Tenant under this Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| ** **                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **HAZARDOUS**                           |   | 25.  (a)  **Hazardous  Substances**.  The term **“Hazardous  Substances,”** as used in this Lease, shall include, without  limitation, flammables, explosives, radioactive materials, asbestos,  polychlorinated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

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| **SUBSTANCES** |   | biphenyls (**PCB’s**),  chemicals known to cause cancer or reproductive toxicity, pollutants,  contaminants, hazardous wastes, toxic substances or related materials,  petroleum and petroleum products, and substances declared to be hazardous or  toxic under any law or regulation now or hereafter enacted or promulgated by  any governmental authority. To the best of Landlord’s knowledge, the Building  does not contain any Hazardous Substances, other than as may have been  previously disclosed to Tenant in writing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| ** **     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|           |   | (b)  **Tenant’s Restrictions**.  Tenant  shall not cause to occur (i) any violation of any federal, state, or  local law, ordinance, or regulation now or hereafter enacted, without  limitation, related to environmental conditions on, under, or about the  Premises, or arising from Tenant’s release of Hazardous Substances,  including, but not limited to, soil and ground water conditions; or (ii) the  use, generation, release, manufacture, refining, production, processing,  storage, or disposal of any Hazardous Substance on, under, or about the  Premises, or the transportation to or from the Premises of any Hazardous  Substance, except for normal cleaning and office supplies in reasonable  quantities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|           |   | (c)  **Environmental Clean-up**.  Tenant  shall, at Tenant’s own expense, comply with all laws regulating the use,  generation, storage, transportation, or disposal of Hazardous Substances (the  **“Laws”**) by Tenant and or its  agents, employees or contractors within or respecting the Premises. Except as  expressly provided in the immediately preceding sentence, Landlord shall make  all submissions to, provide all information required by, and comply with, all  requirements of all governmental authorities (the **“Authorities”**)  under the Laws relating to the Premises.  Should any authority or  any third party demand that a clean-up plan be prepared and that a clean-up  be undertaken because of any deposit, spill, discharge, or other release of  Hazardous Substances by Tenant or its employees that occurs during the Term,  at or from the Premises, then Tenant shall, at Tenant’s own expense, prepare  and submit the required plans and all related bonds and other financial  assurances, and Tenant shall carry out such clean-up plan; otherwise,  Landlord shall be responsible for any clean-up within the Building.  Tenant  shall promptly provide all information regarding the use, generation,  storage, transportation, or disposal by Tenant of Hazardous Substances that  is requested by Landlord.  If Tenant fails to fulfill any duty  imposed under this Section 25 within a reasonable time, Landlord may do  so; and in such case, Tenant shall cooperate with Landlord in order to  prepare all documents Landlord deems necessary or appropriate to determine  the applicability of the Laws to the Premises and Tenant’s use thereof, and  for compliance therewith, and Tenant shall execute all documents upon  Landlord’s request.  No such action by Landlord and no attempt made  by Landlord to mitigate damages under any Law shall constitute a waiver of  any of Tenant’s obligations under this Section 25. The obligations and  liabilities under this Section 25 shall survive the expiration of the  Term or earlier termination of this Lease. |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|           |   | (d)  **Tenant’s Indemnity**.  Tenant  shall indemnify, defend, and save and hold harmless Landlord, the manager of  the Building, and their respective officers, directors, beneficiaries,  shareholders, partners, agents and employees from all fines, suits,  procedures, claims, and actions of every kind, and all costs associated  therewith (including attorneys’ fees and expenses and consulting fees and  expenses) arising out of or in any way connected with any deposit, spill,  discharge, or other release of Hazardous Substances by Tenant or its  employees or contractors that occurs during the Term, at or from the  Premises, or which arises at any time during the Term from Tenant’s use or  occupancy of the Premises.  Tenant’s obligations and liabilities  under this Section 25 shall survive the expiration of the Term or  earlier termination of this Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|           |   | **ESA**.  Landlord  has previously delivered and Tenant hereby acknowledges receipt of the  Property Site Assessment for the Building and the Land dated May 28,  2004 (File Number E2472) and prepared for Landlord by Pinnacle Environmental.  Landlord  represents and warrants, to its knowledge, there are no Hazardous Substances  in, on or affecting the Building or the Premises, other than as may be  reflected therein, if any.  Landlord shall indemnify, defend, and  save and hold harmless Tenant and its officers, directors, beneficiaries,  shareholders, partners, agents and employees from all fines, suits,  procedures, claims, and actions of every kind, and all costs associated  therewith (including attorneys’ fees and expenses and consulting fees and  expenses) arising out of or in any way connected with Landlord’s breach of  its representation set forth in the preceding sentence.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

 

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| **PARKING**       |   | 26.  Tenant shall have the right to use  parking spaces as provided in Exhibit E.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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| **MISCELLANEOUS** |   | 27.  (a)  **Landlord  Transfer**.  Landlord may transfer, in whole or in  part, the Building and any of its rights under this Lease.  If  Landlord assigns its rights under this Lease, then, upon the transferee’s  written assumption of Landlord’s obligations under this Lease, Landlord shall  thereby be released from any further obligations hereunder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ** **        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|              |   | (b)  **Landlord’s Liability**.   The liability of Landlord (and its  partners, shareholders or members) to Tenant (or any person or entity  claiming by, through or under Tenant) for any default by Landlord under the  terms of this Lease or any matter relating to or arising out of the occupancy  or use of the Premises and/or other areas of the Building shall be limited to  Tenant’s actual direct, but not consequential, damages therefor and shall be  recoverable only from the interest of Landlord in the Building, net proceeds  derived from the sale thereof, and to the extent actually received by  Landlord (thus excluding amounts paid to Landlord’s Mortgagees) insurance  proceeds and condemnation awards, and Landlord (and its partners,  shareholders or members) shall not be personally liable for any deficiency.  The  provisions of this Section shall survive any expiration or termination  of this Lease.  Additionally, Tenant hereby waives its statutory  lien under Section 91.004 of the Texas Property Code.  Notwithstanding  the foregoing, this section shall not be deemed to limit any remedies  which Tenant may have in the event of default by Landlord of its indemnity  obligations hereunder. |
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|              |   | (c)  **Tenant’s Liability**.**  **The* *liability  of* *Tenant to* *Landlord* *for any monetary damages arising from any default by  Tenant under the terms of this Lease shall be limited to Landlord’s actual  direct, but not consequential damages therefor.  Nothing in this Section 27(c) shall  affect or limit Landlord’s rights to file legal actions to recover possession  of the Premises; or for injunctive relief against Tenant, or any other  non-monetary relief as provided in Sections 18 or 19 of this Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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|              |   | (d)  **Force Majeure**.  Other  than for Tenant’s monetary obligations under this Lease and obligations which  can be cured by the payment of money (e.g., maintaining insurance), whenever  a period of time is herein prescribed for action to be taken by either party  hereto, such party shall not be liable or responsible for, and there shall be  excluded from the computation for any such period of time, any delays due to  strikes, riots, acts of God, shortages of labor or materials, war,  governmental laws, regulations, or restrictions, or any other causes of any  kind whatsoever which are beyond the control of such party.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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|              |   | (e)  **Brokerage**.  Landlord  and Tenant each warrant to the other that it has not dealt with any broker or  agent in connection with the negotiation or execution of this Lease, other than  Stream Realty Partners, L.P. and Cushman & Wakefield of Texas, Inc.,  (collectively **“Broker”**) whose  commissions shall be paid by Landlord pursuant to separate written  agreements.  Tenant and Landlord shall each defend, indemnify, hold  the other harmless against all costs, expenses, attorneys’ fees, and other  Liability for commissions or other compensation claimed by any broker or  agent, other than Broker, claiming the same by, through, or under the  indemnifying party.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
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|              |   | (f)  **Estoppel Certificates**.  From  time to time, either party shall furnish to any party designated by the  non-requesting parry within ten (10) days after the requesting party has  made a request therefor, a certificate signed by the non-requesting party  confirming and containing such factual certifications and representations as  to this Lease as the requesting party may reasonably request, including, but  not necessarily limited to (i) that the Lease is unmodified and in full  force and effect (or, if there have been modifications, that the same is in  full force and effect as so modified), (ii) the dates to which rental  and other charges payable under this Lease have been paid, and (iii) that  the requesting party is not in default hereunder (or, if the requesting party  is in default, specifying the nature of such default).  Tenant  further agrees that Tenant shall from time to time upon request by Landlord  execute and deliver to Landlord an instrument in recordable form  acknowledging Tenant’s receipt of any notice of assignment of this Lease by  Landlord                                                                                                                                                        |
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|              |   | (g)  **Notices**.  All  notices and other communications given pursuant to this Lease shall be in  writing and shall be (i) mailed by first class, United States Mail,  postage prepaid, certified, with return                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

 

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|   |   | receipt  requested, and addressed to the parties hereto at the address specified in  the Basic Lease Information, (ii) sent by a nationally recognized  overnight courier service, or (iii) sent by facsimile transmission followed  by a confirmatory letter sent in another method permitted hereunder.  All  notices shall be effective upon delivery to the address of the addressee. The  parties hereto may change their addresses by giving notice thereof to the  other in conformity with this provision.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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|   |   | (h)  **Separability**.  If any  clause or provision of this Lease is illegal, invalid, or unenforceable under  present or future laws, then the remainder of this Lease shall not be  affected thereby and in lieu of such clause or provision, there shall be added  as a part of this Lease a clause or provision as similar in terms to such  illegal, invalid, or unenforceable clause or provision as may be possible and  be legal, valid, and enforceable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   | (i)  **Amendments; and Binding Effect**.  This  Lease may not be amended except by instrument in writing signed by Landlord  and Tenant. No provision of this Lease shall be deemed to have been waived by  either party unless such waiver is in writing signed by such party, and no  custom or practice which may evolve between the parties in the administration  of the terms hereof shall waive or diminish the right of either party to  insist upon the performance by the other party in strict accordance with the  terms hereof. The terms and conditions contained in this Lease shall inure to  the benefit of and be binding upon the parties hereto, and upon their  respective successors in interest and legal representatives, except as  otherwise herein expressly provided.  This Lease is for the sole  benefit of Landlord and Tenant, and, other than Landlord’s Mortgagee, no  third party shall be deemed a third party beneficiary hereof. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   | (j)  **Quiet Enjoyment**.  Provided  no Event of Default exists, Tenant shall peaceably and quietly hold and  enjoy the* *Premises for the  Term, without hindrance from Landlord or any party claiming by, through, or  under Landlord, subject to the terms and conditions of this Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   | (k)  **Joint and Several Liability**.  If  there is more than one Tenant, then the obligations hereunder imposed upon  Tenant shall be joint and several.  If there is a guarantor of  Tenant’s obligations hereunder, then the obligations hereunder imposed upon  Tenant shall be the joint and several obligations of Tenant and such  guarantor, and Landlord need not first proceed against Tenant before  proceeding against such guarantor nor shall any such guarantor be released  from its guaranty for any reason whatsoever.                                                                                                                                                                                                                                                                                                                                                                                                                               |
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|   |   | (l)  **Captions**.  The captions  contained in this Lease are for convenience of reference only, and do not  limit or enlarge the terms and conditions of this Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   | (m)  **No Merger**.  There shall  be no merger of the leasehold estate hereby created with the fee estate in  the Premises or any part thereof if the same person acquires or holds,  directly or indirectly, this Lease or any interest in this Lease and the fee  estate in the leasehold Premises or any interest in such fee estate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   | (n)  **No Offer**.  The  submission of this Lease to Tenant shall not be construed as an offer, nor shall  Tenant have any rights under this Lease unless and until Landlord executes a  copy of this Lease and delivers it to Tenant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   | (o)  **Exhibits**.  All exhibits  and attachments attached hereto are incorporated herein by this reference.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

 

| Exhibit A-1 |   | - |   | Legal  Description of the Land                      |
|------------------|--------|---|--------|-----------------------------------------------------|
| Exhibit A-2 |   | - |   | General  Depiction of the Premises – 1st Floor |
| Exhibit A-3 |   | - |   | General  Depiction of the Premises – 2nd Floor |
| Exhibit B   |   | - |   | Building  Rules and Regulations                |
| Exhibit C   |   | - |   | Operating  Expense Escalator                        |
| Exhibit D   |   | - |   | Special  Provisions                                 |
| Exhibit D-1 |   | - |   | ADA  Compliance Matters                             |

 

19

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| Exhibit E |   | - |   | Parking                                                 |
|----------------|--------|---|--------|---------------------------------------------------------|
| Exhibit F |   | - |   | Intentionally Deleted                                   |
| Exhibit G |   | - |   | Subordination Non-Disturbance and Attornment  Agreement |
| Exhibit H |   | - |   | Intentionally Deleted                                   |
| Exhibit I |   | - |   | Janitorial Specifications                               |

 
|                        |   | (p)  **Entire Agreement**.  This  Lease constitutes the entire agreement between Landlord and Tenant regarding  the subject matter hereof and supersedes all oral statements and prior  writings relating thereto.  Except for those set forth in this  Lease, no representations, warranties, or agreements have been made by  Landlord or Tenant to the other with respect to this Lease or the obligations  of Landlord or Tenant in connection therewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| **ADDITIONAL  PROVISIONS:** |   | 28.  **DISCLAIMER.**  **LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES  ARE SUITABLE FOR TENANT’S INTENDED COMMERCIAL PURPOSE.  TENANT’S  OBLIGATION TO PAY RENT HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE  PREMISES OR THE PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT  AS OTHERWISE EXPRESSLY PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY THE  RENT, WITHOUT ABATEMENT, SETOFF OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY  LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.  NOTHING  IN THIS PARAGRAPH SHALL BE CONSTRUED TO DIMINISH THE OBLIGATIONS OF LANDLORD  THAT ARE EXPRESSLY SET FORTH ELSEWHERE IN THIS LEASE.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| ** **                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                        |   | 29.  **Authority**.  Tenant  (if a corporation, partnership or other business entity) hereby represents  and warrants to Landlord that Tenant is a duly formed and existing entity  qualified to do business in the state in which the Premises are located, that  Tenant has full right and authority to execute and deliver this Lease, and  that each person signing on behalf of Tenant is authorized to do so. Landlord  hereby represents and warrants to Tenant that Landlord is a duly formed and  existing entity qualified to do business in the state in which the Premises  are located, that Landlord has full right and authority to execute and  deliver this Lease, and that each person signing on behalf of Landlord is  authorized to do so.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                        |   | 30.  **Telecommunications**.  Tenant and its telecommunications companies, including local exchange  telecommunications companies and alternative access vendor services  companies, shall have no right of access to and within the Building, for the  installation and operation of telecommunications systems, including voice,  video, data, Internet, and any other services provided over wire, fiber optic,  microwave, wireless, and any other transmission systems (**“Telecommunications  Services”**), for part or all of Tenant’s telecommunications  within the Building and from the Building to any other location without  Landlord’s prior written consent, which shall not be unreasonably withheld,  conditioned or delayed. All providers of Telecommunications Services shall be  required to comply with the rules and regulations of the Building,  applicable Laws and Landlord’s policies and practices for the Building. Tenant  acknowledges that Landlord shall not be required to provide or arrange for  any Telecommunications Services and that Landlord shall have no liability to  any Tenant Party in connection with the installation, operation or  maintenance of Telecommunications Services or any equipment or facilities  relating thereto.  Tenant, at its cost and for its own account,  shall be solely responsible for obtaining all Telecommunications Services.  However,  nothing in this Section 29 shall prohibit Tenant’s employees from accessing  areas solely within the Premises that do not contain any equipment serving  other tenants of the Building. |
|                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                        |   | 31.  **Confidentiality**.  Both  Landlord and Tenant acknowledge that the terms and conditions of this Lease  are to remain confidential for both parties’ benefit, and may not be  disclosed by either party to anyone, by any manner or means, directly or  indirectly, without the other party’s prior written consent; however, either  party may disclose the terms and conditions of this Lease if required by Law  or court order, to its attorneys, accountants, employees and existing or  prospective financial partners provided same are advised by Landlord or  Tenant (as the case may be) of the confidential nature of such terms and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

 

20

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|   |   | conditions  and agree to maintain the confidentiality thereof (in each case, prior to  disclosure). The disclosing party shall be liable for any disclosures made in  violation of this Section by the disclosing party or by any entity or  individual to whom the terms and conditions of this Lease were disclosed or  made available by the disclosing party. The consent by either party to any  disclosures shall not be deemed to be a waiver on the part of such party of  any prohibition against any future disclosure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   | 32.  **Water Mold Notification.**  To  the extent Tenant or its agents or employees discover any water leakage,  water damage or mold in or about the Premises or Building, Tenant shall  promptly notify Landlord thereof in writing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   | 33.  **No Recording**.  Tenant  shall **not** record this Lease or any  memorandum of this Lease without the prior written consent of Landlord, which  consent may be withheld or denied in the sole and absolute discretion of  Landlord, and any recordation by Tenant stall be a* *material  breach of this Lease. Tenant grants to Landlord a power of attorney to  execute and record a release instrument releasing any such recorded  instrument of record that was recorded without the prior written consent of  Landlord.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   | **34.  WAIVER OF JURY TRIAL.  TO THE MAXIMUM  EXTENT PERMITTED BY LAW, LANDLORD AND TENANT WAIVE ANY RIGHT TO TRIAL BY JURY  IN ANY LITIGATION OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE  ARISING OUT OF OR WITH RESPECT TO THIS LEASE OR ANY OTHER INSTRUMENT,  DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE  TRANSACTIONS RELATED HERETO.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   | 35.  **No Electronic Transactions**.  The  parties hereby acknowledge and agree this Agreement shall not be executed,  entered into, altered, amended or modified by electronic means. Additionally,  the parties hereby acknowledge and agree the transactions contemplated by  this Agreement shall not be conducted by electronic means.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   | 36.  **Prohibited Persons and Transactions**.  Landlord  and Tenant each represent and warrant to the other, that it is currently in  compliance with and shall at all times during the Term (including any  extension thereof) remain in compliance with the regulations of the OFAC of  the Department of the Treasury (including those named on OFAC’s Specially  Designated and Blocked Persons List) and any statute, executive order  (including the September 24, 2001, Executive Order Blocking Property and  Prohibiting Transactions with Persons Who Commit, Threaten to Commit or  Support Terrorism), or other governmental action relating thereto.                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   | 37.  **No Representations or Warranties**.  Tenant  acknowledges that except for any express warranties and representations  contained in this Lease, Tenant is not relying on any written, oral, implied  or other representations, statements or warranties by Landlord or any agent  of Landlord or any real estate broker or salesman. All previous written,  oral, implied or other statements, representations, warranties or agreements,  if any, are merged in this Lease. Except as expressly set forth herein,  Landlord shall have no liability to Tenant, and Tenant hereby **RELEASES** Landlord from any liability (including  contractual and/or statutory actions for contribution or indemnity), for,  concerning or regarding (1) the nature and condition of the Premises,  including the suitability thereof for any activity or use; (2) any  improvements or substances located thereon; or (3) the compliance of the  Premises with any laws, rules, ordinances or regulations of any government or  other body. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   | **THE  FOREGOING INCLUDES A RELEASE OF LANDLORD FROM CLAIMS BASED ON LANDLORD’S  NEGLIGENCE IN WHOLE OR IN PART AND CLAIMS BASED ON STRICT LIABILITY**. LANDLORD HAS NOT MADE, DOES NOT MAKE AND  EXPRESSLY DISCLAIMS, ANY WARRANTIES, REPRESENTATIONS, COVENANTS OR  GUARANTEES, EXPRESSED OR IMPLIED, OR ARISING BY OPERATION OF LAW, AS TO THE  MERCHANTABILITY, HABITABILITY, QUANTITY, QUALITY OR ENVIRONMENTAL CONDITION  OF THE PREMISES OR ITS SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR  USE; OTHER THAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

 

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|   |   | AS  EXPRESSLY PROVIDED IN THIS LEASE.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | TENANT  AFFIRMS THAT TENANT SHALL HAS (i) INVESTIGATED AND INSPECTED THE  PREMISES TO ITS SATISFACTION AND BECOME FAMILIAR AND SATISFIED WITH THE  CONDITION OF THE PREMISES, AND (ii) MADE ITS OWN DETERMINATION AS TO (a) THE  MERCHANTABILITY, QUANTITY, QUALITY AND CONDITION OF THE PREMISES, INCLUDING THE  POSSIBLE PRESENCE OF TOXIC OR HAZARDOUS SUBSTANCES, MATERIALS OR WASTES OR OTHER  ACTUAL OR POTENTIAL ENVIRONMENTAL CONTAMINATES, AND (b)  THE PREMISES’ SUITABILITY  OR FITNESS FOR ANY PARTICULAR PURPOSE OR USE. TENANT HEREBY ACCEPTS THE  PREMISES IN ITS PRESENT CONDITION ON AN “AS IS”, “WHERE IS” AND “WITH ALL  FAULTS”, INCLUDING ENVIRONMENTAL MATTERS AND ACKNOWLEDGES THAT WITHOUT THIS  ACCEPTANCE, THIS LEASE WOULD NOT BE MADE.                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 38.  **WAIVER OF CONSUMER RIGHTS**.  THE  UNDERSIGNED TENANT HEREBY ACKNOWLEDGES THAT IT IS NOT IN A SIGNIFICANTLY  DISPARATE BARGAINING POSITION; AND HAS BEEN REPRESENTED BY COUNSEL IN SEEKING  OR ACQUIRING THE LEASEHOLD THAT IS THE SUBJECT OF THIS LEASE. TENANT HEREBY  WAIVES ANY AND ALL RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES—CONSUMER  PROTECTION ACT, SECTION 17.41 ET SEQ, BUSINESS & COMMERCE CODE,  A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS, AFTER CONSULTATION  WITH AN ATTORNEY OF ITS OWN SELECTION. TENANT VOLUNTARILY CONSENTS TO THIS  WAIVER.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 39.  Each party hereto may restrain or enjoin any breach of any covenant, duty or  obligation of the other party herein contained without the necessity of  proving the inadequacy of any legal remedy or irreparable harm. The remedies  of either party hereunder shall be deemed cumulative, and no remedy of such  party, whether exercised by such party or not, shall be deemed to be in  exclusion of any other. Except as may be otherwise herein expressly provided,  in all circumstances under this Lease where prior consent or permission of  one (1) party (“**first party**”)  is required before the other party (“**second party**”)  is authorized to take any particular type of action, the matter of whether to  grant such consent or permission shall be within the sole and exclusive  judgment and discretion of the first party; and it shall not constitute any  nature of breach by the first party hereunder or any defense to the  performance of any covenant, duty or obligation of the second party hereunder  that the first party delayed or withheld the granting of such consent or  permission, whether or not the delay or withholding of such consent or  permission was prudent or reasonable or based on good cause. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 40.  In all instances where either party is required to pay any sum or do any act  at a particular indicated time or within an indicated period, it is  understood that time is of the essence.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 41.  The obligation of Tenant to pay all rental and other sums hereunder provided  to be paid by Tenant and the obligation of Tenant to perform Tenant’s other  covenants and duties hereunder constitute independent, unconditional  obligations to be performed at all times provided for hereunder, save and  except only when an abatement thereof or reduction therein is hereinabove  expressly provided for and not otherwise. Tenant waives and relinquishes all  rights which Tenant might have to claim any nature of lien against or withhold,  or deduct from or offset against any rental and other sums provided hereunder  to be paid Landlord by Tenant. Tenant waives and relinquishes any right to  assert, either as a claim or as a defense, that Landlord is bound to perform  or is liable for the nonperformance of any implied covenant or implied duty  of Landlord not expressly herein set forth.                                                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 42.  [Intentionally Omitted].                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   | 43.  All monetary obligations of Landlord and Tenant (including, without  limitation, any monetary obligation of Landlord or Tenant for damages for any  breach of the respective covenants, duties or obligations of Landlord or  Tenant hereunder) are performable exclusively in the county in which the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

 

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|           |   | Building  is located.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|----------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |   | 44.  The laws of the State in which the Building is located shall govern the  interpretation, validity, performance and enforcement of this Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |   | 45.  Words of any gender used in this Lease shall be held and construed to include  any other gender, and words in the singular number shall be held to include  the plural, unless the context otherwise requires.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |   | 46.  Nothing herein contained shall be deemed or construed by the parties hereto,  nor by any third party, as creating the relationship of principal and agent,  or of partnership or of joint venture between the parties hereto, it being  understood and agreed that neither the method of the computation of rental,  nor any other provision contained herein, nor any acts of the parties hereto,  shall be deemed to create any relationship between the parties hereto other  than the relationship of landlord and tenant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |   | 47.  Tenant further acknowledges that no rights, easements or licenses are  acquired by Tenant by implication or otherwise, except as herein expressly  set forth                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |   | 48.  Tenant warrants that Tenant is, and shall remain throughout the Term of this  Lease, authorized to do business and in good standing in the State in which  the Building is located. Tenant agrees, upon request by Landlord, to furnish  Landlord satisfactory evidence of Tenant’s authority for entering into this  Lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |   | 49.  [Intentionally Omitted.]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |   | 50.  In the event Tenant requests from Landlord the written consent of Landlord to  any proposed action for which this Lease requires such consent, Landlord may  require (in addition to the payment of reasonable attorneys’ fees) the  payment by Tenant of a fee representing the administrative cost incurred by  Landlord in processing such request, regardless of whether such consent is granted.  Such fee shall be payable by Tenant at the time such request is made by  Tenant. However, if Landlord reasonably believes that the out-of-pocket costs  payable to third parties to be incurred by Landlord in reviewing the proposed  action or consent will exceed $1,000, Landlord will first notify Tenant of  such cost estimate before proceeding with such third-party expenses. The time  period for Landlord’s consent to the proposed action shall be tolled until  such time as Tenant consents to such additional costs and expenses. If Tenant  fails to consent to such additional costs and expenses within five business  days after Landlord’s written notification to Tenant thereof, Tenant shall be  deemed to have rescinded its request for such action or consent. |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |   | 51.  Landlord shall have the right at any time to change the name or street  address of the Building and to install and maintain a sign or signs on the  interior or exterior of the Building.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |   | 52.  The parties acknowledge that the parties and their counsel have reviewed and  revised this Lease and that the normal rule of construction to the  effect that any ambiguities are to be resolved against the drafting party  shall not be employed in the interpretation of this Lease or any exhibits or  amendments hereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **RELOCATION** |   | 53.  **[Intentionally Omitted].**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|           |   | 54.  **Compliance with Laws**.  Landlord  represents and warrants to Tenant that, to the current, actual knowledge of  Landlord, the Building is in compliance with all applicable laws (including  any restrictive covenants affecting the Building) in existence as of the date  of this Lease. If at any time during the Term, the Building fails to comply  with any law (including any restrictive covenants affecting the Building) and  (including any restrictive covenants affecting the Building), Landlord shall  (subject to the reimbursement of such costs on the terms and subject to the  limitations contained in this Lease) take such action in connection therewith  as may be (and within the time frame) required by law (including any  restrictive                                                                                                                                                                                                                                                                                                                                                                                                                       |

 

23

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|   |   | covenants  affecting the Building) and thereafter diligently pursue such action until  completion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |   | 55.  **Internal Statute of Limitations**.  Notwithstanding  anything to the contrary in this Lease, any charges due to be paid by either  Landlord or Tenant to the other party hereto, other than Basic Rental and any  charges or other sums pertaining to the indemnity and insurance obligations  of either party under this Lease, shall be deemed waived by the other party  hereto unless invoiced to the party owing such amount prior to the expiration  of twelve (12) months following the date such charges are due.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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|   |   | 56.  **Attorneys’ Fees**.  If  there is any legal or arbitration action or proceeding between Landlord and  Tenant to enforce any provision of this Lease or to protect or establish any  right or remedy of either Landlord or Tenant hereunder, the unsuccessful  party to such action or proceeding will pay to the prevailing party all reasonable,  actual out-of-pocket costs and expenses paid or payable to third parties,  including reasonable attorneys’ fees incurred by such prevailing party in  such action or proceeding and in any appeal in connection therewith, and if  such prevailing party recovers a judgment in any such action, proceeding or  appeal, such costs, expenses and attorneys’ fees will be determined by the  court or arbitration panel handling the proceeding and will be included in  and as a part of such judgment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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|   |   | 57.  **Landlord’s Default**.  Landlord  shall be in default under this Lease only if Landlord fails to perform any of  its obligations within the time period provided for under this Lease, and  such failure continues for 30 days after Tenant delivers to Landlord written  notice specifying such failure; provided however, Landlord shall use  reasonable efforts to commence such cure as soon as reasonably practicable  following Tenant’s written notification and if such failure cannot reasonably  be cured within such 30-day period, but Landlord commences to cure such  failure within such 30-day period and thereafter diligently pursues the  curing thereof to completion, then Landlord shall not be in default hereunder  or liable for damages therefor; unless it is not fully cured within a reasonable  time but in no event later than 150 days following receipt of written notice  from Tenant of such failure Unless Landlord fails to so cure such default  after such notice, Tenant shall not have any remedy or cause of action by  reason thereof. If following the Commencement Date Landlord fails to perform  its obligations within the time periods provided for in the previous  sentences of this Section 57, then Tenant may reasonably and in a good  and workmanlike manner perform such obligations and Landlord shall reimburse  Tenant all reasonable and actual third-party, out-of-pocket costs reasonably  and actually incurred by Tenant in connection with performing such  obligations (other than those which would constitute a Basic Cost had  Landlord performed such work, in which case, Landlord shall not be obligated  to reimburse Tenant for the pro rata cost thereof) within 30 days after  Tenant delivers to Landlord written demand therefor, accompanied by invoices  substantiating Tenant’s claim. Nothing herein contained shall give or allow  Tenant any right of offset or credit to or towards its monetary obligations  under this Lease. |
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Effective as of the date first written above.

 

 
|       |       | **LANDLORD****:**                                                  |
|------------|------------|--------------------------------------------------------------------|
|       |       |                                                               |
|       |       |                                                               |
|       |       | **Pearson****Fund  III, L.P.,**   a Texas limited partnership |
|       |       |                                                               |
|       |       | By:                                                                | Pearson Group Capital Management III, Inc.   A Texas corporation   General Partner |
|       |       |                                                               |
|       |       |                                                               | By: | /s/ Craig Nemec |   |
|       |       | Name: Craig Nemec                                                  |
|       |       | Title: President                                                   |
|       |       | Signed the 31st day of July, 2005                                  |
|       |       |                                                               |
|       |       | **TENANT:**                                                        |
|       |       |                                                               |
| ** ** | ** ** | **Sonas****Networks, Inc.**                                   |
|       |       | a  Delaware corporation                                            |
|       |       |                                                               |
|       |       |                                                               |
|       |       | By:                                                                | /s/ Ellen B. Richstone |
|       |       | Name:                                                              | Ellen B. Richstone |
|       |       | Title:                                                             | CFO |
|       |       | Signed the 29th day of July, 2005                                  |
|            |            |                                                                    |  |  |  |  |  |  |  |

 

25

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EXHIBIT A-1

 

LEGAL DESCRIPTION OF LAND

 

BEINGa 4.214 acre tract of land situated in the Baurch Cantrell Survey, Abstract No. 625,City of Richardson, Texas, Dallas County, Texas, and being all of LOT 2, BLOCK1, of a Replat of Richardson Industrial Park East, according to the Map or Platrecorded in Volume 67089, Page 3521, Map Records of Dallas County,Texas.

 

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EXHIBIT A-2 – 1st Floor

 

DEPICTION OF PREMISES ANDFIRST FLOOR COMMON AREA

 

(Being attached for identification purposesonly.Such depictions are expressly made WITHOUT WARRANTY, EXPRESS OR IMPLIED, OF ANYKIND)

 

 

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EXHIBIT A-3 – 2nd Floor

 

DEPICTION OF PREMISES

 

(Being attached for identification purposesonly. Such depictions are expressly made WITHOUT WARRANTY, EXPRESS OR IMPLIED, OF ANYKIND)

 

 

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EXHIBIT B

 

BUILDING RULES AND REGULATIONS

 

The following rules and regulations shall apply to the Premises,the Building, the Parking Facilities associated therewith, the Land and theappurtenances thereto:

 

1.                                       Sidewalks, doorways, vestibules, halls,stairways, and other similar areas shall not be obstructed by tenants or usedby any tenant for any purpose other than ingress and egress to and from theirrespective leased premises and for going from one to another part of the Building.

 

2.                                       Plumbing, fixtures and appliances shall be usedonly for the purposes far which designed, and nosweepings, rubbish, rags or other unsuitable material shall be thrown ordeposited therein.  Damage resulting toany such fixtures or appliances frommisuse by a tenant or its agents, employees or invitees, shall be paid by suchtenant.

 

3.                                       No signs, advertisements or notices shall bepainted or affixed on or to any windows or doors or other part of the Buildingwithout the prior written consent of Landlord. No curtains or other windowtreatments shall be placed between the glass and the Building standard windowtreatments.

 

4.                                       Landlord shall provide and maintain analphabetical directory for all tenants in the main lobby of the Building andTenant shall be listed in the Building Directory on or before the CommencementDate.

 

5.                                       Landlord shall provide all door locks in eachtenant’s leased premises, at Landlord’s cost, and no tenant shall place anyadditional door locks in its leased premises without Landlord’s prior writtenconsent. Landlord shall furnish to each tenant a reasonable number of keys tosuch tenant’s leased premises, at such tenant’s cost, and no tenant shall makea duplicate thereof.

 

6.                                       Movement in or out of the Building of furnitureor office equipment, or dispatch or receipt by tenants of any bulky material,merchandise or materials which require use of elevators or stairways, ormovement through the Building entrances or lobby shall be conducted underLandlord’s supervision at such times and in such a manner as Landlord mayreasonably require.  Each tenant assumesall risks of and shall be liable for all damage to articles moved and injury toany property and or to any persons or public engaged or not engaged in suchmovement, including equipment, property and personnel of Landlord if damaged orinjured as a result of acts in connection with carrying out this service forsuch tenant.

 

7.                                       Landlord may prescribe weight limitations anddetermine the locations for safes and other heavy equipment or items, whichshall in all cases be placed in the Building so as to distribute weight in amanner acceptable to Landlord, which may include the use of such supportingdevices as Landlord may require.   Alldamages to the Building caused by the installation or removal of any propertyof a tenant, or done by a tenant’s property while in the Building, shall berepaired at the expense of such tenant.

 

8.                                       Corridor doors, when not in use, shall be keptclosed. Nothing shall be swept or thrown into the corridors, halls, elevatorshafts or stairways. No birds or animals shall be brought into or kept in, onor about any tenant’s leased premises other than those animals speciallytrained to assist the disabled. No portion of any tenant’s leased premisesshall at any time be used or occupied as sleeping or lodging quarters.

 

9.                                       Tenant shall cooperate with Landlord’semployees in keeping its leased premises neat and clean. Tenants shall notemploy any person for the purpose of such cleaning other than the Building’scleaning and maintenance personnel.

 

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10.                                 To ensure orderly operation of the Building,notice, mineral or other water, towels, etc. shall be delivered to any leasedarea except by persons approved by Landlord, in its reasonable discretion.

 

11.                                 Tenant shall not make or permit any improper,objectionable or unpleasant noises or odors in the Building or otherwiseinterfere in any way with other tenants or persons having business with them.

 

12.                                 No machinery of any kind (other than normaloffice equipment, four Precision air-conditioning units, and UninterruptedPower Supply equipment and other related equipment typical in large datacenters) shall be operated by any tenant in its leased area without Landlord’sprior written consent, nor shall any tenant use or keep in the Building anyflammable or explosive fluid or substance.

 

13.                                 Landlord will not be responsible for lost orstolen personal property, money or jewelry from tenant’s leased premises orpublic or common areas regardless of whether such loss occurs when the area islocked against entry or not.

 

14.                                 No vending or dispensing machines of any kindmay be maintained in any leased premises without the prior written permissionof Landlord.

 

15.                                 All mail chutes located in the Building shallbe available for use by Landlord and all tenants of the Building according to therules of the United States Postal Service.

 

16.                                 Building Hours:   Shall be 7:00 a.m. to 6:00 p.m.Monday through Friday, and 8:00 a.m. to noon on Saturdays.

 

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EXHIBIT C

 

OPERATING EXPENSE ESCALATOR

 

1.                                       Tenant shall pay an amount (per each rentablesquare foot in the Premises) equal to the excess (“**Excess**”)from time to time of the actual Basic Cost per rentable square foot in theBuilding over the actual Basic Cost per rentable square foot in the buildingfor the Base Stop Year (the “**Expense Stop**”).   Landlord may collect such amount in a lumpsum, to be due within 30 days after Landlord furnishes to Tenant the annualcost statement, that is, a statement of Landlord’s actual costs, to befurnished to Tenant by Landlord by April 1 of each calendar year or as soonthereafter as practicable (“**Annual Cost Statement**”).Alternatively, Landlord may make a**goodfaith estimate of the Excess to be due by Tenant for any calendar year or partthereof during the Term, and, unless Landlord delivers to Tenant a revision ofthe estimated Excess, Tenant shall pay to Landlord, on the Commencement Dateand on the first day of each calendar month thereafter, an amount equal to theestimated Excess for such calendar year or part thereof divided by the numberof months in such calendar year during the Term. From time to time (but not morethan twice in any calendar year), Landlord may estimate and re-estimate theExcess to be due by Tenant and deliver a copy of the estimate or re-estimate toTenant. Thereafter, the monthly installments of Excess payable by Tenant shallbe appropriately adjusted in accordance with the estimations so that, by theend of the calendar year in question, Tenant shall have paid all of the Excessas estimated by Landlord. Any amounts paid based on such an estimate shall besubject to adjustment pursuant to Section 3 of this Exhibit whenactual Basic Cost is available for each calendar year.

 

2.                                       For the purposes of this Exhibit, the term “**Basic****Cost**” shall mean all expenses anddisbursements of every kind (subject to the limitations set forth below) whichLandlord incurs, pays or becomes obligated to pay in connection with theownership, operation, and maintenance of the Building (including the associatedParking Facilities), determined in accordance with generally accepted orfederal income tax basis accounting principles consistently applied, includingbut not limited to the following:

 

(a)                                  Reasonable wages and salaries and management fees,in each case, at market rates of all employees engaged in the operation,repair, replacement, maintenance, and security of the Building, includingtaxes, insurance and benefits relating thereto (all of the foregoing not toexceed in the aggregate 5% of gross rents);

 

(b)                                 All supplies and materials used in theoperation, maintenance, repair, replacement, and security of the Building;

 

(c)                                  Cost of all actual capital improvements made tothe Building which although capital in nature can reasonably and demonstrablybe expected to reduce the normal operating costs of the Building, to the extentof such reduction, as well as all capital improvements made in order to complywith any law hereafter promulgated by any governmental authority, as amortizedover the period over which such improvements may be amortized for federal incometax purposes;

 

(d)                                 Cost of all utilities, other than the cost ofutilities actually reimbursed to Landlord by the Building’s tenants;

 

(e)                                  Cost of any insurance or insurance related expenseapplicable to the Building and Landlord’s personal property used in connectiontherewith;

 

(f)                                    All taxes and assessments and governmentalcharges whether federal, state, county or municipal, and whether they be bytaxing or management districts or authorities presently taxing or by others,subsequently created or otherwise, and any other taxes and assessmentsattributable to the Building (or its operation), and the grounds, parkingareas, driveways, and alleys around the Building, excluding, however, federaland state taxes on income (collectively, “**Taxes**”); ifthe present method of taxation changes so that in lieu of the whole or any partof any Taxes levied on the Land or Building, there is levied on Landlord acapital tax directly on the rents received

 

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therefromor a franchise tax, assessment, or charge based, in whole or in part, upon suchrents for the Building, then all such taxes, assessments, or charges, or thepart thereof so based, shall be deemed to be included within the term “Taxes”for the purposes hereof; and

 

(g)                                 Cost of repairs, replacements, and generalmaintenance of the Building; and

 

(h)                                 Cost of service or maintenance contracts withindependent contractors for the operation, maintenance, repair, replacement, orsecurity of the Building (including, without limitation, alarm service, windowcleaning, and elevator maintenance).

 

(i)                                     There are specifically excluded from thedefinition of the term “Basic Cost” costs and expenses.

 

(1)                                  for capital improvements made to the Building,other than capital improvements described in Subsection 2(e) of this Exhibit andexcept for items which, though capital for accounting purposes, are properly consideredmaintenance and repair items, such as painting of common areas, replacement ofcarpet in elevator lobbies, and the like;

 

(2)                                  for repair, replacements and generalmaintenance paid by proceeds of insurance or by Tenant or other third parties,and alterations attributable solely to tenants of the Building other thanTenant;

 

(3)                                  for interest, amortization or other payments onloans to Landlord, as maker;

 

(4)                                  for legal expenses, other than those incurredfor the general benefit of the Building’s tenants (e.g., tax disputes);

 

(5)                                  for renovating or otherwise improving space foroccupants of the Building or vacant space in the Building;

 

(6)                                  for overtime or other expenses of Landlord incuring defaults or performing work expressly provided in this Lease to be homeat Landlord’s expense;

 

(7)                                  for federal income taxes imposed on or measuredby the income of Landlord from the operation of the Building;

 

(8)                                  for repair or replacement or other workoccasioned by exercise of the right of eminent domain (to the extent of thecosts and expenses for which Landlord actually receives a cash award);

 

(9)                                  for leasing commissions, advertising and otherpromotional costs and expenses, attorneys’ fees, costs and disbursements andother expenses incurred in negotiating or executing leases or in resolvingdisputes with other tenants, other occupants, or other prospective tenants oroccupants of the Building, collecting rents or otherwise enforcing leases ofother tenants of the Building;

 

(10)                            for special services rendered to particulartenants of the Building or that exclusively benefit another tenant or tenantsof the Building, including, without limitation, costs of tenant installations,decorating expenses, redecorating expenses, or constructing improvements oralterations to any tenant space, the costs of any janitorial cleaning serviceor security services provided to other tenants which exceed the standard ofthat provided to Tenant and costs in connection with services (includingelectricity), items or other benefits of a type which are not standard for theBuilding and which are not available to Tenant without specific chargetherefor, but which are provided to another tenant or occupant of the Building,whether or not such other tenant or occupant is actually charged therefor byLandlord;

 

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(11)                            for depreciation of the Building, the systemsrelated thereto (e.g., HVAC, elevators, electrical, plumbing, etc.) or theequipment or tools used in connection therewith;

 

(12)                            incurred by Landlord for which Landlord isactually reimbursed by parties other than tenants of the Building, including,without limitation, insurance proceeds;

 

(13)                            for the initial construction of the Building,including the correction of any structural construction defects;

 

(14)                            except for the management fee, of any overheador profit;

 

(15)                            of any amounts paid to any subsidiary oraffiliate of Landlord for services on or to the Building, parking garage orrelated facilities and/or the Land on which the Building is situated, to theextent of any portion of the cost of such services exceeds the reasonable costsfor such services rendered by persons or entities of similar skill, competenceand experience other than a subsidiary or affiliate of Landlord;

 

(16)                            of rental under any ground or underlying leaseor leases for the Land;

 

(17)                            except for the management fee, of Landlord’sgeneral overhead;

 

(18)                            of any compensation paid to clerks, attendantsor other persons in commercial concessions operated by Landlord, other thanwith respect to the parking garage;

 

(19)                            for items and services for which Tenantdirectly reimburses Landlord or pays to third persons with Landlord’s consent,to the extent of such reimbursement or payment;

 

(20)                            of fines, penalties, and legal fees incurreddue to violations by Landlord, its employees, agents, contractors or assigns,or any other tenant or occupant of the Building, of building codes, any othergovernmental rule or requirement or the terms and conditions of any leasepertaining to the Building;

 

(21)                            of management fees to the extent of any portionof such fees which are unreasonable;

 

(22)                            of acquiring sculptures, paintings, wallhangings or other objects of art;

 

(23)                            of wages, salaries, or other compensation paidto any executive employees of Landlord above the level of property manager;provided, further, if any employee of Landlord works on several buildings withinthe area, including the Building, the costs and expenses connected with suchemployee shall be allocated among such buildings by Landlord in accordance withreasonable and consistent criteria;

 

(24)                            incurred in leasing air-conditioning systems,elevators, or other equipment ordinarily considered to be of a capital nature(other than on a temporary basis);

 

(25)                            associated with the removal or encapsulation ofasbestos or other hazardous or toxic substances;

 

(26)                            for repairs or maintenance which are covered bywarranties and service contracts, to the extent such maintenance and repairsare made at no cost to Landlord;

 

(27)                            representing any amount paid for services andmaterials to an affiliate of Landlord (i.e., persons or entities controlled by,under common control with, or which control, Landlord) to the extent suchamount exceeds the amount that would reasonably be paid for such services ormaterials were they rendered by an unaffiliated person, firm or corporation;

 

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(28)                            for amounts payable by Landlord by way ofindemnity or for damages or which constitutes a fine or penalty, includinginterest or penalties for any late payment;

 

(29)                            for repairs necessitated by violations of lawin effect as of the date of the Lease;

 

(30)                            for property taxes and assessments which arenot properly allocable to the Building; without limiting the generality of theforegoing, property taxes and assessments which are properly allocable toundeveloped land shall be excluded from Basic Cost;

 

(31)                            of interest and penalties due to the latepayment of taxes, utility bills or other such costs except any interest orpenalties arising from late payments beyond Landlord’s control; and

 

(32)                            bad debt expenses andcharitable contributions and donations; and

 

(33)                            costs incurred as a result of the grossnegligence of Landlord.

 

3.                                       The Annual Cost Statement shall include astatement of Landlord’s actual Basic Cost for the previous year adjusted asprovided in Section 4 of this Exhibit. If the Annual Cost Statementreveals that Tenant paid more for Basic Cost than the actual Excess in the yearfor which such statement was prepared, then Landlord shall credit or reimburseTenant for such excess within 30 days after delivery of the Annual CostStatement; likewise, if Tenant paid less than the actual Excess, then Tenantshall pay Landlord such deficiency within 30 days after delivery of the AnnualCost Statement.

 

4.                                       With respect to any calendar year or partialcalendar year in which the Building is**notoccupied to the extent of 95% of the rentable area thereof, including calendaryear 2006 (if applicable), the Basic Cost for such period shall, for thepurposes hereof, be increased to the amount which would have been incurred hadthe Building been occupied to the extent of 95% of the rentable area thereof.The foregoing adjustment shall be applied only to those items of Basic Costwhich vary with the level of occupancy of the Building, and in particular,shall not be applied to taxes described in Subsection 2(f) of this Exhibit C.  In no event shall Landlord be entitled torecover more than one hundred percent (100%) of actual Basic Costs pursuant tothis Section.

 

5.                                       For purposes of calculating Excess under this Exhibit C, the Controllable BasicCosts (defined below) for each calendar year after **2006**shall not increase by more than 106% over the Controllable Operating Costs forthe previous calendar year.   “**Controllable Basic Costs**” shallmean all items of Basic Costs which are within the reasonable control ofLandlord; thus, excluding taxes, insurance, utilities, snow removal costs,costs incurred to comply with governmental requirements, and other costs beyondthe reasonable control of Landlord.

 

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EXHIBIT D

 

SPECIALPROVISIONS

 

The following Special Provisions are hereby made apart of the Lease Agreement, in all respects, and shall be read in context ofthe Standard Lease Provisions as set forth and contained therein. In the eventof any express conflict between these Special Provisions and the Standard LeaseProvisions, then these Special Provisions shall control:

 
| 1.               Right of First  Refusal. |   | If during the term of this Lease, Landlord receives  a bona fide offer from a third party (the “**Third  Party Offer**”) to execute a new lease for the lease of (a) the  remaining portion of the first floor of the Building not included in the  Premises or (b) any portion of the third floor of the Building  (collectively, the “**Refusal Space**”)  and Landlord is willing to accept the terms of such Third Party Offer,  Landlord shall, provided that (a) no Event of Default then exists, and (b) Tenant  occupies the Premises, offer to lease to Tenant the Refusal Space on the same  terms and conditions as the Third Party Offer; such offer shall be in  writing, specify the rent to be paid for the Refusal Space, contain the basic  terms and conditions of the Third Party Offer and the date on which the  Refusal Space shall be included in the Premises (the “Offer Notice”). Tenant  shall notify Landlord in writing whether Tenant elects to lease the entire  portion of the Refusal Space subject to the Third Party Offer on the same  terms and conditions as the Third Party Offer in the Offer Notice within  seven (7) business days after Landlord delivers to Tenant the Offer  Notice. If Tenant timely elects to lease the Refusal Space within such seven (7) -  business day period by written notice to Landlord, then Landlord and Tenant  shall execute an amendment to this Lease effective as of the date the Refusal  Space is to be included in the Premises, on the same terms as this Lease  except (a) the Basic Rental shall be the amount specified in the Offer  Notice (b) the term for the Refusal Space shall be that specified in the  Offer Notice, (c) Tenant shall receive any tenant improvement allowance  referenced in the Offer Notice with respect to the Refusal Space, and (d) other  terms set forth in this Lease which are inconsistent with the terms of the  Offer Notice shall be modified accordingly respecting the Refusal Space only.  If Tenant fails to timely elect to Lease the Refusal Space or fails to  execute the Amendment to the Lease consistent herewith within seven (7) business  days of receipt of such from Landlord, then this right shall automatically  terminate as to the portion of the Refusal Space covered by the applicable  Third Party Offer only. |
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| 2.               Monument Signage         |   | So long as (i) no Event of Default then exists,  and (ii) Tenant occupies at the Premises, effective as of the  Commencement Date signage shall be made available for Tenant on both sides of  the existing monument in front of the Building in a manner consistent with  the signage currently in place. Any such signage shall be at Tenant’s sole  cost and subject to applicable governmental approvals and permits, and  Landlord’s prior written approval, which shall not be unreasonably withheld,  conditioned or delayed. Notwithstanding the foregoing.  Landlord shall have the right, at Landlord’s  sole cost and expense, from time to time during the Term, as the same may be  extended, to relocate and/or replace said signage with similar signage of  equal or greater size and of equivalent or better location and visibility.  Tenant’s sign panel or display shall be at least as large as any other panel  or display of any other Tenant. In the event that the pertinent laws, rules,  regulations or governmental authorities limit the number of designations that  may be placed on the monument sign to one, then only the Building name shall  be displayed thereon. In the event that the pertinent laws, rules,  regulations and governmental authorities limit the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

 

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|                                              |   | number of designations to be placed on the  monument sign to two, then only the designation of the Building and the  Tenant then occupying the greatest RSF in the Building shall be on the  monument sign. Subject to the foregoing, Landlord shall use reasonable  efforts to ensure that Tenant will have its name on the monument sign  throughout the Lease Term.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| 3.     Spandrel Signage       |   | So long as (i) no Event of Default then  exists, and (ii) Tenant occupies at the Premises, effective as of the  Commencement Date, and subject to regulatory approvals and Landlord’s prior  written approval, which shall not be unreasonably conditioned, withheld or  delayed, Tenant may install building signage above the 6th floor  spandrel on the northwest side of the building facing Arapaho Road. Any such  signage shall be at Tenant’s sole cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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| 4.     Finish Work  Allowance |   | The space will be provided in its “as-is”  condition. Landlord shall provide Tenant with an allowance for the costs (“**Finish Work Allowance Costs**”) of  hereafter constructing any tenant improvements in the Premises (including,  without limitation, third party architectural and engineering fees with  respect thereto) in an amount not to exceed **$864,840.83**  (i.e., the product of (x)**$32.59** per rentable  square foot and (y) **26,537**  rentable square feet of the Premises) (the “**Finish  Work Allowance**”). All construction and design costs for the  Premises in excess of the Finish Work Allowance shall be paid for entirely by  Tenant, and Landlord shall not provide any reimbursement therefor. The Finish  Work Allowance, less 10% retainage, shall be disbursed as requisitioned by  Tenant, but not more frequently than monthly, within thirty (30) days after  Tenant’s submission of the requisition package. For each disbursement, Tenant  shall submit a requisition package to Landlord with an itemization of the  costs being requisitioned, a certificate by an officer of Tenant that all  such costs are Finish Work Allowance Costs and have been incurred by Tenant,  and appropriate back-up documentation including, without limitation, partial  or full lien waivers (in a form reasonably approved by Landlord), invoices  and bills (together with evidence of Tenant’s payment of such amounts, if  Tenant does not request such  invoices to be paid by joint check pursuant to the next sentence), and, upon  completion of the work, such certificates of completion, final lien waivers,  certificates of occupancy, and as-built plans as Landlord may reasonably  require in light of the nature and scope of the work Notwithstanding the foregoing,  at Tenant’s request, Landlord shall make disbursements of the Finish Work  Allowance by check jointly payable to Tenant and Tenant’s general contractor  with respect to the portion of the work then completed; provided however,  that Landlord shall have no responsibility or Liability to Tenant or such  contractor with respect to such work, including without limitation, the  quality or completeness of such work or any warranties associated therewith.  If the reasonably estimated cost of the work exceeds the Finish Work  Allowance, Landlord reserves the right to make pro-rata disbursements of the  Finish Work Allowance in the proportion that the Finish Work Allowance bears  to the estimated cost of the work, subject to a final reconciliation upon  completion of the work. Subject to the foregoing, Landlord shall disburse the  retainage amount upon receipt of a final back-up documentation, within  forty-five (45) days of completion of all the work. Landlord shall have no  obligation to pay the Finish Work Allowance at any time (a) when Tenant  is in default under the Lease (as amended hereby) beyond the expiration of  any applicable notice or cure period or (b) with respect to any  requisition submitted after the last day of the Sixth (6th) Lease  Month. After the final completion of the work and the reconciliation of the  Finish Work Allowance and the Finish Work Allowance Costs, Tenant may use any  excess Finish Work Allowance for the payment of Rent hereunder or towards the  cost of Tenant’s bona fide move-related expenses, furniture, and cabling  costs respecting the Premises, and third party construction management  services by |

 

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|                                               |   | making written request for such final  disbursement before the last day of the Sixth (6th) Lease Month,  together with all appropriate back up documentation, and Landlord shall  reimburse Tenant for the cost of the same within thirty (30) days of Tenant’s  request therefor. Thereafter Landlord shall have no obligation for any unused  portion of the Finish Work Allowance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| 5.     Early Termination:      |   | Provided no monetary Event of Default by Tenant  then exists at the time of the exercise of the option that is the subject of  this special provision, Tenant shall have the irrevocable right to terminate  the Lease effective on the last day of the 36th Lease Month by  delivering to Landlord written notice thereof (“**Termination  Notice**”) no later than the last day of the 28th  Lease Month accompanied by a Termination Fee (herein so called) in cash or  its equivalent in an amount equal to the balance of as the effective date of  such Termination of all unamortized Landlord’s Finish Work Allowance,  brokerage commissions and costs for the purchase and installation of the  Generator associated with the Lease, such costs to be amortized at a rate of  nine percent (9%) over the initial Term of this Lease. Failing the timely  delivery of the Termination Notice and or the Termination Fee, then the right  herein provided shall automatically cease and expire.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| 6.     Single Renewal  Option: |   | Tenant may renew this Lease for one additional  period of five (5) years, provided there is not then an Event of Default  by Tenant under the Lease, by delivering written notice of the exercise  thereof to Landlord not later than six months before the expiration of the  Term. The Basic Rental payable for each month during such extended Term shall  be the prevailing rental rate (the  “**Prevailing Rental Rate**”), at the  commencement of such extended Term, for renewals of space in buildings  comparable to the Building in the submarket in which the Premises are located  of equivalent quality, size, utility and location, with the length of the  extended Term and the credit standing of Tenant to be taken into account.  Within 30 days after receipt of Tenant’s notice to renew, Landlord shall  deliver to Tenant written notice of the Prevailing Rental Rate and shall  advise Tenant of the required adjustment to Basic Rental, if any, and the  other terms and conditions offered. Tenant shall, within twenty (20) days  after receipt of Landlord’s notice, notify Landlord in writing whether Tenant  accepts or rejects Landlord’s determination of the Prevailing Rental Rate. If  Tenant timely notifies Landlord that Tenant accepts Landlord’s determination  of the Prevailing Rental Rate, then, on or before the commencement date of  the extended Term, Landlord and Tenant shall execute an amendment to this  Lease extending the Term on the same terms provided in this Lease, except as  follows: |
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|                                               |   | (a)           Basic Rental shall  be adjusted to the Prevailing Rental Rate;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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|                                               |   | (b)           Tenant shall have  no further renewal option unless expressly granted by Landlord in writing;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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|                                               |   | (c)           Landlord shall  lease to Tenant the Premises in their then-current condition, and Landlord  shall not provide to Tenant any allowances (e.g., moving allowance,  construction allowance, and the like) or other tenant inducements; provided,  if such allowances have been taken into account in determining the Prevailing  Rental Rate, then Landlord shall provide such allowances to Tenant; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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|                                               |   | (d)           The Expense Stop  shall be adjusted to be the calendar year in which the extended Term  commences (provided such adjustment is taken into account in                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

 

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|                                             |   | determining the  Prevailing Rental Rate).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
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|                                             |   | If Tenant rejects  Landlord’s determination of the Prevailing Rental Rate and timely notifies  Landlord thereof, Tenant may, in its notice to Landlord, require that the  determination of the Prevailing Rental Rate be made by brokers. In such  event, within 10 days thereafter, each party shall select a qualified  commercial real estate broker with at least ten years experience in Leasing  property and buildings in the city or submarket in which the Premises are  located. The two brokers shall give their opinion of prevailing rental rates  within 20 days after their retention. In the event the opinions of the two  brokers differ and, after good faith efforts over the succeeding 20-day  period, they cannot mutually agree, the brokers shall immediately and jointly  appoint a third broker with the qualifications specified above. This third  broker shall immediately (within five days) choose either the determination  of Landlord’s broker or Tenant’s broker and such choice of this third broker  shall be final and binding on Landlord and Tenant. Each party shall pay its  own costs for its real estate broker. Following the determination of the  Prevailing Rental Rate by the brokers, the parties shall equally share the  costs of any third broker,                                                                                                                                                                                                                                |
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| 7.     Satellite Dish/Riser: |   | Subject to the terms set  forth below, Landlord hereby grants Tenant a license to use a portion of the  roof of the Building for the installation of up to two (2) communications  antennae or satellite dish or other communications equipment for Tenant’s  uses ancillary to the Permitted Use in the Premises (the “**Satellite Dish**”). The size,  location, manner of placement, screening, installation specifications, and  other particulars of the Satellite Dish shall be subject to the prior review  and reasonable approval of Landlord. Tenant shall be responsible for  obtaining all necessary permits, approvals, and operating licenses for such  installation and shall pay all costs arising from the installation,  maintenance, repair, and subsequent removal of the Satellite Dish, and repair  and replacement of any disturbed roofing materials associated therewith. Similarly,  subject to the terms set forth below, Landlord hereby grants Tenant a license  to use a portion of the riser space situated at the Building for the  installation of certain equipment for Tenant’s uses ancillary to the  Permitted Use in the Premises. The size, location, manner of placement,  screening, installation specifications, and other particulars of such  equipment shall be subject to the prior review and reasonable approval of  Landlord. Tenant shall be responsible for such installation and shall pay all  costs arising from the installation, maintenance and repair of such equipment. |
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| 8.     Generator             |   | Landlord, at its sole  cost and expense, shall purchase, install and maintain in good working order  throughout the Term, an approximate 500 Kva generator with a 2-hour fuel “day  tank”, pursuant to written specifications as provided by Tenant, and subject  to Landlord’s review and approval, for use by Tenant during the Term;  provided however that Landlord shall also have the right to use such for its  benefit and the benefit of the Building for essential building systems. Such  installation shall include the generator pad, screening and conduit to the  Premises. Conduit shall be adequate in size to accommodate wiring from a  second generator if installed by Tenant, at its sole cost and expense, with  the prior written approval of Landlord, if any. The location of the generator  shall be mutually acceptable to Landlord and Tenant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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|                                             |   | Upon installation of the  generator or contemporaneously therewith, Tenant may, at its sole cost and  expense, perform the electrical testing of the generator and related systems,  to its reasonable satisfaction. Landlord shall be responsible for, and shall  timely perform, all other testing associated with the generator.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

 

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|                                   |   | Landlord and Tenant shall  use their best efforts in the installation and any testing of the generator,  so that the generator will be installed and ready for use on or before  November 1, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
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| 9.     Furniture   |   | In addition to the Finish  Work Allowance, Landlord shall provide Tenant with an allowance for the costs  (“**Furniture Allowance Costs**”) of  hereafter purchasing thirty (30) new Kimball “Reasons” cubicles and thirty  (30) new “CUSP” task chairs, or, in each case, furniture of comparable  quality, and otherwise furnishing up to three (3) conferences rooms with one  (1) new or used conference table and up to twelve (12) new or used  conference chairs for each of the three conference rooms within the Premises in  an amount not to exceed **$100,000.00**  (the “**Furniture Allowance**”). Prior  to the acquisition of such furniture Tenant shall provide copies of the bids  or other pricing for such furniture, and the type and cost of such shall be  subject to Landlord’s review and approval, which approval shall not be  unreasonably withheld, conditioned or delayed; and in the event Landlord does  not approve or disapprove of any such bids within five (5) business days  of Tenant’s submission thereof, then Landlord shall be deemed to have **approved** of such bid. Provided  Landlord, has approved (or is deemed to have approved) the proposed furniture  to be purchased, as provided in the foregoing, the Furniture Allowance shall  be disbursed as requisitioned by Tenant, but not more frequently than  monthly, within thirty (30) days after Tenant’s submission of the requisition  package. For each disbursement, Tenant shall submit a requisition package to  Landlord with an itemization of the costs being requisitioned, a certificate  by an officer of Tenant that all such costs are Furniture Allowance Costs and  have been incurred by Tenant, and appropriate back-up documentation  including, without limitation, invoices and bills (together with evidence of  Tenant’s payment of such amounts, if Tenant does not request such invoices to  be paid by joint check pursuant to the next sentence). Notwithstanding the  foregoing, at Tenant’s request, Landlord shall make disbursements of the  Furniture Allowance by check jointly payable to Tenant and the furniture  supplier with respect to the portion of the furniture then acquired. Landlord  shall have no obligation to pay the Furniture Allowance at any time  (a) when Tenant is in default under the Lease (as amended hereby) beyond  the expiration of any applicable notice or cure period or (b) with  respect to any requisition submitted after the last day of the Sixth (6th)  Lease Month. Thereafter Landlord shall have no obligation for any unused  portion of the Furniture Allowance. All furnishings purchased with the  Furniture Allowance shall be and remain the property of Landlord, provided  however, that during the Term, Tenant shall lease and have the right to use  such furniture, in partial consideration of the Basic Rental provided for  herein, and provided that Tenant during the Term of the Lease shall be  responsible for any and all business personal property taxes assessed  respecting such furniture. |
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| 10.   Security System        |   | Landlord will make its  card-key access system available to Tenant so that Tenant may secure the  Premises via the card-key access system and access the exterior security  cameras (to the extent such cameras are operational).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| 11.   Tenant Audit of Excess |   | Tenant, at its expense,  shall have the right upon fifteen (15) business days advance written notice,  to inspect Landlord’s books and records relating to the Lease and the Building  for any year in which Excess charges are due, any such inspection to be  conducted at Landlord’s building manager’s office, during normal business  hours; provided, however Landlord agrees to reimburse Tenant for the costs of  any such inspection conducted by or for it in the event the inspection  reflect that the Excess charged to Tenant by Landlord hereunder for the  period of time covered by such                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

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|                                                     |   | inspection shall have been overstated by seven  (7%) or more. If such audit or inspection reveals that an error was made in  the Excess previously charged to Tenant, Landlord shall refund to Tenant any  overpayment of any such costs within 30 days of notification thereof. Any  such inspection must cover a period within twenty-four (24) months prior to  the then current calendar year, any objections to charges prior thereto being  conclusively presumed to have been waived. |
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| 12.   Permitted  Equipment                     |   | Any provision of Section 12 of the Building  Rules and Regulations to the contrary notwithstanding. Tenant may use and  operate in the Premises four (4) Precision air-conditioning units, and  Uninterrupted Power Supply equipment and other related equipment typical in  large data centers, subject to the other terms and provisions as provided in  this Lease.                                                                                                        |
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| 13.   Building Hours                           |   | Any provision of Section 16 of the Building  Rules and Regulations to the contrary notwithstanding, the Building  Hours, for purposes of this Lease shall be 7:00 a.m. to  7:30 p.m. Monday through Friday, and 8:00 a.m. to 1:00 p.m. on  Saturdays.                                                                                                                                                                                                               |
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| 14.   Landlord’s  Remedial ADA Compliance |   | Landlord covenants and agrees to commence within  45 days of the Effective Date to commence and diligently pursue to completion  the installation, remediation or repair of the ADA compliance matters set  forth on Exhibit D-1 hereto.                                                                                                                                                                                                                                                |

 

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**Exhibit D**-1

**ADA Compliance Matters**

 

**Women’s Restroom**

 

1.             Accessible signageon front door to be relocated to strike side of door at 60” a.f.f. 

2.             Entrance door torestroom is not accessible on the pull side. 

3.             ADA/TAS stall doorto be 4” max. from side stall wall (it is currently at 7”). 

4.             Coat book on women’sADA/TAS stall is mounted at 53” a.f.f. Needs to be mounted at 48” a.f.f. 

5.             Women’s ADA/TASwater closet is not at an accessible height or distance from closest side wall.Relocate to 1’-6” from side wall and at 17” – 19” a.f.f. to top of rim. 

6.             Provide new women’srear grab bar (to be 36” minimum, is at 30” currently). 

7.             Lavatory apron is26-1/2” a.f.f. and needs to be 29” a.f.f.minimum for required ADA/TAS knee clearance. 

8.             Kneespace underlavatory is not clear 8” deep X 27” high required ADA/TAS clearance because ofexisting angled panel. 

9.             Paper toweldispenser / trash receptacle is mounted too high. Relocate so that paper toweldispenser height is at 48” a.f.f.

 

**Men’s****Restroom**

 

1.             Accessible signageon front door to be relocated to strike side of door at 60” a.f.f. 

2.             Entrance door is notaccessible on the pull side. 

3.             Men’s ADA/TAS watercloset is not at an accessible distance from closest side wall. Relocate watercloset to 1’-6” from side wall. 

4.             Existing urinal doesnot meet the 14” deep TAS requirement. Provide new urinal and mount per ADA/TASrequirements. 

5.             Cut privacy panelbetween urinals back to 24” deep maximum (or width will have to increase to 32”wide. Stall is currently at 30-1/2” wide). 

6.             Paper toweldispenser projects 4-1/4” from wall and is mounted 50” to paper toweldispenser. Provide new paper towel dispenser which projects 4” max. from walland mount at 48” a.f.f. to paper towel dispenser. 

7.             Lavatory apron is26-1/2” a.f.f. and needs to be at 29” a.f.f. minimum for required ADA/TAS kneeclearance. 

8.             Kneespace underlavatory is not have 8” deep X 27” high required ADA/TAS clearance because ofexisting angled panel.

 

**Breakroommillwork**

 

1. Front vertical apron at accessible sinkmeets ADA/TAS knee clearance height, however, horizontal and sloped panelbeyond is impeding on the 8”deep X 27” high required knee space.

 

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**EXHIBIT E**

 

PARKING

 

Parking Spaces.

 

Landlord hereby grants to Tenant and personsdesignated by Tenant a license for the duration of the Term to use up to **one hundred and four (104)unreserved**surfaceparking spaces and **twenty (20) reserved**covered vehicle parking space (as Landlord shall determine) in that certainsurface parking lot facility (the “**Parking Facilities**”) owned byLandlord adjacent to the Building, for the initial Term of the Lease, subjectto its early termination as provided in this Lease, and subject to such terms,conditions and regulations as are from time to time applicable to patrons ofthe Parking Facilities.

 

During such initial Term, there shall be acharge of $0.00 (plus tax) per month per unreserved parking space and acharge of $0.00 (plus tax) per month per reserved parking space, for theparking spaces designated above, whether or not Tenant utilizes such parkingspaces. No deductions from the monthly charge will be made for days on whichthe Parking Facilities or any particular parking space is not used by Tenant.

 

After the initial Term, Tenant may continuesuch license, subject to the payment of the then prevailing fees generallycharged by Landlord for such parking spaces, and subject to such terms,conditions and regulations as are from time to time applicable to patrons ofthe Parking Facilities.

 

Tenant may not assign its licenses withoutthe prior written approval of Landlord, which shall not be unreasonablywithheld, conditioned or delayed.

 

Control of Parking.

 

Tenant shall at all times comply with allapplicable ordinances, rules, regulations, codes, laws, statutes andrequirements of all federal, state, county and municipal governmental bodies ortheir subdivisions respecting the use of the Parking Facilities. Landlordreserves the right from time to time to adopt, modify and enforce reasonable rules governingthe use of the Parking Facilities, including any key-card, sticker or otheridentification or entrance system, and hours of operation. Landlord may refuseto permit any person who violates such rules to park in the ParkingFacilities, and any violation of the rules will subject the car to removalfrom same.

 

Liability.

 

The unreserved parking spaces hereunder willbe provided on an unreserved “first-come, first-served” basis. Tenantacknowledges that Landlord has or may arrange for the Parking Facilities to beoperated by an independent contractor, not affiliated with Landlord. Tenantagrees to look first to its insurance carrier and to require that Tenant’semployees look first to their respective insurance carriers for payment of any lossessustained in connection with any use of the Parking Facilities. Tenant herebywaives on behalf of Tenants insurance carriers all rights of subrogationagainst Landlord or Landlord’s agents. Landlord reserves the right to assignspecific spaces, and to reserve spaces for visitors, small cars, handicappedpersons and for other tenants, guests of tenants or other parties, and Tenantand persons designated by Tenant hereunder will not park in any such assignedor reserved spaces. Landlord also reserves the right to close all or anyportion of the Parking Facilities on a temporary basis (as necessary) in orderto make repairs or perform maintenance services, or to alter, modify, restripeor renovate the Parking Facilities, or if required by casualty, strike,condemnation, act of God, governmental law or requirement or other reasonbeyond Landlord’s reasonable control. If, for any other reason, Tenant orpersons properly designated by Tenant, are denied access to the ParkingFacilities and Tenant or such persons will have complied with this Exhibit E. Landlord’s liability will be limited to parking charges (excludingtickets for parking violations) incurred

 

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by Tenant or such persons in utilizingalternative parking, which amount Landlord will pay upon presentation ofdocumentation supporting Tenant’s claims in connection therewith.

 

Landlord shall usereasonable efforts to monitor the use of reserved parking spaces by thelicenses entitle to use of such, but shall have no liability whatsoever in thisregard.

 

Default Remedies.

 

If Tenant defaults under this Exhibit E, Landlord will have the right to remove from the Parking Facilities anyvehicles hereunder which are involved or are owned or driven by parties involvedin causing such default, without liability there for whatsoever. In addition,if Tenant defaults under this Exhibit E, then, Landlord will havethe right to cancel Tenant’s reserved parking spaces after ten (10) days’written notice, provided Tenant does not cure such within that time period; suchcancellation to continue in any event until such matter has been cured. IfTenant defaults with respect to the same term or condition under this Exhibit E,more than three (3) times during any twelve (12) month period, the nextdefault of such term or condition, will, at Landlord’s election, constitute adefault of the parking arrangements and the person or persons causing suchdefault shall no longer have access to any of the Parking Facilities.

 

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EXHIBIT F

 

INTENTIONALLY DELETED

 

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EXHIBIT G

 

SUBORDINATION,NON-DISTURBANCE AND ATTORNMENT AGREEMENT

 

**THISSUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT**(the “Agreement”) ismade as of the              day of                     ,200   , by and between BANK OF TEXAS, N.A. having an address at 5956 Sherry Lane, Suite 1100, Dallas, Texas 75225 (“Lender”)and SONUS NETWORKS, INC., a Delaware corporation, having an address at 1130 EastArapaho Road, Suite          ,Richardson, Texas 75081 (“Tenant”).

 

**RECITALS:**

 

A.            Tenant is the holderof a leasehold estate in a portion of the property described on Exhibit “A”(the “Property”) under and pursuant to the provisions of a certain lease datedthe              day of          , 2005 betweenPEARSON FUND III, L.P., a Texas limited partnership, as landlord, and Tenant,as tenant (the “Lease”);

 

B.            PEARSON FUND III,L.P., a Texas limitedpartnership (“Landlord”) is the current holder of the “Landlord’s” interest inthe Lease;

 

C.            The Property is oris to be encumbered by one or more mortgages, deeds of trust, deeds to secure debtor similar security agreements (collectively, the “Security Instrument”) infavor of or to be assigned to Lender; and

 

D.            Tenant has agreed tosubordinate the Lease to the Security Instrument and to the lien thereof and Lenderhas agreed to grant non-disturbance to Tenant under the Lease on the terms andconditions hereinafter set forth.

 

**AGREEMENT:**

 

NOW, THEREFORE, the parties hereto mutuallyagree as follows:

 

1.             Subordination. TheLease shall be subject and subordinate in all respects to the lien and terms ofthe Security Instrument, to any and all advances to be made there under and toall renewals, modifications, consolidations, replacements and extensionsthereof.

 

2.            Non-disturbance. Solong as Tenant pays all rents and other charges as specified in the Lease andis not otherwise in default (beyond applicable notice and cure periods) of anyof its obligations and covenants pursuant to the Lease, Lender agrees foritself and its successors in interest and for any purchaser of the Propertyupon a foreclosure of the Security Instrument, that Tenant’s possession of thepremises as described in the Lease will not be disturbed during the term of theLease, as said term may be extended pursuant to the terms of the Lease or assaid premises may be expanded as specified in the Lease, by reason of aforeclosure. For purposes of this agreement, a “foreclosure” shall include (butnot be limited to) a sheriff’s or trustee’s sale under the power of salecontained in the Security Instrument, the termination of any superior lease ofthe Property and any other transfer of the Landlord’s interest in the Propertyunder peril of foreclosure, including, without limitation to the generality ofthe foregoing, an assignment or sale in lieu of foreclosure.

 

3.             Attornment. Tenantagrees to attorn to, accept and recognize any person or entity which acquires theProperty through a foreclosure (an “Acquiring Party”) as the landlord under theLease for the then remaining balance of the term of the Lease, and anyextensions thereof as made pursuant to the Lease. The foregoing provision shallbe self-operative and shall not require the execution of any further instrumentor agreement by Tenant as a condition to its effectiveness. Tenant agrees,however, to execute and deliver, at any time and from time to time, upon therequest of the Lender or any Acquiring Party any reasonable instrument whichmay be necessary or appropriate toevidencesuch attornment.

 

----

 

4.             No Liability.Notwithstanding anything to the contrary contained herein or in the Lease, itis specifically understood and agreed that neither the Lender, any receiver orany Acquiring Party shall be:

(a)   liable for any act,omission, negligence or default of any prior landlord (other than to curedefaults of a continuing nature with respect to the maintenance or repair ofthe demised premises or the Property); provided, however, that any AcquiringParty shall be liable and responsible for the performance of all covenants andobligations of landlord under the Lease accruing from and after the date thatit takes title to the Property; or

(b)   except as set forthin (a), above, liable for any failure of any prior landlord to construct anyimprovements;

(c)   subject to any offsets, credits, claims ordefenses which Tenant might have against any prior landlord; or

(d)   bound by any rent or additional rent which ispayable on a monthly basis and which Tenant might have paid for more than one (1) monthin advance to any prior landlord;

(e)   bound by any cancellation, surrender,amendment or modification of the Lease or release of liability thereunder notexpressly consented to in writing by Lender or otherwise permitted by theSecurity Instrument in each instance, except, for those cancellations,surrenders, amendments or modifications contemplated in the Lease or permittedto be made without Lender’s consent pursuant to the terms of the loan documentsbetween Lender and Landlord, or

(f)    be liable to Tenant hereunder or under theterms of the Lease beyond its interest in the Property.

 

Notwithstanding theforegoing, Tenant reserves its rights to any and all claims or causes of actionagainst such prior landlord for prior losses or damages and against thesuccessor landlord for all losses or damages arising from and after the datethat such successor landlord takes title to the Property.

 

5.            Rent. Tenant hasnotice that the Lease and the rents and all other sums due thereunder have beenassigned in writing to Lender as security for the loan secured by the SecurityInstrument. In the event Lender notifies Tenant of the occurrence of a defaultunder the Security Instrument and demands that Tenant pay its rents and allother sums due or to become due under the Lease directly to Lender, Tenantshall honor such demand and pay its rent and all other sums due under the Leasedirectly to Lender or as otherwise authorized in writing by Lender. Landlordhereby irrevocably authorizes Tenant to make the foregoing payments to Lenderupon such notice and demand.

 

6.            Lender to ReceiveNotices. Tenant shall notify Lender of any default by Landlord under the Lease whichwould entitle Tenant to cancel the Lease, and agrees that, notwithstanding anyprovisions of the Lease to the contrary, no notice of cancellation thereofshall be effective unless Lender shall have received notice of default givingrise to such cancellation and shall have failed within thirty (30) days afterreceipt of such notice to cure such default, or if such default cannot be curedwithin thirty (30) days, shall have failed within thirty (30) days after receiptof such notice to commence and thereafter diligently pursue any actionnecessary to cure such default.

 

7.            NOTICES. All noticesor other written communications hereunder shall be deemed to have been properlygiven (i) upon delivery, if delivered in person with receipt acknowledgedby the recipient thereof, (ii) one (1) Business Day (hereinafterdefined) after having been deposited for overnight delivery with any reputable overnightcourier service, or (iii) three (3) Business Days after having beendeposited in any post office or mail depository regularly maintained by theU.S. Postal Service and sent by registered or certified mail, postage prepaid, returnreceipt requested, addressed to the receiving party at its address set forthabove, and:

 

if to Tenant:

 

Sonus Networks, Inc.

1130 East Arapaho Road, Suite 200

Richardson, Texas 75081

Attn:

Telephone:

Fax:

 

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with a copy to:

 

Sonus Networks, Inc. 

250 Apollo Drive 

Chelmsford, MA 01824

Attn:

Telephone:

Fax:

 

if to Lender:

 

Bank of Texas, NA

5956 Sherry Lane, Suite 1100

Dallas, Texas 75225

Attn: Kimberly (Kim) W. Kittle, VicePresident

kkittle@mail.bokf.com

Telephone: 214.987.8842 direct

Fax:

 

or addressed as such party may from time totime designate by written notice to the other parties. Either party by noticeto the other may designate additional or different addresses for subsequentnotices or communications. For purposes of this Section 7, the term “BusinessDay” shall mean any day other than Saturday, Sunday or any other day on whichbanks are required or authorized to close in Dallas County, Texas. Either partyby notice to the other may designate additional or different addresses forsubsequent notices or communications.

 

8.             Successors. Theobligations and rights of the parties pursuant to this Agreement shall bind andinure to the benefit of the successors, assigns, heirs and legalrepresentatives of the respective parties.

 

9.             Duplicate Originals;Counterparts. This Agreement may be executed in any number of duplicate originalsand each duplicate original shall be deemed to be an original. This Agreementmay be executed in several counterparts, each of which counterparts shall bedeemed an original instrument and all of which together shall constitute asingle agreement.

 

10.           Transfer ofLoan/Servicing. Lender may sell, transfer and deliver the Note and assign theSecurity Instrument, this Agreement and the other documents executed inconnection therewith to one or more Investors (as defined in the SecurityInstrument) in the secondary mortgage market or otherwise. Lender may alsoretain or assign responsibility for servicing the loan evidenced by the Note,or may delegate some or all of such responsibility and/or obligations to aservicer including, but not limited to, any subservicer or master servicer, onbehalf of the Investors. All references to Lender herein shall refer to andinclude any such servicer to the extent applicable. Lender may disclose theterms of this Agreement, the identity of Tenant or any principal of Tenant, orany financial information regarding Tenant or any principal of Tenant, to anyInvestor or potential Investor.

 

IN WITNESS WHEREOF,Lender, Landlord and Tenant have duly executed this Agreement as of the datefirst above written.

 
| **LENDER:** |   |
|-------------|--------|
|        |   |
| By:         |   |
| Its:        |   |
|             |        |  |

 

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| STATE OF  | )     |
|-----------|-------|
|      | ) ss. |
| COUNTY OF | )     |

 

On the          dayof               ,in the year 200    , before me, the undersigned, a NotaryPublic inand for said State, personally appeared                       ,personally known to me or proved to me on the basis of satisfactory evidence to be theindividual whose name is subscribed to the within instrument and acknowledged to methat said person executed the same in said person’s capacity as                                    of                      ,and that by said person’s signature on the instrument, said corporationexecuted the instrument.

 

 
|   |   |          |   |
|--------|--------|---------------|--------|
|   |   | Notary Public |

 

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| **TENANT:** | ** ** | ** ** |
|-------------|------------|------------|
|        |       |       |
|        | By:        |       |
|        |       |       |
|        | Its:       |       |

 
| STATE OF TEXAS | )     |
|----------------|-------|
|           | ) ss. |
| COUNTY OF      | )     |

 

The foregoinginstrument was acknowledged before me this               dayof                 ,2005, by                   the                   of                                          ,a                                 ,on behalf of the                         .

 

 
|                   |   |          |   |
|------------------------|--------|---------------|--------|
|                   |   | Notary Public |
|                   |   |          |
| My Commission Expires: |   |          |
|                   |   |          |
|                   |   |          |   |
|                        |        |               |        |  |

 

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The undersigned accepts and agrees tothe provisions of Section 5 hereof:

 
| **LANDLORD:** | ** ** | ** ** |
|---------------|------------|------------|
|          |       |       |
|          | By:        |       |
|          |       |
|          | Its:       |       |
|               |            |            |  |

 
| STATE OF TEXAS | )     |
|----------------|-------|
|           | ) ss. |
| COUNTY OF      | )     |

 

This instrument wasacknowledged before me  this         dayof                                   ,2005, by                            ..

 
| My commission expires: |   |          |   |
|------------------------|--------|---------------|--------|
|                   |   |          |   |
|                   |   | Notary Public |   |
|                   |   |          |
|                   |   |          |
|                   |   |          |   |
|                   |   |          |   |
| (Seal)                 |   |          |   |

 

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EXHIBIT Ato SNDA

 

**LEGAL DESCRIPTION**

 

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EXHIBIT HINTENTIONALLY DELETED

 

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EXHIBIT IJANITORIAL SPECIFICATIONS

 

**CLEANING SPECIFICATIONS**

 

Cleaning services are to be provided five (5) daysa week unless otherwise specified. Cleaning hours are Sunday through Thursdaybetween 6:00 p.m. and before 7:00 a.m. The cleaning specificationsare as follows:

 

**I.****             ****OFFICEAREAS**

 

A.        Daily

 

1.     Dust and wipe cleanall furniture, fixtures, shelving, and cabinets. Note: Desks with loose paperson the top will not be cleaned.

2.     Spot clean allvertical desk surfaces.

3.     Office wastepaperwill be emptied. Liners will be replaced as required.

4.     Vacuum carpet inoffices as needed; moving light furniture other than desks, file cabinets, etc.Remove any spot on carpet, when possible.

5.     Dust and spot mopall resilient tile floor areas. All floor edges will be damp mopped.

6.     All telephones willbe cleaned and sanitized, if possible.

7.     Spot clean allsurfaces and columns. All glass partitions will be spot cleaned.

8.     Wipe metal doorknobs, light switch plates, mirrors, kick plates, door saddles and directional signs.

9.     Vacuum all trafficareas daily.

 

B.         Weekly

 

1.     Dust and clean allpaneling, door frame, ornamental work, grilles, ventilating louvers, baseboardsand entire doors.

2.     Dust all mini-blinds

 

C.         Monthly

 

1.     Complete all highdusting.

2.     Dust and wipe clean all air diffusers and ceiling ventilators.

3.     Resilient tilefloors will be buffed.

 

**II.****           ****RESTROOMS**

 

A.        Daily

 

1.     Restroom floors areto be swept and washed with disinfectant.

2.     Basins, toiletsbowls and urinals are to be washed and disinfected.

3.     Clean and disinfectboth sides of every toilet seat.

4.     Mirrors, shelves,plumbing work, bright work, and enamel surfaces will be wiped down.

5.     Remove spots,stains, splashes from all wall areas, doors, door frames, light switches, etc.

6.     Waste receptacleswill be emptied and cleaned. Soap, toilet, paper, toilet seat cover, towel, andsanitary napkin/tampon dispensers will he filled.

7.     Tile walls anddividing partitions will be spot cleaned.

8.     Dust top of alltoilet partitions.

 

B.         Weekly

 

1.     Tile walls and dividingpartitions will be washed and disinfected thoroughly.

 

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2.         Resilient tilefloors will be buffed twice per month.

 

C.         Monthly

 

1.         Thoroughly scrubfloors. Pay special attention to corners and edges, base of walls and grouting.

 

**III.****          ****COMMONAREAS, KITCHEN AREA, BREAK AREA**

 

A.        Daily

 

1.     All hard surfacefloors are to be swept and/or dust mopped with dust control treated mops orother effective tools, and left clean and free of dust (includes cove baseand/or carpet caps).

2.     Carpets are to bevacuumed and spot cleaned.

3.     Main lobby floorsare to be wiped and washed.

4.     Spot clean all wallswhere possible, dust floor to ceiling as needed.

5.     Clean entranceglass. Clean entrance doors. Polish thresh plates.

6.     Clean directoryboard.

7.     Waste receptacles areto be emptied.

8.     All water fountainsare to be sanitized and polished.

9.     Lobby furniture isto be dusted and vacuumed.

10.   Stairwell is to beswept and mopped.

11.   All interior glassis to be spot cleaned.

12.   All table tops,counters and sinks in kitchen and break area will be cleaned. Vending machinesand ice makers will be wiped clean with a damp cloth.

 

B.         Weekly

 

1.     Dust and clean allpaneling, ornamental work, grilles, ventilating louvers, baseboards and entiredoors.

2.     Resilient tilefloors will be buffed twice per month.

 

C.         Monthly

 

1.     Complete all highdusting.

2.     Dust and wipe cleanall air diffusers and ceiling ventilators.

 

D.         Quarterly

 

1.     Scrub and refinishall resilient tile floor areas.

 

E.         Semi-Annually

 

1.     Strip and refinishall resilient floor areas.

 

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*C:\99 My Documents\Nemic200412\1130E Arapaho Leases\SanusLease\Drafts\20050720aLandlord\Lease Agreement (v4 from Randy Marx) 20050720 pm 4.DOC*

 

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