Exhibit
10.2
  4/Way
Investments, Inc.
  North
Texas Commercial Association Of Realtors®
  MODIFICATION
OF COMMERCIAL LEASE AGREEMENT
  This
Modification of Commercial Lease Agreement (the “Modification”) is entered into
by and between the undersigned Landlord and Tenant, to modify the Commercial
Lease Agreement (the “Lease”) having an Effective Date of 1-07-04,
covering the Demised Premises described as 1636 N.
Hampton Rd., Suite 270, DeSoto, Texas 75115 with an address of 1636 N.
Hampton Rd., Suite 270, DeSoto in Dallas
County, Texas. In consideration of the provisions contained herein, Landlord and
Tenant agree as follows:
  A.      The
Base Rent is changed to $4,098.00
per month beginning May 1,
2007.
  B.      The
Commencement Date of the Lease is changed to or confirmed as.
  C.      The
Expiration Date of the Lease Term is changed to or confirmed as January
31, 2010.
  D.      Paragraphis changed to
read as follows:
 1.      The
expense base year shall be changed to 2006.
 2. On
or before March 31, 2007 Tenant shall pay the 2006 reimbursables to Landlord in
the amount of $5,065.67, payable in three equal payments of
1,688.56.  The months of February, March and April 2007 shall be rent
free.
 
  EXCEPT as
expressly changed by this Modification, all of the provisions set forth in the
Lease (as may have been previously modified) are confirmed and ratified and
shall remain in full force and effect. All capitalized terms used in this
Modification, which are not defined in this Modification, have the meanings
given to them in the Lease. This Modification is effective as of the last date
beneath the signatures of Landlord and Tenant below.
  LANDLORD
                
                Ronald Darby Non Exempt Lifetime
      Trust
                
                By
      [Signature]:/S/ Stacy A.
      Stewart
                Name:
      Stacy A.
      Stewart
                Title:Trustee
                Date
      of
      Execution:
                
                ALL GUARANTEES of the
      Lease shall remain in full force and effect. This Modification is agreed
      to and accepted by Guarantor for the purpose of confirming and ratifying
      the continuing validity of the Guarantor’s guaranty of the Lease, as
      amended herein.
                
                THE BROKERS agree to and
      accept this Modification.
                
                PRINCIPAL
      BROKER
                
                
                
                By
      [Signature]:
                Name:
              TENANT
                
                CDS/eTelcharge.com,
      Inc.
                
                By
      [Signature]:/S/ Carl O.
      Sherman
                Name:
      Carl O.
      Sherman
                Title:
      President
                Date
      of Execution: February 20,
      2007
                
                GUARANTOR
                
                Carl O.
      Sherman
                
                By
      [Signature]:/S/ Carl O.
      Sherman
                Name:
      Carl O.
      Sherman
                
                COOPERATING
      BROKER
                
                4/Way Investments,
      Inc.
                
                By
      [Signature]:
                Name:
      Broker
 
  Copyright
Notice: This form is provided for the use of members of the North Texas
Commercial Association of Realtors, Inc. Permission is hereby granted to make
limited copies of this form for use in a particular Texas real estate
transaction. Contact the NTCAR office to confirm that you are using the current
version of this form.
  ©
Copyright 1996 NTCAR form 10 (1/96)
   
  4/Way
Investments, Inc.
  North
Texas Commercial Association Of Realtors®
  COMMERCIAL
LEASE AGREEMENT
  TABLE
      OF CONTENTS
              
              EXHIBITS
      AND ADDENDA.  Any exhibit or addendum attached to this Lease is
      incorporated as a part of this Lease for all purposes.  Any term
      not specifically defined in the Addenda shall have the same meaning given
      to it in the body of this Lease.  To the extent any provisions
      in the body of this Lease conflict with the Addenda, the Addenda shall
      control.
                [Check
      all boxes which apply.  Boxes not checked do not
      apply.]
                Exhibit
      A                          Survey
      and/or Legal Description of the Property
                Exhibit
      B                          Floor
      Plan and/or Site Plan
                
                Addendum
      A                    Expense
      Reimbursement
                Addendum
      B                    Renewal
      Options
                Addendum
      C                    Right
      of First Refusal for Additional Space
                Addendum
      D                    Percentage
      Rental/Gross Sales Reports
                Addendum
      E                    Guarantee
                Addendum
      F                    Construction
      of Improvements
                Addendum
      G                    Rules
      and Regulations
                Addendum
      H                    OtherN/AArticle
              Page1.
              Defined
      Terms
              12.
              Lease
      and Term
              23.
              Rent
      and Security Deposit
              24.
              Taxes
              35.
              Insurance
      and Indemnity
              36.
              Use
      of Premises
              47.
              Property
      Condition, Maintenance, Repairs and Alterations
              58.
              Damage
      or Destruction
              69.
              Condemnation
              710.
              Assignment
      and Subletting
              711.
              Default
      and Remedies
              712.
              Landlord’s
      Contractual Lien
              813.
              Protection
      of Lenders
              814.
              Environmental
      Representations and Indemnity
              1015.
              Professional
      Service Fees
              1016.
              Miscellaneous
              1117.
              Additional
      Provisions
              13
 
 IN CONSIDERATION of the terms,
provisions and agreements contained in this Lease, the parties agree as
follows:
  ARTICLE
ONE:  DEFINED TERMS. As used in this
Commercial Lease Agreement (the “Lease”), the terms set forth in this Article
One have the following meanings:
  1.01.  Effective Date: The last date
beneath the signatures of Landlord and Tenant on page 13 below.
  1.02.  Landlord:  Two Eagle Park,
Ltd.
  Address: 211 W.
Pleasant Run, Suite 107, Lancaster, Texas 75146
  Telephone: 972-218-8400                                           Fax:
972-218-8401
  1.03.  Tenant:                      CDS/eTelcharge.com,
Inc.
  Address: 1636 N.
Hampton Rd., Suite 270, DeSoto, Texas 75115
  Telephone: 972-298-3800                                           Fax:
972-298-3802
  1.04.  Demised Premises: 1636 N.
Hampton Rd., Suite 270, DeSoto, Texas 75115
  A.  Street address: 1636 N.
Hampton Rd., Suite 270, DeSoto, Texas 75115 in Dallas
County, Texas.
  B.  Legal description: The
property on which the Premises is situated (the “Property”) described as: 1636 N.
Hampton Rd., Suite 270, DeSoto, Texas or is described on Exhibit A, SURVEY AND/OR LEGAL
DESCRIPTION.
  C.  Floor Plan or Site Plan: Being
a floor area of approximately 2,907
square feet and being approximately N/A
feet by N/A
feet (measured to the exterior of outside walls and to the center of the
interior walls) and being more particularly shown in outline form on Exhibit B, FLOOR PLAN AND/OR SITE
PLAN.
  D.  Tenant’s
Pro Rata Share of the Property is 11.51%.
[See Addendum A, EXPENSE
REIMBURSEMENT, if applicable]
  1.05.  Lease Term:  Three
years and 0
months beginning on February
1, 2004 (the “Commencement Date”) and ending on January
31, 2007 (the “Expiration Date”).
  1.06.  Base Rent:  $132,300.00
total Base Rent for the Lease Term payable in monthly installments of $3,675.00
per month in advance.  (The total amount of Rent is defined in Section
3.01.)
  1.07.  Percentage Rental
Rate:N/A%.  [See Addendum D, PERCENTAGE
RENTAL/GROSS SALES REPORTS, if applicable]
  1.08.  Security Deposit: $1,000.00
(due upon execution of this Lease).  [See Section 3.04]
   -1-
  Permitted
Use:Office.  [See
Section 6.01]
  1.09.  Party to whom Tenant is to deliver
payments under this Lease [check
one]:                    o             Landlord    oPrincipal Broker,
or
  x Other: 4/Way
Investments, Inc., 211 W. Pleasant Run, Suite 107, Lancaster, Texas
75146
  Landlord may designate in writing the
party authorized to act on behalf of Landlord to enforce this
Lease.  Any such authorization will remain in effect until it is
revoked by Landlord in writing.
  1.10.  Principal
Broker:  _____________________________________________________________________________,
acting as
  [check one]:  xagent for Landlord exclusively, oagent for Tenant exclusively,o an intermediary.
  Principal Broker's Address: NA                                                                Telephone:                                Fax:
  1.11.  Cooperating Broker:
___________________________________________________________________________,
acting as
  [check one]. o agent for Landlord exclusively,o agent for Tenant
exclusively,o an
intermediary.
  Cooperating Broker's Address: NA                                                                Telephone:                                Fax:
  1.12.  The Fee: The Professional
Service Fee will be as set forth in [check one].  o Paragraph A, or oParagraph B of Section
15.01.
  A.  The
percentage applicable for leases in Sections 15.01 and 15.02 will
be                                                                                                                
percent (6%).
  B.  The
percentage applicable in Section 15.03 in the event of a sale will be NA                                                                                                                          
percent (6%).
  1.13.  Acceptance: The number of days
for acceptance of this offer is 1
days.  [See Section 16.14]
  ARTICLE
TWO:  LEASE AND LEASE
TERM
  2.01.  Lease of Demised Premises for Lease
Term. Landlord leases the Demised Premises to Tenant and Tenant leases
the Demised Premises from Landlord for the Lease Term stated in Section 1.05.
The Commencement Date is the date specified in Section 1.05, unless advanced or
delayed under any provision of this Lease.
  2.02.  Delay in Commencement.
Landlord shall not be liable to Tenant if Landlord does not deliver possession
of the Demised Premises to Tenant on the Commencement Date specified in Section
1.05 above. Landlord’s non-delivery of possession of the Demised Premises to
Tenant on the Commencement Date will not affect this Lease or the obligations of
Tenant under this Lease. However, the Commencement Date shall be delayed until
possession of the Demised Premises is delivered to Tenant. The Lease Term shall
be extended for a period equal to the delay in delivery of possession of the
Demised Premises to Tenant, plus the number of days necessary for the Lease Term
to expire on the last day of a month, If Landlord does not deliver possession of
the Demised Premises to Tenant within sixty (60) days after the Commencement
Date specified in Section 1.05, Tenant may cancel this Lease by giving written
notice to Landlord within ten (10) days after the 60-day period ends. If Tenant
gives such notice, this Lease shall be canceled effective as of the date of its
execution, and no party shall have any obligations under this Lease. If Tenant
does not give such notice within the time specified, Tenant shall have no right
to cancel this Lease, and the Lease Term shall commence upon the delivery of
possession of the Demised Premises to Tenant. If delivery of possession of the
Demised Premises to Tenant is delayed, Landlord and Tenant shall, upon such
delivery, execute an amendment to this Lease setting forth the revised
Commencement Date and Expiration Date of the Lease Term.
  2.03.  Early Occupancy. If Tenant
occupies the Demised Premises prior to the Commencement Date, Tenant’s occupancy
of the Demised Premises shall be subject to all of the provisions of this Lease.
Early occupancy of the Demised Premises shall not advance the Expiration Date.
Unless otherwise provided herein, Tenant shall pay Base Rent and all other
charges specified in this Lease for the period of occupancy.
  2.04.  Holding Over. Tenant shall
vacate the Demised Premises immediately upon the expiration of the Lease Term or
earlier termination of this Lease. Tenant shall reimburse Landlord for and
indemnify Landlord against all damages incurred by Landlord as a result of any
delay by Tenant in vacating the Demised Premises. If Tenant does not vacate the
Demised Premises upon the expiration of the Lease Term or earlier termination of
this Lease, Tenant’s occupancy of the Demised Premises shall be a day-to-day
tenancy, subject to all of the terms of this Lease, except that the Base Rent
during the holdover period shall be increased to an amount which is
one-and-one-half (PA) times the Base Rent in effect on the expiration or
termination of this Lease, computed on a daily basis for each day of the
holdover period, plus all additional sums due under this Lease. This paragraph
shall not be construed as Landlord’s consent for Tenant to hold over or to
extend this Lease.
  ARTICLE
THREE:  RENT AND SECURITY
DEPOSIT
  3.01.  Manner of Payment. All sums
payable under this Lease by Tenant (the “Rent”) shall be made to the Landlord at
the address designated in Section 1.02, unless another person is designated in
Section 1.10, or to any other party or address as Landlord may designate in
writing. Any and all payments made to a designated third party for the account
of the Landlord shall be deemed made to Landlord when received by the designated
third party. All sums payable by Tenant under this Lease, whether or not
expressly denominated as rent, shall constitute rent for the purposes of Section
502(b)(6) of the Bankruptcy Code and for all other purposes. The Base Rent is
the minimum rent for the Demised Premises and is subject to the terms and
conditions contained in this Lease, together with the attached Addenda, if
any.
  3.02.  Time of Payment. Upon
execution of this Lease, Tenant shall pay the installment of Base Rent for the
first month of the Lease Term. On or before the first day of the second month of
the Lease Term and of each month thereafter, the installment of Base Rent and
other sums due under this Lease shall be due and payable, in advance, without
off-set, deduction or prior demand. Tenant shall cause payments to be properly
mailed or otherwise delivered so as to be actually received by the party
identified in 1.10 above on or before the
   -2-
  due date
(and not merely deposited in the mail). If the Lease Term commences or ends on a
day other than the first or last day of a calendar month, the rent for any
fractional calendar month following the Commencement Date or preceding the end
of the Lease Term shall be prorated by days.
  3.03.  Late Charges. Tenant’s failure
to promptly pay sums due under this Lease may cause Landlord to incur
unanticipated costs. The exact amount of those costs is impractical or extremely
difficult to ascertain. The costs may include, but are not limited to,
processing and accounting charges and late charges which may be imposed on
Landlord by any ground lease or deed of trust encumbering the Demised Premises.
Payments due to Landlord under this Lease are not an extension of credit.
Therefore, if any payment under the Lease is not actually received on or before
the due date (and not merely deposited in the mail), Landlord may, at Landlord’s
option and to the extent allowed by applicable law, impose a Late Charge on any
late payments in an amount equal to one-half of one percent (0.5%) of the amount
of the past due payment (the “Late Charge”) per day for each day after the due
date, until the past due amount in Good Funds is received by Landlord, up to a
maximum of ten percent (10%) of the past due amount. A Late Charge may be
imposed only once on each past due payment. Any Late Charge will be in addition
to Landlord’s other remedies for nonpayment of rent. If any check tendered to
Landlord by Tenant under this Lease is dishonored for any reason, Tenant shall
pay to the party receiving payments under this Lease a fee of twenty-five
dollars ($25.00), plus (at Landlord’s option) a Late Charge as provided above
until good funds are received by Landlord. The parties agree that any Late
Charge and dishonored check fee represent a fair and reasonable estimate of the
costs Landlord will incur by reason of the late payment or dishonored check.
Payments received from Tenant shall be applied first to any Late Charges, second
to Base Rent, and last to other unpaid charges or reimbursements due to
Landlord. Notwithstanding the foregoing, Landlord will not impose a Late Charge
as to the first late payment in any calendar year, unless Tenant fails to pay
the late payment to Landlord within three (3) business days after the delivery
of a written notice from Landlord to Tenant demanding the late payment be paid.
However, Landlord may impose a Late Charge without advance notice to Tenant on
any subsequent late payment in the same calendar year.
  3.04.  Security Deposit. Upon
execution of this Lease, Tenant shall deposit with Landlord a cash Security
Deposit in the amount stated in Section 1.08. Landlord may apply all or part of
the Security Deposit to any unpaid Rent or other charges due from Tenant or to
cure any other defaults of Tenant. If Landlord uses any part of the Security
Deposit, Tenant shall restore the Security Deposit to its full amount within ten
(10) days after Landlord’s written demand. Tenant’s failure to restore the full
amount of the Security Deposit within the time specified shall be a default
under this Lease. No interest will be paid on the Security Deposit. Landlord
will not be required to keep the Security Deposit separate from its other
accounts and no trust relationship is created with respect to the Security
Deposit. Upon any termination of this Lease not resulting from Tenant’s default,
and after Tenant has vacated the Property and cleaned and restored the Demised
Premises in the manner required by this Lease, Landlord shall refund the unused
portion of the Security Deposit to Tenant within thirty days after the
Termination Date or thirty days after Tenant fully complies with the conditions
of termination as required in Section 7.05, whichever is later.
  3.05.  Good Funds Payments. If, for
any reason whatsoever, any two or more payments by check from Tenant to Landlord
for Rent are dishonored and returned unpaid, thereafter Landlord may, at
Landlord’s sole option, upon written notice to Tenant, require that all future
payments of Rent for the remaining term of the Lease must be made by cash,
certified check, cashier’s check, or money order (“Good Funds”) and that the
delivery of Tenant’s personal or corporate check will no longer constitute
payment of Rent under this Lease. Any acceptance by Landlord of a payment for
Rent by Tenant’s personal or corporate check thereafter shall not be construed
as a waiver of Landlord’s right to insist upon payment by Good Funds as set
forth herein.
  ARTICLE
FOUR:  TAXES
  4.01.  Payment by Landlord. Landlord
shall pay the real estate taxes on the Demised Premises during the Lease
Term.
  4.02.  Improvements by Tenant. If the
real estate taxes levied against the Demised Premises for the real estate tax
year in which the Lease Term commences are increased as a result of any
alterations, additions or improvements made by Tenant or by Landlord at the
request of Tenant, Tenant shall pay to Landlord upon demand the amount of the
increase and continue to pay the increase during the Lease Term. Landlord shall
use reasonable efforts to obtain from the tax assessor or assessors a written
statement of the total amount of the increase.
  4.03.  Joint Assessment. If the real
estate taxes are assessed against the Demised Premises jointly with other
property not constituting a part of the Demised Premises, the real estate taxes
applicable to the Demised Premises shall be equal to the amount bearing the same
proportion to the aggregate assessment that the total square feet of building
area in the Demised Premises bears to the total square feet of building area
included in the joint assessment,
  4.04.  Personal Property Taxes.
Tenant shall pay all taxes assessed against trade fixtures, furnishings,
equipment, inventory, products, or any other personal property belonging to
Tenant. Tenant shall use reasonable efforts to have Tenant’s property taxed
separately from the Demised Premises. If any of Tenant’s property is taxed with
the Demised Premises, Tenant shall pay the taxes for its property to Landlord
within fifteen (15) days after Tenant receives a written statement from Landlord
for the property taxes.
  ARTICLE
FIVE:  INSURANCE AND
INDEMNITY
  5.01.  Casualty Insurance. During the
Lease Term, Landlord shall maintain policies of insurance covering loss of or
damage to the Demised Premises in an amount or percentage of replacement value
as Landlord deems reasonable in relation to the age, location, type of
construction and physical condition of the Demised Premises and the availability
of insurance at reasonable rates. The policies shall provide protection against
all perils included within the classification of fire and extended coverage and
any other perils which Landlord deems necessary. Landlord may, at Landlord’s
option, obtain insurance coverage for Tenant’s fixtures, equipment or building
improvements installed by Tenant in or on the Demised Premises. Tenant shall, at
Tenant’s expense, maintain insurance on its fixtures, equipment and building
improvements as Tenant deems necessary to protect Tenant’s interest. Tenant
shall not do or permit to be done anything which invalidates any insurance
policies. Any casualty insurance carried by Landlord or Tenant shall be for the
sole benefit of the party carrying the insurance and under its sole
control.
   -3-
    5.02.  Increase in Premiums. Tenant
shall not permit any operation or activity to be conducted, or storage or use of
any volatile or any other materials, on or about the Demised Premises that would
cause suspension or cancellation of any fire and extended coverage insurance
policy carried by Landlord, or increase the premiums therefor, without the prior
written consent of Landlord. If Tenant’s use and occupancy of the Demised
Premises causes an increase in the premiums for any fire and extended coverage
insurance policy carried by Landlord, Tenant shall pay to Landlord, as
additional rental, the amount of the increase within ten days after demand and
presentation by Landlord of written evidence of the increase.
  5.03.  Liability Insurance. During
the Lease Term, Tenant shall maintain a commercial general liability policy of
insurance, at Tenant’s expense, insuring Landlord against liability arising out
of the ownership, use, occupancy, or maintenance of the Demised Premises. The
initial amounts of the insurance must be at least: $1,000,000 for Each
Occurrence, 52,000,000 General Aggregate per policy year, $100,000 Property
Damage for the Demised Premises, and $10,000 Medical Expense; plus a $5,000,000
commercial general liability umbrella; and shall be subject to periodic
increases based upon economic factors as Landlord may determine, in Landlord’s
discretion, exercised in good faith. However, the amounts of the insurance shall
not limit Tenant’s liability nor relieve Tenant of any obligation under this
Lease. The policies must contain cross-liability endorsements, if applicable,
and must insure Tenant’s performance of the indemnity provisions of Section
5.04. The policies must contain a provision which prohibits cancellation or
modification of the policy except upon thirty (30) days’ prior written notice to
Landlord. Tenant may discharge Tenant’s obligations under this Section by naming
Landlord as an additional insured under a comprehensive policy of commercial
general liability insurance maintained by Tenant and containing the coverage and
provisions described in this Section. Tenant shall deliver a copy of the policy
or certificate (or a renewal) to Landlord prior to the Commencement Date and
prior to the expiration of the policy during the Lease Term. If Tenant fails to
maintain the policy, Landlord may elect to maintain the insurance at Tenant’s
expense. Tenant may, at Tenant’s expense, maintain other liability insurance as
Tenant deems necessary.
  5.04.  Indemnity. Landlord shall not
be liable to Tenant or to Tenant’s employees, agents, invitees or visitors, or
to any other person, for any injury to persons or damage to property on or about
the Demised Premises or any adjacent area owned by Landlord caused by the
negligence or misconduct of Tenant, Tenant’s employees, subtenants, agents,
licensees or concessionaires or any other person entering the Demised Premises
under express or implied invitation of Tenant, or arising out of the use of the
Demised Premises by Tenant and the conduct of Tenant’s business, or arising out
of any breach or default by Tenant in the performance of Tenant’s obligations
under this Lease; and Tenant hereby agrees to indemnify and hold Landlord
harmless from any loss, expense or claims arising out of such damage or injury.
Tenant shall not be liable for any injury or damage caused by the negligence or
misconduct of Landlord, or Landlord’s employees or agents, and Landlord agrees
to indemnify and hold Tenant harmless from any loss, expense or damage arising
out of such damage or injury.
  5.05.  Comparative Negligence. Tenant
and Landlord hereby unconditionally and irrevocably agree to indemnify, defend
and hold each other and their officers, agents, directors, subsidiaries,
partners, employees, licensees and counsel harmless, to the extent of each
party’s comparative negligence, if any, from and against any and all loss,
liability, demand, damage, judgment, suit, claim, deficiency, interest, fee,
charge, cost or expense (including, without limitation, interest, court costs
and penalties, reasonable attorney’s fees and disbursements and amounts paid in
settlement, or liabilities resulting from any change in federal, state or local
law or regulation or interpretation of this Lease) of whatever nature, on a
comparative negligence basis, even when caused in part by Landlord’s or Tenant’s
negligence or the joint or concurring negligence of Landlord, Tenant, and any
other person or entity, which may result or to which Landlord or Tenant and/or
any of their officers, agents, directors, employees, subsidiaries, partners,
licensees and counsel may sustain, suffer, incur or become subject to in
connection with or arising in any way whatsoever out of the leasing, operation,
promotion, management, maintenance, repair, use or occupation of the Demised
Premises, or any other activity of whatever nature in connection therewith, or
arising out of or by reason of any investigation, litigation or other
proceedings brought or threatened, arising out of or based upon the leasing,
operation, promotion, management, maintenance, repair, use or occupancy of the
Demised Premises, or any other activity on the Demised Premises. This provision
shall survive the expiration or termination of this Lease.
  5.06.  Waiver of Subrogation. Each
party to this Lease waives any and every claim which arises or may arise in its
favor against the other party during the term of this Lease or any renewal or
extension of this Lease for any and all loss of, or damage to, any of its
property located within or upon, or constituting a part of, the Demised
Premises, which loss or damage is covered by valid and collectible fire and
extended coverage insurance policies, to the extent that such loss or damage is
recoverable under such insurance policies. These mutual waivers shall be in
addition to, and not in limitation or derogation of, any other waiver or release
contained in this Lease with respect to any loss of, or damage to, property of
the parties. Inasmuch as these mutual waivers will preclude the assignment of
any aforesaid claim by way of subrogation or otherwise to an insurance company
(or any other person), each party hereby agrees to give immediately to each
insurance company (which has issued to such party policies of fire and extended
coverage insurance) written notice of the terms of such mutual waivers, and to
cause such policies to be properly endorsed to prevent the invalidation of the
insurance coverage by reason of these waivers.
  ARTICLE
SIX:  USE OF DEMISED
PREMISES
  6.01.  Permitted Use. Tenant may use
the Demised Premises only for the Permitted Use stated in Section 1,09. The
parties to this Lease acknowledge that the current use of the Demised Premises
or the improvements located on the Demised Premises, or both, may or may not
conform to the city zoning ordinance with respect to the permitted use, height,
setback requirements, minimum parking requirements, coverage ratio of
improvements to total area of land, and other matters which may have a
significant economic impact upon the Tenant’s intended use of the Demised
Premises. Tenant acknowledges that Tenant has or will independently investigate
and verify to Tenant’s satisfaction the extent of any limitations or
non-conforming uses of the Demised Premises. Tenant further acknowledges that
Tenant is not relying upon any warranties or representations of Landlord or the
Brokers who are participating in the negotiation of this Lease concerning the
Permitted Use of the Demised Premises, or with respect to any uses of the
improvements located on the Demised Premises.
   -4-
    6.02.  Compliance with Law. Tenant
shall comply with all governmental laws, ordinances and regulations applicable
to the use of the Demised Premises, and shall promptly comply with all
governmental orders and directives for the correction, prevention and abatement
of nuisances and other activities in or upon, or connected with the Demised
Premises, all at Tenant’s sole expense, including any expense or cost resulting
from the construction or installation of fixtures and improvements or other
accommodations for handicapped or disabled persons required for compliance with
governmental laws and regulations, including but not limited to the Texas
Architectural Barriers Act (Article 9102 and any successor statute) and the
Americans with Disabilities Act (the “ADA”). To the extent any alterations to
the Demised Premises are required by the ADA or other applicable laws or
regulations, Tenant shall bear the expense of the alterations. To the extent any
alterations to areas of the Property outside the Demised Premises are required
by Title III of the ADA or other applicable laws or regulations (for “path of
travel” requirements or otherwise), Landlord shall bear the expense of the
alterations.
  6.03.  Certificate of Occupancy. If
required, Tenant shall obtain a Certificate of Occupancy from the municipality
in which the Property is located prior to occupancy of the Demised Premises.
Tenant may apply for a Certificate of Occupancy prior to the Commencement Date
and, if Tenant is unable to obtain a Certificate of Occupancy, Tenant shall have
the right to terminate this Lease by written notice to Landlord if Landlord or
Tenant is unwilling or unable to cure the defects which prevented the issuance
of the Certificate of Occupancy. Landlord may, but has no obligation to, cure
any such defects, including any repairs, installations, or replacements of any
items which are not presently existing on the Demised Premises, or which have
not been expressly agreed upon by Landlord in writing.
  6.04.  Signs. Without the prior
written consent of Landlord, Tenant may not place any signs, ornaments or other
objects upon the Demised Premises or on the Property, including but not limited
to the roof or exterior of the building or other improvements on the Property,
or paint or otherwise decorate or deface the exterior of the building. Any signs
installed by Tenant must conform with applicable laws, deed restrictions on the
Property, and other applicable requirements. Tenant must remove all signs,
decorations and ornaments at the expiration or termination of this Lease and
must repair any damage and close any holes caused by the removal.
  6.05.  Utility Services. Tenant shall
pay the cost of all utility services, including but not limited to initial
connection charges, all charges for gas, water, sewerage, storm water disposal,
communications and electricity used on the Demised Premises, and for replacing
all electric lights, lamps and tubes.
  6.06.  Landlord’s Access. Landlord
and Landlord’s agents shall have the right to, during normal business hours and
upon reasonable advance notice, and without unreasonably interfering with
Tenant’s business, enter the Demised Premises: (a) to inspect the general
condition and state of repair of the Demised Premises, (b) to make repairs
required or permitted under this Lease, (c) to show the Demised Premises or the
Property to any prospective tenant or purchaser, and (d) for any other
reasonable purpose. If Tenant changes the locks on the Demised Premises, Tenant
must provide Landlord with a copy of each separate key. During the final one
hundred fifty (150) days of the Lease Term, Landlord and Landlord’s agents may
erect and maintain on or about the Demised Premises signs advertising the
Demised Premises for lease or for sale.
  6.07.  Possession. If Tenant pays the
rent, properly maintains the Demised Premises, and complies with all other terms
of this Lease, Tenant may occupy and enjoy the Demised Premises for the full
Lease Term, subject to the provisions of this Lease.
  6.08.  Exemptions from Liability.
Landlord shall not be liable for any damage or injury to the persons, business
(or any loss of income), goods, inventory, furnishings, fixtures, equipment,
merchandise or other property of Tenant, Tenant’s employees, invitees, customers
or any other person in or about the Demised Premises, whether the damage or
injury is caused by or results from: (a) fire, steam, electricity, water, gas or
wind; (b) the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
or any other cause; (c) conditions arising on or about the Demised Premises or
upon other portions of any building of which the Demised Premises is a part, or
from other sources or places; or (d) any act or omission of any other tenant of
any building on the Property. Landlord shall not be liable for any damage or
injury even though the cause of or the means of repairing the damage or injury
are not accessible to Tenant. The provisions of this Section 6.08 shall not,
however, exempt Landlord from liability for Landlord’s gross negligence or
willful misconduct.
  ARTICLE
SEVEN:  PROPERTY CONDITION, MAINTENANCE,
REPAIRS AND ALTERATIONS
  7.01.  Property Condition. Except as
disclosed in writing by Landlord to Tenant contemporaneously with the execution
of this Lease, to the best of Landlord’s actual knowledge the Demised Premises
has no known latent structural defects, construction defects of a material
nature, and to the best of Landlord’s actual knowledge none of the improvements
has been constructed with materials known to be a potential health hazard to
occupants of the Demised Premises. Tenant acknowledges that neither the
Principal Broker nor any Cooperating Broker has made any warranty or
representation to Tenant with respect to the condition of the Demised Premises,
and that Tenant is relying exclusively upon Tenant’s own investigations and the
representations of Landlord, if any, with respect to the condition of the
Demised Premises. Landlord and Tenant agree to hold the Brokers harmless of and
from any and all damages, claims, costs and expenses of every kind and character
resulting from or related to Landlord’s furnishing to the Brokers any false,
incorrect or inaccurate information with respect to the Demised Premises, or
Landlord’s concealing any material information with respect to the condition of
the Demised Premises. Other than as expressly set forth in this Lease, Landlord
represents that on the Commencement Date (and for a period of thirty (30) days
thereafter) the building fixtures and equipment, plumbing and plumbing fixtures,
electrical and lighting system, any fire protection sprinkler system,
ventilating equipment, heating system, air conditioning equipment, roof,
skylights, doors, overhead doors, windows, dock levelers, elevators, and the
interior of the Demised Premises in general are in good operating condition.
Tenant shall have a period of thirty (30) days following the Commencement Date
in which to inspect the Demised Premises and to notify Landlord in writing of
any defects and maintenance, repairs or replacements required to the above named
equipment, fixtures, systems and interior. Within a reasonable period of time
after the timely receipt of any such written notice from Tenant, Landlord shall,
at Landlord’s expense, correct the defects and perform the maintenance, repairs
and replacements.
   -5-
    7.02.  Acceptance of Demised
Premises. Subject to the provisions in Section 7.01, Tenant acknowledges
that: (a) a full and complete inspection of the Demised Premises and adjacent
common areas has been made and Landlord has fully and adequately disclosed the
existence of any defects which would interfere with Tenant’s use of the Demised
Premises for their intended commercial purpose, and (b) as a result of such
inspection and disclosure, Tenant has taken possession of the Demised Premises
and accepts the Demised Premises in its “As Is” condition.
  7.03.  Maintenance and Repair. Except
as otherwise provided in this Lease, Landlord shall be under no obligation to
perform any repair, maintenance or management service in the Demised Premises or
adjacent common areas. Tenant shall be fully responsible, at its expense, for
all repair, maintenance and management services other than those which are
expressly assumed by Landlord.
  A.  Landlord’s
Obligation.
  (1)  Subject
to the provisions of Article Eight (Damage or Destruction) and Article Nine
(Condemnation) and except for damage caused by any act or omission of Tenant,
Landlord shall keep the roof, skylights, foundation, structural components and
the structural portions of exterior walls of the Demised Premises in good order,
condition and repair. Landlord shall not be obligated to maintain or repair
windows, doors, overhead doors, plate glass or the surfaces of walls, In
addition, Landlord shall not be obligated to make any repairs under this Section
until a reasonable time after receipt of written notice from Tenant of the need
for repairs. If any repairs are required to be made by Landlord, Tenant shall,
at Tenant’s sole cost and expense, promptly remove Tenant’s furnishings,
fixtures, inventory, equipment and other property, to the extent required to
enable Landlord to make repairs. Landlord’s liability under this Section shall
be limited to the cost of those repairs or corrections, Tenant waives the
benefit of any present or future law which might give Tenant the right to repair
the Demised Premises at Landlord’s expense or to terminate the Lease because of
the condition.
  (2)  All
repair, maintenance, management and other services to be performed by Landlord
or Landlord’s agents involve the exercise of professional judgment by service
providers, and Tenant expressly waives any claims for breach of warranty arising
from the performance of those services.
  B.  Landlord’s
Obligation.
  (1)  Subject
to the provisions of Section 7.01, Section 7.03.A, Article Eight (Damage or
Destruction) and Article Nine (Condemnation), Tenant shall, at all times, keep
all other portions of the Demised Premises in good order, condition and repair,
ordinary wear and tear excepted, including but not limited to maintenance,
repairs and all necessary replacements of the windows, plate glass, doors,
overhead doors, heating system, ventilating equipment, air conditioning
equipment, electrical and lighting systems, fire protection sprinkler system,
dock levelers, elevators, interior and exterior plumbing, the interior of the
Demised Premises in general, pest control and extermination, down spouts,
gutters, paving, railroad siding, care of landscaping and regular mowing of
grass, and including the exterior of the Demised Premises. In addition, Tenant
shall, at Tenant’s expense, repair any damage to any portion of the Property,
including the roof, skylights, foundation, or structural components and exterior
wails of the Demised Premises, caused by Tenant’s acts or omissions. If Tenant
fails to maintain and repair the Property as required by this Section, Landlord
may, on ten (10) days’ prior written notice, enter the Demised Premises and
perform the maintenance or repair on behalf of Tenant, except that no notice is
required in case of emergency, and Tenant shall reimburse Landlord immediately
upon demand for all costs incurred in performing the maintenance or repair, plus
a reasonable service charge.
  (2)  HVAC
Service. Landlord shall, at Landlord’s own cost and expense, enter into a
regularly scheduled preventative maintenance and service contract for all
refrigeration, heating, ventilating, and air conditioning systems and equipment
within the Demised Premises during the Lease Term. If Tenant fails to enter into
such a service contract acceptable to Landlord, Landlord may do so on Tenant’s
behalf and Tenant agrees to pay Landlord the cost and expense thereof, plus a
reasonable service charge, regularly upon demand.
  7.04.  Alterations, Additions and
Improvements. Tenant shall not create any openings in the roof or
exterior walls, or make any alterations, additions or improvements to the
Demised Premises without the prior written consent of Landlord. Consent for
non-structural alterations, additions or improvements shall not be unreasonably
withheld by Landlord. Tenant may erect or install trade fixtures, shelves, bins,
machinery, heating, ventilating and air conditioning equipment and, provided
that Tenant complies with all applicable governmental laws, ordinances, codes,
and regulations. At the expiration or termination of this Lease, Tenant shall,
subject to the restrictions of Section 7.05 below, have the right to remove
items installed by Tenant, provided Tenant is not in default at the time of the
removal and provided further that Tenant shall, at the time of removal of the
items, repair in a good and workmanlike manner any damage caused by the
installation or removal. Tenant shall pay for all costs incurred or arising out
of alterations, additions or improvements in or to the Demised Premises and
shall not permit any mechanic’s or materialman’s lien to be filed against the
Demised Premises or the Property. Upon request by Landlord, Tenant shall deliver
to Landlord proof of payment reasonably satisfactory to Landlord of all costs
incurred or arising out of any alterations, additions or
improvements.
  7.05.  Condition upon Termination.
Upon the expiration or termination of this Lease, Tenant shall surrender the
Demised Premises to Landlord broom clean and in the same condition as received,
except for ordinary wear and tear which Tenant is not otherwise obligated to
remedy under any provision of this Lease. Tenant shall not be obligated to
repair any damage which Landlord is required to repair under Article Seven
(Property Condition) or Article Eight (Damage or Destruction). In addition,
Landlord may require Tenant to remove any alterations, additions or improvements
(whether or not made with Landlord’s consent) prior to the expiration or
termination of this Lease and to restore the Demised Premises to its prior
condition, all at Tenant’s expense. All alterations, additions and improvements
which Landlord has not required Tenant to remove shall become Landlord’s
property and shall be surrendered to Landlord upon the expiration or termination
of this Lease. In no event, however, shall Tenant remove any of the following
materials or equipment without Landlord’s prior written consent: (i) electrical
wiring or power panels; (ii) lighting or lighting fixtures; (iii) wall
coverings, drapes, blinds or other window coverings; (iv) carpets or other floor
coverings; (v) heating, ventilating, or air conditioning equipment; (vi) fencing
or security gates; or (vii) any other fixtures, equipment or items which, if
removed, would affect the operation or the appearance of the
Property.
   -6-
    ARTICLE
EIGHT:  DAMAGE OR
DESTRUCTION
  8.01.  Notice. If any buildings or
other improvements situated on the Property are damaged or destroyed by fire,
flood, windstorm, tornado or other casualty, Tenant shall immediately give
written notice of the damage or destruction to Landlord.
  8.02.  Partial Damage. If the
building or other improvements situated on the Demised Premises are damaged by
fire, tornado, or other casualty but not to such an extent that rebuilding or
repairs cannot reasonably be completed within one hundred twenty (120) days from
the date Landlord receives written notification by Tenant of the occurrence of
the damage, this Lease shall not terminate, but Landlord shall proceed with
reasonable diligence to rebuild or repair the building and other improvements on
the Demised Premises (other than leasehold improvements made by Tenant or any
assignee, subtenant or other occupant of the Demised Premises) to substantially
the condition in which they existed prior to the damage. If the casualty occurs
during the final eighteen (18) months of the Lease Term, Landlord shall not be
required to rebuild or repair the damage unless Tenant exercises Tenant’s
renewal option (if any) within fifteen (15) days after the date of receipt by
Landlord of the notification of the occurrence of the damage. If Tenant does not
exercise its renewal option, or if there is no renewal option contained in this
Lease, Landlord may, at Landlord’s option, terminate this Lease by promptly
delivering a written termination notice to Tenant, in which event the Rent shall
be abated for the unexpired portion of the Lease Term, effective from the date
of receipt by Landlord of the written notification of the damage. To the extent
the Demised Premises cannot be occupied (in whole or in part) following the
casualty, the Rent payable under this Lease during the period in which the
Demised Premises cannot be fully occupied shall be adjusted
equitably.
  8.03.  Substantial or Total
Destruction. If the building or other improvements situated on the
Demised Premises are substantially or totally destroyed by fire, tornado, or
other casualty, or so damaged that rebuilding or repairs cannot reasonably be
completed within one hundred twenty (120) days from the date Landlord receives
written notification by Tenant of the occurrence of the damage, either Landlord
or Tenant may terminate this Lease by promptly delivering a written termination
notice to the other party, in which event the monthly installments of Rent shall
be abated for the unexpired portion of the Lease Term, effective from the date
of the damage or destruction. If neither party promptly terminates this Lease,
Landlord shall proceed with reasonable diligence to rebuild and repair the
building and other improvements (except that Tenant shall rebuild and repair
Tenant’s fixtures and improvements in the Demised Premises). To the extent the
Demised Premises cannot be occupied (in whole or in part) following the
casualty, the Rent payable under this Lease during the period in which the
Demised Premises cannot be fully occupied shall be adjusted
equitably.
  ARTICLE
NINE:  CONDEMNATION
  If,
during the Lease Term or any extension thereof, all or a substantial part of the
Demised Premises are taken for any public or quasi-public use under any
governmental law, ordinance or regulation or by right of eminent domain, or are
conveyed to the condemning authority under threat of condemnation, this Lease
shall terminate and the monthly installments of Rent shall be abated during the
unexpired portion of the Lease Term, effective from the date of the taking. If
less than a substantial part of the Demised Premises is taken for public or
quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain, or is conveyed to the condemning authority under threat
of condemnation, Landlord, at its option, may by written notice terminate this
Lease. If Landlord does not terminate this Lease, Landlord shall promptly, at
Landlord’s expense, restore and reconstruct the buildings and improvements
(other than leasehold improvements made by Tenant or any assignee, subtenant or
other occupant of the Demised Premises) situated on the Demised Premises in
order to make the same reasonably tenantable and suitable for the use for which
the Demised Premises is leased as defined in Section 6.01, The monthly
installments of Rent payable under this Lease during the unexpired portion of
the Lease Term shall be adjusted equitably. Landlord and Tenant shall each be
entitled to receive and retain such separate awards and portions of lump sum
awards as may be allocated to their respective interests in any condemnation
proceeding. The termination of this Lease shall not affect the rights of the
parties to such awards.
  ARTICLE
TEN:  ASSIGNMENT AND
SUBLETTING
  Tenant
shall not, without the prior written consent of Landlord, assign this Lease or
sublet the Demised Premises or any portion thereof. Any assignment or subletting
shall be expressly subject to all terms and provisions of this Lease, including
the provisions of Section 6.01 pertaining to the use of the Demised Premises. In
the event of any assignment or subletting, Tenant shall remain fully liable for
the full performance of all Tenant’s obligations under this Lease. Tenant shall
not assign its rights under this Lease or sublet the Demised Premises without
first obtaining a written agreement from the assignee or sublessee whereby the
assignee or sublessee agrees to assume the obligations of Tenant under this
Lease and to be bound by the terms of this Lease. If an event of default occurs
while the Demised Premises is assigned or sublet, Landlord may, at Landlord’s
option, in addition to any other remedies provided in this Lease or by law,
collect directly from the assignee or subtenant all rents becoming due under the
terms of the assignment or subletting and apply the rent against any sums due to
Landlord under this Lease. No direct collection by Landlord from any assignee or
subtenant will release Tenant from Tenant’s obligations under this
Lease.
  ARTICLE
ELEVEN:  DEFAULT AND
REMEDIES
   -7-
  Default. Each of the following
events is an event of default under this Lease:
  A.  Failure
of Tenant to pay any installment of the Rent or other sum payable to Landlord
under this Lease on the date that it is due and the continuance of that failure
for a period of five (5) days after Landlord delivers written notice of the
failure to Tenant. This clause shall not be construed to permit or allow a delay
in paying Rent beyond the due date and shall not affect Landlord’s right to
impose a Late Charge as permitted in Section 3.03.
  B.  Failure
of Tenant to comply with any term, condition or covenant of this Lease, other
than the payment of Rent or other sum of money, and the continuance of that
failure for a period of thirty (30) days after Landlord delivers written notice
of the failure to Tenant;
  C.  Failure
of Tenant or any guarantor of Tenant’s obligations under this Lease to pay its
debts as they become due or an admission in writing of inability to pay its
debts, or the making of a general assignment for the benefit of
creditors;
  D.  The
commencement by Tenant or any guarantor of Tenant’s obligations under this Lease
of any case, proceeding or other action seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property;
  E.  The
commencement of any case, proceeding or other action against Tenant or any
guarantor of Tenant’s obligations under this Lease seeking to have an order for
relief entered against it as debtor, or seeking reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property, and Tenant or any
guarantor: (i) fails to obtain a dismissal of such case, proceeding, or other
action within sixty (60) days of its commencement; or (ii) converts the case
from one chapter of the Federal Bankruptcy Code to another chapter; or (iii) is
the subject of an order of relief which is not fully stayed within seven (7)
business days after the entry thereof; and
  F.  Vacancy
or abandonment by Tenant of any substantial portion of the Demised Premises or
cessation of the use of the Demised Premises for the purpose
leased.
  11.02.  Remedies. Upon the occurrence
of any of the events of default listed in Section 11.01, Landlord shall have the
option to pursue any one or more of the following remedies without any prior
notice or demand.
  A.  Terminate
this Lease, in which event Tenant shall immediately surrender the Demised
Premises to Landlord. If Tenant fails to so surrender the Demised Premises,
Landlord may, without prejudice to any other remedy which it may have for
possession of the Demised Premises or Rent in arrears, enter upon and take
possession of the Demised Premises and expel or remove Tenant and any other
person who may be occupying the Demised Premises or any part thereof, by force
if necessary, without being liable for prosecution or any claim for damages.
Tenant shall pay to Landlord on demand the amount of all loss and damage which
Landlord may suffer by reason of the termination, whether through inability to
re-let the Demised Premises on satisfactory terms or otherwise.
  B.  Enter
upon and take possession of the Demised Premises, by force if necessary, without
terminating this Lease and without being liable for prosecution or for any claim
for damages, and expel or remove Tenant and any other person who may be
occupying the Demised Premises or any part thereof. Landlord may re-let the
Demised Premises and receive the rent therefor. Tenant agrees to pay to Landlord
monthly or on demand from time to time any deficiency that may arise by reason
of any such re-letting. In determining the amount of the deficiency, the
professional service fees, attorneys’ fees, court costs, remodeling expenses and
other costs of re-letting shall be subtracted from the amount of rent received
under the re-letting.
  C.  Enter
upon the Demised Premises, by force if necessary, without terminating this Lease
and without being liable for prosecution or for any claim for damages, and do
whatever Tenant is obligated to do under the terms of this Lease. Tenant agrees
to pay Landlord on demand for expenses which Landlord may incur in thus
effecting compliance with Tenant’s obligations under this Lease, together with
interest thereon at the rate of twelve percent (12%) per annum from the date
expended until paid. Landlord shall not be liable for any damages resulting to
Tenant from such action, whether caused by negligence of Landlord or
otherwise.
  D.  Accelerate
and declare the Rent for the entire Lease Term, and all other amounts due under
this Lease, at once due and payable, and proceed by attachment, suit or
otherwise, to collect all amounts in the same manner as if all such amounts due
or to become due during the entire Lease Term were payable in advance by the
terms of this Lease, and neither the enforcement or collection by Landlord of
such amounts nor the payment by Tenant of such amounts shall constitute a waiver
by Landlord of any breach, existing or in the future, of any of the terms or
provisions of this Lease by Tenant or a waiver of any rights or remedies which
the Landlord may have with respect to any such breach.
  E.  In
addition to the foregoing remedies, Landlord shall have the right to change or
modify the locks on the Demised Premises in the event Tenant fails to pay the
monthly installment of Rent when due. Landlord shall not be obligated to provide
another key to Tenant or allow Tenant to regain entry to the Demises Premises
unless and until Tenant pays Landlord all Rent which is delinquent. Tenant
agrees that Landlord shall not be liable for any damages resulting to the Tenant
from the lockout. At such time that Landlord changes or modifies the lock,
Landlord shall post a “Notice of Change of Locks” on the front of the Demised
Premises. Such Notice shall state that:
  (1)  Tenant’s
monthly installment of Rent is delinquent, and therefore, under authority of
Section 1 I .02.E of Tenant’s Lease, the Landlord has exercised its contractual
right to change or modify Tenant’s door locks;
   -8-
  The
Notice has been posted on the Tenant’s front door by a representative of
Landlord and Tenant should make arrangements with the representative to pay the
delinquent installments of Rent when Tenant picks up the key; and
  (2)  The
failure of Tenant to comply with the provisions of the Lease and the Notice
and/or tampering with or changing the door lock(s) by Tenant may subject Tenant
to legal liability.
  F.  No
re-entry or taking possession of the Demised Premises by Landlord shall be
construed as an election to terminate this Lease, unless a written notice of
that intention is given to Tenant. Notwithstanding any such re-letting or
re-entry or taking possession, Landlord may, at any time thereafter, elect to
terminate this Lease for a previous default. Pursuit of any of the foregoing
remedies shall not preclude pursuit of any other remedies provided by law, nor
shall pursuit of any remedy provided in this Lease constitute a forfeiture or
waiver of any monthly installment of Rent due to Landlord under this Lease or of
any damages accruing to Landlord by reason of the violation of any of the terms,
provisions and covenants contained in this Lease. Failure of Landlord to declare
any default immediately upon its occurrence, or failure to enforce one or more
of Landlord’s remedies, or forbearance by Landlord to enforce one or more of
Landlord’s remedies upon an event of default shall not be deemed or construed to
constitute a waiver of default or waiver of any violation or breach of the terms
of this Lease. Pursuit of any one of the above remedies shall not preclude
pursuit by Landlord of any of the other remedies provided in this Lease. The
loss or damage that Landlord may suffer by reason of termination of this Lease
or the deficiency from any re-letting as provided for above shall include the
expense of repossession and any repairs or remodeling undertaken by Landlord
following possession. If Landlord terminates this Lease at any time for any
default, in addition to other Landlord’s remedies, Landlord may recover from
Tenant all damages Landlord may incur by reason of the default, including the
cost of recovering the Demised Premises and the Rent then remaining
unpaid.
  11.03.  Notice of Default. Tenant
shall give written notice of any failure by Landlord to perform any of
Landlord’s obligations under this Lease to Landlord and to any ground lessor,
mortgagee or beneficiary under any deed of trust encumbering the Demised
Premises whose name and address have been furnished to Tenant in writing.
Landlord shall not be in default under this Lease unless Landlord (or such
ground lessor, mortgagee or beneficiary) fails to cure the nonperformance within
thirty (30) days after receipt of Tenant’s notice. However, if the
nonperformance reasonably requires more than thirty (30) days to cure, Landlord
shall not be in default if the cure is commenced within he 30-day period and is
thereafter diligently pursued to completion.
  11.04.  Limitation of Landlord’s
Liability. As used in this Lease, the term “Landlord” means only the
current owner or owners of the fee title to the Demised Premises or the
leasehold estate under a ground lease of the Demised Premises at the time in
question. Each Landlord is obligated to perform the obligations of Landlord
under this Lease only during the time such Landlord owns such interest or title.
Any Landlord who transfers its title or interest is relieved of all liability
with respect to the obligations of Landlord under this Lease accruing on or
after the date of transfer, and Tenant agrees to recognize the transferee as
Landlord under this Lease. However, each Landlord shall deliver to its
transferee the Security Deposit held by Landlord if such Security Deposit has
not then been applied under the terms of this Lease.
  ARTICLE
TWELVE:  LANDLORD’S CONTRACTUAL
LIEN
  In
addition to the statutory Landlord’s lien, Tenant hereby grants to Landlord a
security interest to secure payment of all Rent and other sums of money becoming
due under this Lease from Tenant, upon all inventory, goods, wares, equipment,
fixtures, furniture and all other personal property of Tenant situated in or
upon the Demised Premises, together with the proceeds from the sale or lease
thereof. Tenant may not remove such property without the consent of Landlord
until all Rent in arrears and other sums of money then due to Landlord under
this Lease have first been paid and discharged. Upon the occurrence of an event
of default, Landlord may, in addition to any other remedies provided in this
Lease or by law, enter upon the Demised Premises and take possession of any and
all goods, wares, equipment, fixtures, furniture and other personal property of
Tenant situated on the Demised Premises without liability for trespass or
conversion, and sell the property at public or private sale, with or without
having the property at the sale, after giving Tenant reasonable notice of the
time and place of any such sale. Unless otherwise required by law, notice to
Tenant of the sale shall be deemed sufficient if given in the manner prescribed
in this Lease at least ten (10) days before the time of the sale. Any public
sale made under this Article shall be deemed to have been conducted in a
commercially reasonable manner if held on the Demised Premises or where the
property is located, after the time, place and method of sale and a general
description of the types of property to be sold have been advertised in a daily
newspaper published in the county where the Demised Premises is located for five
(5) consecutive days before the date of the sale. Landlord or its assigns may
purchase at a public sale and, unless prohibited by law, at a private sale. The
proceeds from any disposition dealt with in this Article, less any and all
expenses connected with the taking of possession, holding and selling of the
property (including reasonable attorneys’ fees and legal expenses), shall be
applied as a credit against the indebtedness secured by the security interest
granted herein. Any surplus shall be paid to Tenant or as otherwise required by
law, and Tenant shall promptly pay any deficiencies. Upon request by Landlord,
Tenant agrees to execute and deliver to Landlord a Financing Statement in a form
sufficient to perfect the security interest of Landlord in the aforementioned
property and proceeds thereof under the provisions of the Business and Commerce
Code in force in the State of Texas. The statutory lien for rent is expressly
reserved; the security interest herein granted is in addition and supplementary
thereto. Provided Tenant is not in default under any of the terms of this Lease,
upon written request by Tenant Landlord shall deliver a written subordination of
Landlord’s statutory and contractual liens to any liens and security interests
securing any institutional third party financing of Tenant. Landlord shall not
unreasonably withhold or delay the delivery of Landlord’s written
subordination.
  ARTICLE
THIRTEEN:  PROTECTION OF
LENDERS
  13.01.  Subordination and Attornment.
Landlord shall have the right to subordinate this Lease to any future ground
Lease, deed of trust or mortgage encumbering the Demised Premises, and advances
made on the security thereof and any renewals, modifications, consolidations,
replacements or extensions thereof, whenever made or recorded. Landlord’s right
to obtain such a subordination is subject to Landlord’s providing Tenant with a
written Subordination, Non-disturbance and Attomment Agreement from the ground
lessor, beneficiary or mortgagee wherein Tenant’s right to peaceable possession
of the Demised Premises during the Lease Term shall not be disturbed if Tenant
pays the Rent and performs all of Tenant’s obligations under this Lease and is
not otherwise in default, in which case Tenant shall attorn to the transferee of
or successor to Landlord’s interest in the Demised Premises and recognize the
transferee or successor as Landlord under this Lease. If any ground lessor,
beneficiary or mortgagee elects to have this Lease superior to the lien of its
ground lease, deed of trust or mortgage and gives Tenant written notice thereof,
this Lease shall be deemed superior to the ground lease, deed of trust or
mortgage whether this Lease is dated prior or subsequent to the date of the
ground lease, deed of trust or mortgage or the date of recording thereof.
Tenants rights under this Lease, unless specifically modified at the time this
Lease is executed, are subordinated to any existing ground lease, deed of trust
or mortgage encumbering the Demised Premises.
   -9-
    13.02.  Signing of Documents. Tenant
shall sign and deliver any instruments or documents necessary or appropriate to
evidence any attornment or subordination or any agreement to attorn or
subordinate. If Tenant fails to do so within ten (10) days after written
request, Tenant hereby makes, constitutes and irrevocably appoints Landlord, or
any transferee or successor of Landlord, the attorney-in-fact of Tenant to
execute and deliver the attornment or subordination document or
agreement.
  13.03.  Estoppel
Certificates.
  A.  Upon
Landlord’s written request, Tenant shall execute and deliver to Landlord a
written statement certifying: (1) whether Tenant is an assignee or subtenant;
(2) the expiration date of the Lease; (3) the number of renewal options under
the lease and the total period of time covered by the renewal option(s); (4)
that none of the terms or provisions of the Lease have been changed since the
original execution of the Lease, except as shown on attached amendments or
modifications; (5) that no default by Landlord exists under the terms of the
Lease (or if Landlord is claimed to be in default, stating why); (6) that the
Tenant has no claim against the landlord under the Lease and has no defense or
right of offset against collection of rent or other charges accruing under the
Lease; (7) the amount and date of the last payment of Rent; (8) the amount of
any security deposits and other deposits, if any; and (9) the identity and
address of any guarantor of the lease. Tenant shall deliver the statement to
Landlord within ten (10) days after Landlord’s request. Landlord may forward any
such statement to any prospective purchaser or lender of the Demised Premises.
The purchaser or lender may rely conclusively upon the statement as true and
correct.
  B.  If Tenant
does not deliver the written statement to Landlord within the ten (10) day
period, Landlord, and any prospective purchaser or lender, may conclusively
presume and rely upon the following facts: (1) that the terms and provisions of
this Lease have not been changed except as otherwise represented by Landlord;
(2) that this Lease has not been canceled or terminated except as otherwise
represented by Landlord; (3) that not more than one monthly installment of Base
Rent and other charges have been paid in advance; (4) there are no claims
against Landlord nor any defenses or rights of offset against collection of Rent
or other charges; and (5) that Landlord is not in default under this Lease. In
such event, Tenant shall be estopped from denying the truth of the presumed
facts.
  13.04.  Tenant’s Financial Condition.
Within ten (10) days after written request from Landlord, Tenant shall deliver
to Landlord financial statements as are reasonably required by Landlord to
verify the net worth of Tenant, or any assignee, subtenant, or guarantor of
Tenant. In addition, Tenant shall deliver to any lender designated by Landlord
any financial statements required by the lender to facilitate the financing or
refinancing of the Demised Premises. Tenant represents and warrants to Landlord
that each financial statement is a true, complete, and accurate statement as of
the date of the statement. All financial statements shall be confidential and
shall be used only for the purposes set forth in this Lease.
  ARTICLE
FOURTEEN:  ENVIRONMENTAL REPRESENTATIONS AND
INDEMNITY
  14.01.  Tenant’s Compliance with
Environmental Laws. Tenant, at Tenant’s expense, shall comply with all
laws, rules, orders, ordinances, directions, regulations and requirements of
Federal, State, county and municipal authorities pertaining to Tenant’s use of
the Property and with the recorded covenants, conditions and restrictions,
regardless of when they become effective, including, without limitation, all
applicable Federal, State and local laws, regulations or ordinances pertaining
to air and water quality, Hazardous Materials (as defined in Section 14.05),
waste disposal, air emissions and other environmental matters, all zoning and
other land use matters, and with any direction of any public officer or
officers, pursuant to law, which impose any duty upon Landlord or Tenant with
respect to the use or occupancy of the Property.
  14.02.  Tenant’s Indemnification.
Tenant shall not cause or permit any Hazardous Materials to be brought upon,
kept or used in or about the Property by Tenant, its agents, employees,
contractors or invitees without the prior written consent of Landlord. If Tenant
breaches the obligations stated in the preceding Section or sentence, or if the
presence of Hazardous Materials on the Property caused or permitted by Tenant
results in contamination of the Property or any other property, or if
contamination of the Property or any other property by Hazardous Materials
otherwise occurs for which Tenant is legally liable to Landlord for damage
resulting therefrom, then Tenant shall indemnify, defend and hold Landlord
harmless from any and all claims, judgments, damages, penalties, fines, costs,
liabilities or losses (including, without limitation, diminution in value of the
Property, damages for the loss or restriction on use of rentable or unusable
space or of any amenity or appurtenance of the Property, damages arising from
any adverse impact on marketing of building space or land area, sums paid in
settlement of claims, reasonable attorneys’ fees, court costs, consultant fees
and expert fees) which arise during or after the Lease Term as a result of the
contamination. This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any clean-up, remedial work, removal or restoration work required
by any Federal, State or local government agency because of Hazardous Materials
present in the soil or ground water on or under the Property. Without limiting
the foregoing, if the presence of any Hazardous Materials on the Property (or
any other property) caused or permitted by Tenant results in any contamination
of the Property, Tenant shall promptly take all actions at Tenant’s sole expense
as are necessary to return the Property to the condition existing prior to the
introduction of any such Hazardous Materials, provided
that Landlord’s approval of such actions is first obtained. The foregoing
indemnity shall survive the expiration or termination of this
Lease.
   -10-
   14.03.  Landlord’s Representations and
Warranties. Landlord represents and warrants, to the best of Landlord’s
actual knowledge, that: (i) any handling, transportation, storage, treatment or
usage of Hazardous Materials that has occurred on the Property to date has been
in compliance with all applicable Federal, State, and local laws, regulations
and ordinances; and (ii) no leak, spill, release, discharge, emission or
disposal of Hazardous Materials has occurred on the Property to date and that
the soil or groundwater on or under the Property is free of Hazardous Materials
as of the Commencement Date, unless expressly disclosed by Landlord to Tenant in
writing.
  14.04.  Landlord’s Indemnification.
Landlord hereby indemnifies, defends and holds Tenant harmless from any claims,
judgments, damages, penalties, fines, costs, liabilities, (including sums paid
in settlements of claims) or loss, including, without limitation, attorneys’
fees, court costs, consultant fees, and expert fees, which arise during or after
the term of this Lease from or in connection with the presence or suspected
presence of Hazardous Materials in the soil or groundwater on or under the
Property, unless the Hazardous Material is released by Tenant or is present
solely as a result of the negligence or willful conduct of Tenant. Without
limiting the generality of the foregoing, the indemnification provided by this
Section 14.04 shall specifically cover costs incurred in connection with any
investigation of site conditions or any clean-up, remedial work, removal or
restoration work required by any Federal, State or local governmental
authority.
  14.05.  Definition. For purposes of
this Lease, the term “Hazardous Materials” means any one or more pollutant,
toxic substance, hazardous waste, hazardous material, hazardous substance,
solvent or oil as defined in or pursuant to the Resource Conservation and
Recovery Act, as amended, the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, the Federal Clean Water Act, as amended, or any
other Federal, State or local environmental law, regulation, ordinance, or rule,
whether existing as of the date of this Lease or subsequently
enacted.
  14.06.  Survival. The representations
and indemnities contained in this Article 14 shall survive the expiration or
termination of this Lease.
  ARTICLE
FIFTEEN:  PROFESSIONAL SERVICE
FEES
  15.01.  Amount and Manner of Payment.
Professional service fees due to the Principal Broker shall be calculated and
paid as follows:
  A.  Landlord
agrees to pay to the Principal Broker a monthly professional service fee (the
“Fee”) for negotiating this Lease, plus any applicable sales taxes, equal to the
percentage stated in Section 1.13.A of each monthly Rent payment at the time the
payment is due.
  B.  Landlord
agrees to pay to the Principal Broker a lump sum professional service fee (the
“Fee”) for negotiating this Lease, plus any applicable sales taxes, equal to the
percentage stated in Section 1.13.A of the total Rent to become due to Landlord
during the Lease Term. The Fee shall be paid to the Principal Broker (i)
one-half on the date of final execution of this Lease, and (ii) the balance on
the Commencement Date of this Lease.
  15.02.  Other Brokers. Both Landlord
and Tenant represent and warrant to the other party that they have had no
dealings with any person, firm or agent in the negotiation of this Lease other
than the Broker(s) named in this Lease, and no other broker, agent, person, firm
or entity other than the Broker(s) is entitled to any commission or fee in
connection with this Lease.
  15.03.  Payments on Renewal, Expansion,
Extension or New Lease. If during the Lease Term (as may be renewed or
extended) or within ten (10) years from the Commencement Date, whichever is the
greater period of time, Tenant, Tenant’s successors or assigns: (a) exercises
any right or option to renew or extend the Lease Term (whether contained in this
Lease or in any amendment, supplement or other agreement pertaining to this
Lease) or enters into a new lease or rental agreement with Landlord covering the
Demised Premises; or (b) enters into any lease, extension, renewal, expansion or
other rental agreement with Landlord demising to Tenant any premises located on
or constituting all or part of any tract or parcel of real property adjoining,
adjacent to or contiguous to the Demised Premises and owned by Landlord on the
commencement Date, Landlord shall pay to the Principal Broker an additional Fee
covering the full period of the renewal, extension, lease, expansion or other
rental agreement which shall be due on the date of exercise of a renewal option,
or the date of execution in the case of an extension, new lease, expansion or
other agreement. The additional Fee shall be computed under Section 15.01.A or
15.0I.B above (whichever has been made applicable under Section 1.13), as if a
new lease had been made for such period of time.
  15.04.  Payments on Sale. If Tenant,
Tenant’s successors or assigns, purchases the Demised Premises at any time,
pursuant to a purchase option contained in this Lease (or any lease, extension,
renewal, expansion or other rental agreement) or, in the absence of any purchase
option or exercise thereof, purchases the Demised Premises within ten (10) years
from the Commencement Date, Landlord shall pay to the Principal Broker a
Professional Service Fee in cash equal to the percentage stated in Section
I.13.B of the purchase price, payable at closing. Upon closing of a sale to
Tenant, all monthly lease Fees shall terminate upon payment of the Professional
Service Fee on the sale.
  15.05.  Landlord’s Liability. If this
Lease is negotiated by Principal Broker in cooperation with another broker,
Landlord shall be liable for payment of all Professional Service Fees to
Principal Broker only, whereupon Landlord shall be protected from any claims
from a Cooperating Broker. The Principal Broker may pay a portion of the Fee to
any Cooperating Broker pursuant to a separate agreement between the
Brokers.
   -11-
  Joint Liability of Tenant. If
Tenant enters into any new lease, extension, renewal, expansion, or other
agreement to rent, occupy, or purchase any property described in Section 15.03
within the time specified in that Section, the agreement must be handled by the
Principal Broker, otherwise Tenant shall be jointly and severally liable with
Landlord for any payments due or to become due to the Principal
Broker.
  15.06.  Assumption on Sale. In the
event of a sale of the Demised Premises or the assignment of this Lease by
Landlord, Landlord shall obtain from the purchaser or assignee an Assumption
Agreement in recordable form whereby the purchaser or assignee agrees to pay the
Principal Broker all Professional Service Fees payable under this Lease and
shall deliver a fully executed original counterpart thereof to Principal Broker
on the date of closing of the sale of the Demised Premises or assignment of this
Lease. Landlord shall be released from personal liability for subsequent
payments only upon the delivery to Principal Broker of that counterpart of the
Assumption Agreement.
  15.07.  Termination. The termination
of this Lease by the mutual agreement of Landlord and Tenant shall not affect
the right of the Principal Broker to continue to receive the Fees agreed to be
paid under this Lease, just as if Tenant had continued to occupy the Demised
Premises and had paid the Rent during the entire Lease Term. Termination of this
Lease under Article Eight or Article Nine shall not terminate the Principal
Broker’s right to collect the Fees.
  15.08.  Intermediary
Relationship.
  A.  If either
Principal Broker and/or Cooperating Broker (together, the “Brokers”) has
indicated in Sections 1.11 and 1.12 that they are acting as an intermediary,
then Landlord and Tenant hereby authorize the applicable Broker(s) to act as an
intermediary between Landlord and Tenant in connection with this Lease, and
acknowledge that the source of any expected compensation to the Brokers will be
Landlord, and the Brokers may also be paid a fee by the Tenant. A real estate
broker who acts as an intermediary between parties in a
transaction:
  (1)  may not
disclose to Tenant that Landlord will accept a rent less than the asking rent
unless otherwise instructed in a separate writing by Landlord;
  (2)  may not
disclose to Landlord that Tenant will pay a rent greater than the rental
submitted in a written offer to Landlord unless otherwise instructed in a
separate writing by Tenant;
  (3)  may not
disclose any confidential information, or any information a party specifically
instructs the real estate broker in writing not to disclose, unless otherwise
instructed in a separate writing by the respective party or required to disclose
such information by the Texas Real Estate License Act or a court order or if the
information materially relates to the condition of the property;
  (4)  shall
treat all parties to the transaction honestly; and
  (5)  shall
comply with the Texas Real Estate License Act.
  B.  Appointments.
Broker is authorized to appoint, by providing written notice to the parties, one
or more licensees associated with Broker to communicate with and carry out
instructions of one party, and one or more other licensees associated with
Broker to communicate with and carry out instructions of the other party or
parties. During negotiations, an appointed licensee may provide opinions and
advice to the party to whom the licensee is appointed.
  ARTICLE
SIXTEEN:  MISCELLANEOUS
  16.01.  Disclosure. Landlord and
Tenant understand that a real estate broker is qualified to advise on matters
concerning real estate and is not expert in matters of law, tax, financing,
surveying, hazardous materials, engineering, construction, safety, zoning, land
planning, architecture or the ADA. The Brokers hereby advise Tenant to seek
expert assistance on such matters. Brokers do not investigate a property’s
compliance with building codes, governmental ordinances, statutes and laws that
relate to the use or condition of a property and its construction, or that
relate to its acquisition. If Brokers provide names of consultants or sources
for advice or assistance, Tenant acknowledges that the Brokers do not warrant
the services of the advisors or their products and cannot warrant the
suitability of property to be acquired or leased. Furthermore, the Brokers do
not warrant that the Landlord will disclose any or all property defects,
although the Brokers will disclose to Tenant any actual knowledge possessed by
Brokers regarding defects of the Demised Premises and the Property. In this
regard, Tenant agrees to make all necessary and appropriate inquiries and to use
diligence in investigating the Demised Premises and the Property before
consummating this Lease. Landlord and Tenant hereby agree to indemnify, defend,
and hold the Brokers harmless of and from any and all liabilities, claims,
debts, damages, costs, or expenses, including but not limited to reasonable
attorneys’ fees and court costs, related to or arising out of or in any way
connected to representations concerning matters properly the subject of advice
by experts. In addition, to the extent permitted by applicable law, the Brokers’
liability for errors or omissions, negligence, or otherwise, is limited to the
return of the Fee, if any, paid to the Brokers pursuant to this
Lease.
  ARTICLE
SEVENTEEN:  ADDITIONAL
PROVISIONS
  LANDLORD
                
                Two Eagle Park,
      Ltd.
                
                By
      [Signature]:
                Name:
      Darwin German
      II
                Title:
      Partner
                Date
      of Execution: 1-7-04
                
                PRINCIPAL
      BROKER
                
                By
      [Signature]:
                Name:
                Title:
              TENANT
                
                CDS/eTelcharge.com,
      Inc.
                
                By
      [Signature]:
      /S/ Carl O.
      Sherman
                Name:
      Carl O.
      Sherman
                Title:
      President
                Date
      of Execution: 1-6-04
                
                COOPERATING
      BROKER
                
                By
      [Signature]:
                Name:
      Broker
                Title:
 
 Copyright
Notice: This form is provided for the use of members of the North Texas
Commercial Association of Realtors. Inc. Permission is hereby granted to make
limited copies of this form for use in a particular Texas real estate
transaction. Contact the NTCAR office to confirm that you are using the current
version of this form.
  
   -12-
  4/Way
Investments, Inc.
  North
Texas Commercial Association Of Realtors®
  ADDENDUM
A TO LEASE
  EXPENDE
REIMBURSEMENT
  Demised
Premises/Address:                                         1636 N. Hampton Rd., Suite
270, DeSoto, Texas
75115
  [Check
all boxes which apply. Boxes not checked do not apply to this
Lease.]
  A.  Expense
Reimbursement. Tenant shall pay the Landlord as additional Rent a portion of the
following expenses (collectively the ‘Reimbursement’) which are incurred by or
assessed against the Demised Premises (check all that are to
apply!:
  xAd Valorem
Taxes;
 xInsurance Premiums;
 xCommon Area Maintenance (CAM) Expenses;
 xOperating Expenses;
 oRoof and Structural
Maintenance Expenses;
  B.  Expense
Reimbursement Limitations. The amount of Tenant’s Reimbursement shall be
determined by one of the following methods as described in Section 4 below
(check only one]:
  xBase Year/Expense Stop Adjustment;
 oPro Rata Adjustment;
 oFixed Amount Adjustment;
 oNet Lease Provisions.
  C.  Expense
Reimbursement Payments. Tenant agrees to pay any end-of-year lump sum
Reimbursement within thirty (30) days after receiving an invoice from Landlord.
Any time during the Lease Term (or any renewals or extensions) Landlord may
direct Tenant to pay monthly an estimated portion of the projected future
Reimbursement amount. Any such payment directed by Landlord shall be due and
payable monthly on the same day that the Base Rent is due. Landlord may, at
Landlord’s option and to the extent allowed by applicable law, impose a Late
Charge on any Reimbursement payments which are not actually received by Landlord
on or before the due date, in the amount and manner set forth in Section 3.03 of
this Lease. Any Reimbursement relating to partial calendar years shall be
prorated accordingly. Tenant’s Pro Rata Share of such Reimbursements shall be
based on the square footage of useable area contained in the Demised Premises in
proportion to the square footage of useable building area of the Property.
Tenant may audit or examine those items of expense in Landlords records which
relate to Tenant’s obligations under this Lease. Landlord shall promptly refund
to Tenant any overpayment which is established by an audit or examination. If
the audit or examination reveals an error of more than five percent (5%) over
the figures billed to Tenant, Landlord shall pay the reasonable cost of the
audit or examination.
  D.  Definitions.
  1.  Ad
Valorem Taxes. All general real estate taxes, general and special assessments,
parking surcharges, rent taxes, and other similar governmental charges levied
against the Property for each calendar year.
  2.  Insurance
Premiums. MI Landlord’s insurance premiums attributable to the Property,
including but not limited to insurance for fire, casualty, general liability,
property damage, medical expenses, and extended coverage, and loss of rents
coverage for six months’ Rent.
  3.  Common
Area Maintenance Expenses. Common area maintenance expenses (“CAM’) means all
costs of maintenance, inspection and repairs of the common areas of the
Property, including but not limited to those costs for security, lighting,
painting, cleaning, decorations and fixtures, utilities, ice and snow removal,
trash disposal, project signs, minor roof defects, pest control, project
promotional expenses, property owners’ association dues, wages and salary costs
of maintenance personnel, and other expenses benefiting all the Property which
may be incurred by Landlord, in its discretion, including sales taxes and a
reasonable service charge for the administration thereof. The “common area” is
defined as that part of the Property intended for the collective use of all
tenants including, but not limited to, the parking areas, driveways, loading
areas, landscaping, gutters and downspouts, plumbing, electrical systems, roof,
exterior walls, sidewalks, malls, promenades (enclosed or otherwise), meeting
rooms, doors, windows, corridors and public rest rooms. CAM does not include
depreciation on Landlord’s original investment, cost of tenant improvements,
real estate brokers’ fees, Landlord’s management office and overhead expenses,
or interest or depreciation on capital investments.
  4.  Operating
Expenses. All costs of ownership, building management, maintenance, repairs and
operation of the Property, including but not limited to taxes, insurance, CAM,
reasonable management fees, wages and salary costs of building management
personnel, overhead and operational costs of a management office, janitorial,
utilities, and professional services such as accounting and legal fees.
Operating Expenses do not include the capital cost of management office
equipment and furnishings, depreciation on Landlord’s original investment, roof
and structural maintenance, the cost of tenant improvements, real estate
brokers’ fees, advertising, or interest or depreciation on capital
investments.
   -13-
    5.  Roof and
Structural Maintenance Expenses. All costs of maintenance, repair and
replacement of the roof, roof deck, tlashings, skylights, foundation, floor
slabs, structural components and the structural soundness of the building in
general.
  6.  Base
Year/Expense Stop Adjustment. Tenant shall pay to Landlord as additional rent
Tenant’s Pro Rata Share of increases in Landlord’s Ad Valorem Taxes, Insurance
Premiums, CAM Expenses, Operating Expenses, and/or Roof and Structural
Maintenance Expenses, whichever are applicable, for the Property for any
calendar year during the Lease Term or during any Extension of this Lease, over
[cheek only oneJ:
  xa.  Such
amounts paid by Landlord for the Base Year 2003, or
 ob.  $N/A per square foot
of floor area (as set forth in Section 1.04.C) per year.
  7.  Pro Rata
Adjustment. Tenant shall pay to Landlord as additional Rent Tenant’s Pro Rata
Share of the total amount of Landlord’s Ad Valorem Taxes, Insurance Premiums,
CAM, Operating Expenses, and/or Roof and Structural Maintenance Expenses,
whichever are applicable, for every calendar year during the Lease Term and
during any extension of this Lease.
  8.  Fixed
Amount Adjustment. Tenant shall pay to Landlord as additional Rent the following
monthly amounts as Tenant’s Reimbursement to Landlord for the applicable
expenses which are incurred by or assessed against the Property:
  Ad
      Valorem Taxes
                $N/A           per
      month.Insurance
      Premiums
                $N/A           per
      month.CAM
      Expenses
                $N/A           
      per month.Operating
      Expenses
                $N/A           per
      month.Roof
      and Structural Maintenance Expenses
                $N/A           per
      month.
 9.  Net Lease
Provisions. Notwithstanding anything contained in this Lease to the contrary in
Article Seven or otherwise, Tenant shall be responsible for paying Tenant’s Pro
Rata Share of all costs of ownership, maintenance, repairs, replacements, and
operation of the Demised Premises and the Property, including but not limited to
all costs of Ad Valorem Taxes, Insurance Premiums, Common Area Maintenance
Expenses, Operating Expenses, and Roof and Structural Maintenance
Expenses.
  E.  o Gross-Up Provisions. [Check this only if
applicable.] If the Property is a multi-tenant building and is not fully
occupied during the Base Year or any portion of the Lease Term, an adjustment
shall be made in computing the variable costs for each applicable calendar year.
Variable costs shall include only those items of expense that vary directly
proportionately to the occupancy of the Property. Variable costs which are
included in the CAM and Operating Expenses shall be increased proportionately to
the amounts that, in Landlord’s reasonable judgment, would have been incurred
had ninety percent (90%) of the useable area of the Property been occupied
during those years.
  
   -14-