Document:

OFFICE LEASE

EXHIBIT 10.3

OFFICE LEASE

between

CRESTLINE OFFICE CENTER ASSOCIATES, LLC

a Colorado limited liability company

(as Landlord)

and

MDA HOLDINGS, INC a Georgia corporation

(as Tenant)

		
	ARTICLE

	PAGE

	PRINCIPAL TERMS

	1

	GENERAL COVENANTS

	2

	RENT

	2

	COMPLETION OR REMODELING OF THE PREMISES

	3

	OPERATING EXPENSES

	3

	SERVICES

	8

	QUIET ENJOYMENT

	9

	DEPOSIT

	9

	CHARACTER OF OCCUPANCY

	10

	MAINTENANCE, ALTERATIONS AND REENTRY BY LANDLORD

	10

	ALTERATIONS AND REPAIRS BY TENANT

	11

	CONSTRUCTION LIENS

	1l

	SUBLETTING AND ASSIGNMENT

	12

	DAMAGE TO PROPERTY

	J3

	INDEMNITY TO LANDLORD

	13

	SURRENDER AND NOTICE

	14

	INSURANCE, CASUALTY AND RESTORATION OF PREMISES

	14

	CONDEMNATION

	15

	DEFAULT BY TENANT

	15

	DEFAULT BY LANDLORD

	17

	SUBORDINATION AND ATTORNMENT

	17

	REMOVAL OF TENANT'S PROPERTY

	18

	FOLDING OVER:  TENANCY MONTH-TO-MONTH

	18

	PAYMENTS AFTER TERMINATION

	18

	STATEMENT OF PERFORMANCE

	18

	MISCELLANEOUS

	18

	AUTHORITIES FOR ACTION AND NOTICE

	20

	BROKERAGE

	22

	COUNTERPARTS

	22

	ADDENDUM/EXHIBITS

	22

1

LEASE AGREEMENT

THIS LEASE, dated as of October 29, 2007 (the "Effective Date"), is by and between CRESTLINE OFFICE CENTER ASSOCIATES LLC, a Colorado limited liability company ("Landlord") and MDA HOLDINGS INC. a Georgia corporation ("Tenant").

WITNESSETH:

1.

PRINCIPAL TERMS. Capitalized terms, first appearing in quotations in this Article, elsewhere in the Lease or any Exhibits, are definitions of such terms as used in the Lease and Exhibits and shall have the defined" meaning whenever used "BUILDING": Approximately 6 1,500 square foot office building to be constructed on the Real Property (as hereafter defined) with an address of 7400 East Crestline Circle, Greenwood Village, CO 80111

1.1

“BUILDING”:

Approximately 61,500 square foot office building to be constructed on the Real Property (as hereafter defined) with an address of 7400 East Crestline Circle, Greenwood Village, CO 80111

1.2

“PREMISES”:

Approximately 7,237 rentable square feet Suite 100

1.3

“INITIAL TERM”: 

Five (5) years and one (1) month.  "Commencement Date":  On or about December 1, 2007 subject to the provisions of Article 5.

"Expiration Date": the last day of the 61st full calendar month following the Commencement Date

1.4

“BASE RENT”:

							
	Period

	 
	Monthly

	 
	Annual Rate

Per RSF

	Months 2 - 13

	 
	$

	13,267.83

	 
	$

	22.00*

	Months 14 - 25

	 
	$

	13,569.38

	 
	$

	22.50

	Months 26 - 37

	 
	$

	13,870.92

	 
	$

	23.00

	Months 38 - 49

	 
	$

	14,172.46

	 
	$

	23.50

	Months 50 - 61

	 
	$

	14,474.00

	 
	$

	24.00

*Provided that no uncured Event of Default occurs during the Initial Term, no Base Rent shall be due for Month 1

1.5

OPERATING EXPENSES:

Pro Rata Share (12%) of the portion of annual Operating Expenses in excess of the Base Operating Expenses

1.6

“DEPOSIT”:

$27,742.00

1.7

“PERMITTED USE”:

General Office Use

1.8

“GUARANTOR”:

N/A

1.9

“PARKING”:

29 spaces, of which all 20 may be uncovered spaces (based on  4 spaces per 1,000 rsf), free of charge; provided however that Tenant shall have the right to lease up to 7 underground parking spaces (based on 1 space per 1,000 rsf) at the 

2

rate of $90.00 per month per space, which right must be exercised no later than the end of the fourth (4th) month of the Initial Term, whereupon the number of uncovered spaces to which Tenant shall be entitled shall be reduced by the number of underground parking spaces which Tenant elects to lease

1.10

LANDLORD'S NOTICE ADDRESS:

1010 Northern Boulevard

Great Neck, New York 11021

Attention:  F. William Schmergel

With a copy to:

CRESTLINE OFFICE CENTER ASSOCIATES, LLC

7400 East Crestline Circle, Suite 125

Greenwood Village, CO 80111

Attn:  Paul Schmergel

1.11

RENT PAYMENT ADDRESS:

Crestline Office Center

P.O. Box 973363

Dallas, TX 75397-3363

1.12

LANDLORD’S TAX I.D.:

84-1500407

1.13

TENANT’S NOTICE ADDRESS:

MDA

Precommencement Address:

145 Technology Parkway

Norcross, GA 30092

Post Commencement Address:

7400 East Crestline Circle, Suite 100

Greenwood Village, CO 80111

1.14

TENANT’S TAX I.D.:

58-1761269

1.16

LANDLORD’S BROKER:

Vector Property Services, LLC

1.17

COOPERATING BROKER:

CRESA Partners

1.18

ATTACHMENTS:

[check if applicable]

x

Exhibit A – Depiction of the Premises

x

Exhibit B – Legal Description of the Real Property

x

Exhibit C – Commencement Certificate

x

Exhibit D – Rules and Regulations

2.

GENERAL COVENANTS.  Tenant covenants and agrees to pay Rent and perform the obligations hereafter set forth and in consideration therefore Landlord leases to Tenant the Premises as depicted on the plat attached as Exhibit A, together with a non-exclusive right subject to the provisions hereof, to use plazas, common areas, or other areas on the real property legally described on Exhibit B (the “Real Property”) designated by Landlord for the exclusive or non-exclusive use of the tenants of the Building (“Common Areas”).  The Building, Real Property, Common Areas, and appurtenances are hereinafter collectively sometimes called the “Building Complex”.

3.

TERM.  The Initial Term of the Lease commences at 12:01 a.m. on the Commencement Date and terminates at 12:00 midnight on the Expiration Date (the Initial Term together with any extensions thereof is herein referred to as the “Term”).

3

4.

RENT.  Subject to the provisions below, commencing on the Commencement Date and on the first day of each month thereafter, Tenant shall pay Base Rent in the amount stated in Section 1.4, in advance without notice (all amounts, including Base Rent, to be paid by Tenant pursuant to this Lease as the context requires are sometimes referred to collectively as “Rent(s)”).  Rents shall be paid without set off, abatement, or diminution, at the address set forth In Section 1.11, or at such other place as Landlord from time to time designates in writing.

5.

COMPLETION OR REMODELING OF THE PREMISES.  Provisions regarding remodeling or tenant finish work in the Premises, if any, are set forth in Article 31, below.  “Initial Tenant Finish” means the Premises in its “as is” condition on the Commencement Date.  Except with regard to Initial Tenant Finish, Landlord has no obligation for the completion or remodeling of the Premises, and Tenant accepts the Premises in its “as is” condition on the Commencement Date.  Landlord shall notify Tenant of the pending substantial completion of the Initial Tenant Finish; whereupon the Parties shall schedule an inspection of the Premises to be conducted prior to the Commencement Date, at which Tenant and Landlord shall inspect only the components of the Initial Tenant Finish (the “Inspection”) and shall mutually agree upon items of work from the Initial Tenant Finish that are not satisfactorily completed (The “Punch List Items”).  Landlord shall use commercially reasonable efforts to complete or correct the Punch List Items in a timely manner.  Notwithstanding any provision in this Lease to the contrary, the Commencement Date and Tenant's Rent obligations will not be delayed or extended by any delay in completion of the Initial Tenant Finish (as defined in Article 5, below) unless such delay is caused by “Net Landlord Delay”.  The term “Landlord Delay” means any delay, other than due to Force Majeure Events), Tenant Delay or completion of Punch List items, caused by solely by Landlord's failure to substantially complete the Initial Tenant Finish.  All delays other than Landlord Delay are deemed “Tenant Delay”.  “Net Landlord Delay” means the number of days, if any, by which Landlord Delay exceeds Tenant Delay and the Commencement Date and Tenant's rental obligations will be delayed by the number of days equal to the number of days of Net Landlord Delay, if any.  In no event shall the Commencement Date be extended as a result of Punch List Items.  As soon as the Term commences, Landlord and Tenant agree to execute a commencement agreement in the form attached as Exhibit C, setting forth the exact Commencement Date and Expiration Date.  If during the first year of the Initial Term, Tenant discovers a defect in the Initial Tenant Finish that (a) was not reasonably discoverable during the Inspection; and (b) was not caused by the actions of Tenant or anyone acting by, through or under Tenant (each a “Latent Defect”), provided that Landlord is notified by Tenant of the Latent Defect within, five (5) days of Tenant's discovery thereof, Landlord shall correct such Latent Defect to the Parties reasonable satisfaction.

6.

OPERATING EXPENSES.

6.1

Definitions.  The additional terms below have the following meanings in this Lease:

(1)

“Base Operating Expenses” means the Operating Expenses (as defined below) for Operating Expense Year (as defined below) of 2008.

(2)

“Landlord's Accountants” means that individual or firm employed by Landlord from time to time to keep the books and records for the Building Complex, and/or to prepare the federal and state income tax returns for Landlord with respect to the Building Complex, which books and records shall be certified to by a representative of Landlord.  A1l determinations made hereunder shall be made by Landlord's Accountants unless otherwise stated.

(3)

“Rentable Area” means 61,500 rentable square feet of space.  If there is a significant change in the aggregate Rentable Area as a result of an addition, partial destruction, modification to building design, or similar cause which causes a reduction or increase in the Rentable Area on a permanent basis or, if Landlord re-measures the Building and a change in Rentable Area occurs, Landlord's Accountants shall make such adjustments in the computations as are necessary to provide for such change.

(4)

“Tenant's Pro Rata Share” means the percentage set forth in. Section 1.5.  If Tenant, at any time during the Term, leases additional space in the Building or if the Rentable Area is adjusted, Tenant's Pro Rata Share shall be recomputed by dividing the total rentable square footage of space then leased by Tenant (including any additional space) by the Rentable Area and the resulting figure shall become Tenant's Pro Rata Share.

(5)

“Operating Expense Year” means each calendar year during the Term, except that the first Operating Expense Year begins on the Commencement Date and ends on December 31 of such year and the last Operating Expense Year begins on January 1 of the calendar year in which this Lease 

4

expires or is terminated and ends on the date of such expiration or termination.  If an Operating Expense Year is less than twelve (12) months, Operating Expenses for such year shall be prorated.

(6)

“Operating Expenses” means all operating expenses of any kind or nature which are in Landlord's reasonable judgment necessary, appropriate, or customarily incurred in connection with the operation and maintenance of the Building Complex, subject to the exclusions set forth below.  Operating Expenses include:

(a)

All real property taxes and assessments levied against the Building Complex by any governmental or quasi-governmental authority or under any covenants, declarations, easements or restrictions, including taxes, assessments, surcharges, or service or other fees of a nature not presently in effect which are hereafter levied on the Building Complex as a result of the use, ownership or operation of the Building Complex or for any other reason, whether in lieu of or in addition to, any current real estate taxes and assessments.  However, any taxes which are levied on the rent of the Building Complex will be determined as if the Building Complex were Landlord's only real property.  In no event do taxes and assessments include any federal or state income taxes levied or assessed on Landlord.  Expenses for tax consultants to contest taxes or assessments are also included as Operating Expenses (all of the foregoing are collectively referred to herein as “Taxes”).  Taxes also include special assessments, license taxes, business license fees, business license taxes, commercial rental taxes, levies charges, penalties or taxes, imposed by any authority against the Premises, Building Complex or any legal or equitable interest of Landlord.  Special assessments are deemed payable in such number of installments permitted by law, whether or not actually so paid, and include any applicable interest on such installments.  Taxes (other than special assessments) are computed on an accrual basis based on the year in which they are levied, even though not paid until the following Operating Expense Year;

(b)

Costs of supplies, including costs of relamping and replacing ballasts in all Building standard tenant lighting;

(c)

Costs of energy for the Building Complex, including costs of propane, butane, natural gas, steam, electricity, solar energy and fuel oils, coal or any other energy sources;

(d)

Costs of water and sanitary and storm drainage services;

(e)

Costs of janitorial and security services;

(f)

Costs of general maintenance, repairs, and replacements including costs under HVAC and other mechanical maintenance contracts; and repairs and replacements of equipment used in maintenance and repair work;

(g)

Costs of maintenance, repair and replacement of landscaping;

(h)

Insurance premiums for the Building Complex, including all-risk or multi-peril coverage together with loss of rent endorsement; the part of any claim paid under the deductible portion of any insurance policy carried by Landlord; public liability insurance; and any other insurance carried by Landlord on any component parts of the Building Complex;

(i)

All labor costs, including wages, costs of worker's compensation insurance, payroll taxes, fringe benefits, including pension, profit-sharing and health, and legal fees and other costs incurred in resolving any labor dispute;

(j)

Professional building management fees, costs and expenses, including costs of office space and storage space required by management for performance of its services;

(k)

Legal, accounting, inspection, and other consulting fees (including fees for consultants for services designed to produce a reduction in Operating Expenses or improve the operation, maintenance or state of repair of the Building Complex);

(l)

Costs of capital improvements and structural repairs and replacements to the Building Complex to conform to changes subsequent to the date of issuance of the shell and core certificate of occupancy for the Building in any Applicable Laws (herein “Required Capital Improvements”); and the costs of any capital improvements and structural repairs and replacements designed primarily to reduce Operating Expenses (herein “Cost Savings Improvements”).  Expenditures for Required 

5

Capital Improvements and Cost Savings Improvements will be amortized at a market rate of interest over the useful life of such capital improvement (as determined by Landlord's Accountants); however, the amortized amount of any Cost Savings Improvement in any year will be equal to the estimated resulting reduction in Operating Expenses; and

(m)

Costs incurred for Landlord's Accountants including costs of any experts and consultants engaged to assist in making the computations;

“Operating Expenses” do not include:

(i)

Costs of work, including painting and decorating, which Landlord performs for any tenant other than work of a kind and scope which Landlord is obligated to furnish to all tenants whose leases contain a rental adjustment provision similar to this one;

(ii)

Costs of repairs or other work occasioned by fire, windstorm or other insured casualty to the extent of insurance proceeds received;

(iii)

Leasing commissions, advertising expenses and other costs incurred in leasing space in the Building;

(iv)

Costs of repairs or rebuilding necessitated by condemnation;

(v)

Interest on borrowed money or debt amortization, except as specifically set forth above;

(vi)

Depreciation on the Building Complex

(vii)

Costs of repair or replacement made necessary by fire, other casualty, or exercise of the right of eminent domain to the extent that Landlord receives insurance proceeds or condemnation awards;

(viii)

Advertising and other promotional costs and expenses, attorneys' fees, costs and disbursements and other expenses incurred in negotiating or executing leases or in resolving disputes with other tenants, other occupants, or other prospective tenants or occupants of the Building Complex or any portion thereof, collecting rents or otherwise enforcing leases of other tenants of the Building Complex or any portion thereof;

(ix)

Costs and expenses of special services rendered to particular tenants of the Building Complex or any portion thereof or that exclusively benefit another tenant or tenants of the Building Complex or any portion thereof, including, without limitation, costs of tenant installations, decorating expenses, redecorating expenses or constructing improvements or alterations to any tenant space, and the cost of any janitorial cleaning service or security services provided to other tenants which exceed the standard of that provided to Tenant;

(x)

Costs of electrical energy furnished and metered directly to and required to be paid by tenants of the Building Complex or any portion thereof or for which Landlord is reimbursed by tenants as additional rental over and above any such tenant's base rental or pass through of operating costs;

(xi)

Except for the amortization of the cost of capital investment items which are primarily for the purpose of reducing Operating Expenses, Operating Expenses shall include no cost or expenditure that would be classified as a capital expense under generally accepted accounting principles consistently applied (all such capital expenditures which are primarily for the purpose of reducing Operating Expenses shall be amortized over the useful life of the capital improvement, as determined in accordance with generally accepted accounting principles consistently applied, but in no event to extend beyond the reasonable life of the Building, and the amount to be included in Operating Expenses in any calendar year shall be the lesser of (a) the amortized amount, determined in accordance with the foregoing, or (b) the actual or, if not reasonably obtainable, the reasonably estimated reduction in Operating Expenses resulting from the capital improvement during the same calendar year;

(xii)

Depreciation, amortization and other non cash Items;

6

(xiii)

Costs and expenses incurred by Landlord for which Landlord is actually reimbursed by parties other than tenants of the Building Complex, including, without limitation, insurance proceeds;

(xiv)

Costs and expenses attributable to the initial construction of the any improvement in the Building Complex (including correcting initial construction defects);

(xv)

Overhead and profit increment paid to subsidiaries or affiliates of Landlord for services on or to the Building Complex or any portion thereof, to the extent that the costs of such services exceed the costs of comparable services rendered by unrelated entities;

(xvi)

Finance and debt service fees for the Building Complex or any portion thereof and rental under any ground or underlying lease or leases for the Building Complex or any portion thereof,

(xvii)

Landlord's general overhead except as it directly relates to the operation, management, maintenance, repair and security of the Building;

(xviii)

Any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord;

(xix)

Costs and expenses for items and services for which Tenant reimburses Landlord or pays third persons, to the extent of such reimbursement or payment;

(xx)

Costs, fines or penalties incurred due to violations by Landlord of any governmental rule or authority, other than any such cost, fine or penalty (not otherwise paid by Tenant) incurred due to any violation caused by any act or omission of Tenant, its employees or agents;

(xxi)

Costs of wages, salaries, or other compensation paid to any executive employees of Landlord above the grade of “Property Manager” or paid to employees of Landlord who are not employed full time, on site at the Building Complex; provided, however, if an employee of Landlord works on several buildings within the area, including the Building, the costs and expenses connection with such employee shall be allocated among such buildings by Landlord in accordance with reasonable and consistent criteria;

(xxii)

Costs and expenses incurred in leasing air conditioning systems, elevators or other equipment ordinarily considered to be of a capital nature, except for the component of any such equipment rental representing reasonable charges for maintenance of such items;

(xxiii)

Any costs or expenses incurred in compliance with new or revised federal or state laws or municipal ordinances, or codes or regulations promulgated under any of the same, requiring modification only to any areas of the Building leased to any tenant, including Tenant;

(xxiv)

Any expenses for repairs or maintenance which are covered by warranties and service contracts, to the extent such maintenance and repairs are made at no cost to Landlord;

(xxv)

Any costs representing any amount paid for services and materials to a related person, firm, or entity to the extent such amount exceeds the amount that would be paid for such services or materials at the then existing market rates to an unrelated person, firm or corporation;

(xxvi)

The cost of overtime or other incremental/additional expenses made necessary by reason of Landlord's defaults under this Lease;

(xxvii)

Any amounts payable by Landlord by way of indemnity or for damages or which constitutes a fine or penalty, including interest or penalties for any late payment;

(xxviii)

Repairs, alterations, and general maintenance paid by proceeds of insurance and repairs necessitated by violations of law in effect as of the date of the Lease;

(xxix)

Repairs, alterations, and general maintenance necessitated by the negligence or willful misconduct of Landlord or its agents, employees, or contractors or repairs, alterations, and general maintenance necessitated by the negligence or willful misconduct of any other tenant 

7

or occupant of the Building Complex or of any of their respective agents, employees, contractors, invitees, or licensees; or

(xxx)

Costs and expenses associated with any health, athletic or recreational club of the Building Complex.

To the extent that employees, utilities or other services or costs are attributable to the Building and other buildings on a common basis or are provided for Common Areas, such Operating Expenses shall be reasonably prorated by Landlord to reflect costs to be allocated hereunder to the Building.  If any lease entered into by Landlord with any tenant in the Building is on a so-called “net” basis, or provides for a separate basis of computation for any Operating Expenses with respect to its leased premises, Landlord's Accountants may modify the computation of Base Operating Expenses, Rentable Area, and Operating Expenses for a particular Operating Expense Year to eliminate or modify any expenses which are paid for in whole or in part by such tenant.  If the Rentable Area is not fully occupied during any particular Operating Expense Year, Landlord’s Accountants may adjust those Operating Expenses which are affected by occupancy for the particular Operating Expense Year to reflect 100% occupancy.  Furthermore, in making any computations contemplated hereby, Landlord’s Accountants may make such other modifications to the computations as are required in their judgment to achieve the intention of the parties hereto.

6.2

Additional Payment.  If any increase occurs in Operating Expenses for any Operating Expense Year during the Term in excess of the Base Operating Expenses, Tenant shall pay Landlord Tenant's Pro Rata Share of the amount of such increase (less Estimated Payments, if any, previously made by Tenant for such year).

6.3

Estimated Payments.  During each Operating Expense Year beginning with the first month of the second Operating Expense Year and continuing each month thereafter throughout the Term, Tenant shall pay Landlord, at the same time as Base Rent is paid, an amount equal to 1/12 of Landlord’s estimate of Tenant’s Pro Rata Share of any projected increases in Operating Expenses for the particular Operating Expense Year in excess of Base Operating Expenses (“Estimated Payment”).

6.4

Annual Adjustments.

(1)

Following the end of each Operating Expense Year, including the first Operating Expense Year, Landlord shall submit to Tenant a statement setting forth the exact amount of Tenant’s Pro Rata Share of the increase, if any, of the Operating Expenses for the Operating Expense Year just completed over the Base Operating Expenses.  Beginning with the statement for the second Operating Expense Year, each statement shall set forth the difference, if any, between Tenant’s actual Pro Rata Share of the increase in Operating Expenses for the Operating Expense Year just completed and the estimated amount for such Operating Expense Year.  Each statement shall also set forth file projected increase, if any, in Operating Expenses for the new Operating Expense Year over Base Operating Expenses and the corresponding increase or decrease in Tenant’s monthly Rent for such new Operating Expense Year above or below the Rent paid by Tenant for the immediately preceding Operating Expense Year.

(2)

To the extent that Tenant’s Pro Rata Share of the increase in Operating Expenses for the period covered by a statement is different from the Estimated Payment during the Operating Expense Year just completed, Tenant shall pay Landlord the difference within 30 days following receipt by Tenant of the statement or receive a credit against the next due Rent, as the case may be.  Until Tenant receives a statement, Tenant's Estimated Payment for the new Operating Expense Year shall continue to be paid at the prior Estimated Payment, but Tenant shall commence payment of Rent based on the new Estimated Payment beginning on the first day of the month following the month in which Tenant receives the statement.  Tenant shall also pay Landlord or deduct from the Rent, as the case may be, on the date required for the first payment, as adjusted, the difference, if any, between the Estimated Payment for the new Operating Expense Year set forth in the statement and the Estimated Payment actually paid during the new Operating Expense Year.  If, during any Operating Expense Year, there is a change in the information on which Tenant is then making its Estimated Payments so that the prior estimate is no longer accurate, Landlord may revise the estimate and there shall be such adjustments made in the monthly Rent on the first day of the month following notice to Tenant as shall be necessary by either increasing or decreasing, as the case may be, the amount of monthly Rent then being paid by Tenant for the balance of the Operating Expense Year.

6.5

Miscellaneous.  In no event will any decrease in Rent pursuant to any provision hereof result in a reduction of Rent below the Base Rent.  Delay by Landlord in submitting any statement for any Operating Expense Year does not affect the provisions of this Section or constitute a waiver of 

8

Landlord’s rights for such Operating Expense Year or any subsequent Operating Expense Years.

6.6

Dispute. If Tenant disputes an adjustment submitted by Landlord or a proposed increase or decrease in the Estimated Payment, Tenant shall give landlord notice of such dispute within 30 days after Tenant’s receipt of the adjustment.  If Tenant does not give Landlord timely notice, Tenant waives its right to dispute the particular adjustment.  If Tenant timely objects, Tenant may engage its own certified public accountants (“Tenant’s Accountants”) to verify the accuracy of the statement complained of or the reasonableness of the estimated increase or decrease.  The person conducting the examination on behalf of Tenant shall enter into a confidentiality agreement satisfactory to Landlord.  If Tenant’s Accountants determine that an error has been made, Landlord’s Accountants and Tenant’s Accountants shall endeavor to agree upon the matter, failing which such matter shall be submitted to an independent certified public accountant selected by Landlord, with Tenant’s reasonable approval, for a determination which will be conclusive and binding upon Landlord and Tenant.  All costs incurred by Tenant for Tenant’s Accountants shall be paid for by Tenant unless Tenant’s Accountants disclose an error, acknowledged by Landlord’s Accountants (or found to have occurred through the above independent determination), of more than, ten percent (10%) in the computation of the total amount of Operating Expenses, in which event Landlord shall pay the reasonable costs incurred by Tenant to obtain such audit.  Notwithstanding the pendency of any dispute, Tenant shall continue to pay Landlord the amount of the Estimated Payment or adjustment determined by Landlord’s Accountants until the adjustment has been determined to be incorrect.  If it is determined that any portion of the Operating Expenses were not properly chargeable to Tenant, then Landlord shall promptly credit or refund the appropriate sum to Tenant.

7.

SERVICES.

7.1

Subject to the provisions below, Landlord agrees, without charge, in accordance with standards of other similar first class, multi-tenant office buildings in the metropolitan Denver, Colorado area:  (1) to furnish running water at (a) those points of supply for general use of tenants of the Building, and (b) to the “kitchenette” area within, the Premises (provided that there is no excessive water use therein); (2) during Ordinary Business Hours to furnish, the interior Common Areas heated or cooled air (as applicable), electrical current, janitorial services, and maintenance; (3) during Ordinary Business Hours, subject to Force Majeure Event(s), to furnish heated or cooled air to the Premises for standard office use to the extent required in order to keep the temperature in the Premises within the range from 68 degrees Fahrenheit to 75 degrees Fahrenheit, subject to Force Majeure Event(s) and provided the recommendations of Landlord’s engineer regarding occupancy and use of the Premises are complied with by Tenant, to provide, during Ordinary Business Hours, the general use of passenger elevators for ingress and egress to and from the Premises (at least one such elevator shall be available at all times except in the case of emergencies or repair); (5) to provide janitorial services for the Premises to the extent of the Initial Tenant Finish (including window washing of the outside of exterior windows); and (6) to cause electric current to be supplied to the Premises for Tenant’s Standard Electrical Usage (items (1) through (6) are collectively called “Services”). “Tenant's Standard Electrical Usage” means electricity for normal office purposes including fluorescent and incandescent lighting (including task and task ambient lighting systems) and for normal office equipment, including duplicating (reproduction) machines and personal computers (provided they do not require any additional voltage, special electrical or HVAC requirements beyond the systems existing in the Premises), and internal communications systems.  “Ordinary Business Hours” means 8:00 a.m. to 6:00 p.m. Monday through Friday and 9:00 a.m. to 12:00 p.m. on Saturdays, Legal Holidays excepted,  “Legal Holidays” mean New Year's Day, Martin Luther King Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and such other national holidays hereafter established by the United States Government.

7.2

“Excess Usage” means any usage of electricity (1) during other than Ordinary Business Hours; (2) in an amount in excess of Tenant’s Standard Electrical Usage; or (3) for Special Equipment or for standard HVAC services during other than Ordinary Business Hours.  “Special Equipment” means (a) any equipment consuming more than 0.5 kilowatts at rated capacity, (b) any equipment requiring a voltage other than 120 volts, single phase, or (c) equipment that requires the use of self-contained HVAC units.  If Tenant desires Excess Usage, Landlord will use reasonable efforts to supply the same.  Tenant shall reimburse Landlord for all Landlord’s costs of providing services for Excess Usage, including costs for materials, additional wear and tear on equipment, utilities, and labor (including fringe and overhead costs).  Computation of such costs will be made by Landlord's engineer, based on his engineering survey of Tenant’s Excess Usage.  Tenant shall also reimburse Landlord for all costs of supplementing the Building HVAC System and/or extending or supplementing any electrical service, as Landlord determines is necessary, as a result of Tenant’s Excess Usage.  Prior to installation or use of Special Equipment or operation of the Premises for extended hours on an ongoing basis, Tenant shall notify Landlord of such intended installation or use and obtain Landlord’s consent.  Not less than 48 hours prior 

9

notice shall be given Landlord of Tenant’s request for such services.  Tenant may request that Landlord install at Tenant’s cost a check meter and/or flow meter to determine the cost of Tenant’s Excess Usage.  Tenant shall also pay the cost of replacing light bulbs and/or tubes and ballast used in al1 lighting in the Premises other than that provided by Landlord to all tenants of the Building.

7.3

If Tenant requires janitorial services other than those included as standard Services, Tenant shall separately pay for such services monthly upon billings by Landlord, or Tenant shall, at Landlord’s option, separately contract for such services with the same company used by Landlord to furnish janitorial services to the Building.

7.4

Landlord may discontinue, reduce, or curtail Services (either temporarily or permanently) when necessary due to accident, repairs, alterations, strikes, lockouts, Applicable Laws, or any other happening beyond Landlord’s reasonable control.  Landlord is not liable for damages to Tenant or any other party as a result of any interruption, reduction, or discontinuance of Services (either temporary or permanent) nor shall the occurrence of any such event be construed as an eviction of Tenant, cause or permit an abatement, reduction or setoff of Rent, or operate to release Tenant from Tenant’s obligations,

7.5

Tenant shall promptly notify Landlord of any accidents or defects in the Building of which Tenant becomes aware, including defects in pipes, electric wiring, and HVAC equipment, and of any condition which may cause injury or damage to the Building or any person or property therein.

8.

QUIET ENJOYMENT.  So long as an Event of Default does not exist, Tenant is entitled to the quiet enjoyment and peaceful possession of the Premises subject to the provisions of this Lease.  Landlord shall under no circumstances be held responsible for restriction or disruption of access to the Building from public streets caused by construction work or other actions taken by or on behalf of governmental authorities, or for actions taken by other tenants (their employees, agents, visitors, contractors or invitees), or any other cause not entirely within Landlord’s direct control, and same shall not constitute a constructive eviction of Tenant nor give rise to any right or remedy of Tenant against Landlord of any nature or kind.  This covenant of quiet enjoyment is in lieu of any covenant of quite enjoyment provided or implied by law, and Tenant expressly waives any such other covenant of quiet enjoyment to the extent broader than the covenant contained in this Article.

9.

DEPOSIT.  Tenant has deposited with Landlord the sum specified in Section 1.6 hereof as a security deposit, receipt of which is hereby acknowledged.  The Deposit shall be held by Landlord without liability for interest as security for the faithful performance by Tenant of all of the terms of this Lease to be observed and performed by Tenant.

9.1

USE AND RETURN OF DEPOSIT.  If any of the Rents herein reserved to Landlord shall be overdue and unpaid or should Landlord makE payments on behalf of the Tenant, or Tenant shall fail to perform any of the terms of this Lease, then Landlord may, at its option and without prejudice to any other remedy which Landlord may have on account thereof appropriate and apply the entire Deposit (or so much thereof as may be necessary to compensate Landlord) toward the payment of Rent or other charges due Landlord, or loss or damage sustained by Landlord due to such breach on the part of Tenant.  Tenant shall forthwith upon demand restore the Deposit to the original sum deposited.  Should Tenant comply with all of said terms and promptly pay all of the Rents as they fall due, the Deposit shall be returned in. full to Tenant at the end of the term.

9.2

BANKRUPTCY.  In the event of bankruptcy or other debtor-creditor proceedings against Tenant, the Deposit shall be deemed to be applied first to the payment of Rent and other charges due Landlord for all periods prior to filing of such proceedings.

9.3

TRANSFER OF DEPOSIT.  Landlord may deliver the funds deposited hereunder by Tenant to the purchaser of Landlord's interest in the Premises in the event that such interest be sold and thereupon, provided that the new owner of Landlord's interest in the Premises acknowledges receipt of the Deposit, and agrees, in writing, to assume Landlord's obligations in this Article 9.  Landlord shall be discharged from any further liability with respect to the Deposit, and this provision shall also apply to any subsequent transferees.  Landlord may accomplish such transfer by giving the purchaser a credit against the purchase price or obligating the purchaser to be liable for the Deposit in the sale documents.

10.

CHARACTER OF OCCUPANCY.  Tenant shall occupy the Premises for the Permitted Use and for no other purpose, and use it in a careful, safe, and proper manner and pay on demand for any damage to the Premises caused by misuse or abuse by Tenant, Tenant's agents or employees, or any other person entering upon the Premises under express or implied invitation of Tenant (collectively, "Tenant's Agents").  

10

Tenant, at Tenant's expense, shall comply with all applicable federal, state, city, quasi govemmental and utility provider laws, codes, rules, and regulations now or hereafter in effect ("Applicable Laws") which impose any duty upon Landlord or Tenant with respect to the occupation or alteration of the Premises.  Tenant shall not commit or permit waste or any nuisance on or in the Premises.  Tenant agrees not to store, keep, use, sell, dispose of or offer for sale in, upon or from the Premises any article or substance prohibited by any insurance policy covering the Building Complex nor shall Tenant keep, store, produce or dispose of on, in or from the Premises or the Building Complex any substance which may be deemed an infectious waste or hazardous substance under any Applicable Laws, except customary office and cleaning supplies.  Landlord has received no notification from any governmental authority that hazardous substances (as defined under U.S. federal environmental laws) have been stored or generated at, released or discharged from or are present in the Premises in violation of applicable law.  Notwithstanding the foregoing, if, during the Initial Term, it is discovered and established to Landlord's reasonable satisfaction that (a) hazardous materials (as defined under U.S. federal law) are present in the Premises in amounts and a manner that violates applicable law (the "Violating Substances"), and (2) the Violating Substances were present in the Premises on or prior to the Effective Date; Landlord shall bear the reasonable cost of the removal of the Violating Substances and none of the cost thereof shall be included in Tenant's Pro Rata Share.

11.

MAINTENANCE. ALTERATIONS AND REENTRY BY LANDLORD.

11.1

Landlord will (i) make repairs and replacements to HVAC, mechanical, life safety and electrical systems in. the Premises (to the extent such systems are Building standard) deemed necessary by Landlord for normal operations of the Building Complex; and (ii) provide upkeep, maintenance, and repairs to all Common Areas.  Except as provided in this Section or otherwise expressly required in this Lease, Landlord is not required to make improvements or repairs to the Premises during the Term.

11.2

Landlord or Landlord's agents may at any time enter the Premises (upon reasonable prior notice, except in emergency situations) for examination and inspection, or to perform, if Landlord elects, any obligations of Tenant which Tenant fails to perform or such cleaning, maintenance, janitorial services, repairs, replacements, additions, or alterations as Landlord deems necessary for the safety, improvement, or preservation of the Premises or other portions of the Building Complex or as required by Applicable Laws.  Landlord or Landlord's agents may also show the Premises to prospective purchasers and Mortgagees, at any time, and from time to time; and to prospective tenants during the last nine (9) months of the Initial Term (unless Tenant properly exercises its renewal option, as set forth in Article 36, below), in which event Landlord and Landlord's agents shall not have the right to show the Premises to prospective tenants until the last nine (9) months of the Renewal Period (as defined in Article 35, below).  Notwithstanding the forgoing, if an Event of Default exists, Landlord may show the Premises to prospective tenants at any time, and from time to time.  Any such reentry does not constitute an eviction or entitle Tenant to abatement of Rent.  Landlord may make such alterations or changes in other portions of the Building Complex as Landlord desires so long as such alterations and changes do not unreasonably interfere with Tenant's occupancy of the Premises.  Landlord may use the Common Areas and one or more street entrances to the Building Complex as may be necessary in Landlord's judgment to complete such work.

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ALTERATIONS AND REPAIRS BY TENANT.

12.1

Tenant shall not make any alterations to the Premises during the Term, including installation of equipment or machinery which requires modifications to existing electrical outlets or increases Tenant's usage of electricity beyond Tenant's Standard Electrical Usage (collectively "Alterations") without in each instance first obtaining the written consent of Landlord, which shall not be unreasonably withheld or delayed.  Landlord's consent or approval of the plans, specifications and working drawings for any Alterations shall not constitute any warranty or representation by Landlord (and shall not impose any liability on Landlord) as to their completeness, design sufficiency, or compliance with Applicable Laws.  Tenant shall at its cost:  pay all engineering and design costs incurred by Landlord as to all Alterations, obtain all governmental permits and approvals required, and cause all Alterations to be completed in compliance with Applicable Laws and requirements of Landlord's insurance.  All such work relating to Alterations shall be performed in a good and workmanlike manner, using new materials and equipment at least equal in quality to the Initial Tenant Finish.  All Alterations repair and maintenance work performed by Tenant shall be done at Tenant's expense by Landlord's employees or, with Landlord's prior consent and subject to any conditions imposed by Landlord, by other persons requested by Tenant; however, if such work is not performed by Landlord's employees, Tenant shall pay Landlord a reasonable supervisory fee upon receipt of an invoice.  If Landlord authorizes such persons to perform work, Tenant shall deliver to Landlord prior to commencement certificates issued by insurance companies qualified to do business in the state in which the Premises are located, evidencing that worker's compensation, public liability insurance, and property damage insurance (in amounts, with companies and on forms satisfactory to Landlord) are in force and maintained by all 

11

contractors and subcontractors engaged to perform such work.  All liability policies shall name Landlord, Building Manager, and Mortgagee as additional insureds.  Each certificate shall provide that the insurance may not be cancelled or modified without 10 days' prior written notice to Landlord and Mortgagee.  Landlord also has the right to post notices in the Premises in locations designated by Landlord stating that Landlord is not responsible for payment for such work and containing such other information as Landlord deems necessary.  All such work shall be performed in a manner which does not unreasonably interfere with Landlord or other tenants of the Building, or impose additional expense upon Landlord in the operation of the Building Complex.  Notwithstanding the foregoing, and without modifying or otherwise limiting the provisions of this Section 12.1, Landlord's consent shall not be required for any Alteration that is solely of a cosmetic nature and that (a) is not visible from outside the Premises, (b) will not affect the systems and/or structure of the Building, (c) is solely at the expense of Tenant, and (d) cost of which is $25,000.00 or less.

12.2

Tenant shall keep the Premises and Landlord Furniture (as defined in Article 31, below) in as good order, condition, and repair and in an orderly state, as on the Commencement Date, loss by fire or other casualty or ordinary wear excepted.

12.3

All Alterations, including partitions, paneling, carpeting, drapes or other window coverings, and light fixtures (but excluding Tenant Furniture) are deemed a part of the real estate and the property of Landlord and remain upon and be surrendered with the Premises at the end of the Term, whether by lapse of time or otherwise.  "Tenant Furniture" shall mean movable office furniture not attached to the Building that is (a) brought into the Premises by Tenant and (b) not Landlord Furniture (as defined in Article 36, below).  Notwithstanding the foregoing, at Landlord's discretion, Landlord may require the Tenant, at Tenant's sole cost and expense to remove cable installed by Tenant, whereupon Tenant, at Tenant's sole cost and expense shall repair any damage caused to the Premises or the Building by such removal

13.

CONSTRUCTION LIENS.  Tenant shall pay for all work done on the Premises by Tenant or at its request (other than the Initial Tenant Finish) of a character which may result in liens on Landlord's or Tenant's interest and Tenant will keep the Premises free of all construction liens, and other liens on account of such work.  Tenant indemnifies, defends, and saves Landlord and all Mortgagees harmless from all liability, loss, damage, or expenses, including attorneys' fees, on account of any claims of laborers, materialmen or others for work performed or for materials or supplies furnished to Tenant or persons claiming under Tenant.  If any lien is recorded against the Premises or Building or any suit affecting title thereto is commenced as a result of such work, or supplying of materials, Tenant shall cause such lien to be removed of record within 5 days after notice from Landlord.  If Tenant desires to contest any claim, Tenant must furnish Landlord adequate security of at least 150% of the amount of the claim, plus estimated costs and interest and, if a final judgment establishing the validity of any lien is entered, Tenant shall immediately pay and satisfy the same.  If Tenant fails to proceed as aforesaid, Landlord may pay such amount and any costs, and the amount paid, together with reasonable attorneys' fees incurred, shall be immediately due Landlord upon notice.

14.

SUBLETTING AND ASSIGNMENT.

14.1

Tenant shall not sublet any part of the Premises nor assign or otherwise transfer this Lease or any interest herein (sometimes referred to as "Transfer," and the subtenant or assignee may be referred to as “Transferee”) without the consent of Landlord first being obtained, which consent will not be unreasonably withheld provided that:  (1) Tenant complies with the provisions of Section 14.4; (2) Landlord declines to exercise its rights under Section 14.3; (3) the Transferee is engaged in a business and the portion of the Premises will be used for the Permitted Use in a manner which is in keeping with the then standards of the Building and does not conflict with any exclusive use rights granted to any other tenant of the Building Complex; (4) the Transferee has reasonable, financial worth in light of the responsibilities involved; (5) an Event of Default does not exist at the time Tenant makes its request; (6) the Transferee is not a governmental or quasi-governmental agency; (7) the Transferee is not a tenant or currently negotiating a lease with Landlord in the Building Complex, and provided that Landlord controls sufficient available space in the Building Complex to accommodate such Transferee; and (8) the rent to be paid by the Transferee is not less than the Rent paid by Tenant for such space and is not less than 50% of the rental rate then being offered by Landlord for similar space in the Building.  Transfer includes a sale by Tenant of substantially all of its assets or stock if Tenant is a publicly traded corporation, a merger of Tenant with another corporation, the transfer of 50% or more of the stock in a corporate tenant whose stock is not publicly traded, or transfer of 50% or more of the beneficial ownership interests in a partnership or limited liability company tenant.

14.2

Following any Transfer in accordance with this Article 14, Landlord may, after default by Tenant, collect rent from the Transferee or occupant and apply the net amount collected to the Rent, but no Transfer or collection will be deemed an acceptance of the Transferee or occupant as Tenant or 

12

release Tenant from its obligations.  Consent to a Transfer shall not relieve Tenant from obtaining Landlord's consent to any other Transfer.  Notwithstanding Landlord's consent to a Transfer, Tenant shall continue to be primarily liable for its obligations.  If Tenant collects any rent or other amounts from a Transferee in excess of the Rent for any monthly period, Tenant shall pay Landlord the excess monthly, as and when received.

14.3

Notwithstanding the above, if Tenant requests Landlord's consent to sublet 25% or more of the Premises, Landlord may refuse to grant such consent in its sole discretion and terminate this Lease as to the portion of the Premises with respect to which such consent was requested; provided, however, if Landlord does not consent and elects to terminate the Lease as to such portion, Tenant may within 15 days after notice from Landlord to this effect withdraw Tenant's request for consent.  If such termination occurs, it shall be effective on the date designated in a notice from Landlord and shall not be more than 30 days following such notice.

14.4

Tenant must notify Landlord at least 60 days prior to the desired date of the Transfer ("Tenant's Notice").  Tenant's Notice shall describe the portion of the Premises to be transferred and the terms and conditions.  Landlord has, without obligation, 30 days following receipt of Tenant's Notice to sublet the space on Tenant's behalf or to exercise its rights pursuant to Section 14.3 if Tenant's Notice discloses that 25% or more of the Premises is involved.  If the space covered by Tenant's Notice is subleased by Landlord, rent and other sums due from the subtenant will be paid to Tenant directly and Landlord has no responsibility for the performance by such subtenant of its obligations under its sublease with Tenant.  If Landlord is unwilling or unable to locate a subtenant (and, if applicable, declines to exercise its rights under Section 14.3), Landlord will notify Tenant not later than 60 days after receipt of Tenant's Notice and Tenant shall be free to sublet the specified portion of the Premises to any third party on terms substantially identical to those described in Tenant's Notice, subject to Landlord's consent as set forth above.  If Tenant does not sublet such portion of the Premises within 60 days following Landlord's notice to Tenant, Tenant must reoffer the Premises to Landlord in accordance with the provisions hereof prior to subleasing to a third party.

14.5

All documents utilized by Tenant to evidence a Transfer are subject to approval by Landlord.  Tenant shall pay Landlord's expenses, including reasonable attorneys' fees, of determining whether to consent and in reviewing and approving the documents.  Tenant shall provide Landlord with such information as Landlord reasonably requests regarding a proposed Transferee, including financial information.

14.6

If a trustee or debtor in possession in bankruptcy is entitled to assume control over Tenant's rights under this Lease and assigns such rights to any third party notwithstanding the provisions hereof, the rent to be paid by such party shall be increased to the current Base Rent (if greater than that being paid for the Premises) which Landlord charges for comparable space in the Building as of the date of such third party's occupancy.  If Landlord is entitled under the Bankruptcy Code to “Adequate Assurance” of future performance of this Lease, the parties agree that such term includes the following:

(1)

Any assignee shall have a net worth that is satisfactory to Landlord in its sole discretion.

(2)

The assignee must assume and agree to be bound by the provisions of this Lease.

15.

DAMAGE TO PROPERTY.  Tenant agrees Landlord is not liable for any injury or damage, either proximate or remote, occurring through or caused by fire, water, steam, or any repairs, alterations, injury, accident, or any other cause to (a) the Premises, (b) any portion of the Landlord Furniture or (c) any furniture, fixtures, Tenant improvements, or other personal property of Tenant kept or stored in the Premises, or in other parts of the Building Complex ("Tenant's Personal Property"), whether by reason of the negligence or default of Landlord, other occupants, any other person, or otherwise; and the keeping or storing of all property of Tenant in the Premises and Building Complex is at the sole risk of Tenant.  Notwithstanding the foregoing, and subject to Sections 18.6 and 27.14, below, Landlord shall be liable for injury or damage to the Premises and Landlord Furniture (but not to the Tenant's Personal Property) to the extent that such injury or damage is caused solely and exclusively by Landlord's GN Liability (as hereinafter defined).  "Landlord's GN Liability" means injury or damage caused by the gross negligence or willful misconduct of Landlord or Landlord's administrative agent(s).

16.

INDEMNITY.

16.1

For the purposes of this Section:

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"Claim" includes any action, cause of action, demand, counterclaim, cross claim or third party claim.  Claim includes every kind and nature of claim whatsoever, known or unknown, fixed or contingent, whether in law or in equity.

"Liability or Cost" means any liabilities, losses, costs (including court costs), reasonable attorney's fees, obligations, awards, judgments, fines, penalties, damages, expenses, deficiencies or other reasonable charges whether or not the indemnified party was advised of the possibility of such damages.

'Tenant Party" means Tenant, the Tenant's subtenants, or provided that such person is acting within the scope of its authority or employment, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable.

"Landlord Party" means Landlord and its members, officers, directors, agents, employees and Landlord's affiliates.

"Tenant Indemnified Losses" means the alleged Liability or Cost of a Landlord Party attributable to bodily injury or loss of use or destruction of, injury or damage to property and/or monetary loss arising out of (a) performance or failure to perform under this Lease by a Tenant Party; (b) intentional misconduct and/or (c) negligent acts or omissions of the any Tenant Party.

Subject to Section 18.6, below, Tenant hereby agrees, to the fullest extent permitted by law, to indemnify defend and hold harmless each Landlord Party against Tenant Indemnified Losses.

"Landlord Indemnified Losses" means the alleged Liability or Cost of Tenant caused by Landlord's GN Liability.

Subject to Section 18.6 and Section 27.14; below, Landlord hereby agrees, to the fullest extent permitted by law, to indemnify defend and hold harmless Tenant against Landlord Indemnified Losses.

16.2

Tenant shall maintain throughout the Term a commercial general liability policy, including protection against death, personal injury and properly damage, issued by an insurance company qualified to do business in the state in which the Premises are located, with a single limit of not less than $1,000,000.00.  Such policy shall name Landlord, Building Manager, and Mortgagee as additional insureds, be primary to any other similar insurance of such additional insureds, and provide that it may not be cancelled or modified without at least 20 days' prior notice to Landlord and Mortgagee.  The minimum limits of such insurance do not limit the liability of Tenant hereunder.  Prior to occupancy of the Premises, and prior to expiration of the then-current policy, Tenant shall deliver certificates evidencing that insurance required under this Lease is in effect.

17.

SURRENDER AND NOTICE.  Upon the expiration or other termination of this Lease, Tenant shall immediately quit and surrender to Landlord the Premises broom clean, in good order and condition, ordinary wear and tear and loss by fire or other casualty excepted, and Tenant shall remove all of its movable furniture and other effects, all telephone cable and related equipment in the Building installed by Tenant, and such Alterations, as Landlord requires.  If Tenant fails to timely vacate the Premises as required, Tenant is responsible to Landlord for all resulting costs and damages of Landlord, including any amounts paid to third parties who are delayed in occupying the Premises.

18.

INSURANCE. CASUALTY. AND RESTORATION OF PREMISES.

18.1

Landlord shall maintain property insurance coverage at least as broad as ISO Special Form Coverage against risks of direct physical loss or damage (commonly known as "all risk") for the full replacement cost of the Building Complex (excluding tenants' personal property and equipment).

18.2

Tenant shall maintain throughout the Term insurance coverage at least as broad as ISO Special Form Coverage against risks of direct physical loss or damage (commonly known as "all risk") for the full replacement cost of Tenant's property and betterments in the Premises, including tenant finish in excess of the Initial Tenant Finish.

18.3

If the Building is damaged by fire or other casualty which renders the Premises wholly untenantable and the damage is so extensive that an architect selected by Landlord certifies in writing to Landlord and Tenant within 60 days of said casualty that the Premises cannot, with the exercise of reasonable diligence, be made fit for occupancy within 180 working days from the happening thereof, then, at the option of Landlord or Tenant exercised in writing to the other within 30 days of such determination, this 

14

Lease shall terminate as of the occurrence of such damage.  In the event of termination, Tenant shall pay Rent duly apportioned up to the time of such casualty and forthwith surrender the Premises and all interest.  If Tenant fails to do so, Landlord may reenter and take possession of the Premises and remove Tenant.  If, however, the damage is such that the architect certifies that the Premises can be made tenantable within such 180-day period or neither Landlord or Tenant elects to terminate the Lease despite the extent of damage, then the provisions below apply.

18.4

If the Premises are damaged by fire or other casualty that does not render it wholly untenantable or require a repair period in excess of 180 days, Landlord shall with reasonable promptness except as hereafter provided repair the Premises to the extent of the Initial Tenant Finish.

18.5

If the Building is damaged (though the Premises may not be affected, or if affected, can be repaired within 180 days) and within 60 days after the damage Landlord decides not to reconstruct or rebuild the Building, then, notwithstanding anything contained herein, upon notice to that effect from Landlord within said 60 days, Tenant shall pay the Rent apportioned to such date, this Lease shall terminate from the date of such notice, and both parties discharged from further obligations except as otherwise expressly provided.

18.6

Landlord and Tenant waive all rights of recovery against the other and its respective officers, partners, members, agents, representatives, and employees for loss or damage to its real and personal property kept in the Building Complex which is capable of being insured against under ISO Special Form Coverage, or for loss of business revenue or extra expense arising out of or related to the use and occupancy of the Premises.  Tenant also waives all such rights of recovery against Building Manager.  Each party shall, upon obtaining the property damage insurance required by this Lease, notify the insurance carrier that the foregoing waiver is contained in this Lease and use reasonable efforts to obtain an appropriate waiver of subrogation provision in the policies.

18.7

Rent shall abate during any period of repair and restoration to the extent of any recovery by Landlord under its loss of rent insurance related to the Premises in the same proportion that the part of the Premises rendered untenantable bears to the whole.

19.

CONDEMNATAION.  If the Premises or substantially all of it or any portion of the Building Complex which renders the Premises untenantable is taken by right of eminent domain, or by condemnation (which includes a conveyance in lieu of a taking), this Lease, at the option of either Landlord or Tenant exercised by notice to the other within 30 days after the taking, shall terminate and Rent shall be apportioned as of the date of the taking.  Tenant shall forthwith surrender the Premises and all interest in this Lease, and, if Tenant falls to do so, Landlord may reenter and take possession of the Premises.  If less than all the Premises is taken, Landlord shall promptly repair the Premises as nearly as possible to its condition immediately prior to the taking, unless Landlord elects not to rebuild under Section 18.5.  Landlord shall receive the entire award or consideration for the taking.

20.

DEFAULT BY TENANT.

20.1

Each of the following events is an "Event of Default":

(1)

Any failure by Tenant to pay Rent on the due date unless such failure is cured within 5 business days after notice by Landlord;

(2)

This Lease or Tenant's interest is transferred whether voluntarily or by operation of law except as permitted in Article 14;

(3)

This Lease or any part of the Premises is taken by process of law and is not released within 15 days after a levy;

(4)

Commencement by Tenant of a proceeding under any provision of federal or state law relating to Insolvency, bankruptcy, or reorganization ("Bankruptcy Proceeding");

(5)

Commencement of a Bankruptcy Proceeding against Tenant, unless dismissed within 60 days after commencement;

(6)

The insolvency of Tenant or execution by Tenant of an assignment for the benefit of creditors; the convening by Tenant of a meeting of its creditors or any significant class thereof for 

15

purposes of effecting a moratorium upon or extension or composition of its debts; or the failure of Tenant generally to pay its debts as they mature, or the occurrence of any of the foregoing with respect to any Guarantor, if any, of Tenant's obligations;

(7)

The admission in writing by Tenant (or any general partner of Tenant if Tenant is a partnership), that it is unable to pay its debts as they mature or it is generally not paying its debts as they mature;

(8)

Tenant fails to take possession of the Premises on the Commencement Date, unless such failure (including, but not limited to the failure to pay Rent, including ail applicable Late Fees, interest and penalties) is cured within 90 days after notice from Landlord;

(9)

Tenant fails to perform any of its other obligations and non-performance continues for 30 days after notice by landlord or, if such performance cannot be reasonably had within such 30-day period, Tenant does not in good faith commence performance within such 30-day period and diligently proceed to completion; provided, however, Tenant's right to cure shall not exceed the period provided by Applicable Law;

(10)

Any event which is expressly defined as or deemed an Event of Default under this Lease.

20.2

Remedies of Landlord.  If an Event of Default occurs, Landlord may then or at any time thereafter, either:

(1)

Without further notice except as required by Applicable Laws, reenter and repossess the Premises or any part and expel Tenant and those claiming through or under Tenant and remove the effects of both without being deemed guilty of any manner of trespass and without prejudice to any remedies for arrears of Rent or preceding breach of this Lease.  Should Landlord reenter or take possession pursuant to legal proceedings or any notice provided for by Applicable Law, Landlord may, from time to time, without terminating this Lease, relet the Premises or any part, either alone or in conjunction with other portions of the Building Complex, in Landlord's or Tenant's name but for the account of Tenant, for such periods (which may be greater or less than the period which would otherwise have constituted the balance of the Term) and on such conditions and upon such other terms (which may include concessions of free rent and alteration and repair of the Premises) as Landlord, in its sole discretion, determines and Landlord may collect the rents therefore.  Landlord is not in any way responsible or liable for failure to relet the Premises, or any part thereof, or for any failure to collect any rent due upon such reletting.  If there is other unleased space in the Building, Landlord may lease such other space without prejudice to its remedies against Tenant.  No such reentry or repossession or notice from Landlord shall be construed as an election by Landlord to terminate this Lease unless specific notice of such intention is given Tenant.  Acts of maintenance or preservation or efforts to relet the Premises or the appointment of a receiver upon initiative of Landlord to protect Landlord's interest under this Lease shall not constitute a termination of Tenant's contractual liability under this Lease unless written release of liability is given by Landlord to Tenant.  Landlord reserves the right following any reentry and/or reletting to exercise its right to terminate this Lease by giving Tenant notice, in which event this Lease will terminate as specified in the notice,

(2)

If Landlord takes possession of the Premises without terminating this Lease, Tenant shall pay Landlord (i) the Rent which would be payable if repossession had not occurred, less (ii) the net proceeds, if any, of any reletting of the Premises after deducting all of Landlord's expenses incurred in connection with such reletting, including all repossession costs, brokerage commissions, attorneys' fees, expenses of employees, alteration, and repair costs (collectively "Reletting Expenses"),  If, in connection with any reletting, the new lease term extends beyond the Term or the premises covered thereby including other premises not part of the Premises, a fair apportionment of the rent received from such reletting and the Reletting Expenses will be made in determining the net proceeds received from the reletting.  In determining such net proceeds, rent concessions will also be apportioned over the term of the new lease.  Tenant shall pay such amounts to Landlord monthly on the days on which the Rent would have been payable if possession had not been retaken, and Landlord is entitled to receive the same from Tenant on each such day, or

(3)

Give Tenant notice of termination of this Lease on the date specified and, on such date, Tenant's right to possession of the Premises shall cease and the Lease will terminate except as 

16

to Tenant's liability as hereafter provided as if the expiration of the term fixed in such notice were the end of the Term.  If this Lease terminates pursuant to this Section, Tenant remains liable to Landlord for damages in an amount equal to the Rent which would have been owing by Tenant for the balance of the Term had this Lease not terminated, less the net proceeds, if any, of reletting of the Premises by Landlord subsequent to termination after deducting Reletting Expenses.  Landlord may collect such damages from Tenant monthly on the days on which the Rent would have been payable if this Lease had not terminated and Landlord shall be entitled to receive the same from Tenant on each such day.  Alternatively, if this Lease is terminated, Landlord at its option may recover forthwith against Tenant as damages for loss of the bargain and not as a penalty an amount equal to the worth at the time of termination of the excess, if any, of the Rent reserved in this Lease for the balance of the Term over the then Reasonable Rental Value of the Premises for the same period plus all Reletting Expenses.  "Reasonable Rental Value" is the amount of rent Landlord can obtain for the remaining balance of the Term.

20.3

Cumulative Remedies.  Suits to recover Rent and damages may be brought by Landlord, from time to time, and nothing herein requires Landlord to await the date the Term would expire had there been no Event of Default or termination, as the case may be.  Each right and remedy provided for in this Lease is cumulative and non-exclusive and in addition to every other right or remedy now or hereafter existing at law or equity, including suits for injunctive relief and specific performance.  The exercise or beginning of the exercise by Landlord of one or more rights or remedies shall not preclude the simultaneous or later exercise by Landlord of other rights or remedies.  All costs incurred by Landlord to collect any Rent and damages or to enforce this Lease are also recoverable from Tenant.  If any suit is brought because of an alleged breach of this Lease, the prevailing party is also entitled to recover from the other party all reasonable attorneys' fees and costs incurred in connection therewith.

20.4

No Waiver.  No failure by Landlord to insist upon strict performance of any provision or to exercise any right or remedy upon a breach thereof, and no acceptance of full or partial Rent during the continuance of any breach constitutes a waiver of any such breach or such provision, except by written instrument executed by Landlord.  No waiver shall affect or alter this Lease but each provision hereof continues in effect with respect to any other then existing or subsequent breach thereof.

20.5

Bankruptcy.  Nothing contained in this Lease limits Landlord's right to obtain as liquidated damages in any bankruptcy or similar proceeding the maximum amount allowed by law at the time such damages are to be proven, whether such amount is greater, equal to, or less than the amounts recoverable, either as damages or Rent, referred to in any of the preceding provisions of this Section.  Notwithstanding anything in this Section to the contrary, any proceeding described in Section 20.1(5), (6), (7) and (8) is an Event of Default only when such proceeding is brought by or against the then holder of the leasehold estate under this Lease.

20.5

Late Payment Charge.  Any Rent not paid within 5 days after the due date shall thereafter bear interest at 5 percentage points above the Prime Rate or the highest rate permitted by law, whichever is lower, until paid.  Further, if such Rent is not paid within 5 days after notice, Tenant agrees Landlord will incur additional administrative expenses, the amount of which will be difficult to determine; Tenant therefore shall also pay Landlord a late charge for each late payment of 5% of such payment.  Any amounts paid by Landlord to cure a default of Tenant which Landlord has the right but not the obligation to do, shall, if not repaid by Tenant within 5 days of demand by Landlord, thereafter bear interest at 5 percentage points above the Prime Rate until paid.  "Prime Rate" means that rate announced by Wells Fargo Bank, N.A. as its prime rate on the date closest to the date interest commences.

20.6

Waiver of Jury Trial.  Tenant and Landlord waive any right to a trial by jury in suits arising out of or concerning the provisions of this Lease.

21.

DEFAULT BY LANDLORD.  In the event of any alleged default on the part of Landlord, Tenant shall give notice to Landlord and afford Landlord a reasonable opportunity to cure such default.  Such notice shall be ineffective unless a copy is simultaneously also delivered in the manner required in this Lease to any holder of a mortgage and/or deed of trust affecting all or any portion of the Building Complex (collectively, "Mortgagee"), provided that prior to such notice Tenant has been notified (by way of notice of Assignment of Rents and Leases, or otherwise), of the address of a Mortgagee.  If Landlord fails to cure such default within the time provided, then Mortgagee shall have an additional 30 days following a second notice from Tenant or, if such default cannot be cured within that time, such additional time as may be necessary provided within such 30 days, Mortgagee commences and diligently pursues a cure (including commencement of foreclosure proceedings if necessary to effect such cure).  Tenant's sole remedy will be 

17

equitable relief or actual damages but in no event is Landlord or any Mortgagee responsible for consequential damages or lost profit incurred by Tenant as a result of any default by Landlord.  If a Mortgagee, or transferee under such Mortgage (hereafter defined), succeeds to Landlord's interest as a result of foreclosure or otherwise, such party shall not be: (i) liable for any default, nor subject to any setoff or defenses that Tenant may have against Landlord; (ii) bound by any amendment (including an agreement for early termination) without its consent made at any time after notice to Tenant that such Mortgage requires such consent; and (iii) bound by payment of Rent in advance for more than 30 days.  Tenant agrees to pay Rent (and will receive credit under this Lease) as directed in any Mortgagee's notice of Landlord's default under the Mortgage reciting that Mortgagee is entitled to collect Rent.

22.

SUBORDINATION AND ATTORNMENT.

22.1

This Lease at Landlord's option will be subordinate to any mortgage, deed of trust and related documents now or hereafter placed upon the Building Complex (including all advances made thereunder), and to all amendments, renewals, replacements, or restatements thereof (collectively, "Mortgage").  Tenant agrees that no documentation other than this Lease is required to evidence such subordination.

22.2

If any Mortgagee elects to have this Lease superior to the lien of its Mortgage and gives notice to Tenant, this Lease will be deemed prior to such Mortgage whether this Lease is dated prior or subsequent to the date of such Mortgage or the date of recording thereof.

22.3

In confirmation of subordination or superior position, as the case may be, Tenant will execute such documents as may be required by Mortgagee and if it fails to do so within 10 days after demand, Tenant hereby irrevocably appoints Landlord as Tenant's attorney-in-fact and in Tenant's name, place, and stead, to do so.

22.4

Tenant hereby attorns to all successor owners of the Building, whether such ownership is acquired by sale, foreclosure of a Mortgage, or otherwise.

23.

REMOVAL OF TENANT’S PROPERTY.  All movable personal property of Tenant, including but not limited to Tenant Furniture (collectively "Tenant Property") not removed from the Premises upon vacation, abandonment, or termination of this Lease shall be conclusively deemed abandoned and may be sold, or otherwise disposed of by Landlord without notice to Tenant and without obligation to account; Tenant shall pay Landlord's reasonable expenses in connection with such disposition.  Notwithstanding the foregoing, if the Lease is terminated by Landlord prior to the Expiration Date or expiration of the Renewal Period, for other than an Event of Default that is not timely cured, Tenant shall have at least forty-eight (48) hours within which to remove the Tenant Property (the "Removal Period"), and to restore the Premises pursuant to the provisions of Article 17, above.  During the Removal Period, (a) the Tenant Property shall not be deemed abandoned; and (b) Landlord shall provide Tenant reasonable access to the Premises for the purpose of removing the Tenant Property, pursuant to the terms of this Article 23.

24.

HOLDINGOVER:  TENANCY MONTH-TO-MONTH.  If, after the expiration or termination of this Lease, Tenant remains in possession of the Premises without a written agreement as to such holding over and continues to pay rent and Landlord accepts such rent, such possession is a tenancy from month-to-month, subject to all provisions hereof but at a monthly rent equivalent to 125% of the monthly Rent paid by Tenant immediately prior to such expiration or termination.  Rent shall continue to be payable in advance on the first day of each calendar month.  Such tenancy may be terminated by either party upon 10 days' notice prior to the end of any monthly period.  Nothing contained herein obligates Landlord to accept rent tendered after the expiration of the Term or relieves Tenant of its liability under Article 17.

25.

PAYMENTS AFTER TERMINATION.  No payments by Tenant after expiration or termination of this Lease or after any notice (other than a demand for payment of money) by Landlord to Tenant reinstates, continues, extends the Term, or affects any notice given to Tenant prior to such payments.  After notice, commencement of a suit, or final judgment granting Landlord possession of the Premises, Landlord may collect any amounts due or otherwise exercise Landlord's remedies without waiving any notice or affecting any suitor, judgment.

26.

STATEMENT OF PERFORMANCE.  Tenant agrees at any time (but in no event more than three (3) times in any twelve (12) consecutive month period) upon not less than 10 business days' notice to execute and deliver to Landlord a written statement certifying that this Lease is unmodified and in full force and effect (or, if there have been modifications, that the same is in full force and effect as modified stating the modifications); that there have been no defaults by Landlord or Tenant and no event which with the 

18

giving of notice or passage of time, or both, would constitute such a default (or, if there have been defaults, setting forth the nature thereof); the date to which Rent has been paid in advance and such other information as Landlord requests.  Such statement may be relied upon by a prospective purchaser of Landlord's interest or Mortgagee.  Tenant's failure to timely deliver such statement is conclusive upon Tenant that; (i) this Lease is in full force and effect without modification except as may be represented by Landlord; (ii) there are no uncured defaults in Landlord's performance; and (iii) not more than 1 month's Rent has been paid in advance.  Upon request, Tenant will furnish Landlord an appropriate resolution confirming that the party signing the statement is authorized to do so.

27.

MISCELLANEOUS.

27.1

Transfer by Landlord.  The term "Landlord" means so far as obligations of Landlord are concerned, only the owner of the Building at the time in question and, if any transfer of the title occurs, Landlord herein named (and in the case of any subsequent transfers, the then grantor) is automatically released from and after the date of such transfer of all liability as respects performance of any obligations of Landlord thereafter to be performed.  Any funds in Landlord's possession at the time of transfer in which Tenant has an interest will be turned over to the grantee and any amount then due Tenant under this Lease will be paid to Tenant.

27.2

No Merger.  The termination or mutual cancellation of this Lease will not work a merger, and such termination or cancellation will at the option of Landlord either terminate all subleases or operate as an automatic assignment to Landlord of such subleases.

27.3

Common Area Use.  Landlord may use any of the Common Areas for the purposes of completing or making repairs or alterations in any portion of the Building Complex.  In connection therewith, Landlord shall use commercially reasonable efforts to not materially adversely affect Tenant's access to, or use of the Premises.

27.4

Independent Covenants.  This Lease is to be construed as though the covenants between Landlord and Tenant are independent and not dependent and Tenant is not entitled to any setoff of the Rent against Landlord if Landlord fails to perform its obligations; provided, however, the foregoing does not impair Tenant's right to commence a separate suit against Landlord for any defeat by Landlord so long as Tenant complies with Article 21.

27.5

Validity of Provisions.  If any provision is invalid under present or future laws, then it is agreed that the remainder of this Lease is not affected and that in lieu of each provision that is invalid, there will be added as part of this Lease a provision as similar to such invalid provision as may be possible and is valid and enforceable.

27.6

Captions.  The caption of each Article is added for convenience only and has no effect in the construction of any provision of this Lease.

27.7

Construction.  The parties waive any rule of construction that ambiguities are to be resolved against the drafting party.  Any words following the words "include," "including," "such as," "for example," or similar words or phrases shall be illustrative only and are not intended to be exclusive, whether or not language of non-limitation is used.

27.8

Applicability.  Except as otherwise provided, the provisions of this Lease are applicable to and binding upon Landlord's and Tenant's respective heirs, successors and assigns.  Such provisions are also considered to be covenants running with the land to the fullest extent permitted by law.

27.9

Authority.  Tenant and the party executing this Lease on behalf of Tenant represent to Landlord that such party is authorized to do so by requisite action of Tenant and agree, upon request, to deliver Landlord a resolution, similar document, or opinion of counsel to that effect.

27.10

Severability. If there is more than one party which is the Tenant, the obligations imposed upon Tenant are joint and several.

27.11

Acceptance of Keys, Rent of Surrender.  No act of Landlord or its representatives during the Term, including any agreement to accept a surrender of the Premises or amend this Lease, is binding on Landlord unless such act is by a partner, member or officer of Landlord, as the case may be, or other party designated in writing by Landlord as authorized to act.  The delivery of keys to Landlord or its 

19

representatives will not operate as a termination of this Lease or a surrender of the Premises.  No payment by Tenant of a lesser amount than the entire Rent owing is other than on account of such Rent nor is any endorsement or statement on any check or letter accompanying payment an accord and satisfaction.  Landlord may accept payment without prejudice to Landlord's right to recover the balance or pursue any other remedy available to Landlord

27.12

Building Name and Size.  Landlord may as it relates to the Building and Building Complex:  change the name, increase the size by adding additional real property, construct other buildings or improvements, change the location and/or character, or make alterations or additions.  If additional buildings are constructed or the size is increased, Landlord and Tenant shall execute an amendment which incorporates any necessary modifications to Tenant's Pro Rata Share.  Tenant may not use the Building's name for any purpose other than as part of its business address.

27.13

Diminution of View.  Tenant agrees that no diminution of light, air, or view from the Building entitles Tenant to any reduction of Rent under this Lease, results in any liability of Landlord, or in any way affects Tenant's obligations.

27.14

Limitation of Liability.  Notwithstanding anything to the contrary contained in this Lease, Landlord's liability is limited to Landlord's interest in the Building and Landlord shall never be personally liable for recovery of any judgment.

27.15

Non-Reliance.  Tenant confirms it has not relied on any statements, representations, or warranties by Landlord or its representatives except as set forth herein.

27.16

Written Modification.  No amendment or modification of this Lease is valid or binding unless in writing and executed by the parties.

27.17

Lender’s Requirements.  Tenant will make such modifications to this Lease as may hereafter be required to conform to any lender's requirements, so long as such modifications do not increase Tenant's obligations or materially alter its rights.

27.18

Effectiveness.  Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option to lease and it is not effective unless and until execution and delivery by both Landlord and Tenant.

27.19

Survival.  This Lease, notwithstanding expiration or termination, continues in effect as to any provisions requiring observance or performance subsequent to termination or expiration.

27.20

Time of Essence.  Time is of the essence herein.

27.21

Rules and Regulations.  If roles and regulations are attached hereto, they are a part of this Lease and Tenant agrees that Tenant and Tenant's Agents shall at all times abide by such rules and regulations.

27.22

Recording.  Tenant will not record this Lease.  Recording of the Lease by or on behalf of Tenant is an Event of Default.

28.

AUTHORITIES FOR ACTION AND NOTICE.

28.1

Unless otherwise provided, Landlord may act through Landlord's Building Manager or other designated representatives from time to time.

28.2

All notices or other communications required or desired to be given to Landlord must be in writing and shall be deemed received when delivered personally to any officer, partner, or member of Landlord (depending upon the nature of Landlord) or the manager of the Building (the "Building Manager") whose office is in the Building, or when deposited in the United States mail, postage prepaid, certified or registered, return receipt requested, addressed as set forth in Section 1.10.  All notices or communications required or desired to be given to Tenant shall be in writing and deemed duly served when delivered personally to any officer, employee, partner, or member of Tenant (depending upon the nature of Tenant), individually if a sole proprietorship, or manager of Tenant whose office is in the Building, or when deposited in the United States mail, postage prepaid, certified or registered, return receipt requested, addressed to the appropriate address set forth in Section 1.13.  Either party may designate in writing served as above provided 

20

a different address to which notice is to be mailed.  The foregoing does not prohibit notice from being given as provided in the rules of civil procedure, as amended from time to time, for the state in which the Real Property is located.

29.

PARKING.  Landlord will make available within the Building parking facilities the number and type of parking spaces set forth in Section 1.9.  Spaces designated as covered spaces shall be located in the parking garage and shall be on a reserved basis at the current rate being charged for covered spaces from time to time (the "Parking Rate").  Tenant shall pay the Parking Rate for each covered space monthly. The initial Parking Rate for the covered spaces is $90.00 per month per space.  All parking spaces, other than the covered spaces designated for Tenant's use, shall be in and out, unassigned parking spaces in the surface parking area without additional charge to Tenant.  Notwithstanding the above, the right granted to Tenant to use such spaces is a license only and Landlord's inability to make such spaces available at any time for reasons beyond Landlord's reasonable control is not a material breach by Landlord of its obligations hereunder and Tenant has no rights to use the parking garage except as provided in this Article.  The abatement of Tenant's obligation to pay for unavailable spaces during any period of unavailability constitutes Tenant's sole remedy.  If Tenant fails to timely pay a parking bill, Tenant forfeits its rights to all parking spaces.  All vehicles parked in the parking garage and the personal property therein shall be at the sole risk of Tenant, Tenant's Agents and the users of such spaces and Landlord shall have no liability for loss or damage thereto for whatever cause.

30.

FORCE MAJEURE EVENT.  Any obligation of the Landlord hereunder, which is delayed or not performed due to acts of God, strike, riot, war, weather, terrorism, failure to obtain labor and materials at a reasonable cost, or any other reason beyond the control of the Landlord is to be performed (each a "Force Majeure Event," and collectively "Force Majeure Events"), shall not constitute a default by Landlord and shall be performed within a reasonable time after the end of such cause for delay or nonperformance.

31.

TENANT IMPROVEMENTS AND USE OF LANDLORD'S FURNITURE

31.1

The existing wall coverings in the Premises and tile floors in the kitchen and work rooms shall remain in the Premises in their "as is" condition and state of repair.

31.2

Landlord shall use commercially reasonable efforts to cause the following improvements as set forth below to the Premises no later than December 1, 2007, subject to delays, if any, due to Force Majeure Events (the "Commencement Date"):

(1)

Removal of the partial wall separating the "open" area from the rest of the Premises, and the doorway in the corridor behind the reception desk; and patch the resulting damage to those portions of the walls, to which the removed wall was attached all per the depiction set forth, on Exhibit E,

(2)

Repainting of existing walls with Building "standard" paint,

(3)

Installation of eleven (11) Compel Insignia New Wood Office Suite with U-shaped office desk, bridge and credenza and 1 Compel Insignia desk and bridge (collectively the "New Furniture").  As more specifically set forth below, the New Furniture shall be and remain the personal property of the Landlord, and

(4)

Installation of Designweave P.O.P. Collection carpeting in the Premises, and

(5)

Installation of twenty four (24) 6'x8' Herman Miller AO2 workstations and voice and data cabling (collectively the "Workstations").

31.3

Provided that no uncured Event of Default has occurred during the Initial Term, the Tenant shall have the right to use the following which is and shall remain, at all times, including but not limited to during the Initial Term, and at all times thereafter, the personal property of Landlord.

(1)

The New Furniture,

(2)

The Workstations,

(3)

36 Cue desk chairs (the "Chairs"), and

(4)

Chairs and conference table located in the conference room within the Premises (the Conference Room Furniture")

21

The Workstations, the Chairs, the Conference Room Furniture and the New Furniture shall be termed collectively the "Landlord's Furniture".  Landlord, at its sole option may make substitutions in the Landlord's Furniture with substantially similar items, as determined by Landlord in its reason able judgment.

32.

INTENTIONALLY DELETED.

33.

BROKERAGE.  Tenant represents it has not employed any broker with respect to this Lease and has no knowledge of any broker's involvement in this transaction except those listed in Sections 1.15 and 1.16 (collectively, the "Brokers").  Tenant shall indemnify Landlord against any expense incurred by Landlord as a result of any claim for commissions or fees by any other broker, finder, or agent, whether or not meritorious, employed by Tenant or claiming by, through, or under Tenant, other than the Brokers.  Tenant acknowledges Landlord is not liable for any representations by the Brokers regarding the Premises, Building, Building Complex, or this Lease.

34.

COUNTERPARTS.  This Lease may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Any one or more counterpart signature pages may be removed from one counterpart of the Lease and annexed to another counterpart of the Lease to form a completely executed original instrument without impairing the legal effect of the signature thereon.

35.

ADDENDUM/EXHIBITS.  Any Addenda and/or Exhibits referred to herein and attached hereto are incorporated herein by reference.

36.

RENEWAL OPTION.  Provided that no Event of Default then exists, Tenant shall have one (1) option to renew this Lease (the "Renewal Option") for an additional period of five (5) years (the "Renewal Period"), upon written notice to Landlord provided no later than nine (9) months prior to the end of the Initial Term (the "Renewal Notice").  The terms for the Renewal Period shall be the same as set forth in this Lease, except that Rent shall be at the then current market rate, but in no event less than the Rent payable for the last year of the Initial Term.  If Tenant fails to timely provide a Renewal Notice, Tenant shall be deemed to have waived all rights to the Renewal Option and the Lease shall expire at the end of the Initial Term,

IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year first above written and it is effective upon delivery of a fully-executed copy to Tenant.

					
	MDA HOLDINGS ,INC.

	 
	CRESTLINE OFFICE CENTER ASSOCIATES LLC,

	A Georgia corporation

	 
	a Colorado limited liability company

	 
	 
	 

	By: 

	/s/ James E. Ginter

	 
	By: 

	/s/ F. William Schmergel

	 
	 
	 

	Title: President

	 
	Title: Member

	 
	 
	 

	Print Name: James E. Ginter

	 
	"LANDLORD"

	 
	 
	 

	ATTEST:

	 
	 

	 
	 
	 

	By: /s/ Aida Rivinius

	 
	 

	 
	 
	 

	Print Name: Aida Rivinius

	 
	 

	 
	 
	 

	Print Title: Executive Assistant

	 
	 

	 
	 
	 

	"TENANT"

	 
	 

22EXHIBIT 10

EXHIBIT 10.4

LEASE AGREEMENT BETWEEN

TGS AMERICAN REALTY LIMITED PARTNERSHIP,

AS LANDLORD, AND

MEDICAL DOCTOR ASSOCIATES, INC.,

AS TENANT

DATED SEPTEMBER 21, 2004

600 LAS COLINAS BOULEVARD

IRVING, TEXAS

BASIC LEASE INFORMATION

Lease Date:

September 21, 2004

Landlord:

TGS AMERICAN REALTY LIMITED PARTNERSHIP, A Delaware limited partnership

Tenant:

MEDICAL DOCTOR ASSOCIATES, INC., a Georgia corporation

Premises:

Suite No. 1550, containing 9,330 rentable square feet, in the office building commonly known 

as 600 Las Colinas Boulevard (the “Building”), and whose street address is 600 East Las Colinas Boulevard, Irving, Texas 75039.  The Premises are outlined on the plan attached to the Lease as Exhibit A.  The land on which the Building is located (the “Land”) is described on Exhibit B.  The term “Project” shall collectively refer to the Building, the Land and the driveways, parking facilities, and similar improvements and easements associated with the foregoing or the operation thereof.

Term:

80 full calendar months, plus any partial month from the Commencement Date to the end of the 

month in which the Commencement Date falls, starting on the Commencement Date and ending at 5:00 p.m. local time on the last day of the 80th full calendar month following the Commencement Date, subject to adjustment and earlier termination as provided in the Lease.

Commencement Date:

The earliest of (a) the date on which Tenant occupies any portion of the Premises and begins

conducting business therein, (b) the date on which the Work (as defined in Exhibit D hereto) in the Premises is Substantially Completed (as defined in Exhibit D hereto), or (c) the date on which the work in the Premises would have been Substantially Completed but for the occurrence of any Tenant Delay Days (as defined in Exhibit D hereto).

Basic Rent:

Subject to the conditional abatement of Basic Rent set forth in Exhibit I hereto, Basic Rent

shall be the following amounts for the following periods of time:

			
	Lease Month

	Annual Basic Rent Rate Per

Rentable Square Foot

	Monthly Basic Rent

	1-80

	$15.00

	$11,662.50

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

Security Deposit:

$11,662.50

Rent:

Basic Rent, Tenant's Proportionate Share of increases in Taxes over the Base Tax Year,

Tenant's Proportionate Share of Electrical Costs, Tenant's Proportionate Share of Additional Rent, and all other sums that Tenant may owe to Landlord or otherwise be required to pay under the Lease.

Permitted Use:

General office use.

Tenant’s Proportionate

1.831%, which is the percentage obtained by dividing (a) the number of rentable square feet 

Share:

in the Premises as stated above by (b) the 509,559 rentable square feet in the Building.  Landlord

and Tenant stipulate that the number of rentable square feet in the Premises and in the Building set forth above is conclusive and shall be binding upon them.

Expense Stop:

Operating Costs for the calendar year 2004 (grossed up as provided in Section 4(b)(6) of the 

Lease).

Base Tax Year:

The calendar year 2004.

Initial Liability

$3,000,000

Insurance Amount:

Tenant’s Address:

Prior to Commencement Date:

Following Commencement Date:

Medical Doctor Associates, Inc.

Medical Doctor Associates, Inc.

145 Technology Parkway, NW

600 East Las Colinas Blvd., Suite 1550

Norcross, Georgia 30092

Irving, Texas 75039

Attention:  Jim Ginter

Attention:  [To be determined pursuant to Exhibit E 

Telephone:  770-246-9191

hereto]

Telecopy:  770-849-3616

Telephone:  [To be determined pursuant to Exhibit E 

hereto]

Telecopy:  [To be determined pursuant to Exhibit E 

hereto]

Landlord’s Address:

For all Notices:

With a copy to:

TGS American Realty Limited Partnership

TGS American Realty Limited Partnership

c/o TGS North American Real Estate

c/o TGS Harvard Management Services, LLC

Investment Trust

600 East Las Colinas Blvd., Suite 566

1210, 530 8th Avenue S.W.

Irving, Texas 75039

Calgary, Alberta T2P 3S8

Attention:  Property Manager-600 Las Colinas 

Attention:  General Counsel-600 Las Colinas

Boulevard

Boulevard

Telephone:  972-869-0044

Telephone:  403-264-4310 Ext. 229

Telecopy:  972-869-2043

Telecopy:  403-264-9945

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

			
	LANDLORD:

	TGS AMERICAN REALTY LIMITED PARTNERSHIP,

	 
	a Delaware limited partnership

	 
	By:

	TGS American Realty, LLC, a Delaware limited liability company, its general partner

	 
	 
	 

	 
	 
	 

	 
	By:

	//signed//John Massing

	 
	Name:

	John Massing

	 
	Title:

	Senior VP

	 
	 
	 

	 
	 
	 

	 
	 
	 

	TENANT:

	MEDICAL DOCTOR ASSOCIATES, INC., a Georgia

	 
	Corporation

	 
	 
	 

	 
	 
	 

	 
	By:

	//signed//Michael Pretiger

	 
	Name:

	Michael Pretiger

	 
	Title:

	CFO

	 
	 
	 

TABLE OF CONTENTS

				
	 
	 
	 
	Page No.

	1.

	Definitions and Basic Provisions

	1

	2.

	Lease Grant

	1

	3.

	Tender of Possession

	1

	4.

	Rent

	1

	 
	(a)

	Payment

	1

	 
	(b)

	Operating Costs; Taxes; Electrical Costs

	2

	5.

	Delinquent Payment; Handling Charges

	4

	6.

	Security Deposit

	4

	7.

	Landlord’s Obligations

	5

	 
	(a)

	Services

	5

	 
	(b)

	Excess Utility Use

	5

	 
	(c)

	Restoration of Services; Abatement

	5

	 
	(d)

	Access

	6

	8.

	Improvements; Alterations; Repairs; Maintenance

	6

	 
	(a)

	Improvements; Alterations

	6

	 
	(b)

	Repairs; Maintenance

	6

	 
	(c)

	Performance of Work

	6

	 
	(d)

	Mechanic’s Liens

	7

	9.

	Use

	7

	10.

	Assignment and Subletting

	7

	 
	(a)

	Transfers

	7

	 
	(b)

	Consent Standards

	8

	 
	(c)

	Request for Consent

	8

	 
	(d)

	Conditions to Consent

	8

	 
	(e)

	Attornment by Subtenants

	8

	 
	(f)

	Cancellation

	9

	 
	(g)

	Additional Compensation

	9

	 
	(h)

	Permitted Transfers

	9

	11.

	Insurance; Waivers; Subrogation; Indemnity

	10

	 
	(a)

	Tenant’s Insurance

	10

	 
	(b)

	Landlord’s Insurance

	10

	 
	(c)

	No Subrogation; Waiver of Property Claims

	10

	 
	(d)

	Indemnity

	11

	12.

	Subordination; Attornment; Notice to Landlord’s Mortgagee

	11

	 
	(a)

	Subordination

	11

	 
	(b)

	Attornment

	11

	 
	(c)

	Notice to Landlord’s Mortgagee

	12

	 
	(d)

	Landlord’s Mortgagee’s Protection Provisions

	12

	13.

	Rules and Regulations

	12

	14.

	Condemnation

	12

	 
	(a)

	Total Taking

	12

	 
	(b)

	Partial Taking – Tenant’s Rights

	12

	 
	(c)

	Partial Taking – Landlord’s Rights

	12

	 
	(d)

	Temporary Taking

	12

	 
	(e)

	Award

	13

	15.

	Fire or Other Casualty

	13

	 
	(a)

	Repair Estimate

	13

	 
	(b)

	Tenant’s Rights

	13

	 
	(c)

	Landlord’s Rights

	13

	 
	(d)

	Repair Obligation

	13

	 
	(e)

	Abatement of Rent

	14

	16.

	 
	Personal Property Taxes

	14

				
	17.

	Event of Default

	14

	 
	(a)

	Payment Default

	14

	 
	(b)

	Abandonment

	14

	 
	(c)

	Estoppel

	14

	 
	(d)

	Insurance

	14

	 
	(e)

	Mechanic’s Liens

	14

	 
	(f)

	Other Defaults

	14

	 
	(g)

	Insolvency

	14

	18.

	Remedies

	15

	 
	(a)

	Termination of Lease

	15

	 
	(b)

	Termination of Possession

	15

	 
	(c)

	Perform Acts on Behalf of Tenant

	15

	 
	(d)

	Suspension of Services

	15

	 
	(e)

	Alteration of Locks

	15

	19.

	Payment by Tenant; Non-Waiver; Cumulative Remedies

	16

	 
	(a)

	Payment by Tenant

	16

	 
	(b)

	No Waiver

	16

	 
	(c)

	Cumulative Remedies

	16

	20.

	Landlord’s Lien

	16

	21.

	Surrender of Premises

	16

	22.

	Holding Over

	16

	23.

	Certain Rights Reserved by Landlord

	17

	 
	(a)

	Building Operations

	17

	 
	(b)

	Security

	17

	 
	(c)

	Prospective Purchasers and Lenders

	17

	 
	(d)

	Prospective Tenants

	17

	24.

	Substitution Space

	17

	25.

	Miscellaneous

	18

	 
	(a)

	Landlord Transfer

	18

	 
	(b)

	Landlord’s Liability

	18

	 
	(c)

	Force Majeure

	18

	 
	(d)

	Brokerage

	18

	 
	(e)

	Estoppel Certificates

	18

	 
	(f)

	Notices

	18

	 
	(g)

	Separability

	18

	 
	(h)

	Amendments; Binding Effect; No Electronic Records

	19

	 
	(i)

	Quiet Enjoyment

	19

	 
	(j)

	No Merger

	19

	 
	(k)

	No Offer

	19

	 
	(l)

	Entire Agreement

	19

	 
	(m)

	Waiver of Jury Trial

	19

	 
	(n)

	Governing Law

	19

	 
	(o)

	Recording

	19

	 
	(p)

	Water of Mold Notification

	19

	 
	(q)

	Joint and Several Liability

	19

	 
	(r)

	Financial Reports

	20

	 
	(s)

	Landlord’s Fees

	20

	 
	(t)

	Telecommunications

	20

	 
	(u)

	Confidentiality

	20

	 
	(v)

	Authority

	20

	 
	(w)

	Hazardous Materials

	21

	 
	(x)

	List of Exhibits

	21

	 
	(y)

	Determination of Charges

	21

	 
	(z)

	Prohibited Person and Transactions

	21

	26.

	Other Provisions

	21

	 
	(a)

	Attorneys’ Fees

	21

				

LIST OF DEFINED TERMS

				
	 
	 
	Page No.

	Additional Rent

	2

	Affiliate

	1

	Base Tax Year

	ii

	Basic Lease Information

	1

	Basic Rent

	i

	Building

	i

	Building's Structure

	1

	Building's Systems

	1

	Casualty

	13

	Commencement Date

	i

	Complex

	2

	Construction Allowance

	D-1

	Damage Notice

	13

	Default Rate

	4

	Disabilities Acts

	7

	Electrical Costs

	4

	Estimated Delivery Date

	1

	Event of Default

	14

	Expense Stop

	ii

	GAAP

	9

	Hazardous Materials

	21

	HVAC

	5

	including

	1

	Initial Liability Insurance Amount

	ii

	Land

	i

	Landlord

	1

	Landlord's Mortgagee

	11

	Law

	1

	Laws

	1

	Lease

	1

	Lease Month

	i

	Loss

	11

	Mortgaged

	11

	OFAC

	21

	Operating Costs

	2

	Operating Costs and Tax Statement

	4

	Parking Area

	G-1

	Permitted Transfer

	9

	Permitted Transferee

	9

	Permitted Use

	ii

	Plans

	D-1

	Premises

	i

	Prevailing Rental Rate

	H-1

	Primary Lease

	11

	Project

	i

	Rent

	i

	Repair Period

	13

	Security Deposit

	i

	Substantial Completion

	D-2

	Substantially Completed

	D-2

	Taking

	12

	Tangible Net-Worth

	9

		
	Taxes

	3

	Telecommunications Services

	20

	Tenant

	1

	Tenant Delay Day

	D-1

	Tenant Party

	1

	Tenant's Off-Premises Equipment

	1

	Tenant's Proportionate Share

	ii

	Term

	i

	Total Construction Costs

	D-l

	Transfer

	8

	Work

	D-1

	 
	 

LEASE

This Lease Agreement (this “Lease”) is entered into as of September 21, 2004, between TGS AMERICAN REALTY LIMITED PARTNERSHIP, A Delaware limited partnership (“Landlord”), and MEDICAL DOCTOR ASSOCIATES, INC., a Georgia corporation (“Tenant”).

1.

Definitions and Basic Provisions.  The definitions and basic provisions set forth in the Basic Lease Information (the “Basic Lease Information”) executed by Landlord and Tenant contemporaneously herewith are incorporated herein by reference for all purposes.  Additionally, the following terms shall have the following meanings when used in this Lease:  “Affiliate” means any person or entity which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the party in question; “Building’s Structure” means the Building’s exterior walls, roof, elevator shafts, footings, foundations, structural portions of load-bearing walls, structural floors and subfloors, and structural columns and beams; “Building’s Systems” means the Building’s HVAC, life-safety, plumbing, electrical, and mechanical systems; “including” means including, without limitation; “Laws” means all federal, state, and local laws, ordinances, rules and regulations, all court orders, governmental directives, and governmental orders and all interpretations of the foregoing, and all restrictive covenants affecting the Project, and “Law” means any of the foregoing; “Tenant’s Off-Premises Equipment” means any of Tenant’s equipment or other property that may be located on or about the Project (other than the Premises); and “Tenant Party” means any of the following persons:  Tenant; any assignees claiming by, through, or under Tenant; any subtenants claiming by, through, or under Tenant; and any of their respective agents, contractors, employees, licensees, guests and invitees.

2.

Lease Grant.  Subject to the terms of this Lease, Landlord leases to Tenant, and Tenant leases from Landlord, the Premises.

3.

Tender of Possession.  Landlord and Tenant presently anticipate that possession of the Premises will be tendered to Tenant in the condition required by this Lease on or about November 1, 2004 (the “Estimated Delivery Date”).  If Landlord is unable to tender possession of the Premises in such condition to Tenant by the Estimated Delivery Date, then (a) the validity of this Lease shall not be affected or impaired thereby, (b) Landlord shall not be in default hereunder or be liable for damages therefor, and (c) Tenant shall accept possession of the Premises when Landlord tenders possession thereof to Tenant.  By occupying the Premises, Tenant shall be deemed to have accepted the Premises in their condition as of the date of such occupancy, subject to the performance of punch-list items that remain to be performed by Landlord, if any.  Within five days after the Commencement Date, Tenant shall execute and deliver to Landlord a letter substantially in the form of Exhibit E hereto confirming (1) the Commencement Date and the expiration date of the initial Term, (2) that Tenant has accepted the Premises, and (3) that Landlord has performed all of its obligations with respect to the Premises (except for punch-list items specified in such letter); however, the failure of the parties to execute such letter shall not defer the Commencement Date or otherwise invalidate this Lease.  Occupancy of the Premises by Tenant prior to the Commencement Date shall be subject to all of the provisions of this Lease excepting only those requiring the payment of Basic Rent, Additional Rent, Taxes and Electrical Costs (each as defined herein).  Landlord agrees to promptly correct and complete any punch-list items.

4.

Rent

(a)

Payment.  Tenant shall timely pay to the Landlord Rent, without notice, demand, deduction or set off (except as otherwise expressly provided herein), by good and sufficient check drawn on a national banking association at Landlord’s address provided for in this Lease or as otherwise specified by Landlord and shall be accompanied by all applicable state and local sales or use taxes.  The obligations of Tenant to pay Basic Rent and other sums to Landlord and the obligations of Landlord under this Lease are independent obligations.  Basic Rent adjusted as herein provided, shall be payable monthly in advance.  The first monthly installment of Basic Rent shall be payable contemporaneously with the execution of this Lease; thereafter, subject to the provisions of Exhibit I, Basic Rent shall be payable on the first day of each month beginning on the first day of the second full calendar month of the Term.  The monthly Basic Rent for any partial month at the beginning of the Term shall equal the product of 1/365 of the annual Basic Rent in effect during the partial month and the number of days in the partial month and shall be due on the Commencement Date.  Payments of Basic Rent for any fractional calendar month at 

1

the end of the Term shall be similarly prorated.  Tenant shall pay Additional Rent at the same time and in the same manner as Basic Rent.

(b)

Operating Costs; Taxes; Electrical Costs.

(1)

Commencing January 1, 2005, Tenant shall pay to Landlord Tenant’s Proportionate Share of the amount (“Additional Rent”) by which the annual Operating Costs (defined below) exceed the Expense Stop.  Landlord may make a good faith estimate of the Additional Rent to be due by Tenant for any calendar year or part thereof during the Term.  During each calendar year or partial calendar year or the Term (after the base year, if the Expense Stop is calculated on a base year basis), Tenant shall pay to Landlord, in advance concurrently with each monthly installment of Basic Rent, an amount equal to the estimated Additional Rent for such calendar year or part thereof divided by the number of months therein.  From time to time, Landlord may estimate and re-estimate the Additional Rent to be due by Tenant and deliver a copy of the estimate or re-estimate to Tenant.  Thereafter, the monthly installments of Additional Rent payable by Tenant shall be appropriately adjusted in accordance with the estimations so that, by the end of the calendar year in question, Tenant shall have paid all of the Additional Rent as estimated by Landlord.  Any amounts paid based on such an estimate shall be subject to adjustment as herein provided when actual Operating Costs are available for each calendar year.

(2)

The term “Operating Costs” means all expenses and disbursements (subject to the limitations set forth below) that Landlord incurs in connection with the ownership, operation, and maintenance of the Project, determined in accordance with sound accounting principles consistently applied, including the following costs:  (A) wages and salaries of all on-site employees at or below the grade of senior building manager engaged in the operation, maintenance or security of the Project (together with Landlord’s reasonable allocation of expenses of off-site employees at or below the grade of senior building manager who perform a portion of their services in connection with the operation, maintenance or security of the Project), including taxes, insurance and benefits relating thereto; (B) all supplies and materials used in the operation, maintenance, repair, replacement, and security of the Project; (C) costs for improvements made to the Project which, although capital in nature, are expected to reduce the normal operating costs (including all utility costs) of the Project, as amortized using a commercially reasonable interest rate over the time period reasonably estimated by Landlord to recover the costs thereof taking into consideration the anticipated cost savings, as determined by Landlord using its good faith, commercially reasonable judgment, as well as capital improvements made in order to comply with any Law hereafter promulgated by any governmental authority or any interpretation hereafter rendered with respect to any existing Law, as amortized using a commercially reasonable interest rate over the useful economic life of such improvements as determined by Landlord in its reasonable discretion; (D) cost of all utilities, except Electrical Costs and the cost of other utilities reimbursable to Landlord by the Project’s tenants other than pursuant to a provision similar to this Section 4(b); (E) insurance expenses; (F) repairs, replacements, and general maintenance of the Project; (G) fair market rental and other costs with respect to the management office (reasonable in size) for the Building; and (H) service, maintenance and management contracts with independent contractors for the operation, maintenance, management, repair, replacement, or security of the Project (including alarm service, window cleaning, and elevator maintenance).  If the Building is part of a multi-building office complex (the “Complex”), Operating Costs, Taxes and Electrical Costs for the Complex may be prorated among the Project and the other buildings of the Complex, as reasonably determined by Landlord.

In addition to the exclusions and limitations to Operating Costs set forth above, Operating Costs shall not include costs for (i) capital improvements made to the building, other than capital improvements described in Section 4(b)(2)(C) and except for items which are generally considered maintenance and repair items such as painting of common areas, replacement of carpet in elevator lobbies, and the like; (ii) repair, replacements and general maintenance paid by proceeds of insurance or by Tenant or other third parties; (iii) interest, amortization or other payments on loans to Landlord; (iv) depreciation; (v) leasing commissions; (vi) legal expenses for services, other than those that benefit the Project tenants generally (e.g., tax disputes); (vii) renovating or otherwise improving space for occupants of the Project or vacant space in the Project; (viii) Taxes; (ix) federal income taxes imposed on or measured by the income of Landlord from the operation of the Project; (x) the cost of any special work or service performed for any 

2

tenant (including Tenant) at such tenant’s cost and for which Landlord has been reimbursed by Tenant; (xi) compensation paid to officers and executives of Landlord above the level of building manager (excluding any accountants); (xii) the cost of any items for which Landlord is reimbursed by insurance, condemnation or otherwise; (xiii) interest on debt or amortization payments on any mortgage or deed to secure debt and ground rental under any ground lease or other underlying lease; (xiv) any real estate brokerage commissions (or any fee in lieu of such commission), attorneys’ fees, architectural and engineering fees, permit, license and inspection fees, and any other costs incurred in connection with the leasing (or otherwise allowing to use), subleasing, or lease assignment of any space in the Project to any person or entity; (xv) any advertising expenses incurred in connection with the marketing of any rentable space; (xvi) any expenses for repairs or maintenance which are covered by warranties and service contracts, to the extent such maintenance and repairs are made at no cost to Landlord; (xvii) legal expenses arising out of the construction of the improvements within the Project or disputes with tenants or the enforcement of the provisions of any lease affecting the Project, including without limitation this Lease; (xviii) management fees in excess of the greater of three percent (3%) or the applicable market rate of the rentals collected for the Building in any year; (xix) amounts directly incurred in connection with selling, syndicating, financing, mortgaging or hypothecating any interest in the Project or any equipment therein; (xx) costs (including fines and penalties) incurred due to a violation by Landlord or any tenant or occupant of the Project of any legal requirements, or costs incurred due to the negligence or willful misconduct of Landlord or Landlord’s employees, agents or contractors (however, any insurance deductibles shall be included in Operating Costs); (xxi) any costs or expenses representing an amount paid to an affiliate of Landlord which is in excess of the amount which would be paid to a party which is not an affiliate of Landlord; (xxii) any costs associated with the removal or encapsulation of asbestos or other hazardous substances as required by laws in existence and as interpreted as of the Lease Date; (xxiii) contributions to any organizations, whether political or charitable; (xxiv) reserves, including reserves for bad debts or rental losses; (xxv) costs associated with the operation of the partnership or other entity which constitutes Landlord, as distinguished from costs of operation of the Building or the Project, including accounting and legal costs, costs of defending lawsuits with any mortgagee, and costs of selling, syndicating, financing, mortgaging or hypothecating any ownership interest in Landlord, or any of Landlord’s interests in the building or the Project; (xxvi) depreciation of the Building or any other building in the Project; and (xxvii) interest, principle, points and fees on debts or amortization on any financing except for amortization of capital expenses as permitted under this Lease.  If the Expense Stop is calculated on a base year basis, Operating Costs for the base year only shall not include costs incurred due to extraordinary circumstances, including market-wide labor rate increases due to boycotts and strikes; utility rate increases due to extraordinary circumstances, including conservation surcharges, boycotts, embargos or other shortages; insurance deductibles; or amortized costs relating to capital improvements.

(3)

Tenant shall also pay Tenant’s Proportionate Share of any increase in Taxes for each year and partial year falling within the Term over the Taxes for the Base Tax Year.  Tenant shall pay Tenant’s Proportionate Share of Taxes in the same manner as provided above for Tenant’s Proportionate Share of Operating Costs.  “Taxes” means taxes, assessments, and governmental charges or fees whether federal, state, country or municipal, and whether they be by taxing districts or authorities presently taxing or by others, subsequently created or otherwise, and any other taxes and assessments (including non-governmental assessments for common charges under a restrictive covenant or other private agreement that are not treated as part of Operating Costs) now or hereafter attributable to the Project (or its operation), excluding, however, penalties and interest thereon and federal and state taxes on income (if the present method of taxation changes so that in lieu of or in addition to the whole or any part of any Taxes, there is levied on Landlord a capital tax directly on the rents received therefrom or a franchise tax, assessment, or charge based, in whole or in part, upon such rents for the Project, then all such taxes, assessments, or charges, or the part thereof so based, shall be deemed to be included within the term “Taxes” for purposes hereof).  Taxes shall include the costs of consultants retained in an effort to lower taxes and all costs incurred in disputing any taxes or in seeking to lower the tax valuation of the Project.  For property tax purposes, Tenant waives all rights to protest or appeal the appraised value of the Premises, as well as the Project, and all rights to receive notices of reappraisement as set forth in Sections 41.413 and 42.015 of the Texas Tax Code.

3

(4)

Tenant shall also pay to Landlord Tenant’s Proportionate Share of the cost of all electricity used by the Project (“Electrical Costs”).  Such amount shall be payable in monthly installments on the Commencement Date and on the first day of each calendar month thereafter.  Each installment shall be based on Landlord’s estimate of the amount due for each month.  From time to time during any calendar year, Landlord may estimate or re-estimate the Electrical Costs to be due by Tenant for that calendar year and deliver a copy of the estimate or re-estimate to Tenant.  Thereafter, the monthly installments of Electrical Costs payable by Tenant shall be appropriately adjusted in accordance with the estimations.  Landlord shall cause any tenants of the Building whose equipment consumes a disproportionate amount of electricity f(relative to the other tenants in the Building) to pay their fair share of Electrical Costs.

(5)

By April 1 of each calendar year, or as soon thereafter as practicable, Landlord shall furnish to Tenant a statement of Operating Costs and Electrical Costs for the previous year, in each case adjusted as provided in Section 4(b)(6), and of the Taxes for the previous year (the “Operating Costs and Tax Statement”).  If Tenant’s estimated payments of Operating Costs, Electrical Costs or Taxes under this Section 4(b) for the year covered by the Operating Costs and Tax Statement exceed Tenant’s Proportionate Share of such items as indicated in the Operating Costs and Tax Statement, then Landlord shall promptly credit or reimburse Tenant for such excess; likewise, if Tenant’s estimated payments of Operating Costs, Electrical Costs or Taxes under this Section 4(b) for such year are less than Tenant’s Proportionate Share of such items as indicated in the Operating Costs and Tax Statement, then Tenant shall promptly pay Landlord such deficiency.

(6)

With respect to any calendar year or partial calendar year (including calendar year 2004) in which the Building is not occupied to the extent of 100% of the rentable area thereof, or Landlord is not supplying services to 100% of the rentable area thereof, the Operating Costs and Electrical Costs for such period which vary with the occupancy of the Building shall, for the purposes hereof, be increased to the amount which would have been incurred had the Building been occupied to the extent of 100% of the rentable area thereof and Landlord had been supplying services to 100% of the rentable area thereof.  In no event shall Landlord be entitled to recover more than 100% of actual Operating Costs or more than 100% of actual Electrical Costs pursuant to this Section 4(b)(6).

5.

Delinquent Payment; Handling Charges.  All past due payments required of Tenant hereunder shall bear interest from the date due until paid at the lesser of the “Prime Rate” as published by The Wall Street Journal, Southwest Edition, in its listing of “Money Rates” on the date such payment is due plus five percent (5%) per annum or the maximum lawful rate of interest (such lesser amount is referred to herein as the “Default Rate”); additionally, Landlord, in addition to all other rights and remedies available to it, may charge Tenant a fee equal to five percent of the delinquent payment to reimburse Landlord for its cost and inconvenience incurred as a consequence of Tenant’s delinquency.  In no event, however, shall the charges permitted under this Section 5 or elsewhere in this Lease, to the extent they are considered to be interest under applicable Law, exceed the maximum lawful rate of interest.  Notwithstanding the foregoing, the late fee referenced above shall not be charged with respect to the first occurrence (but not any subsequent occurrence) during any 12-month period that Tenant fails to make payment when due, until five days after Landlord delivers written notice of such delinquency to Tenant.

6.

Security Deposit.

Contemporaneously with the execution of this Lease, Tenant shall pay to Landlord the Security Deposit, which shall be held by Landlord to secure Tenant’s performance of its obligations under this Lease.  The Security Deposit is not an advance payment of Rent or a measure or limit of Landlord’s damages upon an Event of Default (as defined herein).  Landlord may, from time to time following an Event of Default and without prejudice to any other remedy, use all or a part of the Security Deposit to perform any obligation Tenant fails to perform hereunder.  Following any such application of the Security Deposit, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit to its original amount.  Provided that no Event of Default exists or any other condition exists which with the passage of time, the giving of notice, or both, would constitute an Event of Default, Landlord shall, within 30 days after the expiration of the Term and Tenant’s surrender of the Premises in compliance with the provisions of this Lease, return to Tenant the portion of the Security Deposit which was not applied to satisfy Tenant’s obligations.  The Security Deposit may be commingled with other funds, and no interest shall be paid thereon.  If Landlord transfers its interest in the Premises and the transferee assumes Landlord’s obligations under this Lease, then Landlord shall assign the Security Deposit to the transferee and, provided the transferee assumes in writing all of the Landlord’s obligations hereunder arising after 

4

such transfer, Landlord thereafter shall have no further liability for the return of the Security Deposit.  The rights and obligations of Landlord and Tenant under this Section 6 are subject to any other requirements and conditions imposed by Laws applicable to the Security Deposit.

7.

Landlord’s Obligations.

(a)

Services.  Landlord shall use all reasonable efforts to furnish to Tenant:  (1) water at those points of supply provided for general use of tenants of the Building; (2) heated and refrigerated air conditioning (“HVAC”) as appropriate, at such temperatures and in such amounts as are standard for the Building and for comparable buildings in the vicinity of the Building; (3) janitorial service to the Premises on weekdays, other than holidays, for Building-standard installations and such window washing as may from time to time be reasonably required; (4) elevators for ingress and egress to the floor on which the Premises are located, in common with other tenants, provided that Landlord may reasonably limit the number of operating elevators during non-business hours and holidays; and (5) electrical current during normal business hours for equipment that does not require more than 110 volts and whose electrical energy consumption does not exceed normal office usage.  Landlord shall maintain the common areas of the Building in reasonably good order and condition, except for damage caused by a Tenant Party.  If Tenant desires any of the services specified in Section 7(a)(2):  (A) at any time other than between 7:00 a.m. and 6:00 p.m. on weekdays and between 8:00 a.m. and 12:00 p.m. on Saturday (in each case other than holidays), or (B) on Sunday or holidays, then such services shall be supplied to Tenant upon the written request of Tenant delivered to Landlord before 3:00 p.m. on the business day preceding such extra usage, and Tenant shall pay to Landlord the cost of such services within 30 days after Landlord has delivered to Tenant an invoice therefor.  The costs incurred by Landlord in providing after-hour HVAC service to Tenant shall include costs for electricity, water, sewage, water treatment, labor, metering, filtering, and maintenance reasonably allocated by Landlord to providing such service.

(b)

Excess Utility Use.

Landlord shall not be required to furnish electrical current for equipment that requires more than 110 volts or other equipment whose electrical energy consumption exceeds normal office usage.  If Tenant’s requirements for or consumption of electricity exceed the electricity to be provided by Landlord as described in Section 7(a), Landlord shall, at Tenant’s expense, make reasonable efforts to supply such service through the then-existing feeders and risers serving the Building and the Premises, and Tenant shall pay to Landlord the cost of such service within 30 days after Landlord has delivered to Tenant an invoice therefor.  Landlord may determine the amount of such additional consumption and potential consumption by any verifiable method, including installation of a separate meter in the Premises installed, maintained, and read by Landlord, at Tenant’s expense.  Tenant shall not install any electrical equipment requiring special wiring or requiring voltage in excess of 110 volts unless approved in advance by Landlord, which approval shall not be unreasonably withheld.  Tenant shall not install any electrical equipment requiring voltage in excess of Building capacity unless approved in advance by Landlord, which approval may be withheld in Landlord’s sole discretion.  The use of electricity in the Premises shall not exceed the capacity of existing feeders and risers to or wiring in the Premises.  Any risers or wiring required to meet Tenant’s excess electrical requirements shall, upon Tenant’s written request, be installed by Landlord, at Tenant’s cost, if, in Landlord’s judgment, the same are necessary and shall not cause permanent damage to the Building or the Premises, cause or create a dangerous or hazardous condition, entail excessive or unreasonable alterations, repairs, or expenses, or interfere with or disturb other tenants of the Building.  If Tenant uses machines or equipment in the Premises which affect the temperature otherwise maintained by the air conditioning system or otherwise overload any utility, Landlord may install supplemental air conditioning units or other supplemental equipment in the Premises, and the cost thereof, including the cost of installation, operation, use, and maintenance, in each case plus an administrative fee of 15% of such cost, shall be paid by Tenant to Landlord within 30 days after Landlord has delivered to Tenant an invoice therefor.

(c)

Restoration of Services; Abatement.  Landlord shall use reasonable efforts to restore any service required of it that becomes unavailable; however, such unavailability shall not render Landlord liable for any damages caused thereby, be a constructive eviction of Tenant, constitute a breach of any implied warranty, or, except as provided in the next sentence, entitle Tenant to any abatement of Tenant’s obligations hereunder.  If however, Tenant is prevented from using the Premises because of the unavailability of any such service for a period of 25 consecutive business days following Landlord’s receipt from Tenant of a written notice regarding such unavailability, the restoration of which is within Landlord’s reasonable control, and such unavailability was not caused by a Tenant Party or a governmental directive, then Tenant shall, as its exclusive remedy be entitled to a 

5

reasonable abatement of Rent for each consecutive day (after such 25-day period) that Tenant is so prevented from using the Premises.  

(d)

Access.  Subject to the Building rules and regulations attached as Exhibit C hereto and the other provisions of this Lease (including Section 9 here of ), Tenant will be provided access to the Premises 24 hours per day, seven days per week.  If such access is unavailable due to force majeure or any other reason beyond Landlord’s control (including construction performed by parties other than Landlord which prohibits such assess), Landlord shall not be in default under this Section 7(d).

8.

Improvements; Alterations; Repairs; Maintenance.

(a)

Improvements; Alterations.  Improvements to the Premises shall be installed at Tenant’s expense only in accordance with plans and specifications which have been previously submitted to and approved in writing by Landlord, which approval shall be governed by the provisions set forth in this Section 8(a).  No alterations or physical additions in or to the Premises may be made without Landlord’s prior written consent, which shall not be unreasonably withheld or delayed; however, Landlord may withhold its consent to any alteration or addition that would adversely affect (in the reasonable discretion of Landlord) the (1) Building’s Structure or the Building’s Systems (including the Building’s restrooms or mechanical rooms), (2) exterior appearance of the Building, (3) appearance of the Building’s common areas or elevator lobby areas, or (4) provision of services to other occupants of the Building.  Tenant shall not paint or install lighting or decorations, signs, window or door lettering, or advertising media of any type visible from the exterior of the Premises without the prior written consent of Landlord, which consent may be withheld in Landlord’s sole and absolute discretion.  All alterations, additions and improvements made after the Commencement Date by or on behalf of a Tenant Party shall be constructed, maintained, and used by Tenant, at its risk and expense, in accordance with all Laws; Landlord’s consent to or approval of any alterations, additions or improvements (or the plans therefor) shall not constitute a representation or warranty by Landlord, nor Landlord’s acceptance, that the same comply with sound architectural and/or engineering practices or with all applicable Laws, and Tenant shall be solely responsible for ensuring all such compliance.

(b)

Repairs; Maintenance.  Tenant shall maintain the Premises in a clean, safe, and operable condition, and shall not permit or allow to remain any waste or damage to any portion of the Premises (ordinary wear and tear excepted).  Additionally, Tenant, at its sole expense shall repair, replace and maintain in good condition and in accordance with all Laws and the equipment manufacturer’s suggested service programs, all portions of the Premises, Tenant’s Off-Premises Equipment and all areas, improvements and systems exclusively serving the Premises.  Subject to Section 15 of this Lease, Tenant shall repair or replace, subject to Landlord’s direction and supervision, any damage to the Building caused by a Tenant Party.  If Tenant fails to make such repairs or replacements within 15 days after Tenant is made aware of such damage, the Landlord may make the same at Tenant’s cost.  If any such damage occurs outside of the Premises, then Landlord may elect to repair such damage at Tenant’s expense, rather than having Tenant repair such damage.  The cost of all maintenance, repair or replacement work performed by Landlord under this Section 8 shall be paid by Tenant to Landlord within 30 days after Landlord has invoiced Tenant therefor.

(c)

Performance of Work.  All work described in this Section 8 shall be performed only by Landlord or by contractors and subcontractors approved in writing by Landlord.  Tenant shall cause all contractors and subcontractors to procure and maintain insurance coverage naming Landlord, Landlord’s property management company and Landlord’s asset management company as additional insureds against such risks, in such amounts, and with such companies as Landlord may reasonably require.  Tenant shall provide Landlord with the identities, mailing addresses and telephone numbers of all persons performing work or supplying materials prior to beginning such construction and Landlord may post on and about the Premises notices of non-responsibility pursuant to applicable laws.  All such work shall be performed in accordance with all Laws and in a good and workmanlike manner so as not to damage the Building (including the Premises, the Building’s Structure and the Building’s Systems).  All such work which may affect the Building’s Structure or the Building’s Systems must be approved by the Building’s engineer of record, at Tenant’s expense and, at Landlord’s election, must be performed by Landlord’s usual contractor for such work.  All work affecting the roof of the Building must be performed by Landlords’ roofing contractor and no such work will be permitted if it would void or reduce the warranty on the roof.

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(d)

Mechanic’s Liens.  All work performed, materials furnished, or obligations incurred by or at the request of a Tenant Party (not including the work to be performed by Landlord pursuant to Exhibit D hereto) shall be deemed authorized and ordered by Tenant only, and Tenant shall not permit any mechanic’s liens to be filed against the Premises or the Project in connection therewith.  Upon completion of any such work, Tenant shall deliver to Landlord final lien waivers from all contractors, subcontractors and materialmen who performed such work.  If such a lien is filed, then Tenant shall, within ten days after Landlord has delivered notice of the filing thereof to Tenant (or such earlier time period as may be  necessary to prevent the forfeiture of the Premises, the Project or any interest of Landlord therein or the imposition of a civil or criminal fine with respect thereto), either (1) pay the amount of the lien and cause the lien to be released of record, or (2) diligently contest such lien and deliver to Landlord a bond or other security reasonably satisfactory to Landlord.  If Tenant fails to timely take either such action, the Landlord may pay the lien claim, and any amounts so paid, including expenses and interest, shall be paid by Tenant to Landlord within ten days after Landlord has invoiced Tenant therefor.  Landlord and Tenant acknowledge and agree that their relationship is and shall be solely that of “landlord-tenant” (thereby excluding a relationship of “owner-contractor”, “owner-agent” or other similar relationships).  Accordingly, all materialmen, contractors, artisans, mechanics, laborers and any other persons now or hereafter contracting with Tenant, any contractor or subcontractor of Tenant or any other Tenant Party for the furnishing of any labor, services, materials, supplies or equipment with respect to any portion of the Premises, at any time from the date hereof until the end of the Term, are hereby charged with notice that they look exclusively to Tenant to obtain payment for same.  Nothing herein shall be deemed a consent by Landlord to any liens being placed upon the Premises, the Project or Landlord’s interest therein due to any work performed by or for Tenant or deemed to give any contractor or subcontractor or materialman any right or interest in any funds held by Landlord to reimburse Tenant for any portion of the cost of such work.  Tenant shall defend, indemnify and hold harmless Landlord and its agents and representatives from and against all claims, demands, causes of action, suits judgments, damages and expenses (including attorneys’ fees) in any way arising from or relating to the failure by any Tenant Party to pay for any work performed, materials furnished, or obligations incurred by or at the request of a Tenant Party.  This indemnity provision shall survive termination or expiration of this Lease.

(9)

Use.  Tenant shall use the Premises only for the Permitted Use and shall comply with all Laws relating to the use, condition, access to, and occupancy of the Premises and will not commit waste, overload the Building’s Structure or the Building’s Systems or subject the Premises to use that would damage the Premises.  The population density within the Premises as a whole shall at no time exceed one person for each 250 rentable square feet in the premises.  Notwithstanding anything in this Lease to the contrary, as between Landlord and Tenant, (a) Tenant shall bear the risk of complying with Title III of the Americans With Disabilities Act of 1990, any state laws governing handicapped access or architectural barriers, and all rules, regulations, and guidelines promulgated under such laws, as amended from time to time (the “Disabilities Act”) in the Premises, and (b) Landlord shall bear the risk of complying with the Disabilities Acts in the common areas of the Building, other than compliance that is necessitated by the use of the Premises for other than the Permitted Use or as a result of any alterations or additions, including any initial tenant improvement work made by or on behalf of a Tenant Party (which risk and responsibility shall be borne by Tenant).  The Premises shall not be used for any use which is disreputable, creates extraordinary fire hazards, or results in an increased rate of insurance on the Building or its contents, or for the storage of any Hazardous Materials (other than typical office supplies [e.g., photocopier toner] and then only in compliance with all Laws).  Tenant shall not use any substantial portion of the Premises for a “call center”, any other telemarketing use, or any credit processing use.  If, because of a Tenant’s Party’s acts or because Tenant vacates the Premises, the rate of insurance on the Building or its contents increases, then Tenant shall pay to Landlord the amount of such increase within 30 days after demand, and acceptance of such payment shall not waive any of Landlord’s other rights.  Tenant shall conduct its business and control each other Tenant Party so as not to create any nuisance or unreasonably interfere with other tenants or Landlord in its management of the Building.

10.

Assignment and Subletting.

(a)

Transfers.  Except as provided in Section 10(h), Tenant shall not, without the prior written consent of Landlord, (1) assign, transfer, or encumber this Lease or any estate or interest herein, whether directly or by operation of law, (2) permit any other entity to become Tenant hereunder by merger, consolidation, or other reorganization, (3) if Tenant is an entity other than a corporation whose stock is publicly traded, permit the transfer of ownership interest in Tenant so as to result in a change in the current control of Tenant (excluding transfers between existing shareholders), (4) sublet any portion of the Premises, (5) grant any license, concession, or 

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other right of occupancy of any portion of the Premises, or (6) permit the use of the Premises by any parties other than Tenant (any of the events listed in Section 10(a)(1) through 10 (a)(6) being a “Transfer”).

(b)

Consent Standards.  Landlord shall not unreasonably withhold its consent to any assignment or subletting of the Premises, provided that the proposed transferee (1) is creditworthy, (2) has a good reputation in the business community, (3) will use the Premises for the Permitted Use (thus, excluding, without limitation, uses for credit processing and telemarketing) and will not use the Premises in any manner that would conflict with any exclusive use agreement or other similar agreement entered into by Landlord with any other tenant of the Building or Complex , (4) will not use the Premises, Building or Project in a manner that would materially increase the pedestrian or vehicular traffic to the Premises, Building or Project, (5) is not a governmental entity, or subdivision or agency thereof, (6) is not another occupant of the Building or Complex, and (7) is not a person or entity with whom Landlord is then, or has been within the three-month period prior to the time Tenant seeks to enter into such assignment or subletting, negotiating to lease space in the Building or Complex or any Affiliate or any such person or entity; otherwise, Landlord may withhold its consent in its sole discretion.  Additionally, Landlord may withhold its consent in its sole discretion to any proposed Transfer if any Event of Default by Tenant then exists.

(c)

Request for Consent.  If Tenant requests Landlord’s consent to a Transfer, then, at least 15 business days prior to the effective date of the proposed Transfer, Tenant shall provide Landlord with a written description of all terms and conditions of the proposed Transfer, copies of the proposed documentation, and the following information about the proposed transferee:  name and address; reasonably satisfactory information about its business and business history; its proposed use of the Premises; banking, financial, and other credit information; and general references sufficient to enable Landlord to determine the proposed transferee’s creditworthiness and character.  Concurrently with Tenant’s notice of any request for consent to a Transfer, Tenant shall pay to Landlord a fee of $750 to defray Landlord’s expenses in reviewing such request, and Tenant shall also reimburse Landlord within 15 days after request for its reasonable attorneys’ fees (not to exceed $2,000) incurred in connection with considering any request for consent to a Transfer.

(d)

Conditions to Consent.  If Landlord consents to a proposed Transfer, then the proposed transferee shall deliver to Landlord a written agreement whereby it expressly assumes Tenant’s obligations hereunder; however, any transferee of less than all of the space in the Premises shall be liable only for obligations under this Lease that are properly allocable to the space subject to the Transfer for the period of the Transfer.  No Transfer shall release Tenant from its obligations under this Lease, but rather Tenant and its transferee shall be jointly and severally liable therefor.  Landlord’s consent to any Transfer shall not waive Landlord’s rights as to any subsequent Transfers.  If an Event of Default occurs while the Premises or any part thereof is subject to a Transfer, then Landlord, in addition to its other remedies, may collect directly from such transferee all rents becoming due to Tenant and apply such rents against Rent.  Tenant authorizes its transferees to make payments of rent directly to Landlord upon receipt of notice from Landlord to do so following the occurrence of an Event of Default hereunder.  Tenant shall pay for the cost of any demising walls or other improvements necessitated by a proposed subletting or assignment.

(e)

Attornment by Subtenants.  Each sublease by Tenant hereunder shall be subject and subordinate to this Lease and to the matters to which this Lease is or shall be subordinate, and each subtenant by entering into a sublease is deemed to have agreed that in the event of termination, re-entry or dispossession by Landlord under this Lease, Landlord may, at its option, take over all of the right, title and interest of Tenant, as sublandlord, under such sublease, and such subtenant shall, at Landlord’s option, attorn to Landlord pursuant to the then executory provisions of such sublease, except that Landlord shall not be (1) liable for any previous act or omission of Tenant under such sublease, (2) subject to any counterclaim, offset or defense that such subtenant might have against Tenant, (3) bound by any previous modification of such sublease not approved by Landlord in writing or by any rent or additional rent or advance rent which such subtenant might have paid for more than the current month to Tenant, and all such rent shall remain due and owing, notwithstanding such advance payment, (4) bound by any security or advance rental deposit made by such subtenant which is not delivered or paid over to Landlord and with respect to which such subtenant shall look solely to Tenant for refund or reimbursement, or (5) obligated to perform any work in the subleased space or to prepare it for occupancy, and in connection with such attornment, the subtenant shall execute and deliver to Landlord any instruments Landlord may reasonably request to evidence and confirm such attornment.  Each subtenant or licensee of Tenant shall be deemed, automatically upon and as a 

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condition of its occupying or using the Premises or any part thereof, to have agreed to be bound by the terms and conditions set forth in this Section 10(e).  The provisions of this Section 10(e) shall be self-operative, and no further instrument shall be required to give effect to this provision.

(f)

Cancellation.  Landlord may, within 30 days after submission of Tenant’s written request for Landlord’s consent to an assignment or subletting, cancel this Lease as to the portion of the Premises proposed to be sublet or assigned as of the date the proposed Transfer is to be effective.  If Landlord cancels this Lease as to any portion of the Premises, then this Lease shall cease for such portion of the Premises and Tenant shall pay to Landlord all Rent accrued through the cancellation date relating to the portion of the Premises covered by the proposed Transfer.  Thereafter, Landlord may lease such portion of the Premises to the prospective transferee (or to any other person) without liability to Tenant.  Notwithstanding the foregoing, if Landlord provides written notification to Tenant of its election to cancel this Lease as to any portion of the Premises as provided above, Tenant may rescind its proposed assignment or subletting of all or any portion of the Premises by notifying Landlord in writing within seven business days following Landlord’s written cancellation notice.  The provisions of this Section 10(f) shall not apply to any Permitted Transfer.

(g)

Additional Compensation.  While no Event of Default exists, Tenant shall pay to Landlord, immediately upon receipt thereof, fifty percent (50%) of the excess of (1) all compensation received by Tenant for a Transfer less the actual out-of-pocket costs reasonably incurred by Tenant with unaffiliated third parties (i.e., brokerage commissions and tenant finish work) in connection with such Transfer (such costs shall be amortized on a straight-line basis over the term of the Transfer in question) over (2) the Rent allocable to the portion of the Premises covered thereby.  While any Event of Default exists, Tenant shall pay to Landlord, immediately upon receipt thereof, one hundred percent (100%) of the excess of (A) all compensation received by Tenant for a Transfer over (B) the Rent allocable to the portion of the Premises covered thereby.

(h)

Permitted Transfers.  Notwithstanding Section 10(a), Tenant may Transfer all or part of its interest in this lease or all or part of the Premises (a “Permitted Transfer”) to the following types of entities (a “Permitted Transferee”) without the written consent of Landlord:

(1)

an Affiliate of Tenant;

(2)

any corporation, limited partnership, limited liability partnership, limited liability company or other business entity in which or with which Tenant, or its corporate successors or assigns, is merged or consolidated, in accordance with applicable statutory provisions governing merger and consolidation of business entities, so long as (A) Tenant’s obligations hereunder are assumed by the entity surviving such merger or created by such consolidation; and (B) the Tangible Net Worth of the surviving or created entity is not less than the Tangible Net Worth of Tenant as of the date hereof; or

(3)

any corporation, limited partnership, limited liability partnership, limited liability company or other business entity acquiring all or substantially all of Tenant’s assets or stock if such entity’s Tangible Net Wroth after such acquisition is not less than the Tangible Net Wroth of Tenant as of the date hereof.

Tenant shall promptly notify Landlord of any such Permitted Transfer.  Tenant shall remain liable for the performance of all of the obligations of Tenant hereunder, or if Tenant no longer exists because of a merger, consolidation, or acquisition, the surviving or acquiring entity shall expressly assume in writing the obligations of Tenant hereunder.  Additionally, the Permitted Transferee shall comply with all of the terms and conditions of this Lease, including the Permitted Use, and the use of the Premises by the Permitted Transferee may not violate any other agreements affecting the Premises, the Building or the Complex, Landlord or other tenants of the Building or the Complex.  No later than 30 days after the effective date of any Permitted Transfer, Tenant agrees to furnish Landlord with (A) copies of the instrument effecting any of the foregoing Transfers, (B) documentation establishing Tenant’s satisfaction of the requirements set forth above applicable to any such Transfer, and (C) evidence of insurance as required under this Lease with respect to the Permitted Transferee.  The occurrence of a Permitted Transfer shall not waive Landlord’s rights as to any subsequent Transfers.  “Tangible Net Worth” means the excess of total assets over total liabilities, in each case as determined in accordance with generally accepted accounting principles consistently applied (“GAAP”), excluding however, from the determination of total assets all assets 

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which would be classified as intangible assets under GAAP including goodwill, licenses, patents, trademarks, trade names, copyrights, and franchises.  Any subsequent Transfer by a Permitted Transferee shall be subject to the terms of this Section 10.

11.

Insurance; Waivers; Subrogation; Indemnity.

(a)

Tenant’s Insurance.  Effective as of the earlier of (1) the date Tenant enters of occupies the Premises, or (2) the Commencement Date, and continuing throughout the Term, Tenant shall maintain the following insurance policies:  (A) commercial general liability insurance in amounts of $3,000,000 per occurrence or, following the expiration of the initial Term, such other amounts as Landlord may from time to time reasonably require (and, if the use and occupancy of the Premises include any activity or matter that is or may be excluded from coverage under a commercial general liability policy[e.g., the sale, service or consumption of alcoholic beverages], Tenant shall obtain such endorsements to the commercial general liability policy or otherwise obtain insurance to insure all liability arising from such activity or matter [including liquor liability, if applicable] in such amounts as Landlord may reasonably require), insuring Tenant, Landlord, Landlord’s property management company, Landlord’s asset management company and, if requested in writing by Landlord, Landlord’s Mortgagee, against all liability for injury to or death of a person or persons or damage to property arising from the use and occupancy of the Premises and (without implying any consent by Landlord to the installation thereof) the installation, operation, maintenance, repair or removal of Tenant’s Off-Premises Equipment, (B) insurance covering the full value of all alterations and improvements and betterments in the Premises, naming Landlord and Landlord’s Mortgagee as additional loss payees as their interest may appear, (C) insurance covering the full value of all furniture, trade fixtures and personal property (including property of Tenant or others) in the Premises or otherwise placed in the Project by or on behalf of a Tenant Party (including Tenant’s Off-Premises Equipment, (D) contractual liability insurance sufficient to cover Tenant’s indemnity obligations hereunder (but only if such contractual liability insurance is not already included in Tenant’s commercial general liability insurance policy), (E) worker’s compensation insurance, and (F) business interruption insurance in an amount reasonably acceptable to Landlord.  Any insurance required to be maintained by Tenant may be taken out under a blanket insurance policy or policies covering other premises, property or insureds in addition to the Premises and Tenant, provided such policy or policies otherwise comply with this Section 11(a).  Tenant’s insurance shall provide primary coverage to Landlord when any policy issued to Landlord provides duplicate or similar coverage, and in such circumstance Landlord’s policy will be excess over Tenant’s policy.  Tenant shall furnish to Landlord certificates of such insurance and such other evidence satisfactory to Landlord of the maintenance of all insurance coverages required hereunder at least ten days prior to the earlier of the Commencement Date or the date Tenant enters or occupies the Premises, and at least 15 days prior to each renewal of said insurance, and Tenant shall obtain a written obligation on the part of each insurance company to notify Landlord at least 30 days before cancellation or a material change of any such insurance.  All such insurance policies shall be in form, and issued by companies with an A.M. Best rating of A+:VII or better, reasonably satisfactory to Landlord.  If Tenant fails to comply with the foregoing insurance requirements or to deliver to Landlord the certificates or evidence of coverage required herein, Landlord, in addition to any other remedy available pursuant to this Lease or otherwise, may, but shall not be obligated to, obtain insurance and Tenant shall pay to Landlord on demand the premium costs thereof, plus an administrative fee of 15% of such cost.

(b)

Landlord’s Insurance.  Throughout the Term of this Lease, Landlord shall maintain, as a minimum, the following insurance policies:  (1) property insurance for the Building’s replacement value (excluding property required to be insured by Tenant), less a commercially-reasonable deductible if Landlord so chooses, and (2) commercial general liability insurance in an amount of not less than $3,000.000.  Landlord may, but is not obligated to, maintain such other insurance and additional coverages as it may deem necessary.  The cost of all insurance carried by Landlord with respect to the Project shall be included in Operating Costs.  The foregoing insurance policies and any other insurance carried by Landlord shall be for the sole benefit of Landlord and under Landlord’s sole control, and Tenant shall have no right or claim to any proceeds thereof or any other rights thereunder.  Notwithstanding anything in this Lease to the contrary, Landlord’s indemnity obligations under this Lease shall be limited to the extent any such claim is insured against under the terms of any insurance policy maintained by Landlord (or is required to be maintained by Landlord under the terms of this Lease).

(c)

No Subrogation; Waiver of Property Claims.  Landlord and Tenant each waives any claim it might have against the other for any damage to or theft, destruction, loss, or loss of use of any property, to 

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the extent the same is insured against under any insurance policy of the types described in this Section 11 that covers the Project, the Premises, Landlord’s or Tenant’s fixtures, personal property, leasehold improvements, or business or is required to be insured against under the terms hereof, regardless of whether the negligence of the other party caused such Loss (defined below).  Additionally, Tenant waives any claim it may have against Landlord for any Loss to the extent such Loss is caused by a terrorist act.  Each party shall cause its insurance carrier to endorse all applicable policies waiving the carrier’s rights of recovery under subrogation or otherwise against the other party.  Notwithstanding any provision in this Lease to the contrary, Landlord, its agents, employees and contractors shall not be liable to Tenant or to any party claiming by, through or under Tenant for (and Tenant hereby releases Landlord and its servants, agents, contractors, employees and invitees from any claim or responsibility for) any damage to or destruction, loss, or loss of use, or theft of any property of any Tenant Party located in or about the Project, caused by casualty, theft, fire, third parties or any other matter or cause, regardless of whether the negligence of any party caused such loss in whole or in part.  Tenant acknowledges that Landlord shall not carry insurance on, and shall not be responsible for damage to, any property of any Tenant Party located in or about the Project.

(d)

Indemnity.  Subject to section 11(c), Tenant shall defend, indemnify, and hold harmless Landlord and its representatives and agents from and against all claims, demands, liabilities, causes of action, suits, judgments, damages, and expenses (including reasonable attorneys’ fees) arising from any injury to or death of any person or the damage to or theft, destruction, loss or loss of use of any property or inconvenience (a “Loss”) (1) occurring in or on the Project (other than within the Premises) to the extent caused by the negligence or willful misconduct of any Tenant Parties, (2) occurring in the Premises, or (3) arising out of the installation, operation, maintenance, repair or removal of any of Tenant’s Off-Premises  Equipment.  Clauses (2) and (3) of this indemnity are intended to indemnify Landlord and its agents against the consequences of their own negligence or fault, even when Landlord or its agents are jointly, comparatively, contributively, or concurrently negligent with Tenant, and even though any such claim,  cause of action, or suit is based upon or alleged to be based upon the strict liability of Landlord or its agents; however such indemnity shall not apply to the sole or gross negligence or willful misconduct of Landlord and its agents.  Subject to Section 11(c), Landlord shall defend indemnify, and hold harmless Tenant and its agents from and against all claims, demands, liabilities, causes of action, suits, judgments, and expenses (including reasonable attorneys’ fees) for any Loss arising from any occurrence in or on the Building’s common areas to the extent caused by the negligence or willful misconduct of Landlord or its agents, representatives or contractors.  The indemnities set forth in this Lease shall survive termination or expiration of this Lease and shall not terminate or be waived, diminished or affected in any manner by any abatement or apportionment of Rent under any provision of this Lease.  If any proceeding is filed for which indemnity is required hereunder, the indemnifying party agrees, upon request therefor, to defend the indemnified party in such proceeding at its sole cost utilizing counsel satisfactory to the indemnified party.

12.

Subordination; Attornment; Notice to Landlord’s Mortgagee.

(a)

Subordination.  This Lease shall be subordinate to any deed of trust, mortgage, or other security instrument (each, a “Mortgage”), or any ground lease, master lease, or primary lease (each, a “Primary Lease”), that now or hereafter covers all or any part of the Premises (the mortgagee under any such Mortgage, beneficiary under and such deed of trust, or the lessor under any such Primary Lease is referred to herein as a “Landlord’s Mortgagee”).  Any Landlord’s Mortgagee may elect, at any time, unilaterally, to make this Lease superior to its Mortgage, Primary Lease, or other interest in the Premises by so notifying Tenant in writing.  The provisions of this Section shall be self-operative and no further instrument of subordination shall be required; however, in confirmation of such subordination, Tenant shall execute and return to Landlord (or such other party designated by Landlord) within ten days after written request therefor such documentation, in recordable form if required, as a Landlord’s Mortgagee may reasonably request to evidence the subordination of this Lease to such Landlord’s Mortgagee’s Mortgage or Primary Lease (including a subordination, non-disturbance and attornment agreement) or, if the Landlord’s Mortgagee so elects, the subordination of such Landlord’s Mortgagee’s Mortgage or Primary Lease to this Lease.

(b)

Attornment.  Tenant shall attorn to any party succeeding to Landlord’s interest in the Premises, whether by purchase, foreclosure, deed in lieu of foreclosure, power of sale, termination of lease, or otherwise, upon such party’s request, and shall execute such agreements confirming such attornment as such party may reasonably request.

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(c)

Notice to Landlord’s Mortgagee.  Tenant shall not seek to enforce any remedy it may have for any default on the part of Landlord without first giving written notice by certified mail, return receipt requested, specifying the default in reasonable detail, to any Landlord’s Mortgagee whose address has been given to Tenant, and affording such Landlord’s Mortgagee a reasonable opportunity to perform Landlord’s obligations hereunder.

(d)

Landlord’s Mortgagee’s Protection Provisions.  If Landlord’s Mortgagee shall succeed to the interest of Landlord under this Lease, Landlord’s Mortgagee shall not be:  (1) liable for any act or omission of any prior lessor (including Landlord); (2) bound by any rent or additional rent or advance rent which Tenant might have paid for more than the current month to any prior lessor (including Landlord), and all such rent shall remain due and owing, notwithstanding such advance payment; (3) bound by any security or advance rental deposit made by Tenant which is not delivered or paid over to Landlord’s Mortgagee and with respect to which Tenant shall look solely to Landlord for refund or reimbursement; (4) bound by any termination, amendment or modification of this Lease made without Landlord’s Mortgagee’s consent and written approval, except for those terminations, amendments and modifications permitted to be made by Landlord without Landlord’s  Mortgagee’s consent pursuant to the terms of the loan documents between Landlord an Landlord’s Mortgagee; (5) subject to the defenses which Tenant might have against any prior lessor (including Landlord); and (6) subject to the offsets which Tenant might have against any prior lessor (including Landlord) except for those offset rights which (A) are expressly provided in this Lease, (B) relate to periods of time following the acquisition of the Building by Landlord’s Mortgagee, and (C) Tenant has provided written notice to Landlord’s Mortgagee and provided Landlord’s Mortgagee a reasonable opportunity to cure the event giving rise to such offset event.  Landlord’s Mortgagee shall have no liability or responsibility under or pursuant to the terms of this Lease or otherwise after is ceases to own an interest in the Project.  Nothing in this Lease shall be construed to require Landlord’s Mortgagee to see the application of the proceeds of any loan, and Tenant’s agreements set forth herein shall not be impaired on account of any modification of the documents evidencing and securing any loan.

13.

Rules and Regulations.  Tenant shall comply with the rules and regulations of the Project which are attached hereto as Exhibit C.  Landlord may, from time to time, change such rule and regulations for the safety, care, or cleanliness of the Project and related facilities, provided that such changes are applicable to all tenants of the Project, will not unreasonably interfere with Tenant’s use of the Premises and are enforced by Landlord in a non-discriminatory manner.  Tenant shall be responsible for the compliance with such rules and regulations by each Tenant Party.

14.

Condemnation.

(a)

Total Taking.  If the entire Building or Premises are taken by right of eminent domain or conveyed in lieu thereof (a “Taking”), this Lease shall terminate as of the date of the Taking.

(b)

Partial Taking – Tenant’s Rights.  If any part of the Building becomes subject to a Taking and such Taking will prevent Tenant from conducting on a permanent basis its business in the Premises in a manner reasonably comparable to that conducted immediately before such Taking, then Tenant may terminate this Lease as of the date of such Taking by giving written notice to Landlord within 30 days after the Taking, and Basic Rent and Additional Rent shall be apportioned as of the date of such Taking.  If Tenant does not terminate this Lease, then Rent shall be abated on a reasonable basis as to that portion of the Premises rendered untenantable by the Taking.

(c)

Partial Taking – Landlord’s Rights.  If any material portion, but less than all, or the Building becomes subject to a Taking, or if Landlord is required to pay any of the proceeds arising from a Taking to a Landlord’s Mortgagee, then Landlord may terminate this Lease by delivering written notice thereof to Tenant within 30 days after such Taking, and Basic Rent and Additional Rent shall be apportioned as of the date of such Taking.  If Landlord does not so terminate this Lease, then this Lease will continue, but if any portion of the Premises has been taken, Rent shall abate as provided in the last sentence of Section 14(b).

(d)

Temporary Taking.  If all or any portion of the Premises becomes subject to a Taking for a limited period of time (not to exceed 180 days), this Lease shall remain in full force and effect and Tenant shall continue to perform all of the terms, conditions and covenants of this Lease, including the payment of Basic Rent 

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and all other amounts required hereunder.  If any such temporary Taking terminates prior to the expiration of the Term, Tenant shall restore the Premises as nearly as possible to the condition prior to such temporary Taking, at Tenant’s sole cost and expense.  Landlord shall be entitled to receive the entire award for any such temporary Taking, except that Tenant shall be entitled to receive the portion of such award which (1) compensates Tenant for its loss of use of the Premises within the Term and (2) reimburses Tenant for the reasonable out-of-pocket costs actually incurred by Tenant to restore the Premises are required by this Section 14(d).

(e)

Award.  Subject to Section 14(d), if any Taking occurs, then Landlord shall receive the entire award or other compensation for the Land, the Building, and other improvements taken; however, Tenant may separately pursue a claim (to the extent it will not reduce Landlord’s award) against the condemner for the value of Tenant’s personal property which Tenant is entitled to remove under this Lease, moving costs, loss of business, and other claims it may have.

15.

Fire or Other Casualty.

(a)

Repair Estimate.  If the Premises or the Building are damaged by fire or other casualty (a  “Casualty”), Landlord shall, within 60 days after such Casualty, deliver to Tenant a good faith estimate (the “Damage Notice”) of the time needed to repair the damage caused by such Casualty and the estimated completion date for such repair work as determined by Landlord in the exercise of its commercially reasonable discretion.

(b)

Tenant’s Rights.  If a material portion of the Premises is damaged by Casualty such that Tenant is prevented from conducting its business in the Premises in a manner reasonably comparable to that conducted immediately before such Casualty and Landlord estimates that the damage caused thereby cannot be repaired within 210 days after the commencement of repairs (the “Repair Period”), then Tenant may terminate this Lease by delivering written notice to Landlord of its election to terminate within 30 days after the Damage Notice has been delivered to Tenant.

(c)

Landlord’s Rights.  If a Casualty damages the Premises or a material portion of the Building and (1) Landlord estimates that the damage to the Premises cannot be repaired within the Repair Period, (2) the damage to the Premises exceeds 50% of the replacement cost thereof (excluding foundations and footings), as estimated by Landlord, and such damage occurs during the last two years of the Term, (3) regardless of the extent of damage to the Premises, the damage is not fully covered by Landlord’s insurance policies or Landlord makes a good faith determination that restoring the Building would be uneconomical, or (4) Landlord is required to pay any insurance  proceeds arising out of the Casualty to a Landlord’s Mortgagee, then Landlord may terminate this Lease by giving written notice of its election to terminate within 30 days after the Damage Notice has been delivered to Tenant.

(d)

Repair Obligation.  If neither party elects to terminate this Lease following a Casualty, then Landlord shall, within a reasonable time after such Casualty, begin to repair the Premises and shall proceed with reasonable diligence to restore the Premises to substantially the same condition as they existed immediately before such Casualty; however, Landlord shall not be required to repair or replace any alterations or betterments within the Premises (which shall be promptly and with due diligence repaired and restored by Tenant at Tenant’s sole cost and expense) or any furniture, equipment, trade fixtures or personal property of Tenant or others in the Premises or the Building.  If this Lease is terminated under the provisions of this Section 15, Landlord shall be entitled to the full proceeds of the insurance policies providing coverage for all alterations, improvements and betterments in the Premises (and, if Tenant has failed to maintain insurance on such items as required by this Lease, Tenant shall pay Landlord an amount equal to the proceeds Landlord would have received had Tenant maintained insurance on such items as required by this Lease).  If Landlord does not complete the restoration or the Premises within 120 days after the time period estimated by Landlord to repair the damage caused by such Casualty as specified in the Damage Notice, as the same may be extended by force majeure or delays caused by a Tenant Party, Tenant may terminate this Lease by delivering written notice to Landlord and Landlord’s Mortgagee within ten days following the expiration of such 120-day period (as the same may be extended as set forth above) and prior to the date upon which Landlord substantially completes such restoration.  Such termination shall be effective as of the date specified in Tenant’s termination notice (but not earlier than 30 days nor later than 90 days after the date of such notice) as if such date were the date fixed for the expiration of the Term.  If Tenant fails to timely give such termination notice, Tenant shall be deemed to have waived its right to terminate this Lease, time being of the 

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essence with respect thereto.  Notwithstanding the foregoing, if upon the receipt of Tenant’s written election to terminate this Lease as provided in this Section 15(d), Landlord reasonably believes it can complete the restoration of the Premises within 30 days following the receipt of such notice, Landlord may, in its sole discretion, elect to proceed with such restoration and, provided Landlord substantially completes such restoration within such 30-day period, Tenant’s election to terminate shall be null and void.

(e)

Abatement of Rent.  If the Premises are damaged by Casualty, Rent for the portion of the Premises rendered untenantable by the damage shall be abated on a reasonable basis from the date of damage until the completion of Landlord’s repairs (or until the date of termination of this Lease by Landlord or Tenant as provided above, as the case may be).

16.

Personal Property Taxes.  Tenant shall be liable for all taxes levied or assessed against personal property, furniture, or fixtures placed by Tenant in the Premises or in or on the Building or Project.  If any taxes for which Tenant is liable are levied or assessed against Landlord or Landlord’s property and Landlord elects to pay the same, or if the assessed value of Landlord’s property is increased by inclusion of such personal property, furniture or fixtures and Landlord elects to pay the taxes based on such increase, then Tenant shall pay to Landlord, within 30 days following written request therefor, the part of such taxes for which Tenant is primarily liable hereunder, however, Landlord shall not pay such amount if Tenant notifies Landlord that it will contest the validity or amount of such taxes before Landlord makes such payment, and thereafter diligently proceeds with such contest in accordance with Law and if the non-payment thereof does not pose a threat of loss or seizure of the Project or interest of Landlord therein or impose any fee or penalty against Landlord.

17.

Events of Default.  Each of the following occurrences shall be an “Event of Default”:

(a)

Payment Default.  Tenant’s failure to pay Rent within five days after Landlord has delivered written notice to Tenant that the same is due; however, an Event of Default shall occur hereunder without any obligation of Landlord to give any notice if Tenant fails to pay Rent when due and, during the 12 month interval preceding such failure, Landlord has given Tenant written notice of failure to pay Rent on one or more occasions;

(b)

Abandonment.  [Intentionally deleted];

(c)

Estoppel.  Tenant fails to provide any estoppel certificate after Landlord’s written request therefor pursuant to Section 25(e) and such failure shall continue for five days after Landlord’s second written notice thereof to Tenant;

(d)

Insurance.  Tenant fails to procure, maintain and deliver to Landlord evidence of the insurance policies and coverages as required under Section 11(a);

(e)

Mechanic’s Liens.  Tenant fails to pay and release of record, or diligently contest and bond around, any mechanic’s lien filed against the Premises or the Project for any work performed, materials furnished, or obligation incurred by or at the request of Tenant, within the time and in the manner required by Section 8(d);

(f)

Other Defaults.  Tenant’s failure to perform, comply with, or observe any other agreement or obligation of Tenant under this Lease and the continuance of such failure for a period of more than 30 days after Landlord has delivered to Tenant written notice thereof; however, if such failure cannot be cured within such 30-day period (thus excluding, for example, Tenant’s obligation to provide Landlord evidence of Tenant’s insurance coverage) and Tenant commences to cure such failure within such 30-day period and thereafter diligently pursues such cure to completion, then such failure shall not be an Event of Default unless it is not fully cured within an additional 30 days after the expiration of the 30-day period; and

(g)

Insolvency.  The filing of a petition by or against Tenant (the term “Tenant” shall include, for the purpose of this Section 17(g), any guarantor of Tenant’s obligations hereunder) (1) in any bankruptcy or other insolvency proceeding; (2) seeking any relief under any state or federal debtor relief law; (3) for the appointment of a liquidator or receiver for all or substantially all of Tenant’s property or for Tenant’s interest in 

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this Lease; (4) for the reorganization or modification of Tenant’s capital structure; or (5) in any assignment for the benefit of creditors proceeding ; however, if such a petition is filed against Tenant, then such filing shall not be an Event of Default unless Tenant fails to have the proceedings initiated by such petition dismissed within 90 days after the filing thereof.

18.

Remedies.  During the continuance of any Event of Default, Landlord may, in addition to all other rights and remedies afforded Landlord hereunder or by law or equity, take any one or more of the following actions:

(a)

Termination of Lease.  Terminate this Lease by giving Tenant written notice thereof, in which event Tenant shall pay to Landlord the sum of (1) all Rent accrued hereunder through the date of termination, (2) all amounts due under Section 19(a), and (3) an amount equal to (A) the total Rent that Tenant would have been required to pay for the remainder of the Term discounted to present value at a per annum rate equal to the “Prime Rate” as published on the date this Lease is terminated by The Wall Street Journal, Southwest Edition, in its listing of “Money Rates” minus one percent, minus (B) the then present fair rental value of the Premises for such period, similarly discounted;

(b)

Termination of Possession.  Terminate Tenant’s right to possess the Premises without terminating this Lease by giving written notice thereof to Tenant, in which event Tenant shall pay to Landlord (1) all Rent and other amounts accrued hereunder to the date of termination of possession, (2) all amounts due from time to time under Section 19(a), and (3) all Rent and other net sums required hereunder to be paid by Tenant during the remainder of the Term, diminished by any net sums thereafter received by Landlord through reletting the Premises during such period, after deducting all costs incurred by Landlord in reletting the Premises.  If Landlord elects to proceed under this Section 18(b), Landlord may remove all of Tenant’s property from the Premises and store the same in a public warehouse or elsewhere at the cost of, and for the account of, Tenant, without becoming liable for any loss or damage which may be occasioned thereby.  Landlord shall use reasonable efforts to relet the Premises on such terms as Landlord in its sole discretion may determine (including a term different from the Term, rental concessions, and alterations to, and improvement of the Premises); however, Landlord shall not be obligated to relet the Premises before leasing other portions of the Building or Complex and Landlord shall not be obligated to accept any prospective tenant proposed by Tenant unless such proposed tenant meets all of Landlord’s leasing criteria.  Landlord shall not be liable for, nor shall Tenant’s obligations hereunder be diminished because of, Landlord’s failure to relet the Premises or to collect rent due for such reletting.  Tenant shall not be entitled to the excess of any consideration obtained by reletting over the Rent due hereunder, but any such excess shall be credited against amounts due and owing to Landlord by Tenant pursuant to this Lease; however, in no event will Landlord be obligated to pay to Tenant any excess.  Reentry by Landlord in the Premises shall not affect Tenant’s obligations hereunder for the unexpired Term; rather, Landlord may, from time to time, bring an action against Tenant to collect amounts due by Tenant, without the necessity of Landlord’s waiting until the expiration of the Term.  Unless Landlord delivers written notice to Tenant expressly stating that it has elected to terminate this Lease, all actions taken by Landlord to dispossess or exclude Tenant from the Premises shall be deemed to be taken under this Section 18(b).  If Landlord elects to proceed under this Section 18(b), it may at any time elect to terminate this Lease under Section 18(a);

(c)

Perform Acts on Behalf of Tenant.  Perform any act Tenant is obligated to perform under the terms of this Lease (and enter upon the Premises in connection therewith if necessary) in Tenant’s name and on Tenant’s behalf, without being liable for any claim for damages therefore, and Tenant shall reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting compliance with Tenant’s obligations under this Lease (including, but not limited to, collection costs and legal expenses), plus interest thereon at the Default Rate;

(d)

Suspension of Services.  Suspend any above Building-standard services required to be provided by Landlord hereunder without liability to Tenant; or

(e)

Alteration of Locks.  Additionally, with or without notice, and to the extent permitted by Law, Landlord may alter locks or other security devices at the Premises to deprive Tenant of access thereto, and Landlord shall not be required to provide a new key or right of access to Tenant.

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19.

Payment by Tenant; Non-Waiver; Cumulative Remedies.

(a)

Payment by Tenant.  Upon any Event of Default, Tenant shall pay to Landlord all costs incurred by Landlord (including court costs and reasonable attorney’s fees and expenses) in (1) obtaining possession of the Premises, (2) removing and storing Tenant’s or any other occupant’s property, (3) repairing, restoring, altering, remodeling, or otherwise putting the Premises into condition acceptable to a new tenant, (4) if Tenant is dispossessed of the Premises and this Lease is not terminated, reletting all or any part of the Premises (including brokerage commissions, cost of tenant finish work, and other costs incidental to such reletting), (5) performing Tenant’s obligations which Tenant failed to perform, and (6) enforcing, or advising Landlord of, its rights, remedies, and recourses arising out of the default.  To the full extent permitted by law, Landlord and Tenant agree the federal and state courts of the state in which the Premises are located shall have exclusive jurisdiction over any matter relating to or arising from this Lease and the parties’ rights and obligations under this Lease.

(b)

No Waiver.  Landlord’s acceptance of Rent following an Event of Default shall not waive Landlord’s rights regarding such Event of Default.  No waiver by Landlord of any violation or breach of any of the terms contained herein shall waive Landlord’s rights regarding any future violation of such term.  Landlord’s acceptance of any partial payment of Rent shall not waive Landlord’s rights with regard to the remaining portion of the Rent that is due, regardless of any endorsement or other statement on any instrument delivered in payment of Rent or any writing delivered in connection therewith; accordingly, Landlord’s acceptance of a partial payment of Rent shall not constitute an accord and satisfaction of the full amount of the Rent that is due.

(c)

Cumulative Remedies.  Any and all remedies set forth in this Lease:  (1) shall be in addition to any and all other remedies Landlord may have at law or in equity, (2) shall be cumulative, and (3) may be pursued successively or concurrently as Landlord may elect.  The exercise of any remedy by Landlord shall not be deemed an election of remedies or preclude Landlord from exercising any other remedies in the future.  Additionally, Tenant shall defend, indemnify and hold harmless Landlord, Landlord’s Mortgagee and their respective representatives and agents from and against all claims, demands, liabilities, causes of action, suits, judgments, damages and expenses (including reasonable attorneys’ fees) arising from Tenants failure to perform its obligations under this Lease.

20.

Landlord’s Lien.  [Intentionally deleted.]

21.

Surrender of Premises.  No act by Landlord shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept a surrender of the Premises shall be valid unless it is in writing and signed by Landlord.  At the expiration or termination of this Lease, Tenant shall deliver to Landlord the Premises with all improvements located therein in good repair and condition, free of Hazardous Materials placed on the Premises during the Term, broom-clean, reasonable wear and tear (and condemnation and Casualty damage, as to which Sections 14 and 15 shall control) excepted, and shall deliver to Landlord all keys to the Premises.  Provided that no Event of Default exists or any other condition exists which with the passage of time, the giving of notice, or both, could constitute an Event of Default, Tenant may remove all unattached trade fixtures, furniture, and personal property placed in the Premises or elsewhere in the Building by Tenant (but Tenant may not remove any such item which was paid for, in whole or in part, by Landlord or any wiring or cabling unless Landlord requires such removal).  Additionally, at Landlord’s option, Tenant shall remove such alterations, additions, improvements, trade fixtures, personal property, equipment, wiring, conduits, cabling, and furniture (including Tenant’s Off-Premises Equipment) as Landlord may request; however, Tenant shall not be required to remove any addition or improvement to the Premises or the Project if Landlord has specifically agreed in writing that the improvement or addition in question need not be removed.  Tenant shall repair all damage caused by such removal.  All items not so removed shall, at Landlord’s option, be deemed to have been abandoned by Tenant and may be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord without notice to Tenant and without any obligation to account for such items; any such disposition shall not be considered a strict foreclosure or other exercise of Landlord’s rights in respect of the security interest granted under Section 20.  The provisions of this Section 21 shall survive the end of the Term.

22.

Holding Over.  If Tenant fails to vacate the Premises at the end of the Term, then Tenant shall be a tenant at sufferance and, in addition to all other damages and remedies to which Landlord may be entitled for such holding over, (a) Tenant shall pay, in addition to the other Rent, Basic Rent equal to the greater of (1) 150% of the 

16

Rent payable during the last month of the Term, or (2) 125% of the prevailing rental rate in the Building for similar space, and (b) Tenant shall otherwise continue to be subject to all of Tenant’s obligations under this Lease.  The provisions of this Section 22 shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or at law.  If Tenant fails to surrender the Premises upon the termination or expiration of this Lease, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable attorneys’ fees) and liability resulting from such failure, including any claims made by any succeeding tenant founded upon such failure to surrender, and any lost profits to Landlord resulting therefrom.

23.

Certain Rights Reserved by Landlord.  Provided that the exercise of such rights does not unreasonably interfere with Tenant’s use or occupancy of or access to the Premises and does not adversely affect Tenant’s parking rights hereunder, Landlord shall have the following rights:

(a)

Building Operations.  To decorate and to make inspections, repairs, alterations, additions, changes, or improvements, whether structural or otherwise, in and about the Project, or any part thereof; to enter upon the Premises (after giving Tenant reasonable notice thereof, which may be oral notice, except in cases of real or apparent emergency, in which case no notice shall be required) and, during the continuance of any such work, to temporarily close doors, entryways, public space, and corridors in the Building; to interrupt or temporarily suspend Building services and facilities; to change the name of the Building; and to change the arrangement and location of entrances or passageways, doors, and doorways, corridors, elevators, stairs, restrooms, or other public parts of the Building; Landlord agrees to use commercially reasonable efforts to minimize the interference with Tenant’s business operations in connection with exercising such rights;

(b)

Security.  To take such reasonable measures as Landlord deems advisable for the security of the Building and its occupants; evacuating the Building for cause, suspected cause, or for drill purposes; temporarily denying access to the Building; and closing the Building after normal business hours and on Sundays and holidays, subject, however, to Tenant’s right to enter when the Building is closed after normal business hours under such reasonable regulations as Landlord may prescribe from time to time;

(c)

Prospective Purchasers and Lenders.  To enter the Premises at all reasonable hours to show the Premises to prospective purchasers or lenders; and

(d)

Prospective Tenants.  At any time during the last 12 months of the Term (or earlier if Tenant has notified Landlord in writing that it does not desire to renew the Term) or at any time during the continuance of an Event of Default, to enter Premises at all reasonable hours to show the Premises to prospective tenants.

24.

Substitution Space.  Landlord may, at Landlord’s expense, relocate Tenant within the Building space on the eighth floor or a higher floor which is comparable in location within the Building (excluding the floor on which the Premises is located), size, utility and condition to the Premises.  If Landlord relocates Tenant, Landlord shall reimburse Tenant for Tenant’s reasonable out-of-pocked expenses for moving Tenant’s furniture, equipment, and supplies from the Premises to the relocations space and for reprinting Tenant’s stationery of the same quality and quantity as Tenant’s stationery supply on hand immediately before Landlord’s notice to Tenant of the exercise of this relocation right and shall abate Basic Rent payable to Landlord pursuant to this Lease for the first 60 days after the date of such relocation.  Upon such relocation, the relocation space shall be deemed to be the Premises and the terms of this Lease shall remain in full force and shall apply to the relocation space.  No amendment or other instrument shall be necessary to effectuate the relocation contemplated by this Section; however, if requested by Landlord, Tenant shall execute an appropriate amendment document within ten business days after Landlord’s written request therefore.  If Tenant fails to execute such relocation amendment within such time period, or if Tenant fails to relocate within the time period stated in Landlord’s relocation notice to Tenant (or, if such relocation space is not available on the date specified in Landlord’s relocation notice, as soon thereafter as the relocation space becomes available and is tendered to Tenant in the condition required by this Lease), then, in addition to Landlord’s other remedies set forth in this Lease, at law and/or in equity, Landlord may terminate this Lease by notifying Tenant in writing thereof at least 60 days prior to the termination date contained in Landlord’s termination notice.  Time is of the essence with respect to Tenant’s obligations under this Section.

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25.

Miscellaneous.

(a)

Landlord Transfer.  Landlord may transfer any portion of the Project and any of its rights under this Lease.  If Landlord assigns its rights under this Lease, then Landlord shall thereby be released from any further obligations hereunder arising after the date of transfer, provided that the assignee assumes in writing Landlord’s obligations hereunder arising from and after the transfer date.

(b)

Landlord’s Liability.  The liability of Landlord (and its partners, shareholders or members) to Tenant (or any person or entity claiming by, through or under Tenant) for any default by Landlord under the terms of this Lease or any matter relating to or arising out of the occupancy or use of the Premises and/or other areas of the Building shall be limited to Tenant’s actual direct, but not consequential, damages therefore and shall be recoverable only from the interest of Landlord in the Building, and Landlord (and its partners, shareholders or members) shall not be personally liable for any deficiency.  Additionally, Tenant hereby waives its statutory lien under Section 91.004 of the Texas Property Code.

(c)

Force Majeure.  Other than for Landlord’s and Tenant’s obligations under this Lease that can be performed by the payment of money (e.g., payment of Rent and maintenance of insurance), whenever a period of time is herein prescribed for action to be taken by either party hereto, such party shall not be liable or responsible for, and there shall be excluded from the computation of any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, terrorist acts or activities, governmental laws, regulations, or restrictions, or any other causes of any kind whatsoever which are beyond the control of such party.

(d)

Brokerage.  Neither Landlord nor Tenant has dealt with any broker or agent in connection with the negotiation or execution of this Lease, other than Peloton Real Estate Partners, LLC and Pinnacle Commercial Real Estate, Inc., whose commissions shall be paid by Landlord pursuant to separate written agreements.  Tenant and Landlord shall each indemnify the other against all costs, expenses, attorneys’ fees, liens and other liability for commissions or other compensation claimed by any other broker or agent claiming the same by, through, or under the indemnifying party.

(e)

Estoppel Certificates.  From time to time (but not more than four times in any 12-month period unless to a Landlord’s Mortgagee), Tenant shall furnish to any party designated by Landlord, within ten days after Landlord has made a request therefore, a certificate signed by Tenant confirming and containing such factual certifications and representations as to this Lease as Landlord may reasonably request.  Unless otherwise required by Landlord’s Mortgagee or a prospective purchaser or mortgagee of the Project, the initial form of estoppel certificate to be signed by Tenant is attached hereto as Exhibit F.  If Tenant does not deliver to Landlord the certificate signed by Tenant within such required time period, Landlord, Landlord’s Mortgagee and any prospective purchaser or mortgagee, may conclusively presume and rely upon the following facts:  (1) this Lease is in full force and effect; (2) the terms and provisions of this Lease have not been changed except as otherwise represented by Landlord; (3) not more than one monthly installment of Basic 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) Landlord is not in default under this lease.  In such event, Tenant shall be estopped from denying the truth of the presumed facts.

(f)

Notices.  All notices and other communications given pursuant to this Lease shall be in writing and shall be (1) mailed by first class, United States Mail, postage prepaid, certified, with return receipt requested, and addressed to the parties hereto at the address specified in the Basic Lease Information, (2) hand delivered to the intended addressee, (3) sent by a nationally recognized overnight courier service, or (4) sent by facsimile transmission during normal business hours followed by a confirmatory letter sent in another manner permitted hereunder.  All notices shall be effective upon delivery to the address of the addressee (even if such addressee refuses delivery thereof).  The parties hereto may change their addresses by giving notice thereof to the other in conformity with this provision.

(g)

Separability.  If any clause or provision of this Lease is illegal, invalid, or unenforceable under present or future laws, then the remainder of this Lease shall not be affected thereby and in lieu of such clause or provision, there shall be added as a part of this Lease a clause or provision as similar in terms to such illegal, invalid, or unenforceable clause or provision as may be possible and be legal, valid, and enforceable.

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(h)

Amendments; Binding Effect; No Electronic Records.  This Lease may not be amended except by instrument in writing signed by Landlord and Tenant.  No provision of this Lease shall be deemed to have been waived by Landlord unless such waiver is in writing signed by Landlord, and no custom or practice which may evolve between the parties in the administration of the terms hereof shall waive or diminish the right of Landlord to insist upon the performance by Tenant in strict accordance with the terms hereof.  Landlord and Tenant hereby agree not to conduct the transactions or communications contemplated by this Lease by electronic means, except by facsimile transmission as specifically set forth in Section 25(f); nor shall the use of the phrase “in writing” or the word “written” be construed to include electronic communications except by facsimile transmissions as specifically set forth in Section 25(f).  The terms and conditions contained in this Lease shall inure to the benefit or and be binding upon the parties hereto, and upon their respective successors in interest and legal representatives, except as otherwise herein expressly provided. This Lease is for the sole benefit of Landlord and Tenant, and, other than Landlord’s Mortgagee, no third party shall be deemed a third party beneficiary hereof.

(i)

Quiet Enjoyment.  Provided Tenant has performed all of its obligations hereunder, Tenant shall peaceably and quietly hold and enjoy the Premises for the Term, without hindrance from Landlord or any party claiming by, through, or under Landlord, but not otherwise, subject to the terms and conditions of this Lease.

(j)

No Merger.  There shall be no merger of the leasehold estate hereby created with the fee estate in the Premises or any part thereof if the same person acquires or holds, directly or indirectly, this Lease or any interest in this Lease and the fee estate in the leasehold Premises or any interest in such fee estate.

(k)

No Offer.  The submission of this Lease to Tenant shall not be construed as an offer, and Tenant shall not have any rights under this Lease unless Landlord executes a copy of this Lease and delivers it to Tenant.

(l)

Entire Agreement.  This Lease constitutes the entire agreement between Landlord and Tenant regarding the subject matter hereof and supersedes all oral statements and prior writings relating thereto.  Except for this set forth in this Lease, no representations, warranties, or agreements have been made by Landlord or Tenant to the other with respect to this Lease or the obligations of Landlord or Tenant in connection therewith.  The normal rule of construction that any ambiguities be resolved against the drafting party shall not apply to the interpretation of this Lease or any exhibits or amendments hereto.

(m)

Waiver of Jury Trial.  TO THE MAXIMUM EXTENT PERMITTED BY LAW, LANDLORD AND TENANT EACH WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LITIGATION OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE ARISING OUT OF OR WITH RESPECT TO THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

(n)

Governing Law.  This Lease shall be governed by and construed in accordance with the laws of the state in which the Premises are located.

(o)

Recording.  Tenant shall not record this Lease or any memorandum of this Lease without the prior written consent of Landlord, which consent may be withheld or denied in the sole and absolute discretion of Landlord, and any recordation by Tenant shall be a material breach of this Lease.  Tenant grants to Landlord a power or attorney to execute and record a release releasing any such recorded instrument of record that was recorded without the prior written consent of Landlord.

(p)

Water or Mold Notification.  To the extent Tenant or its agents or employees have actual knowledge of any water leakage, water damage or mold in or about the Premises or Project, Tenant shall promptly notify Landlord thereof in writing.

(q)

Joint and Several Liability.  If Tenant is comprised of more than one party, each such party shall be jointly and severally liable for Tenant’s obligations under this Lease.  All unperformed obligations of 

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Tenant hereunder not fully performed at the end of the Term shall survive the end of the Term, including payment obligations with respect to Rent and all obligations concerning the condition and repair of the Premises.

(r)

Financial Reports.  Within 15 days after Landlord’s request, Tenant will furnish Tenant’s most recent audited financial statements (including any notes to them) to Landlord, or, if no such audited statements have been prepared, such other financial statements (and notes to them) as may have been prepared by an independent certified public accountant or failing those, Tenant’s internally prepared financial statements.  If Tenant is a publicly traded corporation, Tenant may satisfy its obligations hereunder by providing to Landlord Tenant’s most recent annual and quarterly reports.  Tenant will discuss its financial statements with Landlord and, following the occurrence of an Event of Default hereunder, will give Landlord access to Tenant’s books and records in order to enable Landlord to verify the financial statements.  Landlord will not disclose any aspect of Tenant’s financial statements that Tenant designates to Landlord as confidential except (1) to Landlord’s Mortgagee or prospective mortgagees or purchasers of the Building, (2) in litigation between Landlord and Tenant, and/or  (3) if required by court order.  Tenant shall not be required to deliver the financial statements required under this Section 25(r) more than once in any 12-month period unless requested by Landlord’s Mortgagee or a prospective buyer or lender of the Building or an Event of Default occurs.

(s)

Landlord’s Fees.  Whenever Tenant requests Landlord to take any action not required of it hereunder or give any consent required or permitted under this Lease, Tenant will reimburse Landlord for Landlord’s reasonable, out-of-pocket costs payable to third parties and incurred by Landlord in reviewing the proposed action or consent, including reasonable attorneys’, engineers’ or architects’ fees, within 30 days after landlord’s delivery to Tenant of a statement of such costs.  Tenant will be obligated to make such reimbursement without regard to whether Landlord consents to any such proposed action.  If Landlord reasonably believes that the out-of-pocket costs payable to third parties to be incurred by Landlord in reviewing the proposed action or consent will exceed $1,000, Landlord will first notify Tenant of such cost estimate before proceeding with such third-party expenses.  If Tenant fails to consent to such additional costs and expenses within five business days after Landlord’s written notification to Tenant thereof, Tenant shall be deemed to have rescinded its request for such action or consent.

(t)

Telecommunications.  Tenant and its telecommunications companies, including local exchange telecommunications companies and alternative access vendor services companies, shall have no right of access to and within the Building, for the installation and operation of telecommunications systems, including voice, video, data, Internet, and any other services provided over wire, fiber optic, microwave, wireless, and any other transmission systems (“Telecommunications Services”), for part or all of Tenant’s telecommunications within the Building and from the Building to any other location without Landlord’s prior written consent, not to be unreasonably withheld.  All providers of Telecommunications Services shall be required to comply with the rules and regulations of the Building, applicable Laws and Landlord’s policies and practices for the Building.  Tenant acknowledges that Landlord shall not be required to provide or arrange for any Telecommunications Services and that Landlord shall have no liability to any Tenant Party in connection with the installation, operation or maintenance of Telecommunications Services or any equipment or facilities relating thereto.  Tenant, at its cost and for its own account, shall be solely responsible for obtaining all Telecommunications Services.

(u)

Confidentiality.  Tenant acknowledges that the terms and conditions of this Lease are to remain confidential for Landlord’s benefit, and may not be disclosed by Tenant to anyone, by any manner or means, directly or indirectly, without Landlord’s prior written consent; however, Tenant may disclose the terms and conditions of this Lease if required by Law or court order, to its attorneys, accountants, employees, proposed assignees and sublessees and existing or prospective financial partners provided same are advised by Tenant of the confidential nature of such terms and conditions and agree to maintain the confidentiality thereof (in each case, prior to disclosure).  Tenant shall be liable for any disclosures made in violation of this Section by Tenant or by any entity or individual to whom the terms of and conditions of this Lease were disclosed or made available by Tenant.  The consent by Landlord to any disclosures shall not be deemed to be a waiver on the part of Landlord of any prohibition against any future disclosure.

(v)

Authority.  Tenant (if a corporation, partnership or other business entity) hereby represents and warrants to Landlord that Tenant is a duly formed and existing entity qualified to do business in the state in which the Premises are located, that Tenant has full right and authority to execute and deliver this Lease, and 

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that each person signing on behalf of Tenant is authorized to do so.  Landlord hereby represents and warrants to Tenant that Landlord is a duly formed and existing entity qualified to do business in the state in which the Premises are located, that landlord has full right and authority to execute and deliver this Lease, and that each person signing on behalf of Landlord is authorized to do so.

(w)

Hazardous Materials.  The term “Hazardous Materials” means any substance, material, or waste which is now or hereafter classified or considered to be hazardous, toxic, or dangerous under any Law relating to pollution or the protection or regulation of human health, natural resources or the environment, or poses or threatens to pose a hazard to the health or safety of persons on the Premises or in the Project.  Tenant shall not use, generate, store, or dispose of, or permit the use, generation, storage or disposal of Hazardous Materials on or about the Premises or the Project except in a manner and quantity necessary for the ordinary performance of Tenant’s business, and then in compliance with all laws.  If Tenant breaches its obligations under this Section 25(w), Landlord may immediately take any and all action reasonably appropriate to remedy the same, including taking all appropriate action to clean up or remediate any contamination resulting from Tenant’s use, generation, storage or disposal of Hazardous Materials.  Notwithstanding Landlord’s indemnity contained in Section 11(d), Tenant shall defend, indemnify, and hold harmless Landlord and its representatives and agents from and against any and all claims, demands, liabilities, causes of action, suits, judgments, damages and expenses (including reasonable attorneys’ fees and cost of clean up and remediation) arising from Tenant’s failure to comply with the provisions of this Section 25(w).  This indemnity provision shall survive termination or expiration of this Lease.

(x)

List of Exhibits.  All exhibits and attachments attached hereto are incorporated herein by this reference.

Exhibit A – Outline of Premises

Exhibit B – Description of the Land

Exhibit C – Building Rules and Regulations

Exhibit D – Tenant Finish-Work:  Work of Limited Scope

Exhibit D-1 – Plans

Exhibit E – Form of Confirmation of Commencement Date Letter

Exhibit F – Form of Tenant Estoppel Certificate

Exhibit G – Parking

Exhibit H – Renewal Option

Exhibit I – Rent Abatement Provisions

(y)

Determination of Charges.  Landlord and Tenant agree that each provision of this Lease for determining charges and amounts payable by Tenant (including provisions regarding Additional Rent and Tenant’s Proportionate Share of Taxes and Electrical Costs) is commercially reasonable and, as to each such charge or amount, constitutes a statement of the amount of the charge or a method by which the charge is to be computed for purposes of Section 93.012 of the Texas Property Code.

(z)

Prohibited Persons and Transactions.  Tenant represents and warrants that neither Tenant nor any of its affiliates, nor any of their respective partners, members, shareholders or other equity owners, and none of their respective employees, officers, directors, representatives or agents is, nor will they become, a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and will not Transfer this Lease to, contract with or otherwise engage in any dealings or transactions or be otherwise associated with such persons or entities.

26.

Other Provisions.

(a)

Attorneys’ Fees.  If there is any legal or arbitration action or proceeding between Landlord and Tenant to enforce any provision of this Lease or to protect or establish any right or remedy of either Landlord or Tenant hereunder, the unsuccessful party to such action or proceeding will pay to the prevailing party 

21

all reasonable, actual out-of-pocket costs and expenses paid or payable to third parties, including reasonable attorneys’ fees incurred by such prevailing party in such action or proceeding and in any appeal in connection therewith, and if such prevailing party recovers a judgment in any such action, proceeding or appeal, such costs, expenses and attorneys’ fees will be determined by the court or arbitration panel handling the proceeding and will be included in and as a part of such judgment written above.

LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT’S INTENDED COMMERCIAL PURPOSE, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, (1) TENANT’S OBLIGATION TO PAY RENT HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND, (2) TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT, DEMAND, SETOFF OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.

This Lease is executed on the respective dates set forth below, but for reference purposes, this Lease shall be dated as of the date first above written.  If the execution date is left blank, this Lease shall be deemed executed as of the date first written above.

			
	LANDLORD:

	TGS AMERICAN REALTY LIMITED PARTNERSHIP,

	 
	a Delaware limited partnership

	 
	By:

	TGS American Realty, LLC, a Delaware limited liability company, its general partner

	 
	 
	 

	 
	 
	 

	 
	By:

	//signed//John Massing

	 
	Name:

	John Massing

	 
	Title:

	Senior VP

	 
	Execution Date: Sept 30/04

	 
	 
	 

	 
	 
	 

	TENANT:

	MEDICAL DOCTOR ASSOCIATES, INC., a Georgia

	 
	Corporation

	 
	 
	 

	 
	 
	 

	 
	By:

	//signed//Michael Pretiger

	 
	Name:

	Michael Pretiger

	 
	Title:

	CFO

	 
	Execution Date: 9/24/04

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