Document:

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                                                                   EXHIBIT 10.31

                                [CRESCENT LOGO]

                                  OFFICE LEASE

                                     BETWEEN

                      CRESCENT REAL ESTATE FUNDING X, L.P.

                                  ("LANDLORD")

                                       and

                                 GAINSCO, INC.

                                   ("TENANT")

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                                TABLE OF CONTENTS

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<Caption>
                                                                            PAGE
                                                                            ----

<S>                                                                           <C>
1.  Basic Lease Information...............................................     1
2.  Lease Grant ..........................................................     2
3.  Term; Adjustment of Commencement Date; Possession.....................     2
4.  Rent..................................................................     3
5.  Tenant's Use of Premises..............................................     7
6.  Security Deposit......................................................     8
7.  Services to be Furnished by Landlord..................................     8
8.  Use of Electrical Services by Tenant..................................     9
9.  Repairs and Alterations...............................................    10
10. Entry by Landlord.....................................................    11
11. Assignment and Subletting.............................................    11
12. Liens.................................................................    13
13. Indemnity and Waiver of Claims........................................    13
14. Insurance.............................................................    14
15. Mutual Waiver of Subrogation..........................................    14
16. Casualty Damage.......................................................    15
17. Condemnation..........................................................    15
18. Events of Default.....................................................    16
19. Remedies..............................................................    16
20. Limitation of Liability...............................................    18
21. No Waiver.............................................................    19
22. Tenant's Right to Possession..........................................    19
23. Relocation ...........................................................    19
24. Holding Over .........................................................    19
25. Subordination to Mortgages; Estoppel Certificate......................    19
26. Attorneys' Fees.......................................................    20
27. Notice................................................................    20
28. Reserved Rights.......................................................    20
29. Surrender of Premises.................................................    20
30. Hazardous Materials...................................................    21
31. Miscellaneous.........................................................    21
</Table>

EXHIBITS AND RIDERS

EXHIBIT A-1  OUTLINE AND LOCATION OF PREMISES
EXHIBIT A-2  LEGAL DESCRIPTION OF PROPERTY
EXHIBIT B    RULES AND REGULATIONS
EXHIBIT C    COMMENCEMENT LETTER
EXHIBIT D    WORK LETTER
EXHIBIT E    PARKING AGREEMENT
EXHIBIT F    EXCLUSIVE BANKING RIGHT HELD BY WELLS FARGO
EXHIBIT G    OPTION TO EXTEND
EXHIBIT H    TERMINATION OPTION

                                       -i-

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                                  OFFICE LEASE

     This Office Lease (this "Lease") is entered into by and between CRESCENT
REAL ESTATE FUNDING X, L.P., a Delaware limited partnership ("Landlord"), and
GAINSCO, INC., a Texas corporation ("Tenant"), and shall be effective as of the
date set forth below Landlord's signature (the "Effective Date").

1.   BASIC LEASE INFORMATION. The key business terms used in this Lease are
     defined as follows:

     A. "Building" shall mean the building commonly known as Fountain Place and
located at 1445 Ross Avenue, Dallas, Dallas County, Texas.

     B. "Rentable Square Footage of the Building" is deemed to be 1,200,266
square feet.

     C. "Premises" shall mean the area shown on Exhibit A-1 to this Lease. The
Premises are located on the 53rd floor and known as suite number(s) 5300. The
"Rentable Square Footage of the Premises" is deemed to be 8,352 square feet. If
the Premises include one or more floors in their entirety, all corridors and
restroom facilities located on such full floor(s) shall be considered part of
the Premises. Landlord and Tenant stipulate and agree that the Rentable Square
Footage of the Building and the Rentable Square Footage of the Premises are
correct and shall not be remeasured.

     D. "Base Rent":

<Table>
<Caption>
                                               ANNUAL RATE           MONTHLY
                         PERIOD              PER SQUARE FOOT        BASE RENT
                         ------              ---------------        ----------
<S>                                               <C>               <C>

             Commencement  to   Expiration        $21.00            $14,616.00
                 Date              Date
</Table>

     E. "Tenant's Pro Rata Share" is equal to the Rentable Square Footage of the
Premises divided by the Rentable Square Footage of the Building.

     F. "Base Year" for Operating Expenses: 2003.

     G. "Term": The period of approximately 48 months starting on the
Commencement Date, subject to the provisions of Article 3.

     H. "Estimated Commencement Date": August 26, 2002, subject to adjustment,
if any, as provided in Section 3.A and the Work Letter, if any.

     I. "Security Deposit": $0.00.

     J. "Guarantor(s)": N/A

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     K.   "Notice Addresses":

     Tenant: On or after the Commencement Date, notices shall be sent to Tenant
at the Premises(1). Prior to the Commencement Date, notices shall be sent to
Tenant at the following address:

GAINSCO, Inc.
500 Commerce Street
Fort Worth, Texas 76102
Attn: Robert W. Stallings
Phone #: (817) 336-2500
Fax #: (817) 335-1230

<Table>
Landlord:                       With a copy to:

<S>                             <C>                          <C>
1445 Ross Avenue                777 Main Street              300 Crescent Court, Suite 120
Suite 5100                      Suite 2100                   Dallas, Texas 75201
Dallas, Texas 75202             Fort Worth, Texas 76102      Attn: Senior Vice President
Attn: Property Manager          Attn: Legal Department       Asset Management and Leasing
Phone #: (214) 855-7766         Phone #: (817) 321-2100      Phone #: (214) 880-4545
Fax #: (214) 855-7764           Fax #: (817) 321-2010        Fax #: (214) 880-4547
</Table>

     Rent (defined in SECTION 4.A.) is payable to the order of Crescent Real
Estate Funding X, L.P. at the following address: P.O. Box 844831, Dallas, Texas
75284-4831 or by wire transfer to Bank of America, Dallas, Texas, ABA
#111-0000-25, for further credit to Crescent Real Estate Funding X, L.P.,
Account #4792376514.

     L. "Business Day(s)" are Monday through Friday of each week, exclusive of
New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the
day after Thanksgiving and Christmas Day ("Holidays"). Landlord may designate
additional Holidays, provided that the additional Holidays are commonly
recognized by other office buildings in the area where the Building is located.

     M.   "Law(s)" means all applicable statutes, codes, ordinances, orders,
rules and regulations of any municipal or governmental entity, now or hereafter
adopted, including the Americans with Disabilities Act and any other law
pertaining to disabilities and architectural barriers (collectively, "ADA"), and
all laws pertaining to the environment, including the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
Section 9601 et. seq. ("CERCLA"). N. "Normal Business Hours" for the Building
are 7:00 A.M. to 7:00 P.M. on Business Days and 8:00 A.M. to 2:00 P.M. on
Saturdays, exclusive of Holidays.

2. LEASE GRANT. Landlord leases the Premises to Tenant and Tenant leases the
Premises from Landlord, together with the right in common with others to use any
portions of the Property (defined below) that are designated by Landlord for the
common use of tenants and others, such as sidewalks, common corridors, vending
areas, lobby areas and, with respect to multi-tenant floors, restrooms and
elevator foyers (the "Common Areas"). "Property" means the Building and the
parcel(s) of land on which it is located as more fully described on EXHIBIT A-2,
together with all other buildings and improvements located thereon; and the
Building garage(s) and other improvements serving the Building, if any, and the
parcel(s) of land on which they are located.

3.   TERM; ADJUSTMENT OF COMMENCEMENT DATE; POSSESSION.

     A. TERM. This Lease shall govern the relationship between Landlord and
Tenant with respect to the Premises from the Effective Date through the last day
of the Term specified in SECTION 1.G (the "Expiration Date"), unless terminated
early in accordance with this Lease. The Term of this Lease (as specified in
SECTION 1.G) shall commence on the "Commencement Date", which shall be the
earlier of (1) the date on which the Landlord Work (defined below) is
Substantially Complete, as determined pursuant to Paragraph 4(c) of the Work
Letter (defined below), or (2) the date on which the Landlord Work would have
been Substantially Complete but for Tenant Delay, as such term is defined in
Paragraph 4(c) of the Work Letter, or (3) the date Tenant takes possession of
any part of the Premises for purposes of conducting business.(2) If Landlord is
delayed in delivering possession of the Premises or

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(1) Attention: Glenn W. Anderson

(2) Notwithstanding anything to the contrary in the foregoing, if the Landlord
Work is Substantially Complete prior to the Estimated Commencement Date, Tenant
may elect, by delivering written notice to Landlord, not to accept possession of
the

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any other space due to any reason, including Landlord's failure to Substantially
Complete the Landlord Work by the Estimated Commencement Date, the holdover or
unlawful possession of such space by any third party, or for any other reason,
such delay shall not be a default by Landlord, render this Lease void or
voidable, or otherwise render Landlord liable for damages. Promptly after the
determination of the Commencement Date, Landlord and Tenant shall enter into a
commencement letter agreement substantially in the form attached as EXHIBIT C.
Notwithstanding any other provision of this Lease to the contrary, if the
Expiration Date would otherwise occur on a date other than the last day of a
calendar month, then the Expiration Date shall be automatically extended to the
last day of such calendar month. "Landlord Work" means the work, if any, that
Landlord is obligated to perform in the Premises pursuant to a separate work
letter agreement (the "Work Letter"), if any, attached as EXHIBIT D. If a Work
Letter is not attached to this Lease or if an attached Work Letter does not
require Landlord to perform any work, the occurrence of the Commencement Date
shall not be conditioned upon the performance of work by Landlord.

     B. ACCEPTANCE OF PREMISES. The Premises are accepted by Tenant in "as is"
condition and configuration subject to (1) any Landlord obligation to perform
Landlord Work, (2) Landlord's repair obligations under SECTION 9.B, and (3) any
latent defects (of which Tenant notifies Landlord within one year after the
Commencement Date) in the Premises or the Landlord Work. BY TAKING POSSESSION OF
THE PREMISES, TENANT AGREES THAT THE PREMISES ARE IN GOOD ORDER AND SATISFACTORY
CONDITION AND AGREES THAT(3) THERE ARE NO REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, BY LANDLORD REGARDING THE CONDITION OF THE PREMISES OR THE BUILDING.

     C. POSSESSION OF PREMISES PRIOR TO COMMENCEMENT DATE. Tenant shall not take
possession of the Premises prior to the Commencement Date except with the prior
written consent of Landlord. If Tenant takes possession of the Premises or
commences business activities at the Premises before the Commencement Date with
Landlord's permission, such possession and occupancy shall be subject to the
terms and conditions of this Lease and Tenant shall pay Rent (defined in SECTION
4.A) to Landlord for each day of possession before the Commencement Date.
However, except for the cost of services requested by Tenant (e.g., freight
elevator usage), Tenant shall not be required to pay Base Rent and Tenant's Pro
Rata Share of Excess Operating Expenses and Tenant's Pro Rata Share of
electrical and other costs under SECTION 4.H for any days of possession before
the Commencement Date during which Tenant, with the written consent of Landlord,
is in possession of the Premises for the sole purpose of performing improvements
or installing furniture, equipment or other personal property.

4.   RENT.

     A. PAYMENTS. As consideration for this Lease, commencing on the
Commencement Date, Tenant shall pay Landlord, without any demand, setoff or
deduction, the total amount of Base Rent, Tenant's Pro Rata Share of Excess
Operating Expenses (defined in SECTION 4.B) and any and all other sums payable
by Tenant under this Lease (all of which are sometimes collectively referred to
as "Rent"). Tenant shall pay and be liable for all rental, sales and use taxes
(but excluding income taxes), if any, imposed upon or measured by Rent under
applicable Law. Base Rent and Tenant's Pro Rata Share of Excess Operating
Expenses shall be due and payable in advance on the first day of each calendar
month without notice or demand, provided that the installment of Base Rent for
the first full calendar month of the Term shall be payable upon the execution of
this Lease by Tenant. All other items of Rent shall be due and payable by Tenant
on or before 30 days after billing by Landlord. All payments of Rent shall be by
good and sufficient check or by other means (such as automatic debit or
electronic transfer) acceptable to Landlord. If the Term commences on a day
other than the first day of a calendar month, the monthly Base Rent and Tenant's
Pro Rata Share of any Excess Operating Expenses for the month shall be prorated
on a daily basis based on a 360 day calendar year. Landlord's acceptance of less
than the correct amount of Rent shall be considered a payment on account of the
earliest Rent due. No endorsement or statement on a check or letter accompanying
a check or payment shall be considered an accord and satisfaction, and either
party may accept such check or payment without such acceptance being considered
a waiver of any rights such party may have under this Lease or applicable Law.
Tenant's covenant to pay Rent is independent of every other covenant in this
Lease.

     B.   EXCESS OPERATING EXPENSES. Tenant shall pay Tenant's Pro Rata Share of
the amount, if any, by which Operating Expenses (defined in SECTION 4.D) for
each calendar year during the Term

--------------------------------------------------------------------------------
Premises earlier than the Estimated Commencement Date, in which event the
Commencement Date shall be the Estimated Commencement Date.

(3) ,EXCEPT FOR ANY REMAINING PUNCHLIST ITEMS RELATED TO THE LANDLORD WORK,

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exceeds Operating Expenses for the Base Year (the "Excess Operating
Expenses").(4) If Operating Expenses in any calendar year decrease below the
amount of Operating Expenses for the Base Year, Tenant's Pro Rata Share of
Operating Expenses for that calendar year shall be $0. In no event shall Base
Rent be reduced if Operating Expenses for any calendar year are less than
Operating Expenses for the Base Year. No later than January 1 of each calendar
year, Landlord shall provide Tenant with a good faith estimate of the Excess
Operating Expenses for such calendar year during the Term. On or before the
first day of each month, Tenant shall pay to Landlord a monthly installment
equal to one-twelfth of Tenant's Pro Rata Share of Landlord's estimate of the
Excess Operating Expenses. If Landlord determines that its good faith estimate
of the Excess Operating Expenses was incorrect, Landlord may provide Tenant with
a revised estimate. After its receipt of the revised estimate, Tenant's monthly
payments shall be based upon the revised estimate. If Landlord does not provide
Tenant with an estimate of the Excess Operating Expenses by January 1 of a
calendar year, Tenant shall continue to pay monthly installments based on the
most recent estimate(s) until Landlord provides Tenant with the new estimate.
Upon delivery of the new estimate, an adjustment shall be made for any month for
which Tenant paid monthly installments based on the same year's prior incorrect
estimate(s). Tenant shall pay Landlord the amount of any underpayment within 30
days after receipt of the new estimate. Any overpayment shall be credited
against the next sums due and owing by Tenant or, if no further Rent is due,
refunded directly to Tenant within 30 days of determination. The obligation of
Tenant to pay for Excess Operating Expenses as provided herein shall survive the
expiration or earlier termination of this Lease.

     C. RECONCILIATION OF OPERATING EXPENSES. Within 120 days after the end of
each calendar year or as soon thereafter as is practicable, Landlord shall
furnish Tenant with a statement of the actual Operating Expenses and Excess
Operating Expenses for such calendar year. If the most recent estimated Excess
Operating Expenses paid by Tenant for such calendar year are more than the
actual Excess Operating Expenses for such calendar year, Landlord shall apply
any overpayment by Tenant against Rent due or next becoming due; provided, if
the Term expires before the determination of the overpayment, Landlord shall,
within 30 days of determination, refund any overpayment to Tenant after first
deducting the amount of Rent due. If the most recent estimated Excess Operating
Expenses paid by Tenant for the prior calendar year are less than the actual
Excess Operating Expenses for such year, Tenant shall pay Landlord, within 30
days after its receipt of the statement of Operating Expenses, any underpayment
for the prior calendar year.

     D. OPERATING EXPENSES DEFINED. "Operating Expenses" means all costs and
expenses incurred or accrued in each calendar year in connection with the
ownership, operation, maintenance, management, repair and protection of the
Property which are directly attributable or reasonably allocable to the
Building, including Landlord's personal property used in connection with the
Property and including all costs and expenditures relating to the following:

     (1)  Operation, maintenance, repair and replacements of any part of the
          Property, including the mechanical, electrical, plumbing, HVAC,
          vertical transportation, fire prevention and warning and security
          systems; materials and supplies (such as light bulbs and ballasts);
          equipment and tools; floor, wall and window coverings; personal
          property; required or beneficial easements; and related service
          agreements and rental expenses.

     (2)  Administrative and management fees, including accounting, information
          and professional services (except for negotiations and disputes with
          specific tenants not affecting other parties)(5); management
          office(s); and wages, salaries, benefits, reimbursable expenses and
          taxes (or allocations thereof) for full and part time personnel
          involved in operation, maintenance and management(6).

     (3)  Janitorial service; window cleaning; waste disposal; gas, water and
          sewer and other utility charges (including add-ons); and landscaping,
          including all applicable tools and supplies.

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(4) Notwithstanding the foregoing, Tenant's Pro Rata Share of Controllable
Expenses (defined below) shall not increase by more than 8% (compounded
annually) over Tenant's Pro Rata Share of Controllable Expenses in the Base
Year. However, any increases in Excess Operating Expenses not recovered by
Landlord due to the foregoing limitation shall be carried forward into all
succeeding calendar years during the Term (subject to the foregoing limitation)
until fully recouped by Landlord. The term "Controllable Expenses" means all
Operating Expenses excluding expenses relating to the cost of utilities,
insurance, real estate taxes and other uncontrollable expenses.

(5) , provided that the management fee shall not exceed 4% of gross revenues for
the Property

(6) at or below the level of regional property manager and regional asset
manager

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     (4)  Property, liability and other insurance coverages carried by Landlord,
          including deductibles and risk retention programs and an allocation of
          a portion of the cost of blanket insurance policies maintained by
          Landlord and/or its affiliates.

     (5)  Real estate taxes, assessments, business taxes, excises, association
          dues, fees, levies, charges and other taxes of every kind and nature
          whatsoever, general and special, extraordinary and ordinary, foreseen
          and unforeseen, including interest on installment payments, which may
          be levied or assessed against or arise in connection with ownership,
          use, occupancy, rental, operation or possession of the Property
          (including personal property taxes for property that is owned by
          Landlord and used in connection with the operation, maintenance and
          repair of the Property), or substituted, in whole or in part, for a
          tax previously in existence by any taxing authority, or assessed in
          lieu of a tax increase, or paid as rent under any ground lease. Real
          estate taxes do not include(7) Landlord's income, franchise or estate
          taxes (except to the extent such excluded taxes are assessed in lieu
          of taxes included above).

     (6)  Compliance with Laws, including license, permit and inspection fees
          (but not in duplication of capital expenditures amortized as provided
          in SECTION 4.D(9))(8); and all expenses and fees, including attorneys'
          fees and court or other venue of dispute resolution costs, incurred in
          negotiating or contesting real estate taxes or the validity and/or
          applicability of any governmental enactments which may affect
          Operating Expenses; provided Landlord shall credit against Operating
          Expenses any refunds received from such negotiations or contests to
          the extent originally included in Operating Expenses (less Landlord's
          costs).

     (7)  Security services, to the extent provided or contracted for by
          Landlord.

     (8)  Goods and services purchased from Landlord's subsidiaries and
          affiliates to the extent the cost of same is generally consistent with
          rates charged by unaffiliated third parties for similar goods and
          services.

     (9)  Amortization of capital expenditures incurred: (A) to conform with
          Laws(9); (B) to provide or maintain building standards (other than
          building standard tenant improvements); or (C) with the intention of
          promoting safety or reducing or controlling increases in Operating
          Expenses, such as lighting retrofit and installation of energy
          management systems. Such expenditures shall be amortized uniformly
          over a reasonable period of time determined by Landlord, together with
          interest on the unamortized balance at the Prime Rate (defined in
          SECTION 19.A(6)) (as of the date incurred) plus 2%.

     E.   EXCLUSIONS FROM OPERATING EXPENSES. Operating Expenses exclude the
following expenditures:

     (1)  Leasing commissions, attorneys' fees and other expenses related to
          leasing tenant space and constructing improvements for the sole
          benefit of an individual tenant.

     (2)  Goods and services furnished to an individual tenant of the Building
          which are above building standard and which are separately
          reimbursable directly to Landlord in addition to Excess Operating
          Expenses.

     (3)  Repairs, replacements and general maintenance paid by insurance
          proceeds or condemnation proceeds.

     (4)  Except as provided in SECTION 4.D(9), depreciation, amortization,
          interest payments on any encumbrances on the Building and the cost of
          capital improvements or additions.

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(7) (A) any penalties and interest incurred because of the delinquency by
Landlord in timely paying such taxes (unless such penalties and interest are
incurred as a result of Tenant's failure to timely pay its portion of such taxes
or as a result of Landlord's contesting such taxes in good faith), and (B)

(8) (only to the extent that such compliance relates to Laws which are amended,
become effective, or are interpreted or enforced differently, after the date of
this Lease)

(9) which are amended, become effective, or are interpreted or enforced
differently, after the date of this Lease; provided, however, all capital
expenditures made in order to conform to or comply with ADA shall be included in
Operating Expenses other than ADA compliance work performed as part of the
Landlord Work described in the Work Letter.

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     (5)  Costs of installing any specialty service, such as an observatory,
          broadcasting facility, luncheon club, or athletic or recreational
          club.

     (6)  Expenses for repairs or maintenance related to the Property which have
          been reimbursed to Landlord pursuant to warranties or service
          contracts.

     (7)  Compensation paid to clerks, attendants or other persons in commercial
          concessions operated by Landlord which customarily sell products or
          services to the public, including tenants of the Building.

     (8)  Costs (other than maintenance costs) of any art work (such as
          sculptures or paintings) used to decorate the Building.

     (9)  Principal payments on indebtedness secured by liens against the
          Building, or costs of refinancing such indebtedness.

     (10) Electrical service costs paid separately pursuant to SECTION 4.H.(10)

     F. PRORATION OF OPERATING EXPENSES; ADJUSTMENTS. If Landlord incurs
Operating Expenses for the Property together with one or more other buildings or
properties, whether pursuant to a reciprocal easement agreement, common area
agreement or otherwise, the shared costs and expenses shall be equitably
prorated and apportioned by Landlord between the Property and the other
buildings or properties. If the Building is not 100% occupied during any
calendar year or partial calendar year or if Landlord is not supplying services
to 100% of the total Rentable Square Footage of the Building at any time during
a calendar year or partial calendar year, Operating Expenses shall be determined
as if the Building had been 100% occupied and Landlord had been supplying
services to 100% of the Rentable Square Footage of the Building during that
calendar year. If Tenant pays for its Pro Rata Share of Operating Expenses based
on increases over a "Base Year" and Operating Expenses for a calendar year are
determined as provided in the prior sentence, Operating Expenses for the Base
Year shall also be determined as if the Building had been 100% occupied and
Landlord had been supplying services to 100% of the Rentable Square Footage of
the Building. The extrapolation of Operating Expenses under this Section shall
be performed by Landlord by adjusting the cost of those components of Operating
Expenses that are impacted by changes in the occupancy of the Building.

     G. AUDIT RIGHTS. Within 60 days (the "Audit Election Period") after
Landlord furnishes its statement of actual Operating Expenses for any calendar
year (including the Base Year), Tenant may, at its expense during Landlord's
normal business hours, elect to audit Landlord's Operating Expenses for such
calendar year only, subject to the following conditions: (1) there is no uncured
event of default under this Lease; (2) the audit shall be prepared by an
independent certified public accounting firm of recognized national standing;
(3) in no event shall any audit be performed by a firm retained on a
"contingency fee" basis; (4) the audit shall commence within 30 days after
Landlord makes Landlord's books and records available to Tenant's auditor and
shall conclude within 60 days after commencement; (5) the audit shall be
conducted where Landlord maintains its books and records and shall not
unreasonably interfere with the conduct of Landlord's business; (6) Tenant and
its accounting firm shall

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(10)

     (11) Salaries of officers and executives of Landlord, except as
          included in SECTION 4.D(2).

     (12) Interest and penalties due to late payment of any amounts owed by
          Landlord, except such as may be incurred as a result of Tenant's
          failure to timely pay its portion of such amounts or as a result of
          Landlord's contesting such amounts in good faith.

     (13) Legal, auditing, consulting and professional fees paid or incurred in
          connection with negotiations for financings, refinancings or sales of
          the Property.

     (14) Costs relating to disputes between Landlord and a specific tenant of
          the Building.

     (15) Costs incurred as a result of an intentional tort by Landlord or its
          agents.

     (16) Costs, penalties and fines incurred due to the violation by Landlord
          or any other tenant of the Building of Laws, or the terms and
          conditions of any lease pertaining to the Building, except such as may
          be incurred by Landlord in contesting in good faith the alleged
          violation.

     (17) Costs relating to or arising, directly or indirectly, from the
          handling, removal, treatment, disposal or replacement of Hazardous
          Materials in the Property, which were not caused by the actions of
          Tenant, its agents, employees, contractors, subtenants, assignees or
          invitees.

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treat any audit in a confidential manner and shall each execute Landlord's
confidentiality agreement for Landlord's benefit prior to commencing the audit;
and (7) the accounting firm's audit report shall, at no charge to Landlord, be
submitted in draft form for Landlord's review and comment before the final
approved audit report is delivered to Landlord, and any reasonable comments by
Landlord shall be incorporated into the final audit report. Notwithstanding the
foregoing, Tenant shall have no right to conduct an audit if Landlord furnishes
to Tenant an audit report for the calendar year in question prepared by an
independent certified public accounting firm of recognized national standing
(whether originally prepared for Landlord or another party). This paragraph
shall not be construed to limit, suspend, or abate Tenant's obligation to pay
Rent when due, including estimated Excess Operating Expenses. Landlord shall
credit any overpayment determined by the final approved audit report against the
next Rent due and owing by Tenant or, if no further Rent is due, refund such
overpayment directly to Tenant within 30 days of determination. Likewise, Tenant
shall pay Landlord any underpayment determined by the final approved audit
report within 30 days of determination. The foregoing obligations shall survive
the Expiration Date. If Tenant does not give written notice of its election to
audit Landlord's Operating Expenses during the Audit Election Period, Landlord's
Operating Expenses for the applicable calendar year shall be deemed approved for
all purposes, and Tenant shall have no further right to review or contest the
same.(11)

     H. ELECTRICAL COSTS. In addition to the Excess Operating Expenses, and as a
separate obligation, Tenant shall pay Landlord Tenant's Pro Rata Share of the
following costs incurred by Landlord which are directly attributable or
reasonably allocable to the Building: (1) electrical services used in the
operation, maintenance and use of the Property; (2) sales, use, excise and other
taxes assessed by governmental authorities on electrical services supplied to
the Property; and (3) other costs of providing electrical services to the
Property. Tenant shall, with each monthly payment of Base Rent, pay Landlord's
estimate of Tenant's Pro Rata Share of such electrical service costs in the same
manner as provided for Operating Expenses in SECTION 4.B.

5.   TENANT'S USE OF PREMISES.

     A. PERMITTED USES. The Premises shall be used only for general office use
(the "Permitted Use") and for no other use whatsoever. Tenant shall not use or
permit the use of the Premises for any purpose which is illegal, creates
obnoxious odors (including tobacco smoke), noises or vibrations, is dangerous to
persons or property, could increase Landlord's insurance costs, or which, in
Landlord's reasonable opinion, unreasonably disturbs any other tenants of the
Building or interferes with the operation of the Building. Except as provided
below, the following uses are expressly prohibited in the Premises: schools,
government offices or agencies; personnel agencies; collection agencies; credit
unions; data processing, telemarketing or reservation centers; medical treatment
and health care; radio, television or other telecommunications broadcasting;
restaurants and other retail; customer service offices of a public utility
company; or any other purpose which would, in Landlord's reasonable opinion,
impair the reputation or quality of the Building, overburden any of the Building
systems, Common Areas or parking facilities (including any use which would
create a population density in the Premises which is in excess of the density
which is standard for the Building), impair Landlord's efforts to lease space or
otherwise interfere with the operation of the Property. Notwithstanding the
foregoing, the following ancillary uses are permitted in the Premises only so
long as they do not, in the aggregate, occupy more than 10% of the Rentable
Square Footage of the Premises or any single floor (whichever is less): (A) the
following services provided by Tenant exclusively to its employees: schools,
training and other educational services; credit unions; and similar employee
services; and (B) the following services directly and exclusively supporting
Tenant's business: telemarketing; reservations; storage; data processing; debt
collection; and similar support services.(12)

     B. COMPLIANCE WITH LAWS. Tenant shall comply with all Laws regarding the
operation of Tenant's business and the use, condition, configuration and
occupancy of the Premises and the use of the Common Areas. Tenant, within 10
days after receipt, shall provide Landlord with copies of any notices Tenant
receives regarding a violation or alleged or potential violation of any Laws.
Tenant shall comply with the rules and regulations of the Building attached as
EXHIBIT B and such other reasonable rules and regulations (or modifications
thereto) adopted by Landlord from time to time. Such rules and

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(11) If the audit proves that Landlord's calculation of Operating Expenses and
electrical costs for the calendar year under inspection was overstated by more
than five percent (5%), then, after verification, Landlord shall pay Tenant's
actual reasonable out-of-pocket audit and inspection fees applicable to the
review of said calendar year statement within thirty (30) days after receipt of
Tenant's invoice therefor.

(12) Tenant acknowledges that Landlord has granted an Exclusive Banking Right to
Wells Fargo Bank (Texas), NA as set forth in Exhibit F attached hereto. Tenant
agrees that it will not use the Premises for any purpose that would result in a
violation of the Exclusive Banking Right granted by Landlord to Wells Fargo Bank
(Texas), N.A., its successors or assigns.

                                        7
<PAGE>

regulations will be applied in an equitable manner as determined by Landlord.
Tenant shall also cause its agents, contractors, subcontractors, employees,
customers, and subtenants to comply with all rules and regulations.

     C. TENANT'S SECURITY. Tenant shall (1) lock the doors to the Premises and
take other reasonable steps to secure the Premises and the personal property of
all Tenant Parties (defined in SECTION 13.A) and any of Tenant's transferees,
contractors or licensees in the Common Areas and parking facilities of the
Building and Property, from unlawful intrusion, theft, fire and other hazards;
(2) keep and maintain in good working order all security devices installed in
the Premises by or for the benefit of Tenant (such as locks, smoke detectors and
burglar alarms); and (3) cooperate with Landlord and other tenants in the
Building on security matters. Tenant acknowledges that any security measures
employed by Landlord are for Landlord's own protection; that Landlord is not a
guarantor of the security or safety of the Tenant Parties or their property; and
that such security matters are the responsibility of Tenant and the local law
enforcement authorities.

6. SECURITY DEPOSIT.(13) Landlord may, from time to time while an event of
default remains uncured, without prejudice to any other remedy, use all or a
portion of the Security Deposit to satisfy past due Rent or to cure any uncured
default by Tenant. If Landlord uses the Security Deposit, Tenant shall on demand
restore the Security Deposit to its original amount. Provided that Tenant has
performed all of its obligations hereunder, Landlord shall return any unapplied
portion of the Security Deposit to Tenant within 30 days after the later to
occur of: (A) the determination of Tenant's Pro Rata Share of any Excess
Operating Expenses for the final year of the Term; (B) the date Tenant
surrenders possession of the Premises to Landlord in accordance with this Lease;
or (C) the Expiration Date. If Landlord transfers its interest in the Premises,
Landlord shall assign the Security Deposit to the transferee and, following the
assignment, Landlord shall have no further liability for the return of the
Security Deposit. Landlord shall not be required to keep the Security Deposit
separate from its other accounts.

7.   SERVICES TO BE FURNISHED BY LANDLORD.

     A.   STANDARD SERVICES. Landlord agrees to furnish Tenant with the
following services during the Term:

     (1)  Water service for use in the lavatories on each floor on which the
          Premises are located.

     (2)  Heat and air conditioning in season during Normal Business Hours, at
          such temperatures and in such amounts as required by governmental
          authority or as Landlord 14 determines are standard for the Building.
          Tenant, upon such notice as is reasonably required by Landlord, and
          subject to the capacity of the Building systems, may request HVAC
          service during hours other than Normal Business Hours. Tenant shall
          pay Landlord the standard charge for the additional service as
          determined by Landlord from time to time.

     (3)  Maintenance and repair of the Property as described in SECTION 9.B.

     (4)  Janitorial service five days per week (excluding Holidays), as
          determined by Landlord. If Tenant's use of the Premises, floor
          covering or other improvements require special services in excess of
          the standard services for the Building, Tenant shall pay the
          additional cost attributable to the special services.

     (5)  Elevator service, subject to proper authorization and Landlord's
          policies and procedures for use of the elevator(s) in the Building.

     (6)  Exterior window washing at such intervals as determined by Landlord.

     (7)  Electricity to the Premises for general office use, in accordance with
          and subject to the terms and conditions in ARTICLE 8.

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(13) The parties have agreed that no Security Deposit will be required of Tenant
at the outset of this Lease. However, if Tenant is thirty (30) days late paying
monthly rentals more than two (2) times in any twelve (12) month period, then
upon written demand by Landlord, a Security Deposit in an amount equal to one
monthly rental payment shall be delivered by Tenant to Landlord and retained by
Landlord for the remainder of the Term.

(14) reasonably

                                        8
<PAGE>

     (15)

     B. SERVICE INTERRUPTIONS. Landlord's failure to furnish, or any
interruption or termination of, services due to the application of Laws, the
failure of any equipment, the performance of repairs, improvements or
alterations, or the occurrence of any other event or cause whether or not within
the reasonable control of Landlord (a "Service Failure"), shall not render
Landlord liable to Tenant, constitute a constructive eviction of Tenant, give
rise to an abatement of Rent, or relieve Tenant from the obligation to fulfill
any covenant or agreement.(16) In no event shall Landlord be liable to Tenant
for any loss or damage, including the theft of Tenant's Property (defined in
ARTICLE 14), arising out of or in connection with the failure of any security
services, personnel or equipment.

     C. THIRD PARTY SERVICES. If Tenant desires any service which Landlord has
not specifically agreed to provide in this Lease, such as private security
systems or telecommunications services serving the Premises, Tenant shall
procure such service directly from a reputable third party service provider
("Provider") for Tenant's own account. Tenant shall require each Provider to
comply with the Building's rules and regulations, all Laws, and Landlord's
reasonable policies and practices for the Building. Tenant acknowledges
Landlord's current policy that requires all Providers utilizing any area of the
Building outside the Premises to be approved by Landlord and to enter into a
written agreement acceptable to Landlord prior to gaining access to, or making
any installations in or through, such area. Accordingly, Tenant shall give
Landlord written notice sufficient for such purposes.

8.   USE OF ELECTRICAL SERVICES BY TENANT.

     A. LANDLORD'S ELECTRICAL SERVICE. Landlord shall furnish building standard
electrical service to the Premises sufficient to operate customary lighting,
office machines and other equipment of similar low electrical consumption.
Landlord may, at any time and from time to time, calculate Tenant's actual
electrical consumption in the Premises either by a survey conducted by a
reputable consultant selected by Landlord, or through separate meters installed,
maintained and read by Landlord, all at Tenant's expense. The cost of any
electrical consumption in excess of that which Landlord determines is standard
for the Building(17) shall be paid by Tenant in accordance with SECTION 8.D. The
furnishing of electrical services to the Premises shall be subject to the rules,
regulations and practices of the supplier of such electricity and of any
municipal or other governmental authority regulating the business of providing
electrical utility service. Landlord shall not be liable or responsible to
Tenant for any loss, damage or expense which Tenant may sustain or incur if
either the quantity or character of the electrical service is changed or is no
longer available or no longer suitable for Tenant's requirements.

     B. SELECTION OF ELECTRICAL SERVICE PROVIDER. Landlord reserves the right to
select the provider of electrical services to the Building and/or the Property.
To the fullest extent permitted by Law, Landlord shall have the continuing
right, upon 30 days written notice, to change such utility provider. All charges
and expenses incurred by Landlord due to any such changes in electrical
services, including maintenance, repairs, installation and related costs, shall
be included in the electrical services costs referenced in SECTION 4.H, unless
paid directly by Tenant.

     C. SUBMETERING. Landlord shall have the continuing right, upon 30 days
written notice, to install a submeter for the Premises at Tenant's expense(18).
If submetering is installed for the Premises, Landlord may charge for Tenant's
actual electrical consumption monthly in arrears at commercially reasonable
rates determined by Landlord (plus, to the fullest extent permitted by
applicable Laws, Landlord's then quoted administrative fee for such
submetering), except as to electricity directly

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(15) (8) Subject to (a) the Building limited access system being operative, (b)
there being no Event of Default for which Tenant's time to cure has elapsed, and
(c) events of Force Majeure, Tenant shall have the right of access to the
Premises twenty-four (24) hours per day, seven days per week during the Term of
this Lease.

(16) Notwithstanding the foregoing, commencing on the 11 th consecutive Business
Day of a Service Failure which is beyond the control of Landlord (unless the
Service Failure is caused by a fire or other casualty, in which event SECTION 16
controls), Tenant shall, as its sole remedy, be entitled to an equitable
diminution of Base Rent based upon the pro rata portion of the Premises which is
rendered unfit for occupancy for the Permitted Use, except to the extent such
Service Failure is caused by a Tenant Party. Commencing on the 6th consecutive
Business Day of any Service Failure within Landlord's control, (unless the
Service Failure is caused by a fire or other casualty, in which event SECTION 16
controls), Tenant shall, as its sole remedy, be entitled to an equitable
diminution of Base Rent based upon the pro rata portion of the Premises which is
rendered unfit for occupancy for the Permitted Use, except to the extent such
Service Failure is caused by a Tenant Party.

(17) (which standard shall be set by comparison of the Tenant's electrical
consumption with the electrical consumption of other general office use tenants
in the Building that do not have submeters)

(18) , but only if Landlord is installing submeters for all tenants or has a
reasonable belief that Tenant's electrical consumption is above Building
standard

                                        9
<PAGE>

purchased by Tenant from third party providers after obtaining Landlord's
consent to the same. Even if the Premises are submetered, Tenant shall remain
obligated to pay Tenant's Pro Rata Share of the cost of electrical services as
provided in SECTION 4.H, except that Tenant shall be entitled to a credit
against electrical services costs equal to that portion of the amounts actually
paid by Tenant separately and directly to Landlord which are attributable to
building standard electrical services submetered to the Premises.

     D. EXCESS ELECTRICAL SERVICE. Tenant's use of electrical service shall not
exceed, in voltage, rated capacity, use beyond Normal Business Hours or overall
load, that which Landlord deems to be standard for the Building(19). If Tenant
requests permission to consume excess electrical service, Landlord may refuse to
consent or may condition consent upon conditions that Landlord reasonably elects
(including the installation of utility service upgrades, meters, submeters, air
handlers or cooling units). The costs of any approved additional consumption (to
the extent permitted by Law), installation and maintenance shall be paid by
Tenant.

9.   REPAIRS AND ALTERATIONS.

     A. TENANT'S REPAIR OBLIGATIONS. Tenant shall, at its sole cost and expense,
promptly perform all maintenance and repairs to the Premises that are not
Landlord's express responsibility under this Lease, and shall keep the Premises
in good condition and repair, ordinary wear and tear excepted. Tenant's repair
obligations include, without limitation, repairs to: (1) floor covering and/or
raised flooring; (2) interior partitions; (3) doors; (4) the interior side of
demising walls; (5) electronic, phone and data cabling and related equipment
(collectively, "Cable") that is installed by or for the benefit of Tenant and
located in the Premises or other portions of the Building; (6) supplemental air
conditioning units, private showers and kitchens, including hot water heaters,
plumbing, dishwashers, ice machines and similar facilities serving Tenant
exclusively; (7) phone rooms used exclusively by Tenant; (8) Alterations
(defined below) performed by contractors retained by Tenant, including related
HVAC balancing; and (9) all of Tenant's furnishings, trade fixtures, equipment
and inventory. Landlord reserves the right to perform any of the foregoing
maintenance or repair obligations or require that such obligations be performed
by a contractor approved by Landlord, all at Tenant's expense. All work shall be
performed in accordance with the rules and procedures described in SECTION 9.C
below. If Tenant fails to make any repairs to the Premises for more than 15 days
after notice from Landlord (although notice shall not be required if there is an
emergency), Landlord may, in addition to any other remedy available to Landlord,
make the repairs, and Tenant shall pay the reasonable cost of the repairs to
Landlord within 30 days after receipt of an invoice, together with an
administrative charge in an amount equal to 15% of the cost of the repairs.(20)

     B. LANDLORD'S REPAIR OBLIGATIONS. Landlord shall keep and maintain in good
repair and working order and make repairs to and perform maintenance upon: (1)
structural elements of the Building(21); (2) standard mechanical (including
HVAC), electrical, plumbing and fire/life safety systems serving the Building
generally; (3) Common Areas; (4) the roof of the Building; (5) exterior windows
of the Building; and (6) elevators serving the Building. Landlord shall promptly
make repairs (taking into account the nature and urgency of the repair) for
which Landlord is responsible. If any of the foregoing maintenance or repair is
necessitated due to the acts or omissions of any Tenant Party (defined in
SECTION 13.A),(22) Tenant shall pay the costs of such repairs or maintenance to
Landlord within 30 days after receipt of an invoice, together with an
administrative charge in an amount equal to 15% of the cost of the repairs.

     C.   ALTERATIONS.

     (1)  When Consent Is Required. Tenant shall not make alterations, additions
          or improvements to the Premises or install any Cable in the Premises
          or other portions of the Building (collectively, "Alterations")
          without first obtaining the written consent of Landlord in

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(19) (which standard shall be set by comparison of the Tenant's overall usage,
voltage rated capacity, use beyond Normal Business Hours, and overall electrical
load with the overall usage, voltage rated capacity, use beyond Normal Business
Hours and overall electrical load of other general office use tenants in the
Building that do not have submeters)

(20) Tenant acknowledges that certain equipment within the Premises was left by
a former tenant. Landlord makes no representations or warranties as to the
condition of such equipment except as set forth in the Work Letter and Tenant
accepts the same in its current "as-is" condition.

(21) and the Parking Facilities

(22) except to the extent such repair or maintenance is covered by insurance,

                                       10
<PAGE>

          each instance. However, Landlord's consent shall not be required for
          any Alteration that satisfies all of the following criteria (a "Minor
          Alteration"): (a) is of a cosmetic nature such as painting,
          wallpapering, hanging pictures and installing carpeting; (b) is not
          visible from outside the Premises or Building; (c) will not affect the
          systems or structure of the Building; and (d) does not require work to
          be performed inside the walls or above the ceiling of the Premises.

     (2)  Requirements For All Alterations, Including Minor Alterations. Prior
          to starting work on any Alteration, Tenant shall furnish to Landlord
          for review and approval: plans and specifications; names of proposed
          contractors (provided that Landlord may designate specific contractors
          with respect to Building systems); copies of contracts; necessary
          permits and approvals; evidence of contractors' and subcontractors'
          insurance; and Tenant's security for performance of the Alteration.
          Changes to the plans and specifications must also be submitted to
          Landlord for its approval. Some of the foregoing requirements may be
          waived by Landlord for the performance of specific Minor Alterations;
          provided that such waiver is obtained in writing prior to the
          commencement of such Minor Alterations. Landlord's waiver on one
          occasion shall not waive Landlord's right to enforce such requirements
          on any other occasion. Alterations shall be constructed in a good and
          workmanlike manner using materials of a quality that is at least equal
          to the quality designated by Landlord as the minimum standard for the
          Building. Landlord may designate reasonable rules, regulations and
          procedures for the performance of Alterations in the Building and, to
          the extent reasonably necessary to avoid disruption to the occupants
          of the Building, shall have the right to designate the time when
          Alterations may be performed. Tenant shall reimburse Landlord within
          30 days after receipt of an invoice for out-of-pocket sums paid by
          Landlord for third party examination of Tenant's plans for
          Alterations. In addition, within 30 days after receipt of an invoice
          from Landlord, Tenant shall pay to Landlord its then-quoted standard
          fee for Landlord's oversight and coordination of any Alterations. Upon
          completion of the Alterations, Tenant shall furnish "as-built" plans
          (which shall not be required for Minor Alterations), completion
          affidavits, full and final waivers of liens, receipts and bills
          covering all labor and materials. Tenant shall assure that the
          Alterations comply with all insurance requirements and Laws.

     (3)  Landlord's Liability For Alterations. Landlord's approval of an
          Alteration shall not be a representation by Landlord that the
          Alteration complies with applicable Laws or will be adequate for
          Tenant's use. Tenant acknowledges that Landlord is not an architect or
          engineer, and that the Alterations will be designed and/or constructed
          using independent architects, engineers and contractors. Accordingly,
          Landlord does not guarantee or warrant that the applicable
          construction documents will comply with Laws or be free from errors or
          omissions, nor that the Alterations will be free from defects, and
          Landlord will have no liability therefor.

10. ENTRY BY LANDLORD. Landlord, its agents, contractors and representatives may
enter the Premises to inspect or show the Premises, to clean and make repairs,
alterations or additions to the Premises, and to conduct or facilitate repairs,
alterations or additions to any portion of the Building, including other
tenants' premises(23). Except in emergencies or to provide janitorial and other
Building services after Normal Business Hours, Landlord shall provide Tenant
with reasonable prior notice of entry into the Premises, which may be given
orally. Landlord shall have the right to temporarily close all or a portion of
the Premises to perform repairs, alterations and additions, if reasonably
necessary for the protection and safety of Tenant and its employees. Except in
emergencies, Landlord will not close the Premises if the work can reasonably be
completed on weekends and after Normal Business Hours; provided, however, that
Landlord is not required to conduct work on weekends or after Normal Business
Hours if such work can be conducted without closing the Premises. Entry by
Landlord for any such purposes shall not constitute a constructive eviction or
entitle Tenant to an abatement or reduction of Rent.

11.   ASSIGNMENT AND SUBLETTING.

     A. LANDLORD'S CONSENT REQUIRED. Except in connection with a Permitted
Transfer (defined in SECTION 11.E), Tenant shall not assign, transfer or
encumber any interest in this Lease or sublease or allow any third party to use
any portion of the Premises (collectively or individually, a

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(23) provided, however, any such showing to prospective new tenants shall be
limited to showings during the last nine (9) months of the Lease Term.

                                       11
<PAGE>

"Transfer") without the prior written consent of Landlord, which consent shall
not be unreasonably withheld if Landlord does not elect to exercise its
termination rights under SECTION 11.B below. Without limitation, Tenant agrees
that Landlord's consent shall not be considered unreasonably withheld if: (1)
the proposed transferee's financial condition does not meet the criteria
Landlord uses to select Building tenants having similar leasehold obligations;
(2) the proposed transferee is a governmental organization or present occupant
of the Building, or Landlord is otherwise engaged in lease negotiations with the
proposed transferee for other premises in the Building; (3) any uncured event of
default exists under this Lease (or a condition exists which, with the passage
of time or giving of notice, would become an event of default); (4) any portion
of the Building or Premises would likely become subject to additional or
different Laws as a consequence of the proposed Transfer; (5) the proposed
transferee's use of the Premises conflicts with the Permitted Use or any
exclusive usage rights granted to any other tenant in the Building; (6) the use,
nature, business, activities or reputation in the business community of the
proposed transferee (or its principals, employees or invitees) does not meet
Landlord's standards for Building tenants; (7) either the Transfer or any
consideration payable to Landlord in connection therewith adversely affects the
real estate investment trust (or pension fund or other ownership vehicle)
qualification tests applicable to Landlord or its affiliates; or (8) the
proposed transferee is or has been involved in litigation with Landlord or any
of its affiliates(24). Tenant shall not be entitled to receive monetary damages
based upon a claim that Landlord unreasonably withheld its consent to a proposed
Transfer and Tenant's sole remedy shall be an action to enforce any such
provision through specific performance or declaratory judgment. Any attempted
Transfer in violation of this Article is voidable at Landlord's option.

     B. CONSENT PARAMETERS/REQUIREMENTS. As part of Tenant's request for, and as
a condition to, Landlord's consent to a Transfer, Tenant shall provide Landlord
with financial statements for the proposed transferee, a complete copy
(unexecuted) of the proposed assignment or sublease and other contractual
documents, and such other information as Landlord may reasonably request.
Landlord shall then have the right (but not the obligation) to terminate this
Lease as of the effective date of Transfer with respect to the portion of the
Premises which Tenant desires to Transfer. In such event, the rent and other
charges payable shall be proportionately reduced.(25) Consent by Landlord to one
or more Transfer(s) shall not operate as a waiver of Landlord's rights to
approve any subsequent Transfers. In no event shall any Transfer or Permitted
Transfer release or relieve Tenant from any obligation under this Lease, nor
shall the acceptance of Rent from any assignee, subtenant or occupant constitute
a waiver or release of Tenant from any of its obligations or liabilities under
this Lease. Tenant shall pay Landlord a review fee of $750 for Landlord's review
of any Permitted Transfer or requested Transfer, provided if Landlord's actual
reasonable costs and expenses (including reasonable attorney's fees) exceed
$750, Tenant shall reimburse Landlord for its actual reasonable costs and
expenses in lieu of a fixed review fee.

     C. PAYMENT TO LANDLORD. If the aggregate consideration paid to Tenant for a
Transfer exceeds that payable by Tenant under this Lease (prorated according to
the transferred interest), Tenant shall pay Landlord 50% of such excess (after
deducting therefrom reasonable leasing commissions and reasonable costs of
tenant improvements paid to unaffiliated third parties in connection with the
Transfer, with proof of same provided to Landlord). Tenant shall pay Landlord
for Landlord's share of any excess within 30 days after Tenant's receipt of such
excess consideration. If any uncured event of default exists under this Lease
(or a condition exists which, with the passage of time or giving of notice,
would become an event of default), Landlord may require that all sublease
payments be made directly to Landlord, in which case Tenant shall receive a
credit against Rent in the amount of any payments received, but not to exceed
the amount payable by Tenant under this Lease.

     D. CHANGE IN CONTROL OF TENANT. Except for a Permitted Transfer, if Tenant
is a corporation, limited liability company, partnership, or similar entity, and
if the entity which owns or controls a majority of the voting shares/rights at
any time changes for any reason (including a merger, consolidation or
reorganization), such change of ownership or control shall constitute a
Transfer. The foregoing shall not apply so long as, both before and after the
Transfer, Tenant is an entity whose outstanding stock is listed on a recognized
security exchange, or if at least 80% of its voting stock is owned by another
entity, the voting stock of which is so listed; provided, however, that Tenant
shall give

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(24) during the two year period immediately preceding the Transfer.

(25) In the event Landlord elects to terminate this Lease pursuant to the right
granted in this Subparagraph 11(B), Landlord shall provide written notice to
Tenant of its election to terminate this Lease ("Landlord's Termination
Notice"). Tenant shall then have the right to withdraw its request for
Landlord's consent to the proposed Transfer ("Withdrawal Right"), provided
Tenant exercises such Withdrawal Right within 5 Business Days after receipt of
Landlord's Termination Notice. If Tenant timely exercises its Withdrawal Right,
the Lease shall continue in full force and effect as if Tenant had not requested
Landlord's consent to the proposed Transfer.

                                       12
<PAGE>

Landlord written notice at least 30 days prior to the effective date of such
change in ownership or control.

     E. NO CONSENT REQUIRED. Tenant may assign its entire interest under this
Lease to an Affiliate (defined below) or to a successor to Tenant by purchase,
merger, consolidation or reorganization without the consent of Landlord,
provided that all of the following conditions are satisfied (a "Permitted
Transfer"): (1) no uncured event of default exists under this Lease; (2)
Tenant's successor shall own all or substantially all of the assets of Tenant;
(3) the Affiliate or Tenant's successor shall have a net worth which is at least
equal to the greater of Tenant's net worth at the date of this Lease or Tenant's
net worth as of the day prior to the proposed purchase, merger, consolidation or
reorganization; (4) no portion of the Building or Premises would likely become
subject to additional or different Laws as a consequence of the proposed
Transfer; (5) the Affiliate's or Tenant's successor's use of the Premises shall
not conflict with the Permitted Use or any exclusive usage rights granted to any
other tenant in the Building; (6) neither the Transfer nor any consideration
payable to Landlord in connection therewith adversely affects the real estate
investment trust (or pension fund or other ownership vehicle) qualification
tests applicable to Landlord or its affiliates; (7) the Affiliate or Tenant's
successor is not and has not been involved in litigation with Landlord or any of
its affiliates; and (8) Tenant shall give Landlord written notice at least 30
days prior to the effective date of the proposed purchase, merger, consolidation
or reorganization.(26) The term "Affiliate" means any person or entity
controlling, controlled by or under common control with Tenant. Tenant's notice
to Landlord shall include information and documentation showing that each of the
above conditions has been satisfied. If requested by Landlord, the Affiliate or
Tenant's successor shall sign a commercially reasonable form of assumption
agreement.

12. LIENS. Tenant shall not permit mechanic's or other liens to be placed upon
the Property, Premises or Tenant's leasehold interest in connection with any
work or service done or purportedly done by or for the benefit of Tenant. If a
lien is so placed, Tenant shall, within(27) days of notice from Landlord of the
filing of the lien, fully discharge the lien by settling the claim which
resulted in the lien or by bonding or insuring over the lien in the manner
prescribed by the applicable lien Law. If Tenant fails to discharge the lien,
then, in addition to any other right or remedy of Landlord, Landlord may bond or
insure over the lien or otherwise discharge the lien. Tenant shall, within 30
days after receipt of an invoice from Landlord, reimburse Landlord for any
amount paid by Landlord, including reasonable attorneys' fees, to bond or insure
over the lien or discharge the lien.

13.  INDEMNITY AND WAIVER OF CLAIMS.

     A. TENANT'S INDEMNITY. Subject to Article 15, Tenant shall hold Landlord,
its trustees, members, principals, beneficiaries, partners, officers, directors,
shareholders, employees, Mortgagee(s) (defined in ARTICLE 25) and agents
harmless from, and indemnify and defend such parties against, all liabilities,
obligations, damages, penalties, claims, actions, costs, charges and expenses,
including reasonable attorneys' fees and other professional fees that may be
imposed upon, incurred by or asserted against any of such indemnified parties
that arise out of or in connection with any damage or injury (i) occurring in
the Premises, except to the extent caused by the negligence or willful
misconduct of Landlord or any of its employees, agents or contractors
(collectively, "Landlord Parties"); or (ii) occurring elsewhere in the Building
or on the Property to the extent caused by the negligence or willful misconduct
of Tenant or any assignees, subtenants and licensees claiming by, through or
under Tenant, or any of their respective agents, contractors, employees and
invitees (collectively, "Tenant Parties").

     B. LANDLORD'S INDEMNITY. Subject to ARTICLES 15 and 20, Landlord shall hold
Tenant, its trustees, members, principals, beneficiaries, partners, officers,
directors, shareholders, employees and agents harmless from, and indemnify and
defend such parties against, all liabilities, obligations, damages, penalties,
claims, actions, costs, charges and expenses, including reasonable attorneys'
fees and other professional fees, which may be imposed upon, incurred by or
asserted against any of such indemnified parties that arise out of or in
connection with any damage or injury occurring in the Premises or the Building
or on the Property to the extent caused by the negligence or willful misconduct
of any of the Landlord Parties.

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(26) Tenant may assign its entire interest under this Lease to General Agents
Insurance Company of America, Inc., a Texas corporation, ("Proposed Assignee")
without the consent of Landlord, provided conditions (1), (4), (5), (6), (7) and
(8) of this Subparagraph 11(E) are satisfied. Landlord acknowledges that if
Tenant assigns its interest pursuant to this footnote, notwithstanding the
provisions of Exhibits G and H to the contrary, Proposed Assignee shall have the
right to exercise the rights contained in Exhibits G and H.

(27) 15 Business Days

                                       13
<PAGE>
14.   INSURANCE.

     A. TENANT'S INSURANCE. Tenant shall maintain the following insurance
("Tenant's Insurance"), at its sole cost and expense: (1) commercial general
liability insurance applicable to the Premises and its appurtenances providing,
on an occurrence basis, a minimum combined single limit of(28) (coverage in
excess of $1,000,000 may be provided by way of an umbrella/excess liability
policy); (2) causes of loss-special form (formerly "all risk") property
insurance, , covering all above building standard leasehold improvements and
Tenant's trade fixtures, equipment, furniture and other personal property within
the Premises ("Tenant's Property") in the amount of the full replacement cost
thereof; (3) business income (formerly "business interruption") insurance
written on an actual loss sustained form or with sufficient limits to address
reasonably anticipated business interruption losses; (4) business automobile
liability insurance to cover all owned, hired and nonowned automobiles owned or
operated by Tenant providing a minimum combined single limit of $1,000,000; (5)
workers' compensation insurance as required by the state in which the Premises
is located and in amounts as may be required by applicable statute (provided,
however, if no workers' compensation insurance is statutorily required, Tenant
shall carry workers' compensation insurance in a minimum amount of $500,000);
and (6) employer's liability insurance in an amount of at least $500,000 per
occurrence. Any company underwriting any of Tenant's Insurance shall have,
according to A.M. Best Insurance Guide, a Best's rating of not less than A- and
a Financial Size Category of not less than VIII. All commercial general
liability and business automobile liability insurance policies shall name
Landlord (or any successor), Landlord's Mortgagee (if any), and other designees
of Landlord as the interest of such designees shall appear, as "additional
insureds" and shall be primary with Landlord's policy being secondary and
noncontributory. If any aggregate limit is reduced because of losses paid to
below 75% of the limit required by this Lease, Tenant will notify Landlord in
writing within 10 days of the date of reduction. All policies of Tenant's
Insurance shall contain endorsements that the insurer(s) shall give Landlord and
its designees at least 30 days' advance written notice of any change(29),
cancellation, termination or lapse of insurance. Tenant shall provide Landlord
with a certificate of insurance and all required endorsements evidencing
Tenant's Insurance prior to the earlier to occur of the Commencement Date or the
date Tenant is provided with possession of the Premises for any reason, and upon
renewals at least 10 days prior to the expiration of the insurance coverage. All
of Tenant's Insurance policies, endorsements and certificates will be on forms
and with deductibles and self-insured retention, if any, reasonably acceptable
to Landlord. The limits of Tenant's insurance shall not limit Tenant's liability
under this Lease.

     B. LANDLORD'S INSURANCE. Landlord shall maintain: (1) commercial general
liability insurance applicable to the Property which provides, on an occurrence
basis, a minimum combined single limit of $5,000,000 (coverage in excess of
$1,000,000 may be provided by way of an umbrella/excess liability policy); and
(2) causes of loss-special form (formerly "all risk") property insurance on the
Building in the amount of the replacement cost thereof, as reasonably estimated
by Landlord. The foregoing insurance and any other insurance carried by Landlord
may be effected by a policy or policies of blanket insurance and shall be for
the sole benefit of Landlord and under Landlord's sole control. Consequently,
Tenant shall have no right or claim to any proceeds thereof or any other rights
thereunder.

15. MUTUAL WAIVER OF SUBROGATION. Notwithstanding anything in this Lease to the
contrary, Tenant waives, and shall cause its insurance carrier(s) and any other
party claiming through or under such carrier(s), by way of subrogation or
otherwise, to waive any and all rights of recovery, claim, action or causes of
action against all Landlord Parties and the trustees, principals, beneficiaries,
partners, officers, and directors of Landlord Parties, for any loss or damage to
Tenant's business, any loss of use of the Premises, and any loss, theft or
damage to Tenant's Property (including Tenant's automobiles or the contents
thereof), INCLUDING ALL RIGHTS (BY WAY OF SUBROGATION OR OTHERWISE) OF RECOVERY,
CLAIMS, ACTIONS OR CAUSES OF ACTION ARISING OUT OF THE NEGLIGENCE OF ANY
LANDLORD PARTIES, which loss or damage is (or would have been, had the insurance
required by this Lease been maintained) covered by insurance. In addition,
Landlord(30) shall cause its insurance carrier(s) and any other party claiming
through or under such carrier(s), by way of subrogation or otherwise, to waive
any and all rights of recovery, claim, action or causes of action against all
Tenant Parties and the trustees, principals, beneficiaries, partners, officers,
and directors of Tenant Parties, for any loss of or damage to or loss of

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(28) $2,000,000

(29) which would have the effect of reducing any insurance required by this
Lease

(30) waives, to the extent a claim against a Landlord Party is fully covered by
Landlord's insurance (but excluding from such waiver any deductible payable by a
Landlord Party under such insurance policy) and Landlord

                                       14
<PAGE>

use of the Building, any additions or improvements to the Building, or any
contents thereof, INCLUDING ALL RIGHTS (BY WAY OF SUBROGATION OR OTHERWISE) OF
RECOVERY, CLAIMS, ACTIONS OR CAUSES OF ACTION ARISING OUT OF THE NEGLIGENCE OF
ANY TENANT PARTIES, which loss or damage is (or would have been, had the
insurance required by this Lease been maintained) covered by insurance.

16.  CASUALTY DAMAGE.

     A. REPAIR OR TERMINATION BY LANDLORD. If all or any part of the Premises
are damaged by fire or other casualty, Tenant shall immediately notify Landlord
in writing. Landlord shall have the right to terminate this Lease if: (1) the
Building shall be damaged so that, in Landlord's judgment, substantial
alteration or reconstruction of the Building shall be required (whether or not
the Premises have been damaged); (2) Landlord is not permitted by Law to rebuild
the Building in substantially the same form as existed before the fire or
casualty; (3) the Premises have been materially damaged and there is less
than(31) of the Term remaining on the date of the casualty; (4) any Mortgagee
requires that the insurance proceeds be applied to the payment of the mortgage
debt; or (5) an uninsured loss of the Building occurs notwithstanding Landlord's
compliance with SECTION 14.B above. Landlord may exercise its right to terminate
this Lease by notifying Tenant in writing within 90 days after the date of the
casualty. If Landlord does not terminate this Lease under this SECTION 16.A,
Landlord shall commence and proceed with reasonable diligence to repair and
restore the Building and/or the Premises to substantially the same condition as
existed immediately prior to the date of damage; provided, however, that
Landlord shall only be required to reconstruct building standard leasehold
improvements existing in the Premises as of the date of damage, and Tenant shall
be required to pay the cost for restoring any other leasehold improvements.
However, in no event shall Landlord be required to spend more than the insurance
proceeds received by Landlord.

     B. TIMING FOR REPAIR; TERMINATION BY EITHER PARTY. If all or any portion of
the Premises is damaged as a result of fire or other casualty,(32) Landlord
shall, with reasonable promptness, cause an architect or general contractor
selected by Landlord to provide Landlord and Tenant with a written estimate of
the amount of time required to substantially complete the repair and restoration
of the Premises, using standard working methods ("Completion Estimate"). If the
Completion Estimate indicates that the Premises cannot be made tenantable
within(33), then regardless of anything in SECTION 16.A above to the contrary,
either party shall have the right to terminate this Lease by giving written
notice to the other of such election within 10 days after receipt of the
Completion Estimate. Tenant, however, shall not have the right to terminate this
Lease if the fire or casualty was caused by the negligence or intentional
misconduct of any of the Tenant Parties. If neither party terminates this Lease
under this SECTION 16.B, then Landlord shall repair and restore the Premises in
accordance with, and subject to the limitations of, SECTION 16.A.(34)

     C. ABATEMENT. In the event a material portion of the Premises is damaged as
a result of a fire or other casualty,(35) the Base Rent(36) shall abate for the
portion of the Premises that is damaged and not used by Tenant until substantial
completion of the repairs and restoration required to be made by Landlord
pursuant to SECTION 16.A. Landlord shall not be liable for any loss or damage to
Tenant's Property or to the business of Tenant resulting in any way from the
fire or other casualty or from the repair and restoration of the damage.
Landlord and Tenant hereby waive the provisions of any Law relating to the
matters addressed in this Article, and agree that their respective rights for
damage to or destruction of the Premises shall be those specifically provided in
this Lease.

17. CONDEMNATION. Either party may terminate this Lease if the whole or any
material part of the Premises are taken or condemned for any public or
quasi-public use under Law, by eminent domain or private purchase in lieu
thereof (a "Taking"). Landlord shall also have the right to terminate this Lease
if there is a Taking of any portion of the Building or Property which would
leave the remainder of the

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(31) 1 year

(32) or access thereto is denied (including without limitation failure of
elevator service),

(33) 225 days from the date of damage

(34) If Landlord fails to complete such repairs to the Premises within 225 days
from the date of damage, then Tenant shall have the right to terminate this
Lease following 30 days written notice given after such 225 day period;
provided, however, if Landlord completes such repairs prior to the expiration of
the 30 day notice period, Tenant's right to terminate shall be null and void.

(35) or access thereto is denied (including without limitation failure of
elevator service),

(36) and Tenant's Pro Rata Share of Operating Expenses and Electrical Costs

                                       15
<PAGE>

Building unsuitable for use as an office building in a manner comparable to the
Building's use prior to the Taking. In order to exercise its right to terminate
this Lease under this ARTICLE 17, Landlord or Tenant, as the case may be, must
provide written notice of termination to the other within 45 days after the
terminating party first receives notice of the Taking. Any such termination
shall be effective as of the date the physical taking of the Premises or the
portion of the Building or Property occurs. If this Lease is not terminated, the
Rentable Square Footage of the Building, the Rentable Square Footage of the
Premises and Tenant's Pro Rata Share shall, if applicable, be appropriately
adjusted by Landlord. In addition, Base Rent for any portion of the Premises
taken or condemned shall be abated during the unexpired Term effective when the
physical taking of the portion of the Premises occurs. All compensation awarded
for a Taking, or sale proceeds, shall be the property of Landlord, any right to
receive compensation or proceeds being expressly waived by Tenant. However,
Tenant may file a separate claim at its sole cost and expense for Tenant's
Property (excluding above building standard leasehold improvements) and Tenant's
reasonable relocation expenses, provided the filing of such claim does not
diminish the award which would otherwise be receivable by Landlord.

18.   EVENTS OF DEFAULT. Tenant shall be considered to be in default under this
Lease upon the occurrence of any of the following events of default:

     A.   Tenant's failure to pay when due all or any portion of the Rent
("Monetary Default")(37).

     B.   Tenant's failure to perform any of the obligations of Tenant in the
manner set forth in ARTICLES 14, 23, 24 or 25 (a "Time Sensitive Default").

     C. Tenant's failure (other than a Monetary Default or a Time Sensitive
Default) to comply with any term, provision or covenant of this Lease, if the
failure is not cured within(38) days after written notice to Tenant. However,
if Tenant's failure to comply cannot reasonably be cured within(39) days,
Tenant shall be allowed additional time (not to exceed an additional(40) days)
as is reasonably necessary to cure the failure so long as: (1) Tenant commences
to cure the failure within the(41) day period following Landlord's initial
written notice, and (2) Tenant diligently pursues a course of action that will
cure the failure and bring Tenant back into compliance with this Lease. However,
if Tenant's failure to comply creates a hazardous condition, the failure must be
cured immediately upon notice to Tenant. In addition, if Landlord provides
Tenant with notice of Tenant's failure to comply with the same specific term,
provision or covenant of this Lease on more than two (2) occasions during any 12
month period, Tenant's subsequent violation of the same term, provision or
covenant shall, at Landlord's option, be deemed an incurable event of default by
Tenant.

     D. Tenant or any Guarantor becomes insolvent, files a petition for
protection under the U.S. Bankruptcy Code (or similar Law) or a petition is
filed against Tenant or any Guarantor under such Laws and is not dismissed
within 45 days after the date of such filing, makes a transfer in fraud of
creditors or makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts when due.

     E.   The leasehold estate is taken by process or operation of Law.

     F. In the case of any ground floor or retail tenant, or any other tenant
whose space is visible from the Common Areas or elevator lobby areas of the
Building, Tenant does not take possession of, or abandons or vacates all or a
substantial portion of the Premises.

     G.   Tenant is in default beyond any notice and cure period under any other
lease or agreement with Landlord, including any lease or agreement for parking.

19.   REMEDIES.

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(37) ; provided that the first such failure during any consecutive 12 month
period shall not be an event of default if Tenant pays the amount due within 5
days after written notice from Landlord

(38) 30

(39) 30

(40) 30

(41) 30

                                       16
<PAGE>

     A.   LANDLORD'S REMEDIES. Upon any default, Landlord shall have the right
without notice or demand (except as provided in ARTICLE 18) to pursue any of its
rights and remedies at Law or in equity, including any one or more of the
following remedies:

     (1)  Terminate this Lease, in which case Tenant shall immediately surrender
          the Premises to Landlord. If Tenant fails to surrender the Premises,
          Landlord may, in compliance with applicable Law and without prejudice
          to any other right or remedy, enter upon and take possession of the
          Premises and expel and remove Tenant, Tenant's Property and any
          parties occupying all or any part of the Premises. Tenant shall pay
          Landlord on demand the amount of all past due Rent, all Costs of
          Reletting (defined below) and any deficiency that may arise from
          reletting or the failure to relet the Premises. "Costs of Reletting"
          shall include commercially reasonable costs, losses and expenses
          incurred by Landlord in reletting all or any portion of the Premises,
          including the cost of removing and storing Tenant's furniture, trade
          fixtures, equipment, inventory or other property, repairing and/or
          demolishing the Premises, removing and/or replacing Tenant's signage
          and other fixtures, making the Premises ready for a new tenant,
          including the cost of advertising, commissions, architectural fees,
          legal fees and leasehold improvements (even if amortized over a new
          lease term which exceeds the balance of the Term), and any allowances
          and/or concessions provided by Landlord.

     (2)  Terminate Tenant's right to possession of the Premises and change the
          locks, without judicial process, and, in compliance with applicable
          Law, expel and remove Tenant, Tenant's Property and any parties
          occupying all or any part of the Premises. If Landlord terminates
          Tenant's possession of the Premises under this SECTION 19.A(2),
          Landlord shall have no obligation to post any notice and Landlord
          shall have no obligation whatsoever to tender to Tenant a key for new
          locks installed in the Premises. Landlord may (but shall not be
          obligated to) relet all or any part of the Premises, without notice to
          Tenant, for a term that may be greater or less than the balance of the
          Term and on such conditions (which may include concessions, free rent
          and alterations of the Premises) and for such uses as Landlord in its
          absolute discretion shall determine. Landlord may collect and receive
          all rents and other income from the reletting. Tenant shall pay
          Landlord on demand all past due Rent, all Costs of Reletting and any
          deficiency arising from the reletting or failure to relet the
          Premises. Landlord shall not be responsible or liable for the failure
          to relet all or any part of the Premises or for the failure to collect
          any Rent. The re-entry or taking of possession of the Premises shall
          not be construed as an election by Landlord to terminate this Lease
          unless a written notice of termination of this Lease is given to
          Tenant.

     (3)  Cure such event of default for Tenant at Tenant's expense (plus a 15%
          administrative fee).

     (4)  Withhold or suspend payment of sums Landlord would otherwise be
          obligated to pay to Tenant under this Lease or any other agreement.

     (5)  Require all future payments to be made by cashier's check, money order
          or wire transfer after the first time any check is returned for
          insufficient funds, or the second time any sum due hereunder is more
          than five (5) days late.

     (6)  In lieu of calculating damages under SECTIONS 19.A(1) or 19.A(2)
          above, Landlord may elect to receive as damages the sum of (a) all
          Rent accrued through the date of termination of this Lease or Tenant's
          right to possession, and (b) an amount equal to the total Rent that
          Tenant would have been required to pay for the remainder of the Term
          discounted to present value at the Prime Rate (defined below) then in
          effect, minus the then present fair rental value of the Premises for
          the remainder of the Term, similarly discounted, after deducting all
          anticipated Costs of Reletting. For purposes hereof, the "Prime Rate"
          shall be the per annum interest rate publicly announced by a federally
          insured bank selected by Landlord in the state in which the Building
          is located as such bank's prime or base rate.

     (7)  Recover such other amounts in addition to or in lieu of the foregoing
          as may be permitted from time to time by applicable Law, including any
          other amount necessary to compensate Landlord for all the detriment
          proximately caused by Tenant's failure to perform its obligations
          under this Lease or which in the ordinary course of events would be
          likely to result therefrom. Tenant shall hold Landlord, its trustees,
          members, principals, beneficiaries, partners, officers, directors,
          shareholders, employees,

                                       17
<PAGE>

          Mortgagee(s) and agents harmless from and indemnify and defend such
          parties against, all liabilities, obligations, damages, penalties,
          claims, actions, costs, charges and expenses, including reasonable
          attorneys' fees and other professional fees, which may be imposed
          upon, incurred by or asserted against any of such indemnified parties
          that arise out of or in connection with a breach of this Lease,
          specifically including any violation of applicable Laws or
          Contamination (defined in ARTICLE 30) caused by a Tenant Party.

     B. TENANT NOT RELIEVED FROM LIABILITIES. Unless expressly provided in this
Lease, the repossession or re-entering of all or any part of the Premises shall
not relieve Tenant of its liabilities and obligations under this Lease. No right
or remedy of Landlord shall be exclusive of any other right or remedy. Each
right and remedy shall be cumulative and in addition to any other right and
remedy now or subsequently available to Landlord at Law or in equity. If Tenant
fails to pay any amount when due hereunder, Landlord shall be entitled to
receive interest on any unpaid item of Rent at a rate equal to the lesser of 18%
per annum or the highest rate permitted by Law. In addition, if Tenant fails to
pay any item or installment of Rent when due, Tenant shall pay Landlord an
administrative fee equal to 5% of the past due Rent. However, in no event shall
the charges permitted under this SECTION 19.B or elsewhere in this Lease, to the
extent they are considered interest under applicable Law, exceed the maximum
lawful rate of interest. Receipt by Landlord of Tenant's keys to the Premises
shall not constitute an acceptance or surrender of the Premises.

     C. MITIGATION OF DAMAGES. Upon termination of Tenant's right to possess the
Premises, Landlord shall, only to the extent required by Law, use objectively
reasonable efforts to mitigate damages by reletting the Premises. Landlord shall
not be deemed to have failed to do so if Landlord refuses to lease the Premises
to a prospective new tenant with respect to whom Landlord would be entitled to
withhold its consent pursuant to SECTION 11.A, or who (1) is an affiliate,
parent or subsidiary of Tenant; (2) is not acceptable to any Mortgagee of
Landlord; (3) requires improvements to the Premises to be made at Landlord's
expense(42); or (4) is unwilling to accept lease terms then proposed by
Landlord, including: (a) leasing for a shorter or longer term than remains under
this Lease; (b) re-configuring or combining the Premises with other space, (c)
taking all or only a part of the Premises; and/or (d) changing the use of the
Premises. Notwithstanding Landlord's duty to mitigate its damages as provided
herein, Landlord shall not be obligated to give any priority to reletting
Tenant's space in connection with its leasing of space in the Building or any
complex of which the Building is a part.

     D. LANDLORD'S LIEN. To secure Tenant's obligations under this Lease, Tenant
grants Landlord a contractual security interest on all of Tenant's furniture,
fixtures and equipment now or hereafter situated in the Premises and all
proceeds therefrom, including insurance proceeds (collectively, "Collateral").
No Collateral shall be removed from the Premises without Landlord's prior
written consent until all of Tenant's obligations are fully satisfied (except in
the ordinary course of business and then only if replaced with items of same or
greater value and quality). Upon any event of default, Landlord may, to the
fullest extent permitted by Law and in addition to any other remedies provided
herein, enter upon the Premises and take possession of any Collateral without
being held liable for trespass or conversion, and sell the same at public or
private sale, after giving Tenant at least 5 days written notice (or more if
required by Law) of the time and place of such sale. Such notice may be sent
with or without return receipt requested. Unless prohibited by Law, any Landlord
Party may purchase any Collateral at such sale. The proceeds from such sale,
less Landlord's expenses, including reasonable attorneys' fees and other
expenses, shall be credited against Tenant's obligations. Any surplus shall be
paid to Tenant (or as otherwise required by Law) and any deficiency shall be
paid by Tenant to Landlord upon demand. Upon request, Tenant shall execute and
deliver to Landlord a financing statement sufficient to perfect the foregoing
security interest, or Landlord may file a copy of this Lease as a financing
statement, as permitted under Law.(43)

20.   LIMITATION OF LIABILITY. Notwithstanding anything to the contrary
contained in this Lease, the liability of Landlord (and of any successor
Landlord) to Tenant (or any person or entity claiming by, through or under
Tenant) shall be limited to the interest of Landlord in the Property(44). Tenant
shall look

----------
(42) which improvements are in excess of those being then offered by the
Landlord to prospective tenants in the Building.

(43) E. LANDLORD DEFAULTS AND TENANT REMEDIES. Except as otherwise provided in
this Lease and specifically subject to SECTIONS 3.B and 20, if Landlord fails in
the performance of any of Landlord's obligations under this Lease and such
failure continues for 30 days after Landlord's receipt of written notice thereof
from Tenant (or an additional reasonable time after such receipt if (A) such
failure cannot be cured within such 30 day period, and (B) Landlord commences
curing such failure within such 30 day period and thereafter diligently pursues
the curing of such failure), then Tenant shall be entitled to exercise any
remedies that Tenant may have at law or in equity.

(44) , which shall include (i) the unencumbered proceeds of sale received upon
execution of a judgment in favor of Tenant and levy thereon against the right,
title, and interest of Landlord in the Property, (ii) the unencumbered rents or
other income from

                                       18
<PAGE>

solely to Landlord's interest in the Property for the recovery of any judgment
or award against Landlord. No Landlord Party shall be personally liable for any
judgment or deficiency. Before filing suit for an alleged default by Landlord,
Tenant shall give Landlord and the Mortgagee(s) (defined in ARTICLE 25) whom
Tenant has been notified hold Mortgages (defined in ARTICLE 25) on the Property,
Building or Premises, notice and reasonable time to cure the alleged default.
Tenant hereby waives all claims against all Landlord Parties for consequential,
special or punitive damages allegedly suffered by any Tenant Parties, including
lost profits and business interruption.

21. NO WAIVER. Neither party's failure to declare a default immediately upon its
occurrence or delay in taking action for a default shall constitute a waiver of
the default, nor shall it constitute an estoppel. Neither party's failure to
enforce its rights for a default shall constitute a waiver of that party's
rights regarding any subsequent default.

22. TENANT'S RIGHT TO POSSESSION. Provided Tenant pays the Rent and fully
performs all of its other covenants and agreements under this Lease, Tenant
shall have the right to occupy the Premises without hindrance from Landlord or
any person lawfully claiming through Landlord, subject to the terms of this
Lease, all Mortgages, insurance requirements and applicable Law. This covenant
and all other covenants of Landlord shall be binding upon Landlord and its
successors only during its or their respective periods of ownership of the
Building, and shall not be a personal covenant of any Landlord Parties.

23.   RELOCATION.(45)

24. HOLDING OVER. Except for any permitted occupancy by Tenant under ARTICLE 29,
if Tenant or any party claiming by through or under Tenant fails to surrender
the Premises at the expiration or earlier termination of this Lease, the
continued occupancy of the Premises shall be that of a tenancy at sufferance.
Tenant shall pay an amount (on a per month basis without reduction for partial
months during the holdover) equal to 200% of the greater of: (1) the sum of the
Base Rent and Tenant's Pro Rata Share of Excess Operating Expenses due for the
period immediately preceding the holdover; or (2) the fair market gross rental
for the Premises as reasonably determined by Landlord(46). Tenant shall
otherwise continue to be subject to all of Tenant's obligations under this
Lease. No holdover by Tenant or payment by Tenant after the expiration or early
termination of this Lease shall be construed to extend the Term or prevent
Landlord from immediate recovery of possession of the Premises by summary
proceedings or otherwise. In addition to the payment of the amounts provided
above, if Landlord is unable to deliver possession of the Premises to a new
tenant, or to perform improvements for a new tenant, as a result of Tenant's
holdover and Tenant fails to vacate the Premises within 15 days after Landlord
notifies Tenant of Landlord's inability to deliver possession, or perform
improvements, such failure shall constitute a Time Sensitive Default hereunder;
and Tenant shall be liable to Landlord for, and shall protect Landlord from and
indemnify and defend Landlord against, all losses and damages, including any
claims made by any succeeding tenant resulting from such failure to vacate, and
any consequential damages that Landlord suffers from the holdover.

25. SUBORDINATION TO MORTGAGES; ESTOPPEL CERTIFICATE. Tenant accepts this Lease
subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or
other lien(s) now or subsequently affecting the Premises, the Building or the
Property, and to renewals, modifications, refinancings and extensions thereof
(collectively, a "Mortgage"). The party having the benefit of a Mortgage shall
be referred to as a "Mortgagee." This clause shall be self-operative, but upon
request from a Mortgagee, Tenant shall execute a commercially reasonable
subordination agreement in favor of the Mortgagee. In lieu of having the
Mortgage be superior to this Lease, a Mortgagee shall have the right at any time
to subordinate its Mortgage to this Lease. If requested by a
successor-in-interest to all or a part of Landlord's interest in this Lease,
Tenant shall, without charge, attorn to the successor-in-interest. Tenant shall,
within 5 days after receipt of a written request from Landlord, execute and
deliver an estoppel certificate to those parties as are reasonably requested by
Landlord (including a Mortgagee or prospective purchaser). The estoppel
certificate shall include a statement certifying that this Lease is unmodified
(except as identified in the estoppel certificate) and in full force and effect,
describing the dates to which Rent and other charges have been paid,
representing that, to the best of Tenant's knowledge, there is no default (or
stating with specificity the nature of the alleged default) and certifying

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the Property receivable by Landlord, and (iii) the unencumbered consideration
received by Landlord from the sale or other disposition of all or any part of
Landlord's right, title, and interest in the Property

(45) Intentionally Omitted.

(46) ; provided however, so long as no uncured event of default exists under the
Lease, for the first 30 days of any such holdover Tenant shall pay only 150% of
such greater amount

                                       19
<PAGE>

other matters with respect to this Lease that may reasonably be requested.
Tenant's failure to provide any estoppel certificate within the 5 day period
specified above, and the continuation of such failure for a period of 5 days
after Landlord delivers a second written notice requesting same, shall
constitute a Time Sensitive Default under this Lease.

26. ATTORNEYS' FEES. If either party institutes a suit against the other for
violation of or to enforce any covenant or condition of this Lease, or if either
party intervenes in any suit in which the other is a party to enforce or protect
its interest or rights, the prevailing party shall be entitled to all of its
costs and expenses, including reasonable attorneys' fees.

27. NOTICE. If a demand, request, approval, consent or notice (collectively, a
"notice") shall or may be given to either party by the other, the notice shall
be in writing and delivered by hand or sent by registered or certified mail with
return receipt requested, or sent by overnight or same day courier service, or
sent by facsimile, at the party's respective Notice Address(es) set forth in
ARTICLE 1, except that if Tenant has vacated the Premises (or if the Notice
Address for Tenant is other than the Premises, and Tenant has vacated such
address) without providing Landlord a new Notice Address, Landlord may serve
notice in any manner described in this Article or in any other manner permitted
by Law. Each notice shall be deemed to have been received or given on the
earlier to occur of actual delivery (which, in the case of delivery by
facsimile, shall be deemed to occur at the time of delivery indicated on the
electronic confirmation of the facsimile) or the date on which delivery is first
refused, or, if Tenant has vacated the Premises or the other Notice Address of
Tenant without providing a new Notice Address, three (3) days after notice is
deposited in the U.S. mail or with a courier service in the manner described
above. Either party may, at any time, change its Notice Address by giving the
other party written notice of the new address in the manner described in this
Article.

28. RESERVED RIGHTS. This Lease does not grant any rights to light or air over
or about the Building. Landlord excepts and reserves exclusively to itself the
use of: (A) roofs, (B) telephone, electrical and janitorial closets, (C)
equipment rooms, Building risers or similar areas that are used by Landlord for
the provision of Building services, (D) rights to the land and improvements
below the floor of the Premises, (E) the improvements and air rights above the
Premises, (F) the improvements and air rights outside the demising walls of the
Premises, (G) the areas within the Premises used for the installation of utility
lines and other installations serving occupants of the Building, and (H) any
other areas designated from time to time by Landlord as service areas of the
Building. Landlord has the right to change the Building's name or address.
Landlord also has the right to make such other changes to the Property and
Building as Landlord deems appropriate, provided the changes do not materially
affect Tenant's ability to use the Premises for the Permitted Use. Landlord
shall also have the right (but not the obligation) to temporarily close the
Building if Landlord reasonably determines that there is an imminent danger of
significant damage to the Building or of personal injury to Landlord's employees
or the occupants of the Building. The circumstances under which Landlord may
temporarily close the Building shall include, without limitation, electrical
interruptions, hurricanes and civil disturbances. A closure of the Building
under such circumstances shall not constitute a constructive eviction nor
entitle Tenant to an abatement or reduction of Rent.

29. SURRENDER OF PREMISES. All improvements to the Premises (collectively,
"Leasehold Improvements") shall be owned by Landlord and shall remain upon the
Premises without compensation to Tenant. At the expiration or earlier
termination of this Lease or Tenant's right of possession, Tenant shall remove
Tenant's Removable Property (defined below) from the Premises, and quit and
surrender the Premises to Landlord, broom clean, and in good order, condition
and repair, ordinary wear and tear excepted. As used herein, the term "Tenant's
Removable Property" shall mean: (A) Cable installed by or for the benefit of
Tenant and located in the Premises or other portions of the Building; (B) any
Leasehold Improvements that are performed by or for the benefit of Tenant and,
in Landlord's reasonable judgment, are of a nature that would require removal
and repair costs that are materially in excess of the removal and repair costs
associated with standard office improvements ("Special Installations"); and (C)
Tenant's personal property.(47) Notwithstanding the foregoing, Landlord may, in
Landlord's sole discretion and at no cost to Landlord, require Tenant to leave
any of its Special Installations in the Premises. If Tenant fails to remove any
of Tenant's Removable Property (other than Special Installations which Landlord
has designated to remain in the Premises) within 2 days after the termination of
this Lease or of Tenant's right to possession, Landlord, at Tenant's sole cost
and expense, shall be entitled (but not obligated) to remove and store Tenant's
Removable Property. Landlord shall not be responsible for the value,
preservation or safekeeping of Tenant's Removable Property. Tenant shall pay
Landlord, upon demand, the expenses and storage charges incurred for Tenant's
Removable Property. To the fullest extent permitted by applicable Law, any
unused portion of Tenant's Security

----------
(47) Tenant shall have no obligation to remove any property or equipment owned
by Landlord.

                                       20
<PAGE>

Deposit may be applied to offset Landlord's costs set forth in the preceding
sentence. In addition, if Tenant fails to remove Tenant's Removable Property
from the Premises or storage, as the case may be, within 30 days after written
notice, Landlord may deem all or any part of Tenant's Removable Property to be
abandoned, and title to Tenant's Removable Property (except with respect to any
Hazardous Material [defined in ARTICLE 30]) shall be deemed to be immediately
vested in Landlord. Except for Special Installations designated by Landlord to
remain in the Premises, Tenant's Removable Property shall be removed by Tenant
before the Expiration Date; provided that upon Landlord's prior written consent
(which must be requested by Tenant at least 30 days in advance of the Expiration
Date and which shall not be unreasonably withheld), Tenant may remain in the
Premises for up to 5 days after the Expiration Date for the sole purpose of
removing Tenant's Removable Property. Tenant's possession of the Premises for
such purpose shall be subject to all of the terms and conditions of this Lease,
including the obligation to pay Base Rent and Tenant's Pro Rata Share of Excess
Operating Expenses on a per diem basis at the rate in effect for the last month
of the Term. In the event this Lease is terminated prior to the Expiration Date,
Tenant's Removable Property (except for Special Installations designated by
Landlord to remain in the Premises) shall be removed by Tenant on or before such
earlier date of termination. Tenant shall repair damage caused by the
installation or removal of Tenant's Removable Property.

30.  HAZARDOUS MATERIALS. No Hazardous Material (defined below) (except for
de minimis quantities of household cleaning products and office supplies used in
the ordinary course of Tenant's business at the Premises and that are used, kept
and disposed of in compliance with Laws) shall be brought upon, used, kept or
disposed of in or about the Premises or the Property by any Tenant Parties or
any of Tenant's transferees, contractors or licensees without Landlord's prior
written consent, which consent may be withheld in Landlord's sole and absolute
discretion. Tenant's request for such consent shall include a representation and
warranty by Tenant that the Hazardous Material in question (A) is necessary in
the ordinary course of Tenant's business, and (B) shall be used, kept and
disposed of in compliance with all Laws. If Contamination (defined below) occurs
as a result of an act or omission of any Tenant Party, Tenant shall, at its
expense, promptly take all actions necessary to comply with Laws and to return
the Premises, the Building, the Property and/or any adjoining or affected
property to its condition prior to such Contamination, subject to Landlord's
prior written approval of Tenant's proposed methods, times and procedures for
remediation. Tenant shall provide Landlord reasonably satisfactory evidence that
such actions shall not adversely affect any Landlord Party or contaminated
property. Landlord may require that a representative of Landlord be present
during any such actions and/or that such actions be taken after business hours.
If Tenant fails to take and diligently prosecute any necessary remediation
actions within 30 days after written notice from Landlord or an authorized
governmental agency (or any shorter period required by any governmental agency)
that such remediation is required, Landlord may take such actions and Tenant
shall reimburse Landlord therefor, plus a 15% administrative fee, within 30 days
of Landlord's invoice. For purposes of this ARTICLE 30, a "Hazardous Material"
is any substance (Y) the presence of which requires, or may hereafter require,
notification, investigation or remediation under any Laws; or (Z) which is now
or hereafter defined, listed or regulated by any governmental authority as a
"hazardous waste", "extremely hazardous waste", "solid waste", "toxic
substance", "hazardous substance", "hazardous material" or "regulated
substance", or otherwise regulated under any Laws. "Contamination" means any
release or disposal of a Hazardous Material in, on, under, at or from the
Premises, the Building or the Property which may result in any liability, fine,
use restriction, cost recovery lien, remediation requirement, or other
government or private party action or imposition affecting any Landlord Party.
For purposes of this Lease, claims arising from Contamination shall include, but
not be limited to, diminution in value, restrictions on use, adverse impact on
leasing space, and all costs of site investigation, remediation, removal and
restoration work, including response costs under CERCLA and similar statutes.
Landlord advises Tenant that based on an asbestos survey report for the building
prepared by Law Engineering and Environmental Services, Inc., dated September
19, 1997, non-friable asbestos containing materials are present in the Building
in pipe insulation wrap with coating and mastic. In addition, based on a
previous asbestos survey performed by Maxim Engineers, Incorporated and reviewed
by Law Engineering and Environmental Services, Inc., non-friable
asbestos-containing materials are present on the roof of the Building in black
aggregate material. Because any tenant alterations or other work in the Premises
could disturb such materials and possibly release asbestos fibers into the air,
Tenant must obtain Landlord prior written approval before undertaking any such
projects that may affect such materials, notwithstanding anything to the
contrary set forth in SECTION 9.C or elsewhere in the Lease.

31.  MISCELLANEOUS.

     A.   GOVERNING LAW; JURISDICTION AND VENUE; SEVERABILITY; PARAGRAPH
HEADINGS. This Lease and the rights and obligations of the parties shall be
interpreted, construed and enforced in accordance with the Laws of the state in
which the Building is located. All obligations under this Lease

                                       21
<PAGE>

are performable in the county or other jurisdiction where the Building is
located, which shall be venue for all legal actions. If any term or provision of
this Lease shall to any extent be invalid or unenforceable, the remainder of
this Lease shall not be affected, and each provision of this Lease shall be
valid and enforced to the fullest extent permitted by Law. The headings and
titles to the Articles and Sections of this Lease are for convenience only and
shall have no effect on the interpretation of any part of this Lease. The word
"including" shall not be construed restrictively to limit or exclude other items
not listed.

     B.   RECORDING. Tenant shall not record this Lease or any memorandum
without Landlord's prior written consent.

     C. FORCE MAJEURE. Whenever a period of time is prescribed for the taking of
an action by Landlord or Tenant, the period of time for the performance of such
action shall be extended by the number of days that the performance is actually
delayed due to strikes, acts of God, shortages of labor or materials, war, civil
disturbances and other causes beyond the reasonable control of the performing
party ("Force Majeure"). However, events of Force Majeure shall not extend any
period of time for the payment of Rent or other sums payable by either party or
any period of time for the written exercise of an option or right by either
party.

     D. TRANSFERABILITY; RELEASE OF LANDLORD. Landlord shall have the right to
transfer and assign, in whole or in part, all of its rights and obligations
under this Lease and in the Building and/or Property, and upon such transfer
Landlord shall be released from any further obligations hereunder, and Tenant
agrees to look solely to the successor in interest of Landlord for the
performance of such obligations.

     E. BROKERS. Tenant represents that it has not dealt directly with any
broker in connection with this Lease. 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 broker or agent
claiming the same by, through or under the indemnifying party, other than those
specifically identified above, if any.

     F. AUTHORITY; JOINT AND SEVERAL LIABILITY. Landlord covenants, warrants and
represents that: (1) each individual executing, attesting and/or delivering this
Lease on behalf of Landlord is authorized to do so on behalf of Landlord; (2)
this Lease is binding upon and enforceable against Landlord; and (3) Landlord is
duly organized and legally existing in the state of its organization and is
qualified to do business in the state in which the Premises are located.
Similarly, Tenant covenants, warrants and represents that: (a) each individual
executing, attesting and/or delivering this Lease on behalf of Tenant is
authorized to do so on behalf of Tenant; (b) this Lease is binding upon and
enforceable against Tenant; and (c) Tenant is duly organized and legally
existing in the state of its organization and is qualified to do business in the
state in which the Premises are located. If there is more than one Tenant, or if
Tenant is comprised of more than one party or entity, the obligations imposed
upon Tenant shall be joint and several obligations of all the parties and
entities. Notices, payments and agreements given or made by, with or to any one
person or entity shall be deemed to have been given or made by, with and to all
of them.

     G. TIME IS OF THE ESSENCE; RELATIONSHIP; SUCCESSORS AND ASSIGNS. Time is of
the essence with respect to Tenant's performance of its obligations and the
exercise of any expansion, renewal or extension rights or other options granted
to Tenant. This Lease shall create only the relationship of landlord and tenant
between the parties, and not a partnership, joint venture or any other
relationship. This Lease and the covenants and conditions in this Lease shall
inure only to the benefit of and be binding only upon Landlord and Tenant and
their permitted successors and assigns.

     H. SURVIVAL OF OBLIGATIONS. The expiration of the Term, whether by lapse of
time or otherwise, shall not relieve either party of any obligations which
accrued prior to or which may continue to accrue after the expiration or early
termination of this Lease. Without limiting the scope of the prior sentence, it
is agreed that Tenant's obligations under SECTIONS 4.A, 4.B, and 4.C, and under
ARTICLES 6, 8, 12, 13, 19, 24, 29 and 30 shall survive the expiration or early
termination of this Lease.

     I. BINDING EFFECT. Landlord has delivered a copy of this Lease to Tenant
for Tenant's review only, and the delivery of it does not constitute an offer to
Tenant or an option. This Lease shall not be effective against any party hereto
until an original copy of this Lease has been signed by such party and delivered
to the other party.

     J.   FULL AGREEMENT; AMENDMENTS. This Lease contains the parties' entire
agreement regarding the subject matter hereof. All understandings, discussions,
and agreements previously made

                                       22
<PAGE>

between the parties, written or oral, are superseded by this Lease, and neither
party is relying upon any warranty, statement or representation not contained in
this Lease. This Lease may be modified only by a written agreement signed by
Landlord and Tenant. The exhibits and riders attached hereto are incorporated
herein and made a part of this Lease for all purposes.

     K.   TAX WAIVER. Tenant waives all rights pursuant to all Laws to protest
appraised values or receive notice of reappraisal regarding the Property
(including Landlord's personalty), irrespective of whether Landlord contests
same.

     L.   WAIVER OF CONSUMER RIGHTS.(48)

     M. METHOD OF CALCULATION. Landlord and Tenant, being knowledgeable and
experienced in commercial transactions, agree the provisions of the Lease for
determining charges, amounts and additional rent payable by Tenant (including,
without limitation, those allocating to Tenant a share of taxes, electrical
charges and expenses) are commercially reasonable and valid even though such
methods may not state a precise mathematical formula for determining such
charges. ACCORDINGLY, TENANT VOLUNTARILY AND KNOWINGLY WAIVES ALL RIGHTS AND
BENEFITS OF TENANT UNDER SECTION 93.004 OF THE TEXAS PROPERTY CODE, ASSESSMENT
OF CHARGES, AS SUCH SECTION NOW EXISTS OR AS MAY BE HEREAFTER AMENDED OR
SUCCEEDED.

(49)

----------
(48) Intentionally Omitted.

(49) O. PROHIBITED USE. The Premises shall not be used for any pornographic or
obscene purposes, any commercial sex establishment, any pornographic, obscene,
nude or semi-nude performances, modeling, materials, activities or sexual
conduct or any other use that has or could reasonably be expected to have a
material adverse effect on the value of the Building.

                                       23
<PAGE>

Landlord and Tenant have executed this Lease as of the Effective Date specified
below Landlord's signature.

                  LANDLORD:

                  CRESCENT REAL ESTATE FUNDING X, L.P.,
                  a Delaware limited partnership

                    By:  CRE Management X, LLC,
                         a Delaware limited liability company,
                         its general partner

                         By:  Crescent Real Estate Equities, Ltd.,
                             a Delaware corporation,
                              its Manager

                    By:    /s/ MICHAEL LEWIS
                           -----------------------------------------
                    Name:  Michael Lewis
                           -----------------------------------------
                    Title: Vice President
                           -----------------------------------------
                    Effective Date: August 19, 2002
                                    --------------------------------

                    TENANT:

                    GAINSCO, INC.,
                    a Texas corporation

                    By:    /s/ GLENN W. ANDERSON
                           -----------------------------------------
                    Name:  Glenn W. Anderson
                           -----------------------------------------
                    Title: President/CEO
                           -----------------------------------------

                                       24
<PAGE>

                                  EXHIBIT A-1

                        OUTLINE AND LOCATION OF PREMISES

                                [TO BE ATTACHED]

                                        1
<PAGE>

                                  EXHIBIT A-2

                          LEGAL DESCRIPTION OF PROPERTY

BEING a tract of land situated in the City of Dallas, Texas, and being all of
Lot 1A, Block A\515 of the First Interstate Bank Addition, an addition to the
City of Dallas, Texas, as recorded in Volume 90048, Page 1612 of the Deed
Records of Dallas County, Texas, and being more particularly described as
follows:

BEGINNING at a cross cut in brass monument for corner at the present
intersection of the Northwest R.O.W. line of Ross Avenue (an 80 foot R.O.W.)
with the Northeast R.O.W. line of North Field Street (a variable width R.O.W.);

THENCE North 48 degrees 10 minutes 27 seconds West a distance of 162.26 feet
with the Northeast line of North Field Street to a cross cut in brass monument
for corner;

THENCE North 48 degrees 11 minutes 33 seconds West a distance of 39.74 feet with
the Northeast line of North Field Street to a cross cut in brass monument for
corner;

THENCE North 42 degrees 53 minutes 57 seconds West a distance of 86.34 feet with
the Northeast line of North Field Street to a point for corner;

THENCE North 44 degrees 47 minutes 14 seconds East a distance of 277.42 feet to
a point for corner;

THENCE South 45 degrees 08 minutes 31 seconds East a distance of 291.80 feet to
a point for corner on the Northwest line of Ross Avenue;

THENCE South 45 degrees 35 minutes 40 seconds West a distance of 270.12 feet
with the Northwest Right-of-Way line of Ross Avenue to the POINT OF BEGINNING
and containing 80,157.88 square feet or 1.8402 acres of land.

                                      A-2-i
<PAGE>

                                    EXHIBIT B

                              RULES AND REGULATIONS

1.   Sidewalks, halls, passageways, exits, entrances, elevators, escalators,
     stairways, and other common areas shall not be obstructed by Tenant or used
     by Tenant for any purpose other than for ingress to and egress from the
     Premises. Landlord shall in all cases retain the right to control and
     prevent access thereto by all persons whose presence, in the judgment of
     the Landlord, shall be prejudicial to the safety, character, reputation or
     interests of the Building, including its tenants and occupants. Nothing
     shall be swept or thrown into the corridors, halls, elevators or stairways.

2.   No sign, placard, picture, name, advertisement or notice (a "Sign") visible
     from the exterior of the Premises shall be inscribed, painted, affixed,
     installed or displayed by Tenant without the prior written consent of
     Landlord. Absent any such consent, Landlord shall have the right to remove
     any Sign without notice to and at the expense of Tenant. Any such consent
     shall be deemed to relate to only the particular Sign so consented to by
     Landlord and shall not be construed as dispensing with the necessity of
     obtaining the prior written consent of Landlord with respect to any other
     Sign. All approved Signs or lettering on doors and walls shall be
     inscribed, painted, affixed, installed, printed or otherwise displayed, at
     the expense of Tenant, by a person approved by Landlord and in a manner or
     style acceptable to Landlord.

3.   No curtains, draperies, blinds, shutters, shades, screens or other
     coverings, awnings, hangings or decorations shall be installed or used in
     connection with any window or door of the Premises without the prior
     written consent of Landlord, except for normal and customary interior
     decorations to the Premises not visible from the exterior of the Building.
     In any event, any such items shall be installed so as to face the interior
     surface of the standard window treatment established by Landlord and shall
     in no way be visible from the exterior of the Building. No articles shall
     be placed or kept on the windowsills or any terraces so as to be visible
     from the exterior of the Building. No articles shall be placed against
     glass partitions or doors which might appear unsightly from the outside the
     Premises. No sashes, sash doors, skylights, windows or doors that reflect
     or admit light or air into the halls, passageways or other public places in
     the Building shall be covered or obstructed by Tenant without the prior
     written consent of Landlord.

4.   Tenant shall not employ or permit any person(s) other than the janitorial
     contractor of the Landlord to clean the Premises without the prior written
     consent of Landlord. In the event of any permitted person being employed by
     Tenant to do janitorial work, while in the Building and outside of the
     Premises such person(s) shall be subject to the control and direction of
     the Building's management office (not as an agent or servant of Landlord);
     however, Tenant shall in all cases be responsible for the acts of such
     person(s).

5.   Tenant and its employees, upon daily departure, shall cause (a) the doors
     of the Premises to be securely locked, and (b) to the extent practical shut
     off all faucets, valves and other control apparatuses to water and other
     resources, so as to prevent waste or damage. With the exception of
     permitting ingress and egress to the Building, Tenant shall keep doors(s)
     to the Building's corridors on multi-tenant floors of the Building closed
     at all times.

6.   Tenant shall not waste electricity, water, heating, air-conditioning or any
     other resources and shall cooperate fully with Landlord to assure the most
     effective utilization of such Building resources. Tenant shall not attempt
     to adjust any Building resource controls other than any thermostats
     specifically installed for Tenant's use. No heating, air-conditioning unit
     or other similar apparatus shall be installed or used by Tenant without the
     prior written consent of Landlord.

7.   Tenant shall not alter any lock or access device, nor shall Tenant install
     any new or additional lock, access device or bolt on any door of the
     Premises without the prior written consent of Landlord. In the event of any
     permitted installation, Tenant shall in each case furnish Landlord with a
     key for any such lock or device.

8.   Landlord shall furnish Tenant, at no cost to Tenant, two (2) keys to the
     Premises. Tenant shall pay a reasonable charge for any additional keys
     furnished by Landlord. Any card-keys issued by Landlord shall upon such
     issuance require payment of a refundable deposit in an amount reasonably
     determined from time to time by Landlord. Tenant shall not make or have
     made copies of any keys or card-keys furnished by Landlord. Tenant shall,
     upon the expiration or

                                       B-i
<PAGE>

     sooner termination of its tenancy, deliver to Landlord all of such keys and
     card-keys, together with any of the keys relating to the Premises
     including, but not limited to, all keys to any vaults or safes which remain
     on the Premises. In the event of the loss of any keys furnished by Landlord
     to Tenant, Tenant shall pay Landlord (a) the cost thereof (less any deposit
     paid by Tenant) or (b) the cost of changing the subject lock(s) or access
     device(s) if Landlord deems it necessary to make such change.

9.   The toilet rooms, toilets, urinals, washbowls, plumbing fixtures and any
     other Building apparatus shall not be used for any purpose other than that
     for which they were constructed; and no foreign substance of any kind shall
     be thrown therein. Any loss, cost or expense relating to any breakage,
     stoppage or damage resulting from any violation of this rule shall be borne
     by Tenant.

10.  Tenant shall not permit any cooking on the Premises (except that private,
     non commercial use by Tenant and its employees of Underwriters'
     Laboratory-approved equipment for the preparation of coffee, tea, hot
     chocolate and similar beverages, and for the heating of foods, shall be
     permitted; provided that such equipment is used in accordance with all
     applicable federal, state and city laws, codes, ordinances, rules and
     regulations). The Premises shall not be used for lodging or sleeping
     purposes. If the Premises becomes infested with vermin or pests, Tenant, at
     its sole cost and expense, shall have such pests exterminated by Landlord
     approved exterminators.

11.  All tenants will refer any contractors, contractor's representatives and
     installation technicians rendering any services to them to Landlord for
     Landlord's supervision and approval prior to commencement of any work.

12.  Tenant shall not install any radio or television antenna, loudspeaker or
     other device on the roof or exterior of the Building. Tenant shall not
     interfere with any radio or television broadcast or reception from within
     the Building.

13.  The freight elevator shall be available for use by Tenant, subject to
     reasonable scheduling by Landlord. No furniture, freight, equipment,
     materials, supplies, packages, merchandise or other property shall be
     received in the Building or carried up or down the elevators, except
     between such hours and in such elevators designated by Landlord. Any
     deliveries, removals or relocations of large, bulky or voluminous items,
     such as furniture, office machinery and equipment, etc., can only be made
     after obtaining approval from the Landlord, which approval shall not be
     unreasonably withheld or delayed. The tenants assume all risks and shall
     indemnify and hold Landlord harmless against claims of damage to articles
     moved and injury to persons engaged in such movement, including without
     limitation damages and injury to equipment, property and personnel of
     Landlord resulting from acts in connection with such delivery, removal or
     relocation. All damages done to the Building by the installation or removal
     of any tenant's property or caused by any tenant's property within the
     Building, shall be repaired at the expense of such tenant.

14.  Tenant shall not place a load upon any floor of the Premises which exceeds
     the load per square foot the floor was designed to carry, or any load
     allowed by law. Landlord shall have the right to prescribe the weight, size
     and position of safes, any library or other shelving, furniture or other
     heavy equipment brought into the Building, and Tenant shall bear the
     reasonable fees of any structural engineer hired by Landlord in connection
     therewith. Safes or other heavy objects shall, if considered necessary to
     Landlord, stand on wood strips of such thickness as determined by Landlord
     to be necessary to properly distribute the weight thereof. Landlord shall
     not be responsible for loss of or damage to any such safes or other heavy
     objects for any cause; all damages done to the Building by moving or
     maintaining of any such items shall be repaired at the expense of Tenant.

15.  No machinery other than the kind considered usual and standard for general
     office use shall be operated by any tenant in its leased area without the
     prior written consent of Landlord. Business machines or mechanical
     equipment of Tenant, which causes noise or vibration that may be
     transmitted to the structure of the Building or any space therein to such a
     degree objectionable to Landlord or any other tenants or occupants of the
     Building, shall be placed and maintained by Tenant, at Tenant's expense, on
     vibration eliminators or other devices sufficient to eliminate such noise
     or vibration. Tenant shall bear the reasonable fees of any acoustical or
     structural engineer hired by Landlord in connection therewith.

16.  Tenant shall not mark, drive nails or screws, or drill into the partitions,
     ceilings or floors of the Premises or in any way deface the Premises except
     for normal and customary interior decorations.

                                      B-ii
<PAGE>

17.  Tenant shall not install, maintain or operate on the Premises any vending
     machine without the prior written consent of Landlord.

18.  No animals (other than those assisting the handicapped), including
     reptiles, birds, fish (or aquariums), or other non-human, non-plant living
     things or organic Christmas decor of any kind shall be allowed in the
     Building.

19.  There shall not be used in the Building any hand trucks, except those
     equipped with rubber tires and side guards, or any other material handling
     equipment, except as approved in advance in writing by Landlord. No
     scooters, roller skates, roller blades, bicycles, and no other vehicles of
     any kind shall be brought into and operated within the Project. Bicycles
     and vehicles may only be parked in areas designated for such purpose.

20.  Tenant shall store all of its trash and garbage within the interior of the
     Premises. No materials shall be placed in the Building's trash boxes or
     receptacles if such material is of such a nature that it may not be
     disposed of in the ordinary and customary manner, or if such an act would
     violate any law or ordinance governing such removal and disposal.

21.  Canvassing, soliciting, distributing of handbills or any other written
     material, and peddling in the Building are prohibited; Tenant shall
     cooperate to prevent such activity. Tenant shall not engage in
     office-to-office solicitation of business from other tenants or occupants
     of the Building.

22.  Landlord reserves the right to exclude or to expel from the Building any
     person who, in Landlord's judgment, is intoxicated or under the influence
     of liquor or drugs, or who is in violation of any of these Rules and
     Regulations.

23.  Tenant shall comply with all safety, fire protection and evacuation
     procedures and regulations established by Landlord or any governmental
     agency. No firearms or weapons of any kind are allowed within the Premises
     or the Building.

24.  No tenant shall invite to its premises, or permit the visit of, persons in
     such numbers or under such conditions to interfere with the use and
     enjoyment of any of the plazas, entrances, corridors, escalators,
     elevators, and other facilities of the Building by other tenants.

25.  Landlord will not be responsible for lost or stolen personal property,
     money or jewelry from any tenant's Premises or public or common areas
     regardless of whether such loss occurs when the area is locked against
     entry or not, except as may be otherwise set forth in the Lease. Tenant
     assumes any and all responsibility for protecting the Premises from theft,
     robbery and pilferage by taking necessary steps including, but not limited
     to, keeping doors locked and other means of entry to the Premises closed.

26.  Any additional or special requirements of Tenant shall be attended to only
     upon application to the office of the Building by an authorized individual.
     Employees of Landlord shall not perform any work or do anything outside of
     the regular duties unless under special instructions from Landlord. No such
     employees shall admit any person (Tenant or otherwise) to any office
     without specific instructions from Landlord.

27.  Landlord may waive any of these Rules and Regulations for the benefit of
     any particular tenant or occupant of the Building in any particular
     instance; however, no such waiver by Landlord shall be construed as a
     waiver of these Rules and Regulations with respect to any other tenant or
     occupant thereof. Any revised rules and regulations, when made and written
     notice thereof is given to a tenant, shall be binding upon it in like
     manner as if originally herein prescribed.

28.  Landlord will provide and maintain an alphabetical directory of each
     tenant's firm name on the first floor (main lobby) of the Building and no
     other directory shall be permitted unless agreed upon by Landlord in
     writing.

29.  To insure orderly operation of the Building, no ice, water or other
     mineral, towels, newspaper, etc. shall be delivered to any leased area
     except by persons appointed or approved by Landlord in writing.

30.  The Premises shall not be occupied by an average of more than one (1)
     person per 150 square feet of rentable space in the Premises without prior
     written consent of Landlord.

                                      B-iii
<PAGE>

31.  Tenant shall be charged for the issuance of Weigand access control card
     keys in excess of one Weigand access control card key per 1,000 rentable
     square feet of space of which the Premises is comprised. The current charge
     per Weigand key is $25.00 upon issuance and $50.00 for any replacement card
     key, which sum includes the cost associated with invalidating and
     revalidating of previously issued card keys and their replacements. The
     charges set forth in this paragraph are subject to periodic adjustment by
     Landlord based upon the actual costs incurred by Landlord with regard to
     such Weigand keys. Notwithstanding the foregoing, Landlord agrees that the
     $25.00 charge referenced above for the initial issuance of six (6) Weigand
     keys to Tenant shall be abated.

32.  The area within twenty (20) feet of any entrance to the Building and the
     Building's Common Areas, including restrooms, lobbies, elevators and the
     parking garage shall be designated as "non-smoking areas".

These Rules and Regulations are provided as a general guideline. Please refer to
your Lease Agreement for information specific to your tenancy.

                                      B-iv
<PAGE>

                                    EXHIBIT C

                               COMMENCEMENT LETTER

Re:  Office Lease dated _____________, 2002 (the "Lease") between CRESCENT REAL
     ESTATE FUNDING X, L.P. ("Landlord") and GAINSCO, INC. ("Tenant") for the
     Premises, the Rentable Square Footage of which is 8,352, located on the 53
     rd floor of Fountain Place. Unless otherwise specified, all capitalized
     terms used herein shall have the same meanings as in the Lease.

Landlord and Tenant agree that:

1.   Except for punchlist items, if any, set forth on Exhibit A attached hereto,
     Landlord has fully completed all Landlord Work required under the terms of
     the Lease.

2.   Tenant has accepted possession of the Premises. The Premises are usable by
     Tenant as intended; Landlord has no further obligation to perform any
     Landlord Work or other construction (except punchlist items, if any, set
     forth on Exhibit A attached hereto), and Tenant acknowledges that both the
     Building and the Premises are satisfactory in all respects.

3.   The Commencement Date of the Lease is ______________, 2002.

4.   The Expiration Date of the Lease is the last day of ______________, ______.

5.   Tenant's Address at the Premises after the Commencement Date is:

        ---------------------------------------

        ---------------------------------------

        ---------------------------------------
        Attention:
                   ----------------------------
        Phone:
               --------------------------------
        Fax:
             ----------------------------------

All other terms and conditions of the Lease are ratified and acknowledged to be
unchanged.

     EXECUTED as of ______________, 200__.

                                        {ATTACH APPROPRIATE SIGNATURES}

                                       C-i
<PAGE>

                                    EXHIBIT D

                                   WORK LETTER

     This Work Letter is attached as an Exhibit to an Office Lease (the "Lease")
between CRESCENT REAL ESTATE FUNDING X, L.P., as Landlord, and GAINSCO, INC., as
Tenant, for the Premises, the Rentable Square Footage of which is 8,352, located
on the 53 rd floor of the Building. Unless otherwise specified, all capitalized
terms used in this Work Letter shall have the same meanings as in the Lease. In
the event of any conflict between the Lease and this Work Letter, the latter
shall control.

     1. Tenant accepts the Premises AS-IS, except that Landlord agrees that it
shall, at its expense, (i) re-paint within the Premises the currently existing
painted walls with a paint color to be selected by Tenant from Landlord's
Building Standard Materials, (such selection to be made by Tenant within five
(5) Business Days from the date of this Lease or, Tenant having failed to select
the color, Landlord will select a paint color similar to the existing paint
color), (ii) fill holes and re-texture walls where Landlord is going to repaint,
(iii) oil the wood finishes where wood finishes currently exist in the Premises,
(iv) replace missing wood base molding in three offices (such wood molding to be
approximately two feet in length in each location), (v) repair broken wood at
the top of the executive office door, (vi) replace ADA signs in the restrooms,
(vii) fix or replace (at Landlord's option) the Building standard light fixture
in the executive secretary area, (viii) paint or repair (at Landlord's option) a
scratch on the elevator door, (ix) have installed light bulbs in all light
fixtures, and (x) stretch the carpet in the places where carpet currently exists
in the Premises, all such work to be completed prior to the Commencement Date
(the "Landlord Work). In addition, Landlord represents that as of the date of
this Lease, the undercounter refrigerator in the executive office is in working
condition. Landlord agrees, at its expense and prior to the Commencement Date,
to replace the icemaker in the executive office and the dishwasher in the
kitchen portion of the Premises, such replacement equipment to be similar to the
existing equipment and in working condition on the date of installation.

     2. ADA Compliance; Substantial Completion. Landlord shall, as an Operating
Expense, be responsible for compliance with the Americans With Disability Act
("ADA") for the core areas of the Building (including elevators, Common Areas,
service areas and the Property's parking facilities) and all points of access
into the Property. In addition, exclusive of the bathroom adjoining the
executive office (the "EXECUTIVE BATHROOM"), Landlord shall, at Landlord's cost,
be responsible for bringing the existing restrooms and the kitchen in the
Premises into compliance with ADA and the Texas Accessibility Standards ("TAS")
(such ADA and TAS restroom and kitchen compliance work being referred to herein
as the "LANDLORD COMPLIANCE WORK" and is also included in the term "Landlord
Work"). ADA and TAS compliance for the Executive Bathroom is the responsibility
of Tenant. Landlord shall indemnify and hold harmless Tenant for any fines,
costs, or damages related to ADA or TAS non-compliance of the kitchen and/or
bathrooms (other than the Executive Bathroom) unless such fines, costs or
damages are caused by Tenant's failure to cooperate with Landlord in its
completing any Landlord Work. Landlord will complete the Landlord Work described
in Paragraph 1 above prior to August 26, 2002. Landlord will commence the
Landlord Compliance Work within sixty (60) days following Landlord's receipt of
written notice from the Tenant that it wants the Landlord Compliance Work to
begin or upon Landlord receiving any notice from an individual or a governmental
representative indicating the restroom and/or kitchen is not in ADA or TAS
compliance, whichever first occurs. Once Landlord commences the Landlord
Compliance Work, Landlord agrees to use commercially reasonable efforts to
complete such work without undue delay, but Landlord shall not be required to
pay overtime labor charges, or extra costs for night time or weekend work to
expedite the completion date. Except for the original Landlord Work (but
including the kitchen and restrooms once Landlord has completed the Landlord
Compliance Work), Tenant shall, at its expense, be responsible for ADA and TAS
compliance in the Premises, including the restrooms on the 53 rd floor of the
Building. Landlord shall not be responsible for determining whether Tenant is a
public accommodation under ADA. Such determinations shall be the sole
responsibility of Tenant. The Landlord Work shall be deemed to be "SUBSTANTIALLY
COMPLETE" on the date that all Landlord Work (other than the Landlord Compliance
Work and any details of construction, mechanical adjustment or any other similar
matter, the noncompletion of which does not materially interfere with Tenant's
use or occupancy of the Premises) has been performed. Time is of the essence in
connection with the obligations of Landlord and Tenant under this Work Letter.
Landlord shall not be liable or responsible for any claims incurred (or alleged)
by Tenant due to any delay in achieving Substantial Completion for any reason.
Tenant's sole and exclusive remedy for any delay in achieving Substantial
Completion for any reason other than Tenant Delay (defined below) shall be the
resulting postponement (if any) of the commencement of rental payments under the
Lease. "Tenant Delay" means any act or omission of Tenant or its agents,

                                       D-i
<PAGE>

employees, vendors or contractors that actually delays the Substantial
Completion of the Landlord Work, including the performance of work in the
Premises by Tenant or Tenant's contractor(s) during the performance of the
Landlord Work.

     3. Tenant in Possession during Landlord Compliance Work. Tenant understands
that the Landlord Compliance Work to be performed pursuant to this Work Letter
may result in noise, vibration, dirt, dust, odors, and other circumstances
commonly attendant to construction. Tenant also understands that bringing the
kitchen into ADA compliance may require a reconfiguration of the kitchen within
the Premises. Tenant agrees to cooperate with Landlord in any required
reconfiguration of the kitchen. Tenant hereby waives any claim of injury or
inconvenience to Tenant's business, interference with Tenant's business, loss of
occupancy or quiet enjoyment of the Premises, or any other loss occasioned by
such entry or the performance of the Landlord Compliance Work required pursuant
to the terms of this Work Letter, and the same shall not relieve Tenant of any
obligations under the Lease. Landlord will attempt to minimize the disruption to
Tenant's business during its performance of the Landlord Compliance Work. No
entry into the Premises by Landlord under this Work Letter shall be deemed a
forcible or unlawful entry into the Premises or a detainer of the Premises, or
an eviction, actual or constructive, of Tenant from the Premises, or any part of
the Premises, nor shall such entry entitle Tenant to damages or an abatement of
Rent or other charges that the Lease requires Tenant to pay. Tenant shall fully
cooperate with Landlord and its contractors and shall not in anyway impede,
inhibit or hinder any of the Landlord Compliance Work.

                                      D-ii
<PAGE>

                                    EXHIBIT E

                                PARKING AGREEMENT

     This Parking Agreement (the "Agreement") is attached as an Exhibit to an
Office Lease (the "Lease") between CRESCENT REAL ESTATE FUNDING X, L.P., as
Landlord, and GAINSCO, INC., as Tenant, for the Premises, the Rentable Square
Footage of which is 8,352, located on the 53 rd floor of the Building. Unless
otherwise specified, all capitalized terms used in this Agreement shall have the
same meanings as in the Lease.

1. As of the Commencement Date of the Lease, Tenant shall have the option to
take up to seven (7) permits, one of which shall allow access to a reserved
space and six (6) of which allowing access to unreserved spaces in Building
parking garage which Landlord provides for the use of tenants and occupants of
the Building (the "Parking Facilities"). In addition, Tenant shall have option
to take up to five (5) permits allowing access to surface parking lot space,
such rights to be on a month-to-month basis so long as Landlord as the right to
control the surface parking lot. During the Term (including any renewal or
extension), Tenant shall pay Landlord's quoted monthly contract rate (as set
from time to time) for each unreserved permit, plus any taxes thereon.

2. Tenant shall at all times comply with all Laws respecting the use of the
Parking Facilities. Landlord reserves the right to adopt, modify, and enforce
reasonable rules and regulations governing the use of the Parking Facilities
from time to time including any key-card, sticker, or other identification or
entrance systems and hours of operations. Landlord may refuse to permit any
person who violates such rules and regulations to park in the Parking
Facilities, and any violation of the rules and regulations shall subject the
automobile in question to removal from the Parking Facilities.

3. Tenant may validate visitor parking by such method or methods as Landlord may
approve, at the validation rate (as set from time to time) generally applicable
to visitor parking. Unless specified to the contrary above, the parking spaces
for the parking permits provided hereunder shall be provided on an unreserved,
"first-come, first-served" basis. Tenant acknowledges that Landlord has arranged
or may arrange for the Parking Facilities to be operated by an independent
contractor, un-affiliated with Landlord. In such event, Tenant acknowledges that
Landlord shall have no liability for claims arising through acts or omissions of
such independent contractor. Landlord shall have no liability whatsoever for any
damage to vehicles or any other items located in or about the Parking
Facilities, and in all events, Tenant agrees to seek recovery from its insurance
carrier and to require Tenant's employees to seek recovery from their respective
insurance carriers for payment of any property damage sustained in connection
with any use of the Parking Facilities. Landlord reserves the right to assign
specific parking spaces, and to reserve parking spaces for visitors, small cars,
handicapped persons and for other tenants, guests of tenants or other parties,
with assigned and/or reserved spaces. Such reserved spaces may be relocated as
determined by Landlord from time to time, and Tenant and persons designated by
Tenant hereunder shall not park in any such assigned or reserved parking spaces.
Landlord also reserves the right to close all or any portion of the Parking
Facilities, at its discretion or if required by casualty, strike, condemnation,
repair, alteration, act of God, Laws, or other reason beyond Landlord's
reasonable control; provided, however, that except for matters beyond Landlord's
reasonable control, any such closure shall be temporary in nature. If Tenant's
use of any parking permit is precluded for any reason, Tenant's sole remedy for
any period during which Tenant's use of any parking permit is precluded shall be
abatement of parking charges for such precluded permits. Tenant shall not assign
its rights under this Agreement except in connection with a Permitted Transfer.

4. Tenant's failure to pay for any of the above-referenced parking permits or to
otherwise comply with any provision of this Agreement shall constitute an event
of default under the Lease. In addition to any rights or remedies available to
Landlord in the event of a default under the Lease, Landlord shall have the
right to cancel this Agreement and/or remove any vehicles from the Parking
Facilities. Furthermore, any event of default under the Lease shall constitute a
default under this Agreement.

                                       E-i
<PAGE>

                                    EXHIBIT F

                       WELLS FARGO EXCLUSIVE BANKING RIGHT

     GAINSCO, INC ("Tenant") acknowledges that Wells Fargo Bank (Texas) N.A.,
its successors and assigns (herein "Wells Fargo") has the exclusive banking
right to operate an institution offering traditional retail and consumer banking
functions in the Building. By "exclusive banking right" it is intended that
nowhere within the Building shall there be any banks, motor banks, automatic
teller machines, savings and loan associations or thrift institutions of any
type performing traditional retail and consumer banking functions within the
Building other than Wells Fargo. In addition there shall be no machines or other
equipment located in the Building capable of providing the services referenced
above. The exclusive banking right shall not preclude the leasing of space in
the Building to any other banking institution, savings and loan association, or
thrift institution (such being collectively called "Financial Institutions") so
long as (i) no such Financial Institution conducts traditional retail and
consumer banking functions from the premises so leased or anywhere else in the
Building, (ii) no such Financial Institution has any signage which is affixed to
the Building, and (iii) no such Financial Institution occupies any space in the
building which is less than thirty (30) feet above the ground level of the
Building. The term "traditional retail and consumer banking functions" as used
herein shall mean receiving retail and consumer deposits, paying checks, issuing
money orders, cashier's checks, exchanging foreign currency and receiving and
disbursing cash by any means whatsoever including without limitation human
tellers or automated teller machines. The exclusive banking right granted to
Wells Fargo shall not be construed as precluding Landlord from leasing space in
the Building to a mortgage banker, an investment banker, a stock brokerage firm
or to a real estate brokerage firm or other comparable entities not performing
traditional retail and consumer banking functions within the Building.

                                      E-ii
<PAGE>

                                    EXHIBIT G

                                OPTION TO EXTEND

A.   RENEWAL PERIOD. Tenant may, at its option, extend the Term for one renewal
     period of five years (the "Renewal Period") by written notice to Landlord
     (the "Renewal Notice") given no earlier than 12 nor later than 9 months
     prior to the expiration of the Term, provided that at the time of such
     notice and at the commencement of such Renewal Period, (i) Tenant remains
     in occupancy of the Premises, and (ii) no uncured event of default exists
     under the Lease (and no condition exists which, with the passage of time
     and/or giving of notice, would be an event of default). Such Renewal Period
     shall commence upon the expiration date of the initial Term. The Base Rent
     payable during the Renewal Period shall be at the Market Rental Rate for
     the Premises. Except as provided in Exhibit H and this Option to Extend,
     all terms and conditions of the Lease shall continue to apply during the
     Renewal Period.

B.   MARKET RENTAL RATE. The "Market Rental Rate" shall be the rate (or rates) a
     willing tenant would pay and a willing landlord would accept for a
     comparable transaction (e.g., renewal in comparable space in a comparable
     building in the central business district of Dallas, Texas) as of the
     commencement date of the applicable term, neither being under any
     compulsion to lease and both having reasonable knowledge of the relevant
     facts, considering the highest and most profitable use if offered for lease
     in the open market with a reasonable period of time in which to consummate
     a transaction. The parties agree that the best evidence of the Market
     Rental Rate will be the rate then charged for comparable transactions in
     the Property.

C.   ACCEPTANCE. Within 30 days of the Renewal Notice, Landlord shall notify
     Tenant of the Base Rent for such Renewal Period (the "Rental Notice").
     Tenant may accept the terms set forth in the Rental Notice by written
     notice (the "Acceptance Notice") to Landlord given within 15 days after
     receipt of the Rental Notice. If Tenant timely delivers its Acceptance
     Notice, Tenant shall, within 15 days after receipt, execute a lease
     amendment confirming the Base Rent and other terms applicable during the
     Renewal Period. If Tenant fails timely (i) to deliver its Acceptance Notice
     or (ii) to execute and return the required lease amendment, then this
     Option to Extend shall automatically expire and be of no further force or
     effect. In addition, this Option to Extend shall terminate upon assignment
     of this Lease or subletting of all or any part of the Premises not made in
     connection with a Permitted Transfer.

                                      E-iii
<PAGE>

                                    EXHIBIT H

                               TERMINATION OPTION

Tenant shall have the option to terminate this Lease at any time after the 40 th
month of the original Term, provided that (i) Tenant gives Landlord at least
nine (9) months prior written notice of Tenant's election to terminate, and (ii)
Tenant is not in default under this Lease at the time of the giving of such
notice nor on the Termination Date (as defined below). Such notice must specify
the date on which Tenant desires the termination to become effective (the
"Termination Date"), which date must be the last day of a calendar month.
Additionally, Tenant's right to terminate hereunder is conditioned upon the
payment in full by Tenant, on or before the Termination Date, of (i) all Rent
through and including the Termination Date, and (ii) the cash sum of $29,232.00
(collectively, the "Termination Payment"). After Landlord's receipt of the
Termination Payment and as long as Tenant has surrendered the Premises in the
condition required under this Lease, neither party shall have any rights,
liabilities or obligations under this Lease for the period accruing after the
Termination Date, except those which, by the provisions of this Lease, expressly
survive the termination of this Lease. In the event the Term is extended
(pursuant to the right contained in Exhibit G of this Lease or otherwise)
Tenant's Termination Option pursuant to this Exhibit H shall be deemed waived
and of no further force or effect.

                                       E-iv<PAGE>
                                                                   EXHIBIT 10.25

                       [LETTERHEAD OF WACHOVIA BANK, N.A.]

April 17, 2002

Mr. Robert W. Lackey, Sr., Group A Manager
Mr. Neall W. Humphrey, Group B Manager
Prime/Home Impressions, LLC
420 Third Ave. NW
Hickory, NC 28601

Gentlemen:

Wachovia Bank, N.A. (the "Bank") is pleased to extend to Prime/Home Impressions,
LLC (the "Borrower") a revolving line of credit of up to Three Million and
00/100 Dollars ($3,000,000.00) (the "Commitment").

PURPOSE:                   To finance short-term working capital

REPAYMENT TERMS:           Interest shall be paid monthly in arrears. All
                           principal and interest outstanding shall become due
                           and payable in full on the expiration date.

EXPIRATION:                The Commitment shall expire on April 16, 2003

INTEREST RATE:             The Note shall bear interest at a rate per annum
                           equal to the "Monthly LIBOR Index" for the applicable
                           Interest Period plus Two Percent (2.00%).

                           As used herein, the "Monthly LIBOR Index" for an
                           applicable Interest Period shall mean a rate per
                           annum equal to the quotient obtained by dividing the
                           applicable "LIBOR" for such Interest Period by 1.00
                           minus the "Eurodollar Reserve Percentage".

                           As used herein, the "LIBOR" shall mean for the
                           applicable Interest Period, the rate per annum at
                           which deposits of United States dollars with
                           maturities comparable to the applicable Interest
                           Period, that appears on the display designated as
                           page "3750" of the Telerate Service (or such other
                           page as may replace page 3750 of that service or such
                           other service or services as may be designated by the
                           British Bankers' Association for the purpose of
                           displaying London Interbank Offered Rates for U.S.
                           dollar deposits), determined as of 11:00 a.m. (London
                           time) (rounded upward to the next higher of 1/10,000
                           of 1%), two (2) business days prior to the
                           commencement of the applicable Interest Period.

                           As used herein, "Eurodollar Reserve Percentage" means
                           for any day that percentage (expressed as a decimal)
                           which is in effect on such day, as prescribed by the
                           Board of Governors of the Federal Reserve System (or
                           any successor) for determining the maximum reserve
                           requirement for a member bank of the Federal Reserve
                           System in respect of

<PAGE>

                           "Eurocurrency liabilities" (as adjusted automatically
                           on and as of the effective date of any change in the
                           Eurodollar Reserve Percentage).

                           As used herein, "Interest Period" shall mean each
                           successive calendar month, with the first Interest
                           Period being the period from the date of the Note
                           until the last day-of that calendar month.

FEES/COSTS:                Borrower agrees to pay to the Bank a fee of
                           one-quarter of one percent (1/4%) of the Commitment
                           amount upon acceptance of the Commitment.

COLLATERAL-                The aggregate amount outstanding under the Commitment
BORROWING BASE:            shall not exceed Paragraph the Margin. "Margin"
                           shall mean an amount equal to 85% of the face dollar
                           amount of Eligible Accounts Receivable (as
                           hereinafter defined) as of the date of determination,
                           plus 60% of the value of Eligible Inventory (as
                           hereinafter defined).

                           The Bank hereby agrees that in the event that the
                           Borrower is in noncompliance with the "Margin"
                           requirement, the Borrower shall have an opportunity
                           to correct such non-compliance by providing the
                           necessary funds to the Bank to satisfy the Margin
                           requirement within seven (7) days after the sooner to
                           occur of the following:

                           1.    Receipt of notice of such non-compliance from
                                 the Bank; or

                           2.    The due date of the borrowing base report in
                                 which such non-compliance is first reported.

                           This recitation of the right of the Borrower to
                           correct the non-compliance shall not constitute an
                           election by the Bank to waive its right to demand
                           payment at any time under any event as the Bank in
                           its sole discretion may deem appropriate.

                           "Eligible" accounts receivable are defined as the
                           accounts receivable of the Borrower that are less
                           than 90 days from the due date except for.

                           (1)   Inter-Company Accounts: Accounts receivable
                                 from companies that share common ownership with
                                 the Borrower, whether in whole or in part,
                                 excluding "pass-through" accounts receivable
                                 for which Home Impressions, Inc. serves as the
                                 collection agent on behalf of the Borrower.

                           (2)   Tainted Accounts: Accounts receivable of which
                                 more than 50% of the amount owed is more than
                                 90 days past due, thus making the entire
                                 account ineligible.

                           (3)   Questionable Accounts: Any other account
                                 determined by the Bank to be questionable.

                           "Eligible" inventory is defined as sellable raw
                           materials and finished goods that are in the
                           possession of the Borrower as of the date of
                           determination.

GUARANTORS:                As selected and offered by the Borrower, the Loan
                           shall be unconditionally guaranteed, on the Bank's
                           form, evidencing the joint and several liability of
                           the following companies:

                           Home Impressions, Inc.
                           Trade Source International, Inc.
                           Craftmade International, Inc.

<PAGE>

REQUIRED REPORTS:          Annual Compiled Financial Statements: The Borrower
(Borrower):                shall provide to the Bank compiled financial
                           statements for each fiscal year ending June 30. The
                           compilations shall be certified by an officer of the
                           company, and shall be delivered to the Bank no later
                           than 90 days from the end of the accounting period.

                           Quarterly Financial Statements: The Borrower shall
                           provide to the Bank a quarterly balance sheet and
                           income statement prepared internally and certified by
                           an officer of the company. These reports shall be
                           delivered to the Bank no later than-45 days from the
                           end of the accounting period.

                           Monthly Receivables Report: The Borrower shall
                           provide to the Bank a monthly aging report of
                           accounts receivable. The report shall be delivered to
                           the Bank no later than 15 days from the end of the
                           accounting period.

                           Monthly Inventory Report: The Borrower shall provide
                           to the Bank a monthly report of inventory in its
                           possession. The report shall be delivered to the Bank
                           no later than 15 days from the end of the accounting
                           period.

                           Monthly Borrowing Base Report: The Borrower shall
                           provide to the Bank a monthly borrowing base report
                           no later than 15 days from the end of the accounting
                           period.

REQUIRED REPORTS:          Home Impressions, Inc., identified for these purposes
(Guarantor #1):            as Guarantor #1, shall provide to the Bank a compiled
                           financial statement for each fiscal year ending May
                           31. The compilation shall be prepared internally and
                           shall be certified by an officer of the company. The
                           compilation shall be delivered to the Bank no later
                           than 90 days from the end of the accounting period.

REQUIRED REPORTS:          Craftmade International, Inc., identified for these
(Guarantor #2):            purposes as Guarantor #2, shall provide to the Bank
                           an audited financial statement for each fiscal year
                           ending June 30. The audit shall be prepared by an
                           independent accounting firm acceptable to the Bank,
                           and shall be delivered to the Bank no later than 90
                           days from the end of the accounting period.

                           Guarantor #2 shall also provide to the Bank a
                           quarterly balance sheet and income statement prepared
                           internally, and certified by an officer of the
                           company. The quarterly financial report shall detail
                           the balance sheet and income statement of the
                           Guarantor's subsidiaries including, but not limited
                           to, Trade Source International, Inc. The report shall
                           be delivered to the Bank no later than 45 days from
                           the end of the accounting period.

COVENANTS:                 Guarantor #2, as defined above, covenants and agrees
                           that from the date hereof and until payment in full
                           of the principal and interest on the loan, unless the
                           Bank shall otherwise consent in writing, Guarantor #2
                           shall:

                           1.    Maintain at all times a consolidated "Total
                                 Liabilities to Tangible Net Worth" ratio of no
                                 greater than 3.00 to 1.00. "Tangible Net Worth"
                                 is defined as the sum of all shareholder equity
                                 less -all intangibles appearing on the balance
                                 sheet. This covenant shall be measured by the
                                 Bank on a quarterly basis and shall be reported
                                 to the Bank by Guarantor #2 no later than 45
                                 days from the end of each quarterly accounting
                                 period.

                           2.    Maintain at all times a consolidated "Funded
                                 Debt to EBITDA" ratio of no greater than 2.75
                                 to 1.00. "Consolidated Funded Debt" is defined
                                 as the sum of the debt of the Company and its
                                 Subsidiaries, determined on a consolidated
                                 basis, consisting of (without duplication) the
                                 following: (i) indebtedness for borrowed money;
                                 (ii) Capital Leases, and (iii) Guarantees of
                                 debt of Persons other than the Company or any
                                 Subsidiary.

<PAGE>

                                 "Consolidated EBITDA" is defined as the sum of
                                 the following, calculated on a consolidated
                                 basis in accordance with GAAP for the Company
                                 and its Subsidiaries: (i) Consolidated Net
                                 Income, plus (ii) Consolidated Interest
                                 Expense, plus (iii) Depreciation and
                                 Amortization expense, plus (iv) expenses for
                                 taxes paid or accrued during such period. This
                                 covenant shall be measured by the Bank at the
                                 end of each quarter on a rolling four-quarter
                                 basis, and shall be reported to the Bank by
                                 Guarantor #2 no later than 45 days from the end
                                 of each quarterly accounting period.

OTHER CONDITIONS:          This commitment is subject to the maintenance by the
                           Borrower and the Guarantors of a condition
                           satisfactory to the Bank and the execution of loan
                           documents satisfactory to the Bank. (Examples of an
                           unsatisfactory condition include a change in
                           management or ownership, an adverse change in
                           financial condition, or any default on any obligation
                           to the Bank or to a third party.)

                           In no event shall either the Borrower, the
                           Guarantors, or the Bank be liable to the other for
                           indirect, special, or consequential damages that may
                           arise out of the issuance of this commitment.

                           Closing must occur by April 30, 2002

                           All information and representations are and will be
                           at closing accurate.

                           No condition or other term of this commitment may be
                           waived or modified except by a writing signed by the
                           Borrower, the Guarantors, and the Bank.

To acknowledge your acceptance, please sign below and return this document to
the Bank. Thank you for this opportunity to serve your fine company.

Very truly yours,

/s/ Philip E. Moore

Philip E. Moore
Senior Vice President

Accepted this 18th day of April, 2002.

BORROWER

Prime/Home Impressions, LLC - A Manager Managed Limited Liability Company

<Table>
<S>                                                 <C>
By: /s/ Robert W. Lackey                            By:  /s/ Neall W. Humphrey
    ---------------------------------------             ---------------------------------------------
    Robert W. Lackey, Sr., Group Manager                 Neall W. Humphrey, Group B. Manager

MEMBERS

Home Impressions, Inc. Group A Member                Trade Source International, Inc., Group B Member

By:  /s/ Robert W. Lackey                            By:  /s/James R. Ridings
     ---------------------------------------             --------------------------------------------
       Robert W. Lackey, Sr., Vice President              James R. Ridings, President
</Table>

<PAGE>

GUARANTORS

Home Impressions, Inc.

By:  /s/Robert W. Lackey
     --------------------------------------
     Robert W. Lackey, Sr., Vice-President

Trade Source International, Inc.

By:  /s/James R. Ridings
     --------------------------------------
     James R. Ridings, President

Craftmade International Inc.

By:  /s/James R. Ridings
     --------------------------------------
     James R. Ridings, President

<PAGE>
 This Note and Security is a renewal of an existing Note and Security Agreement
                          between Borrower and Lender

NOTE AND SECURITY AGREEMENT

Hickory, North Carolina

Date:  April 17, 2002                                             $3,000,000.00

FOR VALUE RECEIVED, Prime/Home Impressions, LLC, limited liability company
organized and existing under the laws of the State of North Carolina and whose
chief executive office is located at 420 3rd Avenue NW, Hickory, North Carolina
28601 (hereinafter the "Borrower"), hereby promises to pay to the order of
Wachovia Bank, NA. (hereinafter the "Lender") at its office where borrowed, or
at such other place as Lender hereafter may direct from time to time in writing,
in immediately available funds of lawful money of the United States, the sum of
Three Million and 00/100 Dollars together with any unpaid interest hereon from
date of advance, in accordance with the terms contained in this Note and
Security Agreement (hereinafter referred to as the "Note"). The optional
provisions applicable to this Note are checked below.

REPAYMENT:

[ ]  One payment in full of principal and unpaid interest due _________________

[ ]  On demand __________________________

[ ]  ________ payments of $_________ beginning ____________________________ and
     thereafter __________________________ until ____________________________.

     When the entire principal amount then outstanding and all accrued but
     unpaid interest shall be paid in full.

[X]  On demand the principal amount set forth above or the unpaid principal
     amount of all advances which the Lender actually makes hereunder to the
     Borrower, whichever amount is less. The Borrower may borrow, repay and
     reborrow sums up to the principal amount set forth above. This Note shall
     be used to evidence the outstanding principal balance advanced hereunder
     until it is surrendered to the Borrower by the Lender, and it shall
     continue to be used even though there may be periods prior to such
     surrender when no amount of principal or interest is owing hereunder. If
     advances of the principal amount hereof are to be made by Lender to the
     Borrower after the date of this Note, Lender, at its sole discretion, is
     hereby authorized to make such advances under this. Note upon telephonic or
     written communication of a borrowing request from any Person representing
     himself or herself to be the Borrower or, in the event the Borrower is an
     organization, a duly authorized officer or representative of Borrower.

INTEREST:

Payable: [X] in arrears; [ ]  in advance
         [X] in addition to the payments described above;
         [ ] included in the payments described above.

Payable at the rate per annum of [ ] Prime Rate plus ____%;  [ ] __________% of
Prime Rate; [ ] ____________% Fixed;

   [ ]  Those rates which may be offered from time to time by the Lender and
        agreed to by the Borrower and so noted by the Lender on an attachment
        hereto. In the event of a good faith dispute among the parties to this
        Note as to rate under this rate option, the rate shall be the Prime
        Rate, adjusted for any changes in the Prime Rate as of the day such Rime
        Rate changes;

  [X]   The rate(s) set forth in Schedule 1 attached to this Note and
        incorporated herein by reference;

  [ ]   Those rates which have been offered by the Lender to the Borrower in the
        Loa a Agreement or Commitment Letter checked below, the provisions of
        which shall determine such rates, the procedure for the selection of
        such rates and the time periods for which such rates shall apply.

In no case shall interest exceed the maximum rate permitted by applicable law.

If the interest is based upon the Prime Rate, such interest rate will be
adjusted on: [ ] The day the Prime Rate changes   [ ] Other ________

Due: [ ] On principal payment dates [X] Other MONTHLY BEGINNING MAY 1, 2002
Interest will be calculated on the basis of [X] A year of 360 days and paid for
the actual number of days elapsed [ ] Other __________

After demand or maturity (whether by acceleration or otherwise), as applicable,
interest on any unpaid balance hereof shall be payable on demand at a rate per
annum-equal to the greater of 150 % of the Prime Rate, or 2 % above the rate
applicable prior to demand or maturity, adjusted for any changes in the Prime
Rate as of the day such Prime Rate changes, not to exceed the maximum rate
permitted by applicable law.

To the extent not prohibited by law, a late charge of four percent (4%) or the
applicable statutory maximum, whichever is greater, shall be assessed on any
payment remaining past due for fifteen (15) days or more unless interest on this
Note is payable in advance, in which case such period shall instead be thirty
(30) days or more; provided, however, that if any applicable statute allows, a
shorter minimum time period for the imposition of a late charge, such shorter
time period shall prevail.

As used herein, "Prime Rate" refers to that interest rate so denominated and set
by the Lender from time to time as an interest rate basis for borrowings. The
Prime Rate is one of several interest rate bases used by the Lender. The Lender
lends at interest rates above and below the Prime Rate.

All payments on this Note shall be applied, in accordance with the then current
billing statement applicable to this Note, first to accrued interest, then to
fees, then to principal due and then to late charges. Any remaining funds shall
be applied to the further reduction of principal. Notwithstanding the foregoing,
upon the occurrence of a default hereunder, payments shall be applied as
determined by Lender in its sole discretion.

[ ] The terms and conditions in a Loan Agreement dated ___________ between the
    parties hereto, as the same may be amended from time to time, shall be
    considered a part hereof to the same extent as if written herein.

[X] The terms and conditions in a Commitment Letter dated APRIL 17, 2002 from
    the Lender to the Borrower, as the same may be amended, extended or replaced
    from time to time, shall be considered a part hereof to the same extent as
    if written herein.

In addition to any other collateral specified herein and in other agreements, to
secure the indebtedness evidenced by this Note, together with any extensions,
modifications, or renewals thereof, in whole or in part, as well as all other
indebtedness, obligations and liabilities of the Borrower to the Lender, now
existing or hereafter incurred or arising, including, , without limitation, ail
sums arising under any ISDA Master Agreement now or hereafter executed between
Borrower and Lender and any related schedules and confirmations thereto
(hereinafter sometimes referred to as the "Obligations"), except for other
indebtedness, obligations and liabilities owing to Lender that constitute (a)
consumer credit as defined in Federal Reserve Board Regulation Z and either
subject to the disclosure requirements of Federal Reserve Board Regulation Z or
state consumer protection laws or (b) non-consumer credit if under applicable
state law the maximum interest rate for such credit is reduced when secured
(herein collectively referred to as "Restricted Debt"), the Borrower does hereby
grant to the Lender a security interest in, and does hereby assign, pledge,
transfer and convey to Leader the following described property:

Collateral more particularly described in Security Agreement-Commercial dated
February 24, 1999 between Borrower and Lender

whether now owned or hereafter acquired, together with any and all additions and
accessions thereto or replacements thereof, returned or unearned premiums from
any insurance written in connection with this Note and any products and/or
proceeds of any of the foregoing. In no event, however, shall the Lender have a
security interest in any goods acquired by the Borrower for personal, family or
household purposes more than 10 days after the date of this Note, unless such
goods are added to or attached to

<PAGE>

the collateral (as hereinafter defined). In addition, to the extent not
prohibited by law, the Borrower hereby grants to the Lender a security interest
in, and does hereby assign, pledge, transfer and convey to Lender, (i) all other
property of the Borrower now or hereafter in the possession or control of the
Lender (exclusive of any such property in the possession or control of the
Lender as a fiduciary other than as agent), including, without limitation, all
cash, stock or other dividends and all proceeds thereof, and all rights to
subscribe for securities incident thereto and any substitutions or replacements
for, or other rights in connection with, any of the Collateral and (ii) any of
Borrower's deposit accounts (as such term is defined in the Uniform Commercial
Code of the State of North Carolina, as the same may be amended from time to
time (the "Code")), whether such accounts be general or special, or individual
or multiple party, held by Lender and upon all drafts, notes, or other items
deposited for collection or presented for payment by the Borrower with the
Lender, and the Lender may at any time, without demand or notice, appropriate
and apply any of such to the payment of any of the Obligations (except for
Restricted Debt), whether or not due. All property described in this paragraph,
in which the Borrower has granted to the Lender a security interest or security
title hereunder, is herein collectively referred to as the "Collateral." If,
with respect to any Collateral in the form of investment securities, a stock
dividend is declared or any stock split-up made or right to subscribe issued,
all the certificates for the shares representing such stock dividend or spilt-up
or right to subscribe will be immediately delivered, duly endorsed, to the
Lender as additional Collateral. The Lender shall be deemed to have possession,
control and custody of any Collateral actually in transit to it or to any of its
officers or agents.

If at any time the Collateral pledged as security for any of the Obligations
shall be or become unsatisfactory to the Lender or should the Lender deem itself
insecure, the Borrower will immediately furnish such further property to be held
by the Lender as if originally pledged as Collateral hereunder or make such
payment on account as will be satisfactory to. the Lender.

The Lender shall have, but shall not be limited to, the following rights, each
of which may be exercised at any time or from time to time:( i) to transfer this
Note and the Collateral, and any transferee shall have all the rights of the
Lender hereunder and the Lender shall be thereafter relieved from any liability
with respect to any Collateral so transferred; (ii) to transfer the whole or any
part of the Collateral in the name of itself or its nominees; (iii) to vote any
investment securities forming a part of the Collateral; (iv) to notify the
obligors on any Obligation to make payment to the Lender of any amounts due
thereon; (v) to execute at any time in the name of any party hereto and to file
one or more financing statements describing the Collateral, which financing
statements may contain a generic collateral description that is broader than the
Collateral and which may describe any agricultural liens or other statutory
liens held by Lender; (vi) to receive or take control of any income or other
proceeds of any of the Collateral; and (vii) to request and receive current
financial information from any party liable for all or any part of the
Obligations.

Borrower will at Lender's request maintain insurance on the Collateral in
amounts at least equal to the fair market value of the Collateral and against
casualty, public liability and property damage risks and such other risks as
Lender may request; provided, however, if the Collateral described above is a
vehicle(s), Borrower agrees to obtain and maintain liability insurance as
required by law and collision and comprehensive insurance with a deductible not
exceeding $500.00. All insurance shall be with companies with a Best Insurance
Report Rating of B+ or better, and Borrower will pay all premiums for insurance
when due. Unless and until requested by Lender, Borrower shall not be required
to name Lender as additional insured in such policy or to provide Lender a copy
of the policy for or certificate evidencing such insurance, but when and if
requested by Lender, the Borrower shall immediately (but no later than five (5)
calendar days) (i) cause all policies of such insurance to specify that Lender
is an additional insured as its interests may appear and to provide that such
insurance shall not be cancellable by Borrower or the insurer without at least
30 days advance written notice to Lender and that proceeds are payable to Lender
regardless of any act or omission of Borrower which would otherwise result in a
denial of a claim; and (ii) deliver all policies or certificates thereof (with
copies of such policies) to Lender. In the event any or all of such insurance is
cancelled, any returned premium thereon may be collected by Lender and applied
by Lender to any part of the Obligations, either matured or unmatured. Lender is
authorized to receive the proceeds of any insurance loss and at the option of
Lender shall apply such proceeds toward either the repair or replacement of the
Collateral or the payment of the Obligations secured hereby. The undersigned
will also pay all taxes and other impositions on the Collateral as well as the
cost of repairs or maintenance to the Collateral. If the undersigned fails to
maintain such insurance or fails to pay any and all amounts for taxes, repairs,
maintenance and other costs, Lender may, at its option, but shall not be
required to, purchase such insurance or pay any premium owing with respect to
such insurance or pay such amounts for taxes, repairs, maintenance and other
costs, and any such sum paid by Lender shall be payable by the Borrower on
demand by Lender or at its option may be added to the Obligations and secured
hereby. The loss, injury or destruction of the Collateral, with or without the
fault of Borrower, shall not release the Borrower from any liability hereunder
or in any way affect Borrower's liability hereunder.

The occurrence of any one or more of the following conditions or events shall
constitute an "Event of Default" hereunder: (i) any failure of any Obligor
(which term shall include the Borrower and each endorser, surety or guarantor of
this Note) to pay any of the Obligations when due or to observe or perform any
agreement, covenant or promise hereunder or in any other agreement, note,
instrument or certificate of any Obligor to the Lender, now existing or
hereafter executed in connection with any of the Obligations, including, but not
limited to, a loan agreement, if applicable, and any agreement guaranteeing
payment of any of the Obligations; (ii) any default of any Obligor in the
payment or performance of any other liabilities, indebtedness or obligations to
Lender or any other creditor or to allow or permit any other liabilities,
indebtedness or obligations to Leader or any other creditor to be accelerated;
(iii) any failure of any Obligor to furnish Lender current financial information
upon request; (iv) any failure of any Obligor or any pledgor of any security
interest in the Collateral (the "Pledgor") to observe or perform any agreement,
covenant or promise contained in any agreement, instrument or certificate
executed in connection with the granting of a security interest in property to
secure the Obligations or any guaranty securing the Obligations; (v) any
warranty, representation or statement made or furnished to the Lender by or on
behalf of any Obligor or Pledgor in connection with the extension of credit
evidenced by this Note proving to have been false in any material respect when
made or furnished, (vi) any loss, theft, substantial damage, destruction, sale,
foreclosure of or encumbrance to any of the Collateral, or the making of any
levy, seizure or attachment thereof or thereon or the rendering of any judgment
or lien or garnishment or attachment against any Obligor or Pledgor or his
property, whether actual or threatened; (vii) the dissolution, change in
control, change of status to an organization, change of type of organization,
termination of existence, insolvency, business failure, or appointment of a
receiver of any part of the property of, assignment for the benefit of creditors
by, or the commencement of any proceeding under any bankruptcy or insolvency
laws, state or federal, by or against, the Borrower or any other Obligor or
Pledgor; (viii) if Borrower, any Pledgor or any Obligor shall change its name,
change its principal residence, change its chief executive office, change its
status to an organization, change its state of organization, change its type of
organization, or change its organizational identification number, as applicable,
without giving Secured Party at least thirty (30) days' written notice (ix) any
discontinuance or termination of any guaranty of any of the Obligations by a
guarantor; or (x) the Lender determining that some event has occurred, failed to
occur or is threatened, or some objective condition exists or is threatened,
which significantly impairs the prospects that any of the Obligations will be
paid when due or which significantly affects the financial or business condition
of any Obligor in an adverse manner, or the Collateral or any other property
securing the Obligations or any substantial portion thereof is in danger of
misuse, misappropriation or confiscation.

Upon the occurrence of an Event of Default (and the expiration of any applicable
notice and/or grace periods), to the extent permitted by law, the Lender at its
option may terminate any obligation to extend any additional credit or make any
other financial accommodation to the Borrower and/or may declare all of the
Obligations to be immediately due and payable, all without notice or demand, and
shall have in addition to and independent of the right to declare the
Obligations to be due and payable and any other rights of the Lender under this
Note or any other agreement with any Obligor or any Pledgor, the remedies of a
secured party under the Code, including, without limitation thereto, the right
to take possession of the Collateral, or the proceeds thereof and to sell or
otherwise dispose thereof, and for this purpose, to sign in the name of any
Obligor or Pledgor any transfer, conveyance or instrument necessary or
appropriate in order for the Lender to sell or dispose of any of the Collateral,
and the Lender may, so far as the Borrower can give authority therefor, enter
upon the premises on which the Collateral or any part thereof may be situated
and remove the same therefrom, without being liable in any way to any Obligor on
account of entering any premises. The Lender may require the Borrower to
assemble the Collateral and make the Collateral available to the Lender at a
place to be designated by the Lender which is reasonably convenient to both
parties. Unless the Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market, the Lender shall
give the Borrower written notice of the time and place of any public sale
thereof or of the time after which any private sale or other intended
disposition thereof is to be made. The requirement of sending reasonable notice
shall be met if such notice is mailed; postage prepaid, or otherwise given, to
the Borrower or Pledgor at the last address shown on the Lender's records at
least ten (10) days before such disposition. Lender may (i) comply with any
applicable state or federal law requirements in connection with a disposition of
the Collateral, (ii) sell the Collateral without giving any warranties as to the
Collateral, and (iii) specifically disclaim any warranties of title or the like
and in so doing any of the foregoing will not be considered adversely to affect
the commercial reasonableness of any sale of the Collateral. If any Obligation
(including but not limited to the Note) is a demand instrument, the

<PAGE>

statement of a maturity date, the requirement for the payment of periodic
interest or the recitation of defaults and the right of Lender to declare any
Obligation due and payable shall not constitute an election by Lender to waive
its right to demand payment under a demand at any time and in any event as
Lender in its sole discretion may deem appropriate.

The rights of the Lender specified herein shall be in addition to, and not in
limitation of the Lender's rights under the Code, or any other statute or rules
of law conferring rights similar to those conferred by the Code, and under the
provisions of any other instrument or agreement executed by the Borrower, any
other Obligor or any Pledgor to the Lender. All prior agreements to the extent
inconsistent with the terms of this Note shall be construed in accordance with
the provisions hereof. Any rights or remedies of the Lender may be exercised or
taken in any order or sequence whatsoever, at the sole option of the Lender.
This agreement shall bind and inure to the benefit of the heirs, legatees,
executors, administrators and assigns of Lender and shall bind all persons who
become bound as a debtor to this security agreement.

The security agreement set forth herein and the security interest in the
Collateral created hereby shall terminate only when all of the Obligations have
been indefeasibly paid in full and such payments are no longer subject to
rescission, recovery or repayment upon the bankruptcy, insolvency,
reorganization, moratorium, receivership or similar proceeding affecting the
Borrower or any other person. No waiver by the Lender of any default shall be
effective unless in writing nor operate as a waiver of any other default or of
the same default an a future occasion. All rights of the Lender hereunder shall
inure to the benefit of its successors and assigns, and all obligations of the
Borrower shall bind the heirs; legal representatives, successors and assigns of
the Borrower. The Borrower and each endorser, surety or guarantor of this Note,
whether bound by this or by separate instrument or agreement, shall be jointly
and severally liable for the indebtedness evidenced by this Note and hereby
severally ( i) waive presentiment for payment, demand, protest, notice of
nonpayment or dishonor and of protest and any and all other notices and demands
whatsoever; to the fullest extent permitted by applicable law; (ii) consent that
at any time, or from time to time, payment of any sum payable under this Note
may` be extended without notice whether for a definite or indefinite time; and
(iii) agree to remain liable until all of the Obligations are paid in full
notwithstanding any impairment, substitution, release or transfer of Collateral
or any one or more Borrower or Obligor by the Lender, with or without
consideration, or of any extension, modification or renewal. No conduct of the
holder shall be deemed a waiver or release of such liability, unless the holder
expressly releases such party in writing. The Borrower shall pay to the holder
on demand all expenses, including reasonable attorneys' fees and expenses of
legal counsel, incurred by the holder in any way arising from or relating to the
enforcement or attempted enforcement of the Note and any related guaranty,
collateral document or other document and the collection or attempted
collection, whether by litigation or otherwise, of the Note. Time is of the
essence.

Borrower acknowledges that Lender may reproduce (by electronic means or
otherwise) any of the documents evidencing and/or securing the Obligations and
thereafter may destroy the original documents. Borrower does hereby agree that
any document so reproduced shall be and remain the binding obligation of
Borrower, enforceable and admissible in evidence against it to the same extent
as if the original documents had not been destroyed.

This Note, and the rights and obligations of the parties hereunder, shall be
governed and construed in accordance with the laws of the State of North
Carolina, except to the extent that the Code provides for the application of
other law with respect to the Collateral.

IN WITNESS WHEREOF, the Borrower has executed this Note under seal the day and
year set forth above.

                            Borrower:

                            Prime/Home Impressions, LLC

                            By:      /s/ Robert W. Lackey                 (SEAL)
                               -------------------------------------------------
                                     Robert W. Lackey, Sr.
                            Title: Group A. Manager

                            By:      /s/ Neall W. Humphrey                (SEAL)
                               -------------------------------------------------
                                     Neall W. Humphrey
                            Title: Group B Manager

                            By:      /s/ Robert W. Lackey                 (SEAL)
                               -------------------------------------------------
                            Home/Impressions, Inc, by its Vice President,
                            Robert W. Lackey, Sr.
                            Title:  Group A Member

                            By:      /s/ James R. Ridings                 (SEAL)
                               -------------------------------------------
                            Trade Source International, Inc. by its President,
                            James R. Ridings
                            Title: Group B Member

<PAGE>

                                   SCHEDULE 1

This Schedule is referenced on the Note and Security Agreement dated April 17,
2002 in the stated amount of $3,000,000.00 (the "Note") between Prime/Home
Impressions, LLC ("Borrower") and Wachovia Bank N.A. ("Lender") and shall be
considered a part thereof to the same extent as if written therein.

     The Note shall bear interest from the date hereof at a rate per annum equal
to the Monthly LIBOR Index plus two percent (2.00%).

     As used herein, the "Monthly LIBOR Index" shall mean a rate per annum equal
to LIBOR (determined in accordance with the paragraph below), adjusted for all
applicable Costs (as hereinafter defined). The Monthly LIBOR Index shall be
adjusted on the first day of each calendar month and shall be further adjusted
on and as of the effective date of changes in the Lender's Costs. As used
herein, "Costs" shall mean any charges, fees or costs incurred by the Lender as
the result of any changes in the-laws, rules, regulations, or governmental
requirements pertaining to LIBOR loans.

     As used herein, "LIBOR" shall mean the rate per annum (rounded upward to
the next higher of 1/10,000 of 1%) for deposits of United States dollars with
maturities of one month, that. appears on the display designated as page "3750"
of the Telerate Service (or such other page as may replace 3750 of that service
or such other service or services as may be designated by the British Bankers'
Association for the purpose of displaying London Interbank Offered Rate for U.
S. Dollar deposits), determined as of 11:00 a.m. London time, two (2) Business
Days prior to the first day of each calendar month.

     As used herein, "Business Day" shall mean a day on which dealings in United
States dollar deposits are being carried out in the London interbank eurodollar
market.

     Notwithstanding any provisions herein to the contrary, if the Lender should
at anytime be unable to determine LIBOR, then the Monthly LIBOR Index shall be
based on an interest rate selected by the Lender in good faith that approximates
one month LIBOR taking into account rates in relevant markets. Such rate shall
be in effect until the first day of the next calendar month on which LIBOR is
determinable.

<PAGE>

GUARANTY AGREEMENT

WHEREAS. the undersigned has requested Wachovia Bank, N.A. (herein called the
"Lender") to extend credit or make certain financial accommodations to
Prime/Home Impressions. LLC (herein called the "Borrower") or to renew, or
extend, in whole or in part, existing indebtedness or financial accommodations
of the Borrower to the Lender, and the Lender has extended credit or extended or
renewed existing indebtedness or made financial accommodations and/or may in the
future extend credit or extend or renew existing indebtedness or make certain
financial accommodations by reason of such request and in reliance upon this
guaranty;

NOW, THEREFORE, in consideration of such credit extended or renewed and/or to be
extended or renewed or such financial accommodations made or to be made in its
discretion by the Lender to the Borrower (whether to the same, greater or lesser
extent than any limit, if applicable, of this guaranty), in consideration of One
Dollar ($1.00) and other good and valuable consideration, the receipt and
sufficiency of which is acknowledged, the undersigned hereby unconditionally
guarantees to the Lender and its successors, endorsees, transferees and assigns,
the punctual payment when due, whether by acceleration or otherwise, and at all
times thereafter of (a) all debts, liabilities and obligations whatsoever of the
Borrower to the Lender, now existing. or hereafter coming into existence,
whether joint or several, whether created directly or acquired by endorsement,
assignment or otherwise, whether absolute or contingent, secured or unsecured,
due or not due, including but not being limited to notes, checks, drafts,
credits, advances, and obligations to reimburse draws against letters of credit;
(b) accrued but unpaid interest on such debts, liabilities and obligations,
whether accruing before or after any maturity(ies) thereof, and (c) all
expenses, including reasonable attorneys' fees and expenses of legal counsel
incurred by Lender if any such debts, liabilities or obligations of the Borrower
are collected, or the liability of the undersigned hereunder enforced, by or
through any attorney at law (all of (a), (b) and (c) being hereinafter referred
to as the "Obligations"). References herein to Borrower shall be deemed to
include any successor corporations to Borrower, if Borrower is a corporation, or
any reconstituted partnerships of Borrower, if Borrower is a partnership.

The undersigned consents that, at any time, and from time to time, either with
or without consideration, the whole or any part of any security now or hereafter
held for any Obligations may be substituted, exchanged, compromised, impaired,
released, or surrendered with or without consideration; the time or place of
payment of any Obligations or of any security thereof may be changed or
extended, in whole or in part, to a time certain or otherwise, and may be
renewed or accelerated, in whole or in part; the Borrower may be granted
indulgences generally; any of the provisions of any note or other instrument
evidencing any Obligations of any security therefor may be modified or waived;
any party liable for the payment thereof (including but not being limited to any
co-guarantor) may be granted indulgences or released; neither the death,
termination of existence, bankruptcy, incapacity, lack of authority nor
disability of the Borrower or any one or more of the guarantors, including any
of the undersigned, shall affect the continuing obligation of any other
guarantor, including any of the undersigned, and that no claim need be asserted
against the personal representative, guardian,

<PAGE>

custodian, trustee or debtor in bankruptcy or receiver of any deceased,
incompetent, bankrupt or insolvent guarantor, any deposit balance to the credit
of the Borrower or any other party liable for the payment of the Obligations or
liable upon any security therefor may be released, in whole or in part, at,
before and/or after the stated, extended or accelerated maturity of any
Obligations; and the Lender may release, discharge, compromise or enter into any
accord and satisfaction with respect to any collateral for the Obligations, or
the liability of the Borrower or any of the undersigned, or any liability of any
other person primarily or secondarily liable on any of the Obligations, all
without notice to or further assent by the undersigned, who shall remain bound
hereon, notwithstanding any such exchange, compromise, surrender, extension,
renewal, acceleration, modification, indulgence, release, discharge or accord
and satisfaction.

Without limiting any of the foregoing, in the event of incompetency, or
dissolution of the Borrower, or should the Borrower become insolvent (as defined
by the Uniform Commercial Code as in effect for the State of North Carolina, or
if a petition in bankruptcy be filed by or against the Borrower, or if a
receiver be appointed for any part of the property or assets of the Borrower, or
if any final judgment for money damages be entered against the Borrower in a
court of competent jurisdiction and remain unsatisfied for a period of thirty
(30) days or more, or if the Lender shall deem itself insecure with respect to
the Obligations and whether or not such event occurs at a time when any of such
Obligations are otherwise due and payable, the undersigned agrees to pay to the
Lender upon demand the full amount which would be payable hereunder by the
undersigned if all such Obligations were then due and payable.

The undersigned expressly waives: (a) notice of acceptance of this guaranty and
of all extensions or renewals of credit or other financial accommodations to the
Borrower; (b) presentment and demand for payment of any of the Obligations; (c)
protest and notice of dishonor or of default to the undersigned or to any other
party with respect to any of the Obligations or with respect to any security
therefor; (d) any invalidity or disability in whole or in part at the time of
the acceptance of, or at any time with respect to, any security for the
Obligations or with respect to any party primarily or secondarily liable for the
payment of the Obligations to the Lender; (e) the fact that any security for the
Obligations may at any time or from time to time be in default or be
inaccurately estimated or may deteriorate in value for any cause whatsoever; (f)
any diligence in the creation or perfection of a security interest or collection
or protection of or realization upon the Obligations or any security therefor,
any liability hereunder, or any party primarily or secondarily liable for the
Obligations or any lack of commercial reasonableness in dealing with any
security for the Obligations; (g) any duty or obligation on the part of the
Lender to ascertain the extent or nature of any security for the Obligations, or
any insurance or other rights respecting such security, or the liability of any
party primarily or secondarily liable for the Obligations, or to take any steps
or action to safeguard, protect, handle, obtain or convey information
respecting, or otherwise follow in any manner, any such security, insurance or
other rights; (h) any duty or obligation on the Lender to proceed to collect the
Obligations from, or to commence an action against, the Borrower, any other
guarantor, or any other person, or to resort to any security or to any balance
of any deposit account or credit on the books of the Lender in favor of the
Borrower or any other person, despite any notice or request of the undersigned
to do so; (i) to the extent not prohibited by law, the right to assert any of
the. benefits under any statute providing appraisal or other rights which may
reduce or prohibit any deficiency judgments in any foreclosure or

                                                                               2
<PAGE>

other action; (j) all other notices to which the undersigned might otherwise be
entitled; (k) demand for payment under this guaranty; or (l) any rights of the
undersigned pursuant to North Carolina General Statutes Section 26-7 or any
similar or subsequent law.

This is a guaranty of payment and not of collection. The liability of the
undersigned on this guaranty shall be continuing, direct and immediate and not
conditional or contingent upon either the pursuit of any remedies against the
Borrower or any other person or foreclosure of any security interests or liens
available to the Lender, its successors, endorsees or assigns. The Lender may
accept any payment(s), plan for adjustment of debts, plan for reorganization or
liquidation, or plan of composition or extension proposed by, or on behalf of,
the Borrower or any other guarantor without in any way affecting or discharging
the liability of the undersigned hereunder. If the Obligations are partially
paid, the undersigned shall remain liable for any balance of such Obligations.
This guaranty shall be revived and reinstated in the event that any payment
received by Lender on any Obligation is required to be repaid or rescinded under
present or future federal or state law or regulation relating to bankruptcy,
insolvency or other relief of debtors. The undersigned agrees to furnish
promptly to the Lender annual financial statements and such other current
financial information as the Lender may reasonably request from time to time.

The undersigned expressly represents and acknowledges that loans and other
financial accommodations by the Lender to the Borrower are and will be to the
direct interest and advantage of the undersigned.

The Lender may, without notice of any kind, sell, assign or transfer all or any
of the Obligations, and in such event each and every immediate and successive
assignee, transferee, or holder of all or any of the Obligations shall have the
right to enforce this guaranty, by suit or otherwise, for the benefit of such
assignee, transferee or holder, as fully as if such assignee, transferee or
holder were herein by name specifically given such rights, powers and benefits,
but the Lender shall have an unimpaired right, prior and superior to that of any
such assignee, transferee or holder, to enforce this guaranty for the benefit of
the Lender, as to so much of the Obligations as it has not sold, assigned or
transferred.

No delay or failure on the part of the Lender in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise by
the Lender of any right or remedy shall preclude other or further exercise of
any other right or remedy.

For the purpose of this guaranty, the Obligations shall include all debts,
liabilities and obligations of the Borrower to the Lender, notwithstanding any
right or power of the Borrower or anyone else to assert any claim or defense as
to the invalidity or unenforceability thereof, and no such claim or defense
shall impair or affect the obligations and liabilities of the undersigned
hereunder. Without limiting the generality of the foregoing, if the Borrower is
a corporation, partnership, joint venture, trust or other form of business
organization, this guaranty covers all Obligations purporting to be made in
behalf of such organization by any officer or agent of the same, without regard
to the actual authority of such officer or agent. The term "corporation" shall
include associations of all kinds and all purported corporations, whether or not
correctly and legally chartered and organized.

                                                                               3
<PAGE>

To the extent not prohibited by law, the undersigned hereby grants to the Lender
a security interest in and security title to and hereby assigns, pledges,
transfers and conveys to Lender (i) all property of the undersigned of every
kind or description now or hereafter in the possession or control of the Lender,
exclusive of any such property in the possession or control of the Lender as a
fiduciary other than as agent, for any reason including, without limitation, all
cash, stock or other dividends and all proceeds thereof, and all rights to
subscribe for securities incident thereto and any substitutions or replacements
therefor and (ii) any balance or deposit accounts of the undersigned, whether
such accounts be general or special, or individual or multiple party, and upon
all drafts, notes, or other items deposited for collection or presented for
payment by the undersigned with the Lender, exclusive of any such property in
the possession or control of the Lender as a fiduciary other than as agent, and
the Lender may at any time, without demand or notice, appropriate and apply any
of such to the payment of any of the Obligations, whether or not due, except for
other indebtedness, obligations and liabilities owing to Lender that constitute
(a) consumer credit as defined in Federal Reserve Board Regulation Z or (b)
non-consumer credit if under applicable state law the maximum interest rate for
such credit is reduced when secured.

Any amount received by the Lender from whatever source and applied by it toward
the payment of the Obligations shall be applied in such order of application as
the Lender may from time to time elect.

This guaranty shall bind and inure to the benefit of the Lender, its successors
and assigns, and likewise shall bind and inure to the benefit of the
undersigned, their heirs, executors, administrators, successors and assigns. If
more than one person shall execute this guaranty or a similar, contemporaneous
guaranty, the term "undersigned," shall mean, as used herein, all parties
executing this guaranty and such similar guaranties and all such parties shall
be liable, jointly and severally, one with the other and with the Borrower, for
each of the undertakings, agreements, obligations, covenants and liabilities
provided for herein with respect to the undersigned. This guaranty contains the
entire agreement and there is no understanding that any other person shall
execute this or a similar guaranty. Furthermore, no course of dealing between
the parties, no usage of trade, and no parole or extrinsic evidence shall be
used to supplement or modify any terms of this guaranty; nor are there any
conditions to the complete effectiveness of this guaranty.

This guaranty shall be deemed accepted by Lender in the State of North Carolina.
The parties agree that this guaranty shall be deemed, made, delivered, performed
and accepted by Lender in the State of North Carolina and shall be governed by
the laws of the State of North Carolina. Wherever possible each provision of
this guaranty shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provisions of this guaranty shall be prohibited
by or invalid under such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this guaranty.

The undersigned (a) submits to personal jurisdiction in the State of North
Carolina, the courts thereof and any United States District Court sitting
therein, for the enforcement of this

                                                                               4
<PAGE>

guaranty, (b) waives any and all personal rights under the law of any
jurisdiction to object on any basis (including, without limitation,
inconvenience of forum) to jurisdiction or venue within the State of North
Carolina, for the purpose of litigation to enforce this guaranty, and (c) agrees
that service of process may be made upon the undersigned by first class postage
prepaid mail, addressed to the undersigned at the latest address of the
undersigned known to the Lender (or at such other address as the undersigned may
specify for the purpose by notice to the Lender). Nothing herein contained,
however, shall prevent the Lender from bringing any action or exercising any
rights against any security and against the Borrower personally, and against any
assets of the Borrower, within any other state or jurisdiction.

Guarantor acknowledges that Lender may reproduce (by electronic means or
otherwise) any of the documents evidencing and/or securing the Obligations and
thereafter may destroy the original documents. Guarantor does hereby agree that
any document so reproduced shall be and remain the binding obligation of
Guarantor, enforceable and admissible in evidence against it to the same extent
as if the original documents had not been destroyed.

This guaranty shall remain in full force and effect as to each of the
undersigned unless and until terminated as to one or more of the undersigned by
notice to that effect actually received by the Lender, by registered mail,
addressed to Lender at 100 North Main Street, Winston-Salem, North Carolina
27101, but no such notice shall affect or impair the liabilities hereunder of
such of the undersigned who gives or on whose behalf is given any such notice
for the Obligations existing at the date of receipt by the Lender of such
notice, any renewals, modifications, or extensions thereof (whether made before
or after such notice is received), any interest thereon, or any costs or
expenses, including without limitation, attorneys' fees incurred in the
collection thereof or any future advances made by Lender to Borrower as required
or permitted pursuant to the terms of the instruments, documents or agreements
evidencing or providing for the Obligations. Any such notice of termination by
or on behalf of any of the undersigned shall affect only that person and shall
not affect or impair the liabilities and obligations hereunder of any other
person.

The undersigned hereby expressly waives, for Lender's benefit and the benefit of
the Borrower and any other guarantor, maker or endorser of the Obligations, any
and all claims or actions against the Borrower, any other guarantor, maker or
endorser of the Obligations and any and all rights of recourse against any
property or assets of the Borrower, any other guarantor, maker or endorser of
the Obligations (including without limitation any security for the Obligations)
arising out of or related to any payment made by the undersigned under this
guaranty, including, without limitation, any claim of the undersigned for
subrogation, reimbursement, exoneration, contribution or indemnity that the
undersigned may have against the Borrower, any other guarantor, maker or
endorser of the Obligations and any benefit of, and any other right to
participate in, any security for the Obligations or any guaranty of the
Obligations now or hereafter held by Lender. The waiver contained in this
paragraph shall continue and survive after the termination of this guaranty and
the payment of the Obligations

The terms and provisions of any addendum attached hereto are incorporated herein
by reference and made a part hereof.

                                                                               5
<PAGE>

IN WITNESS WHEREOF, each of the undersigned has executed this guaranty under
seal this 2nd day of March, 2001.

                                             Craftmade International, Inc.

                                                 /s/ James R. Ridings     (SEAL)
                                             -----------------------------------
                                             By:    James R. Ridings
                                             Title: President

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