Document:

exv10w8

 

Exhibit
10.8

13700 Benchmark Drive

Farmers Branch, TX 75234

INDUSTRIAL LEASE AGREEMENT

          THIS LEASE AGREEMENT (the “Lease”), made and entered into by and between the Landlord and Tenant
hereinafter named.

          1.
DEFINITIONS AND BASIC PROVISIONS. The following definitions and basic
provisions shall be used in conjunction with and limited by the reference thereto in the provisions
of this Lease:

	 	(a)	 	“Landlord”: Centre Development Co., Inc., a Texas corporation.
	 
	 	(b)	 	“Tenant”: Sport Supply Group, Inc., a Delaware corporation.
	 
	 	(c)	 	“Premises”: That certain real property described on Exhibit “A” attached hereto and made a
part hereof, together with the Building (herein so called) and other improvements now or hereafter
located thereon.
	 
	 	(d)	 	“Lease Term”: A period of one hundred twenty (120) months commencing on January 1, 1995
(the “Commencement Date”) and ending on December 31, 2004 (the “Expiration Date”), subject to any
adjustment pursuant to paragraph 2 hereof.
	 
	 	(e)	 	“Basic Rental”: $44,004.64 per month.
	 
	 	(f)	 	“Permitted Use”: office, warehouse, and distribution operations.
	 
	 	(g)	 	“Maximum Rate”: The lesser of (i) the sum of three percent (3%), plus the Prime Rate (as
hereinafter defined) or (ii) the maximum rate of interest permitted by applicable law, including as
to Article 5069-1.04, Vernon’s Texas Civil Statutes (and as the same may be incorporated by
reference in other Texas statutes) but otherwise without limitation that rate based on the
“indicated rate ceiling”. The term “Prime Rate” shall mean the prime interest rate as announced or
published in The Wall Street Journal, its successor or assigns, from time to time, or, in the event
The Wall Street Journal does not announce or publish a prime interest rate, the prime interest rate
announced or published from time to time by such national publication as may be selected by the
Landlord.
	 
	 	(h)	 	“Additional Rent”: All sums of money, other than Basic Rental, which become due under this
Lease. Basic Rental and Additional Rent shall collectively constitute the “Rent” or “Rentals” due
or to become due under this Lease and are herein so called.

          2.
LEASE GRANT. Landlord, in consideration of the Basic Rental to be paid and the other
covenants and agreements to be performed by Tenant and upon the terms and conditions hereinafter
stated, does hereby lease, demise and let unto Tenant the Premises commencing on the Commencement
Date (as defined in paragraph l[d] hereof, or as adjusted as hereinafter provided) and ending on
the last day of the Lease Term, unless sooner terminated as herein provided. If this Lease is
executed before the Premises are available and ready for occupancy, and Landlord cannot deliver
possession on the Commencement Date, then Landlord shall not be deemed to be in default hereunder,
and Tenant agrees to accept possession of the Premises at such time as the Premises are available
and ready for occupancy and such date shall be deemed to be the Commencement Date, and the
Expiration Date set forth in paragraph l(d) hereof shall be extended for a period equal to the
number of days that the Premises are not available and ready for occupancy beyond the Commencement
Date specified in paragraph l(d) hereof plus the number of days necessary for the Lease
Term to expire on the last day of a month; provided, however, that because of the damages Tenant
will suffer as a result of not being able to take occupancy by February 1, 1995, including the
holdover rent Tenant will be obligated to pay in connection with its current space, in the event
the Premises are not available and ready for

	 	 	 	 	 
	 

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INDUSTRIAL
LEASE AGREEMENT — Page 1

 

 

occupancy by February 1, 1995 (which date shall be extended by any delay caused or
attributable to Tenant or by force majeure as provided in paragraph 27 hereof), Landlord agrees to
pay Tenant, as liquidated damages and as Tenant’s sole remedy, the sum of $2,500.00 for each day
from February 1, 1995 (as such date may be extended as provided above) that the Premises are not
available and ready for occupancy. The amount due Tenant hereunder shall be credited to the next
accruing installments(s) of Basic Rental hereunder. Landlord hereby waives payment of Basic Rental
covering any period prior to the date the Premises are available and ready for occupancy; however,
should Tenant occupy the entire Premises prior to the Commencement Date specified in paragraph l(d)
hereof, the Commencement Date and Lease Term shall be altered to coincide with said occupancy with
the Expiration Date of this Lease remaining unchanged. In the event Tenant should occupy a portion
of the Premises prior the date the entire Premises are available and
ready for occupancy, Tenant
shall pay to Landlord the pro rata portion of the full Basic Rental and Additional Rent based upon
the area of the Building occupied by Tenant. For the purpose hereof, the Premises shall be deemed
“available and ready for occupancy” at such time as Landlord has substantially completed the
construction or installation of all tenant improvements required to be completed by Landlord
pursuant to paragraph 5 of this Lease to the extent reasonably necessary so as to allow Tenant to
occupy the Premises and commence operations of its business therein, notwithstanding the fact that
there may remain as incomplete certain minor, “punchlist” items which do not materially interfere
with Tenant’s intended use of the Premises. The improvements shall be deemed to have been
substantially completed upon the first to occur of (i) the issuance of a certificate of occupancy
permitting Tenant to occupy the Premises (or the taking of such other action as may be customary to
permit occupancy or use thereof); or (ii) the date the Tenant occupies the Premises. By occupying
the Premises, Tenant shall be deemed to have accepted the same as suitable for the purposes herein
intended and to have acknowledged that the same comply fully with Landlord’s covenants and
obligations except for (A) any latent defects not discoverable upon inspection; and (B) any “punch
list” items respecting the tenant improvements to be constructed by Landlord pursuant to paragraph
5 hereof, which are identified by Tenant in writing to Landlord within thirty (30) days following
Tenant’s occupancy of the Premises. Landlord hereby expressly disclaims and Tenant hereby expressly
waives any and all warranties or representations, express or implied, concerning the suitability of
the Premises for the intended commercial purpose of Tenant.

     After the Commencement Date of this Lease and the completion of the tenant improvements in
accordance with paragraph 5 of this Lease, Tenant shall, upon request from Landlord, execute and
deliver to Landlord a letter of acceptance of delivery of the Premises, which letter shall also
state the Commencement Date and Expiration Date.

     3. RENT.

     (a) In consideration of this Lease, Tenant promises and agrees to pay Landlord the Basic
Rental, without deduction or set off, for each and every month of the Lease Term and further
promises and agrees to pay all Additional Rent which becomes due hereunder. The nonpayment of any Additional
Rent shall afford Landlord all the rights and remedies as are herein provided in the case of
nonpayment of the Basic Rental. Any term or provision of this Lease to the contrary
notwithstanding, the covenant and obligation of Tenant to pay Rent hereunder shall be independent
from any obligations, warranties, representations, express or implied, if any, of Landlord herein
contained.

     (b) The Basic Rental installment for the first month of the Lease Term shall be payable by Tenant
to Landlord contemporaneously with the execution hereof, and a like monthly installment shall be
due and payable without demand on or before the first day of each calendar month during the Lease
Term beginning with the second month of the Lease Term. Basic Rental for any fractional month at
the beginning or end of the Lease Term shall be prorated.

     (c) Notwithstanding any expiration or earlier termination of this Lease, Tenant’s obligation to
pay any and all Additional Rent under this Lease shall continue and shall cover all periods up to
the date this Lease expires or is terminated. Tenant’s obligation to pay any and all Additional
Rent under this Lease and Landlord’s and Tenant’s obligation to make the

	 	 	 	 	 
	 

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adjustments
referred to in this Lease shall survive any expiration or
termination of this Lease.

     (d) If any Basic Rental payment required to be paid or which becomes due under this Lease is
not paid by the tenth (10th) day following the day on which it is due, a service charge of five
percent (5%) of such amounts due shall become due and payable in addition to the amounts due. Said
service charge is for the purpose of reimbursing Landlord for the extra costs and expenses in
connection with the handling and processing of late payments. In addition to such service charge,
if any Basic Rental payment is not paid by the tenth (10th) day following the day Landlord notifies
Tenant that the Basic Rental was not paid on the date due, Tenant shall pay to Landlord, in
addition to such Basic Rental payment and the service charge, interest on such Basic Rental payment
calculated at the Maximum Rate from the date such Basic Rental payment was due until paid by
Tenant.

     (e) If any Additional Rent required to be paid or which becomes due under this Lease is not paid
when due, and provided that such payment remains unpaid for five (5) business days following
written notice from Landlord to Tenant of such non-payment, Tenant shall pay to Landlord, in
addition to such amounts, interest on such amounts at the Maximum Rate from the date such amounts
were due until paid by Tenant.

     4. TAXES
AND OTHER ASSESSMENTS.

     (a) Tenant agrees to pay to Landlord as Additional Rent all taxes, assessments and
governmental charges of any kind and nature whatsoever (hereinafter collectively referred to as
“taxes”) lawfully levied or assessed against the Premises. Such amount shall be paid immediately
upon Landlord’s invoice to Tenant for same, and
in the event any such amount is not paid within thirty (30) days prior to the date the taxes become
delinquent, the unpaid amount shall bear interest at the Maximum Rate from the date of such invoice
until payment by Tenant.

     (b) If
at any time during the term of this Lease, the present method of taxation shall be changed
so that in lieu of the whole or any part of any taxes, assessments or governmental charges levied,
assessed or imposed on real estate and the improvements thereon, there shall be levied, assessed or
imposed on Landlord a capital levy or other tax directly on the Basic Rentals received therefrom
and/or a franchise tax assessment, levy or charge measured by or based, in whole or in part, upon
such Basic Rentals for the present or any future building or buildings on the real property
described on Exhibit “A”, then all such taxes, assessments, levies or charges, or the part thereof
so measured or based, shall be deemed to be included within the term “taxes” for the purposes
hereof; provided, however, Tenant shall have no obligation to pay any income taxes of
Landlord, irrespective of the taxing jurisdiction and/or whether such income taxes are
characterized as franchise taxes or otherwise.

     (c) The Landlord shall have the right to employ a tax consulting firm to attempt to assure a fair
tax burden on the Premises within the applicable taxing jurisdiction. Tenant shall pay to Landlord
upon demand from time to time, as Additional Rent, the reasonable cost of such service. If
Landlord elects not to employ such consultant, then Tenant shall have the right to do so.

     (d) Any payment to be made pursuant to this Lease with respect to the real estate tax year in
which this Lease commences or terminates shall be prorated.

     (e) Tenant shall pay to Landlord as Additional Rent any assessments made against the Premises
pursuant to any deed restrictions or development standards to which the Premises are subject.
Such amount shall be paid immediately upon Landlord’s invoice to Tenant for same and in the event
any such amount is not paid within twenty (20) days after the date of Landlord’s invoice to Tenant,
the unpaid amount shall bear interest at the Maximum Rate from the date of the invoice until
payment by Tenant.

	 	 	 	 	 
	 

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INDUSTRIAl LEASE AGREEMENT —  Page 3

 

 

     5. LEASEHOLD
IMPROVEMENTS. Landlord agrees to construct and install the Leasehold
Improvements (herein so called) which are generally described in preliminary drawings and design
criteria attached hereto as Exhibit “B” and made a part hereof. Immediately after the execution
hereof Landlord and Tenant will cooperate with one another to prepare final plans and
specifications for the construction and installation of the Leasehold Improvements. Such final
plans and specifications, when approved in writing by Landlord and Tenant, shall be attached to
this Lease as Exhibit “B-l” and shall become a part hereof. No failure or refusal on the part of
Tenant to approve final plans and specifications within a reasonable time after the execution
hereof shall render this Lease void or voidable nor shall it delay the Commencement Date set forth
in paragraph l(d) hereof. No delay caused by Tenant during the construction or installation of the
Leasehold Improvements shall delay the Commencement Date of this Lease from what it would have been
had such delay not occurred. Landlord shall, at its sole cost, procure all building and other
permits required for the construction of the Leasehold Improvements as contemplated by this
paragraph 5, and Landlord shall pay all mitigation fees, impact fees, tap-in and connection fees or other fees
assessed against Landlord incidental to such construction.

     Landlord and Tenant acknowledge that the Landlord has computed the Basic Rental by budgeting an
allowance of $238,710.12 (the “Allowance”) for Interior Tenant Improvements (herein so called) to
be constructed within the Building. Both parties acknowledge that the Allowance is not a firm
budget nor a final estimate of costs. Should the total cost of the Interior Tenant Improvements
exceed the Allowance, the annual Basic Rental shall be automatically increased by an amount equal
to 10% of such excess. Similarly, should the total cost of the interior Tenant Improvements be less
than the Allowance, the annual Basic Rental shall be automatically decreased by an amount equal to
10% of such savings.

     Within a reasonable time following the Commencement Date, Landlord and Tenant shall execute an
amendment to this Lease setting forth the final annual Basic Rental and monthly Basic Rental
resulting from any increases or decreases, if any, set forth above.

     All
changes in the Interior Tenant Improvements that are contemplated by
this paragraph 5 must be
executed by a written Change Order (so called herein) executed by Landlord and Tenant. With respect
to any Change Order requested by Tenant, Tenant must submit to Landlord such information as
Landlord may require. Tenant shall be responsible for the payment of all “Change Costs” (as
hereinafter defined), and Landlord will have no obligation to effect any Change Order unless and
until Tenant shall have paid to Landlord the sum of all Change Costs relating thereto. For the
purposes hereof, the term “Change Costs” shall mean all costs and expenses attributable to any
Change Order requested by Tenant, including, but not limited to: (i)any additional architectural or
engineering services, (ii) any changes to materials in process of fabrication, (iii) cancellation
or modification of supply or fabricating contracts, (iv) the removal or alteration of any tenant
improvements or any plans completed or in process or (v) delays affecting the schedule of the
Interior Tenant Improvements; provided, however, that Tenant shall only be required to pay
such Change Costs if Landlord has given Tenant an estimate of such Change Costs prior to Tenant’s
approval thereof and such actual Change Costs do not exceed an amount which is 105% of such
estimate. Tenant shall not be responsible for any actual Change Costs which exceed 105% of
Landlord’s estimate.

     With respect to any “punch list” items regarding the Leasehold Improvements which are identified by
Tenant in writing to Landlord within thirty (30) days following Tenant’s occupancy of the Premises
and which are not completed by Landlord within thirty (30) days following receipt of such written
notice (or longer period of time as is necessary to effect the completion of any such “punch list”
item; provided, Landlord commences the completion within said thirty (30) day period and proceeds
diligently thereafter), then Tenant shall have the right to complete said item, and the full amount
of the reasonable cost and expenses entailed shall be owing by Landlord to Tenant within said
thirty (30) days following Landlord’s receipt of Tenant’s request for payment, supported by
invoices and paid receipts, but in no event (except as expressly provided in paragraph 32) shall
Tenant have

	 	 	 	 	 
	 

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INDUSTRIAL LEASE AGREEMENT — Page 4

 

 

the right
to deduct any portion of the amount owed by Landlord from any Rent then due or
thereafter coming due hereunder.

     6. UTILITIES. Landlord agrees to provide water, gas, sewer, electricity, and
telephone service connections to the Premises; but Tenant shall pay for all water, gas, heat,
light, power, telephone, sewer, fire sprinkler, lawn sprinkler charges and other utilities and
services used on or from the Premises, together with any taxes, penalties, surcharges or the like pertaining thereto
and any maintenance charges for utilities and shall furnish all electric light bulbs and tubes.
Landlord shall in no event be liable for any interruption or failure of utility services on the
Premises, unless due to Landlord’s gross negligence.

     7. USE:
COMPLIANCE WITH LAWS.

     (a) Permitted use. Tenant shall use the Premises only for the Permitted Use (as defined in
paragraph l[g] hereof). Tenant hereby expressly acknowledges and agrees that the Premises as
designed is acceptable for Tenant’s intended commercial purpose. Tenant will not occupy or use
the Premises, or permit any portion of the Premises to be occupied or used, for any business or
purpose other than the Permitted Use or for any use or purpose which is unlawful in part or in
whole or deemed to be disreputable in any manner or extrahazardous on account of fire, nor permit
anything to be done which will in any way increase the rate of fire insurance on the Building or
contents unless Tenant pays to Landlord the amount of such increase upon demand. Tenant will
conduct its business and control its agents, employees and invitees in such a manner as not to
create any nuisance, nor interfere with, annoy or disturb other tenants or Landlord in management
of the project of which the Premises form a part. Tenant will maintain the Premises in a clean,
healthful and safe condition and will comply with all laws, ordinances, orders, rules and
regulations (state, federal, municipal and other agencies or bodies having any jurisdiction
thereof) with reference to use, condition or occupancy of the Premises. Tenant will not, without
the prior written consent of Landlord (which consent shall not be unreasonably withheld or
delayed), paint, install lighting or decoration, or install any signs, window or door lettering or
advertising media of any type on or about the Premises or any part thereof. Should Landlord agree
in writing to any of the items in the preceding sentence, Tenant will maintain such permitted item
in good condition and repair at all times. Outside storage, except for trucks or other vehicles
and other short-term (meaning less than two (2) weeks) storage, is also prohibited without
Landlord’s prior written consent and must, in all cases, be in full compliance with all applicable
laws, rules, ordinances, regulations and restrictions.

     (b) Hazardous Materials.

     (i) As used in this Lease, the term “Hazardous Material” means any flammable items, explosives,
radioactive materials, hazardous or toxic substances, material or waste or related materials,
including any substances defined as or included in the definition of “hazardous substances”,
“hazardous wastes”, “infectious wastes”, “hazardous materials” or “toxic substances” now or
subsequently regulated under any applicable federal, state or local laws or regulations including,
without limitation, oil, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing
inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs and similar
compounds, and including any different products and materials which are subsequently found to have
adverse effects on the environment or the health and safety of persons.

     (ii) As used in this Lease, the term “Hazardous Materials Laws” shall mean all federal, state and
local laws, ordinances and regulations relating to industrial hygiene, environmental protection or
the use, analysis, generation, manufacture, storage, presence, disposal or transportation of any
Hazardous Materials.

     (iii) Tenant shall not cause or permit any Hazardous Material to be generated, produced, brought
upon, used, stored, treated or disposed of in or about the Premises, by Tenant, its agents,
employees,

	 	 	 	 	 
	 

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INDUSTRIAL LEASE AGREEMENT — Page 5

 

 

licensees, invites, business associates, sublessees, assigns,
contractors, subcontractors or others acting for or on behalf of Tenant (collectively, “Tenant
Related Party”) without the prior written consent of Landlord. Landlord shall be entitled to take
into account such other factors or facts as Landlord may in its good faith business judgment
determine to be relevant in determining whether to grant, condition or withhold consent to Tenant’s
proposed activity with respect to Hazardous Material and Tenant shall indemnify, defend and hold
Landlord and each of Landlord’s partners, shareholders, officers, directors, employees, agents,
attorneys, investment advisors, portfolio managers, trustees, ancillary trustees, and their
affiliates (including, without limitation, its successors and assigns and their respective
partners, shareholders, officers, directors and employees (collectively, “Indemnitees”) free and
harmless from any and all actions (including, without limitation, remedial or enforcement actions
of any kind, administrative or judicial proceedings, and orders or judgments arising out of or
resulting therefrom), costs, claims, damages (including, without limitation, punitive damages),
expenses (including, without limitation, attorneys’, consultants’ and experts’ fees, court costs
and amounts paid in settlement of any claims or actions), fines, forfeitures or other civil,
administrative or criminal penalties, injunctive or other relief (whether or not based upon
personal injury, property damage, contamination of, or adverse effects upon, the environment,
water tables or natural resources), liabilities or losses (economic or other) (collectively, the
“Claims”) arising from a breach of this prohibition by Tenant or any Tenant Related Party. In no
event, however, shall Landlord be required to consent to the installation or use of any storage
tanks in, on or under the Premises. If Landlord consents to the generation, production, use,
storage, treatment or disposal of Hazardous Materials in or about the Premises by Tenant or any
Tenant Related Party, then, in addition to any other requirements or conditions that Landlord may
impose in connection with such consent, (1) Tenant promptly shall deliver to Landlord copies of all
permits, approvals, filings, reports and hazardous waste manifests reflecting the legal and proper
generation, production, use, storage, treatment or disposal of all Hazardous Materials generated,
used, stored, treated or removed from the Premises and, upon Landlord’s request, copies of all
hazardous waste manifests relating thereto, and (2) upon expiration or earlier termination of
this Lease, Tenant shall cause all Hazardous Materials arising out of or related to the use or
occupancy of the Premises by Tenant or any Tenant Related Party to be removed from the Premises and
transported for use, storage or disposal in accordance with all applicable laws, regulations and
ordinances, and Tenant shall provide Landlord with evidence reasonably satisfactory to Landlord of
compliance with all applicable laws, regulations and ordinances.

     (iv) In the event that Hazardous Materials are discovered upon, in, or under the Premises, and the
applicable governmental agency or entity having jurisdiction over the Premises requires the removal
of such Hazardous Materials, Tenant shall be responsible for removing those Hazardous Materials
arising out of or related to the use or occupancy of the Premises by Tenant or any Tenant Related
Party. Notwithstanding the foregoing, Tenant shall not take any remedial action in or about the
Premises, nor enter into any settlement agreement, consent decree or other compromise with respect
to any claims relating to any Hazardous Material in any way connected with the Premises without
first notifying Landlord of Tenant’s intention to do so and affording Landlord the opportunity to
appear, intervene or otherwise appropriately assert and protect Landlord’s interest with respect
thereto. Tenant immediately shall notify Landlord in writing of: (1) any spill, release, discharge
or disposal of any Hazardous Material in, on or under the Premises or any portion thereof, (2) any
enforcement, cleanup, removal or other governmental or regulatory action instituted, contemplated
or threatened pursuant to any Hazardous Materials Laws; (3)
any claim made or threatened by any person against Tenant or the Premises relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from or claimed to result from
any Hazardous Materials; and (4) any reports made to any environmental agency arising out of or in
connection with any Hazardous Materials in, on or removed from the Premises, including any
complaints, notices, warnings, reports or

	 	 	 	 	 
	 

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asserted
violation in connection therewith. Tenant also shall supply to Landlord as promptly as
possible, and in any event within five (5) business days after Tenant first receives or sends the
same, copies of all claims, reports, complaints, notices, warnings or asserted violations relating
in any way to the Premises or Tenant’s use thereof.

     (v) Except as hereinafter provided, Landlord shall indemnify, defend and hold Tenant and its
officers, directors, employees, agents, attorneys and shareholders harmless from and against any
and all Claims arising from or caused, in whole or in part, directly or indirectly, from the
presence or discharge (whether occurring in the past or in the future) of Hazardous Materials in,
on, under, upon or from the Premises, caused by Landlord, which Hazardous Materials were or are
located or present at or in the Premises at the time of the execution of this Lease (whether or not
such location or presence was known to Landlord or Tenant at such time). Landlord’s indemnity
contained herein shall not extend to, and Landlord shall not be liable for any incremental costs
attributable to Tenant’s or any Tenant Related Party’s exacerbation of contamination.

     (vi) Within forty-five (45) days following the full execution of this Lease, Landlord shall furnish
to Tenant a copy of Landlord’s environmental report (the “Report”) respecting the Premises. In the
event the Report discloses the existence of Hazardous Materials upon or under the Premises, then
either Landlord or Tenant may terminate this Lease by providing written notice to the other within
fifteen (15) days following the date Landlord furnishes the Report to Tenant.

     (vii) In the event (a) Hazardous Materials are discovered upon the Premises, (b) the existence of
such Hazardous Materials were not previously disclosed by the Report, (c) neither Landlord nor
Tenant have responsibility for such Hazardous Materials pursuant to this subparagraph 7(b) then
Landlord may voluntarily but shall not be obligated to take all action necessary to bring the
Premises into compliance with Hazardous Materials Laws at Landlord’s sole cost. In the event
Landlord fails to notify Tenant in writing within sixty (60) days of the notice to Landlord of the
discovery of such Hazardous Materials that Landlord intends to voluntarily take such action as is
necessary to bring the Premises into compliance with Hazardous Materials Laws, then Tenant may
terminate this Lease on a date not less than ninety (90) days following written notice of such
intent to terminate.

     (viii) The respective rights and obligations of Landlord and Tenant under this subparagraph 7(b)
shall survive the expiration or earlier termination of this Lease.

     (c) Compliance
with Laws and Ordinances. Once the Leasehold Improvements have been
completed by Landlord in accordance with paragraph 5 hereof, Landlord represents that the Building
shall comply with applicable laws and building codes as presently interpreted and enforced by
federal, state and municipal governmental bodies having jurisdiction thereof. Tenant shall,
throughout the term of this Lease, and at Tenant’s sole cost and expense, promptly comply or cause
compliance with or remove or cure any violation, occurring from and after the Commencement Date and
during the term of this Lease, of any and all present and future laws, ordinances, orders, rules,
regulations and requirements of all federal, state, municipal and other governmental bodies having
jurisdiction over the Premises and the appropriate departments, commissions, boards and officers
thereof, and the orders, rules and regulations of any other body now or hereafter
constituted exercising lawful or valid authority over the Premises, or any portion thereof, or the
sidewalks, curbs, roadways, alleys, entrances or railroad track facilities adjacent or appurtenant
thereto, or exercising authority with respect to the use or manner of use of the Premises, or such
adjacent or appurtenant facilities, and whether the compliance, curing or removal of any such
violation and the costs and expenses necessitated thereby shall have been foreseen or unforeseen,
ordinary or extraordinary, and whether or not the same shall be presently within the contemplation
of Landlord or Tenant or shall involve any change of governmental policy, or require structural or
extraordinary repairs, alterations or additions by Tenant and irrespective of the costs thereof.

	 	 	 	 	 
	 

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     8. REPAIRS
AND MAINTENANCE.

     (a) Tenant shall at its own cost and expense keep and maintain all parts of the Premises in good
condition (reasonable wear and tear and casualty damage excepted), promptly making all necessary
repairs and replacements, interior and exterior, structural and non-structural, ordinary and
extraordinary, including but not limited to, windows, glass and plate glass, doors, and special
office entries, interior walls and finish work, floors and floor coverings, downspouts, gutters,
heating, air conditioning and ventilation systems, dock boards, truck doors, dock bumpers,
irrigation systems, paving, parking lot improvements, plumbing work and fixtures, pest
extermination, exterior lighting fixtures, regular removal of trash and debris, regular mowing of
any grass, trimming, weed removal, landscape replacement, general landscape maintenance, keeping
the parking areas, driveways, alleys and the whole of the premises in a clean and sanitary
condition. Tenant’s maintenance obligations shall include any rail spur areas and any spur track
serving the Premises if Tenant, at any time during the Lease Term, makes use of any rail spur
track. In this regard, Tenant agrees to sign a joint maintenance agreement with the railroad
company servicing the Premises, if requested by the railroad company. Tenant shall not be
obligated to repair any damage caused by fire, tornado or other casualty covered by the insurance
to be maintained by Landlord pursuant to the provisions of this Lease, except that Tenant shall be
obligated to repair all wind damage to glass except with respect to tornado or hurricane damage.

     (b) In the event Tenant fails to perform or have performed the following services after written
notice from Landlord and a ten (10) day opportunity to cure, Landlord reserves the right to perform
or have performed the paving and landscape maintenance, landscape replacement, exterior painting,
maintenance of exterior lighting fixtures, and the maintenance of the irrigation systems and common
sewerage line plumbing which are otherwise Tenant’s obligations under paragraph 8(b)(l) above and
in such event, Tenant shall, in lieu of the obligations set forth under paragraph 8(b)(l) above
with respect to such items, be liable to Landlord for the reasonable cost and expense of same,
including but not limited to, the reasonable cost for mowing of grass; care of shrubs; landscape
replacement; general landscaping; maintenance (but not replacement) of parking areas, parking lot
improvements, driveways and alleys; exterior repainting, maintenance of the exterior lighting
fixtures and the maintenance of the irrigation systems. Tenant shall have no obligation to repair,
maintain or contribute to Landlord’s expense of replacing, repairing or maintaining the roof,
foundation of other structural portions of the Premises. In the event Landlord is permitted by the
terms of this Lease and elects to perform or cause to be performed such work, Tenant shall pay when
due such costs and expenses.

     (c) Tenant shall, at its own cost and expense, enter into a regularly scheduled preventive
maintenance/service contract with a maintenance contractor for servicing all hot water, heating and
air conditioning systems and equipment within or serving the Premises. The maintenance contractor and the contract
must be approved by Landlord (which approval will not be unreasonably withheld or delayed). The
service contract must include all services suggested by the equipment manufacturer within the
operation/maintenance manual and must become effective (and a copy thereof delivered to Landlord)
within thirty (30) days of the date Tenant takes possession of the Premises.

     (d) If Tenant should fail to perform any of its obligations hereunder with respect to repairs and
maintenance within ten (10) days after receipt of written notice form Landlord, then Landlord may,
if it so elects, in addition to any other remedies provided herein, effect such repairs and
maintenance. Any sums expended by Landlord in effecting such repairs and maintenance shall be due
and payable, on demand, together with interest thereon at the Maximum Rate from the date of each
such expenditure by Landlord to the date of repayment by Tenant.

     9. ALTERATIONS
AND IMPROVEMENTS. At the expiration or earlier termination of this Lease,
Tenant shall deliver up the Premises with all improvements located thereon (including all
mechanical, plumbing and HVAC systems) in good repair and condition, reasonable wear and tear
excepted, and shall deliver to Landlord all keys to the Premises. Tenant shall also remove

	 	 	 	 	 
	 

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all trash
and debris from the Premises and leave some in a “broom clean” condition. The cost and
expense of any repairs necessary to restore the condition of the Premises to the condition in which
they are to be delivered to Landlord shall be borne by Tenant. Tenant will not make or allow to be
made any alterations or physical additions in or to the Premises without the prior written consent
of Landlord, which consent shall not be unreasonably withheld as to non-structural alterations. As
a condition to Landlord’s consent to any non-structural alterations, Landlord may require that
Tenant furnish to Landlord such information as Landlord may reasonably request in order to assist
Landlord in making the determination as to whether or not such alterations may be made, including,
but not limited to, the plans and specifications for the proposed alteration and the identity of
Tenant’s architect, engineer and contractor to perform the work. If Landlord does not approve or
disapprove the proposed non-structural alteration within thirty (30) days after Landlord’s receipt
of such information, then it shall be deemed that Landlord has approved the Tenant’s request for
the non-structural alteration, in which case Tenant shall proceed with due diligence to complete
the alteration in accordance with the plans and specifications submitted to Landlord and in
accordance with all applicable laws, rules and ordinances and regulations. All alterations,
additions or improvements (whether temporary or permanent in character) made in or upon the
Premises, either by Landlord or Tenant, shall be Landlord’s property on expiration or earlier
termination of this Lease and shall remain on the Premises without compensation to Tenant. All
furniture, movable trade fixtures and equipment installed by Tenant may be removed by Tenant at the
expiration or earlier termination of this Lease if Tenant so elects, and shall be so removed if
required by Landlord, or if not so removed shall, at the option of Landlord, become the
property of Landlord. All such installations, removals and restoration shall be accomplished in a
good, workmanlike manner so as not to damage the Premises or the primary structure or structural
qualities of the Building, the other improvements or the plumbing, electrical lines or other
utilities.

     10. ASSIGNMENT
AND SUBLETTING. Tenant shall not assign this Lease, or allow it to be
assigned, in whole or in part, by operation of law or otherwise or mortgage or pledge the same, or
sublet the Premises, or any part thereof, without the prior written consent of Landlord and in no
event shall any such assignment or sublease ever release Tenant from any obligation or
liability hereunder. No assignee or sublessee of the Premises or any portion thereof may assign or
sublet the Premises or any portion thereof. Landlord shall not unreasonably withhold its consent to
any assignment or subletting, but may condition such consent upon such matters as Landlord deems
reasonable, including, but not limited to, the financial condition of such proposed assignee or
subtenant(s) being equal to or greater than the financial condition of Tenant as of the full
execution of this Lease and the reputation and operations of the proposed assignee or subtenant(s).

     If the Tenant desires to assign or sublet all or any part of the Premises, it shall so notify
Landlord at least thirty (30) days in advance of the date on which Tenant desires to make such
assignment or sublease. Tenant shall provide Landlord with a copy of the proposed assignment or
sublease, and such information as Landlord might request concerning the proposed assignee or
subtenant(s) to allow Landlord to make informed judgments as to the financial condition, reputation,
operations and general desirability of the proposed assignee or subtenant(s).

     Notwithstanding the above prohibition against the assignment and subletting, Tenant may upon thirty
(30) days prior written notice to Landlord, assign this Lease to a surviving entity following
Tenant’s merger therein (so long as the surviving entity has a financial net worth equal to or
greater than Tenant’s net worth immediately prior to such merger, the assignee expressly assumes
Tenant’s obligations hereunder and the use or the Premises is not changed) or assign or sublet the
Premises or any part thereof to its parent corporation or one of its wholly owned subsidiaries or
an “affiliate”. As used herein, an “affiliate” is an entity that “controls”, “controlled by” or
“under common control with” the Tenant.

     In the event of the transfer and assignment by Landlord of its interest in this Lease and the
Premises, and provided the transferee or assignee expressly assumes Landlord’s obligations under
this Lease, Landlord shall thereby be released from any future obligations hereunder, and Tenant
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to look
solely to such Successor in interest of the Landlord for performance of such future
obligations; provided, however, that Landlord, acknowledges and consents to the placing of
liens and other financing statements on inventory that will be stored in the Premises in the
ordinary course of Tenant’s business.

     11. LIABILITY. Landlord shall not be liable to Tenant or Tenant’s employees, agents,
patrons or visitors, or to any other person whomsoever, for any injury to person or damage to
property on or about the Premises, resulting front and/or caused in part or whole by the negligence
or misconduct of Tenant, its agents, servants or employees, or of any other person entering upon
the Premises, or caused by the Building or other improvements becoming out of repair, or caused by
leakage of gas, oil, water or steam or by electricity emanating from the Premises, or due to any
cause whatsoever, except injury to persons or damage to property the sole cause of which is the
gross negligence or willful misconduct of Landlord, and Tenant hereby covenants and agrees that it
will at all times indemnify and hold safe and harmless the Premises, the Landlord, Landlord’s
agents and employees from any loss, liability, claims, suits, costs, expenses, including without
limitation attorney’s fees and damages, both real and alleged, arising out of any such damage or
injury. The provisions of this paragraph shall survive the
expiration or earlier termination of this Lease. Tenant shall procure and maintain throughout the
term of this Lease a policy or policies of insurance, at its sole cost and expense, insuring
Landlord, Landlord’s managing agent and Tenant against all claims, demands or actions arising out
of or in connection with: (i) the Premises; (ii) the condition of the Premises; (iii) Tenant’s
operations in and maintenance and use of the Premises; and (iv) Tenant’s liability assumed under
this Lease, the limits of such policy or policies to be in the amount of not less than
$2,000,000.00 per occurrence in respect of injury to persons (including death) and damage or
destruction to property, including loss of use thereof. All such policies shall be procured by
Tenant from responsible insurance companies reasonably satisfactory to Landlord. Certificates
evidencing such coverage, together with receipts evidencing payment of premiums therefor, shall be
delivered to Landlord prior to the Commencement Date of this Lease. Not less than fifteen (15) days
prior to the expiration date of such coverage, certificates evidencing the renewal thereof (bearing
notations evidencing the payment of renewal premiums) shall be delivered to Landlord. Such
certificates shall further provide that not less than thirty (30) days written notice shall be
given to Landlord before such coverage may be canceled or changed.

     12. MORTGAGES. Tenant accepts this Lease subject to any deeds of trust, security interests
or mortgages which might now or hereafter constitute a lien upon the Premises and to deed
restrictions, zoning ordinances and other building and fire ordinances and governmental regulations
relating to the use of the Premises. Provided Tenant is furnished a written non-disturbance
agreement (providing, in part, that so long as Tenant shall continue to perform all of the
covenants and conditions of this Lease, that Tenant’s right of possession of the Premises pursuant
to this Lease will be recognized), Tenant (i) shall at any time hereafter, on demand, execute any
instruments, releases or other documents that may be required by any mortgagee for the purpose of
subjecting and subordinating this Lease to the lien of any such deed of trust, security interest or
mortgage and (ii) agrees to attorn to any mortgages, trustee under a deed of trust or purchaser at
a foreclosure sale or trustee’s sale as Landlord under this Lease. With respect to any deed of
trust, security interest or mortgage hereafter constituting a lien on the Premises, Landlord, at
its sole option, shall have the right to waive the applicability of this paragraph so that this
Lease will not be subject and subordinate to any such deed of trust, security interest or mortgage.
Either Landlord or Tenant shall upon request by the other, execute and deliver from time to time,
one or more instruments certifying that this Lease is in full force and unmodified (or if modified
stating the date and nature of each modification), the date through which the Basic Rental has been
paid, the unexpired term of this Lease, and such other matters pertaining to this Lease as may be
requested by such party. In connection with any subsequent deeds of trust, security
interests or mortgages, which Landlord desires to place upon the Premises, Tenant shall not be
obligated to agree to any changes to this Lease in connection therewith. Furthermore, Landlord
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other use restrictions affecting the Premises without Tenant’s written consent.

     13. INSPECTION. Landlord and Landlord’s agents and representatives shall have the
right to enter upon and inspect the Premises at any reasonable time during business hours, for the
purpose of ascertaining the condition of the Premises or in order to make such repairs as may be
required or permitted to be made by Landlord, and Landlord’s agents and representatives shall have
the right to enter upon the Premises at any reasonable time during business hours for the purpose
of showing the Premises and shall have the right to erect on the Premises a suitable sign
indicating the Premises are available for lease (during the final 180 days of the term of this
Lease) or for sale.

     14. CONDEMNATION. If the whole or any substantial part of the Premises (including, but not
limited to, 15% of the Building or parking area) should be taken for any public or quasi-public use
under governmental law, ordinance or regulation, or by right of eminent domain, or by private
purchase in lieu thereof and the taking would prevent or materially interfere with the use of the
Premises for the purposes contemplated by the Permitted Use, this Lease shall terminate and the
Basic Rental shall be abated during the unexpired portion of this Lease, effective when the
physical taking of said Premises shall occur. If part of the Premises shall be taken for any public
or quasi-public use under any governmental law, ordinance or by right of eminent domain, or by
private purchase in lieu thereof, and this Lease is not terminated as provided in this paragraph,
this Lease shall not terminate but the Basic Rental payable hereunder during the unexpired portion
of this Lease shall be reduced to such extent as may be fair and reasonable under all of the
circumstances.

     In the event of any such taking or private purchase in lieu thereof, Landlord and Tenant shall each
be entitled to receive and retain such separate awards and/or portion of lump sum awards as may be
allocated to their respective interests in any condemnation proceedings.

     15. INSURANCE,
FIRE OR OTHER CASUALTY. Landlord agrees to maintain an “all risk” insurance
policy covering the Leasehold Improvements in an amount equal to the “replacement cost” thereof as
such term is defined in the Replacement Cost Endorsement to be attached thereto, insuring against
the perils of fire, lightning, vandalism, malicious mischief and loss of rent, extended by a
Special Extended Coverage Endorsement to insure against all other risks of direct physical loss,
such coverages and endorsements to be as defined, provided and limited in the standard bureau forms
prescribed by the insurance regulatory authority for the State in which the Premises are situated
for use by insurance companies admitted in such state for the writing of such insurance or risks
located within such state. Subject to the provisions of this paragraph, such insurance shall be for
the sole benefit of Landlord and under its sole control. Tenant agrees to pay to Landlord
Landlord’s cost of maintaining such insurance, together with such other insurance as Landlord deems
reasonable and prudent. Said payments shall be made to Landlord immediately upon presentation to
Tenant of Landlord’s statement setting forth the amount due. In the event any such amount is not
paid within twenty (20) days after the presentation to Tenant of the amount so due, the unpaid
amount shall bear interest at the Maximum Rate from the date of such presentation until paid by
Tenant. Any payment to be made pursuant to this paragraph with respect to the year in which this
Lease expires or otherwise terminates shall bear the same ratio to the
payment which would be required to be made for the full year as the part of such year covered by
the term of this Lease bears to a full year.

     If the Leasehold Improvements should be damaged or destroyed by fire, tornado or other casualty,
Tenant shall give immediate written notice thereof to Landlord and Landlord shall, at its sole cost
and expense, proceed with reasonable diligence to rebuild and repair such improvements to
substantially the condition in which they existed prior to such damage or destruction, except
Landlord shall not be required to rebuild, repair, or replace any part of the partitions, fixtures,
additions and other improvements which may have been placed in, on or about the Premises by Tenant
and except that Tenant shall pay to Landlord, upon demand, any applicable deductible amount
specified under Landlord’s insurance. The Rent payable hereunder, except to

	 	 	 	 	 
	 

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the extent
covered by insurance, shall in no event relate by reason of damage or destruction.

     If any improvements situated on the Premises should be damaged or destroyed by any casualty
other than a peril covered by the insurance to be provided hereunder, Tenant shall at its sole cost
and expense thereupon proceed with diligence to rebuild and repair such improvements to
substantially the condition in which they existed prior to such damage or destruction subject to
Landlord’s approval of the plans and specifications for such
rebuilding and repairing.

     Notwithstanding anything herein to the contrary, in the event (i) that there are less than four (4)
years remaining on the Lease Term at the time the Premises are damaged for destroyed (and Tenant
does not elect to extend the Lease Term as hereafter provided) and (ii) the holder of any
indebtedness secured by a mortgage or deed of trust covering the Building or the Premises requires
that the insurance proceeds be applied to such indebtedness, then Landlord shall have the right to
terminate this Lease by delivering written notice of termination to Tenant within fifteen (15) days
after such requirement is made by any such holder, whereupon all rights and obligations hereunder
(other than those which survive the termination of this Lease) shall cease and terminate. If,
however, there are more than four (4) years remaining on the
Lease Term at the time the Premises
are damaged or destroyed (or if less than four (4) years remain but the Lease Term is extended as
here after provided), then the insurance proceeds in case of loss or damage shall be applied on the
account of the obligation of Landlord to restore the damage or destruction pursuant to this
paragraph 15.

     In the event (A) less than four (4) years remain on the Lease Term at the time the Premises are
damaged or destroyed and (B) the holder of any indebtedness secured by a mortgage or deed of trust
covering the Building or the Premises requires that the insurance proceeds be applied to such
indebtedness, then the Tenant shall have the option, which shall be exercised (if at all) within
thirty (30) days after Tenant receives notice of the occurrence of items (A) and (B) and Landlord’s
determination of the “fair rental value” of the Premises as hereinafter set forth, to extend the
Lease Term (without affecting Tenant’s options to further extensions pursuant to paragraph 45
hereof) to that date which is four (4) years following the date of the damage or destruction to the
Premises. In such case, the Basic Rental for that period of time extending beyond the Expiration
Date (as set forth in paragraph 1[d] hereof) shall be the “fair rental value” of the Premises at
the time of the casualty, as determined by Landlord in its sole but reasonable discretion after
evaluating, among other things, the prevailing rental rates for buildings of similar quality, size,
utility and location.

     16. HOLDING
OVER. Should Tenant, or any of its successors in interest, hold over the
Premises, or any part thereof, after the expiration of the Lease Term, unless otherwise agreed in
writing, such holding over shall constitute and be construed as tenancy from month to month only,
at a Basic Rental equal to the Basic Rental payable for the last month of the term of this Lease
plus twenty-five percent (25%) of such amount. The holding over by Tenant, or any of its
successors, for any part of a month shall entitle Landlord to collect the Rent called for under
this paragraph for the entirety of such month. The provisions of this paragraph shall not be
construed as Landlord’s consent for the Tenant to hold over.

     17. TAXES
ON TENANT’S PROPERTY. Tenant shall be liable for all taxes levied or assessed
against personal property, furniture or fixtures placed by Tenant in the Premises. If any such
taxes for which Tenant is liable are levied or assessed against Landlord or Landlord’s property and
if Landlord elects to pay the same or if the assessed value of Landlord’s property is increased by
inclusion of personal property, furniture or fixtures placed by Tenant in the Premises, and
Landlord elects to pay the taxes based on such increase, Tenant shall pay to Landlord upon demand
that part of such taxes for which Tenant is primarily liable hereunder; provided, however,
Landlord shall first give Tenant written notice of such taxes, and Tenant shall have the
opportunity to pay and/or contest the payment of such taxes.

	 	 	 	 	 
	 

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     18. EVENTS
OF DEFAULT. The following event shall be deemed to be events of default by
Tenant under this Lease:

     (a) Tenant shall fail to pay any of the Basic Rental or Additional Rent hereby reserved and
such failure shall continue for a period of ten (10) days after the date such payment was due.

     (b) Tenant shall fail to comply with any term, provision or covenant of this Lease, other than the
payment of Rent, and shall not cure such failure within thirty (30) days after written notice
thereof to Tenant (provided, however, if Tenant commences the cure within such 30 day period and
diligently pursues such cure, Tenant shall be afforded an additional period of time to effect such
cure as is reasonably necessary, but in no event will the total cure
period exceed 90 days).

     (c) Tenant shall make a general assignment for the benefit of creditors.

     (d) Tenant shall file a petition under any section or chapter of the United States Bankruptcy
Code, as amended, or under any similar law or statute of the United States or any State thereof; or
Tenant shall be adjudged bankrupt or insolvent in proceedings filed against Tenant thereunder and
such adjudication shall not be vacated or set aside within ninety (90) days.

     (e) A receiver or trustee shall be appointed for all or substantially all of the assets of Tenant
and such receivership shall not be terminated or stayed within ninety (90) days.

     19. REMEDIES. Upon the occurrence of any event of default specified in paragraph 18 hereof,
and after the expiration of any applicable notice and cure period, Landlord shall have the option
to pursue any one or more of the following remedies without any notice or demand whatsoever:

     (a) Terminate this Lease, in which event Tenant shall immediately surrender the Premises to
Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages
in Rent, enter upon and take possession and expel or remove Tenant and any other person who may be
occupying said Premises or any part thereof, without being liable for prosecution or any claim for
damages thereof; and Tenant agrees to pay to Landlord on demand the amount of all loss and damage
which Landlord may suffer by reason of such termination, whether through inability to relet the
Premises on satisfactory terms or otherwise, including the loss of Rent for the remainder of the
Lease Term.

     (b) Enter upon and take possession of the Premises and expel or remove Tenant and any other person
who may be occupying the Premises or any part thereof, without being liable for prosecution or any
claim for damages therefor, and if Landlord so elects, relet the Premises on such terms as Landlord
shall deem advisable and receive the Basic Rental thereof; and Tenant agrees to pay to Landlord on
demand any deficiency that may arise by reason of such reletting for the remainder of the Lease
Term. Landlord need not give Tenant any further written notice whatsoever of Landlord’s intent to
take possession of the Premises and expel or remove Tenant, and Landlord shall have the right to
change the locks on any door of the Premises without notifying Tenant of the name, address or
telephone number of an individual or company from whom a new key may be obtained, nor shall
Landlord have any obligation to provide a new key to Tenant until such time as all events of
default have been cured and Tenant has provided to Landlord additional security for, or further
assurances of, Tenant’s future performance of all Tenant’s obligations arising under this Lease;
such security and assurances to be satisfactory to Landlord in the exercise of Landlord’s sole and
absolute discretion.

     (c) Enter upon the Premises, without being liable for prosecution or any claim for damages
therefor, and do whatever Tenant is obligated to do under the terms of this Lease; and Tenant
agrees to reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting
compliance with Tenant’s obligations under this Lease, and Tenant further agrees that

	 	 	 	 	 
	 

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Landlord shall not be liable for any damages resulting to the Tenant from such action.

     (d) Pursue the statutory Landlord’s lien for Rent which is not waived by anything contained
herein, except for the Landlord’s Agreement (as hereinafter defined).

     No re-entry or taking possession of the Premises by Landlord shall be construed as an election on
its part to terminate this Lease, unless a written notice of such intention be given to Tenant.
Notwithstanding any such reletting or re-entry or taking possession, Landlord may at any time
thereafter elect to terminate this Lease for a previous default. Pursuit of any of the foregoing
remedies shall not preclude pursuit of any of the other remedies herein provided or any other
remedies provided by law, nor shall pursuit of any remedy herein provided constitute a forfeiture
or waiver of any Rent due to Landlord hereunder or of any damages accruing to Landlord by reason of
the violation of any of the terms, provisions and covenants herein contained. Landlord’s acceptance
of Rent following an event of default hereunder shall not be construed as Landlord’s waiver of such
event of default. No waiver by Landlord of any violation or breach of
any of the terms, provisions, and covenants herein contained shall be deemed or construed to
constitute a waiver of any other violation or breach of any of the terms, provisions, and covenants
herein contained. Forbearance by Landlord to enforce one or more of the remedies herein provided
upon an event of default shall not be deemed or construed to constitute a waiver of any other
violation or default. The loss or damage that Landlord may suffer by reason of termination of this
Lease or the deficiency from any reletting as provided for above shall include the expense of
repossession and any repairs or remodeling undertaken by Landlord following possession. Should
Landlord at any time terminate this Lease for any default, in addition to any other remedy Landlord
may have, Landlord may recover from Tenant all damages Landlord may incur by reason of such
default, including the cost of recovering the Premises and the loss of Rent for the remainder of
the Lease Term. It is expressly agreed that Landlord shall have no obligation or duty to mitigate
damages, and Tenant hereby waives and relinquishes any right or claim for mitigation of damages.

     20. SURRENDER OF PREMISES. No act or thing done by the Landlord or its agents during the
term hereby granted shall be deemed an acceptance of a surrender of the Premises, and no agreement
to accept a surrender of the Premises shall be valid unless the same be made in writing and
subscribed by the Landlord.

     21. ATTORNEYS’
FEES. If on account of any breach or default by Tenant in Tenant’s
obligations under this Lease it should be necessary or appropriate for Landlord to bring any action
under this Lease or to enforce or defend any of Landlord’s rights hereunder, then Tenant agrees in
each and any such case to pay to Landlord a reasonable attorneys’ fee.

     22. LANDLORD’S
LIEN. In addition to the statutory landlord’s lien, Landlord shall have,
at all times, a valid security interest to secure payment of all Rent and other sums of money
becoming due hereunder from Tenant, and to secure payment of any damages or loss which Landlord may
suffer by reason of the breach by Tenant of any covenant, agreement or condition contained herein,
upon all goods, wares, equipment, fixtures, furniture, improvements, accounts, contract rights,
chattel paper and other personal property of Tenant presently or which may hereafter be situated on
the Premises, and all proceeds therefrom, and such property shall not be removed therefrom without
the consent of Landlord until all arrearages in Rent as well as any and all other sums of money
then due to Landlord hereunder shall first have been paid and discharged and all the covenants,
agreements and conditions hereof have been fully complied with and performed by Tenant.
Notwithstanding the foregoing or any of the provision in this paragraph 22, Landlord acknowledges
that Tenant has granted a security interest to a lender (“Tenant’s Lender”) in connection with the
financing of its inventory, and Landlord agrees to execute the subordination agreement (the
“Landlord’s Agreement”), the form of which is attached
hereto as Exhibit “C”. Landlord will
endeavor to obtain Tenant’s Lender’s approval as to the form and substance of the Landlord’s
Agreement within thirty (30) days following the final execution of this Lease, failing which,
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its option
either (i) terminate this Lease or (ii) waive the Landlord’s lien herein contained,
together with any statutory lien. Landlord shall have the right to negotiate and make all such
changes to the Landlord’s Agreement as the Landlord and the Tenant’s Lender may mutually agree to
provided that such changes do not adversely affect Tenant’s rights hereunder. Upon the occurrence
of an event of default by Tenant, Landlord may, in addition to any other remedies provided herein
(but subject to the Landlord’s Agreement), enter upon the Premises and take possession of any and
all goods, wares, equipment, fixtures, furniture, improvements, accounts, contract rights, chattel
paper and other personal property of Tenant situated on the Premises, without liability for
trespass or conversion, and sell the same at public or private sale, with or without having such
property at the sale, after giving Tenant reasonable notice of the time and place of any public
sale or of the time after which any private sale is to be made, at which sale the Landlord or its
assigns may purchase unless otherwise prohibited by law. Unless otherwise provided by law, and
without intending to exclude any other manner of giving Tenant reasonable notice, the requirement
of reasonable notice shall be met if such notice is given in the manner prescribed in this Lease at
least five (5) days before the time of sale. The proceeds from any such disposition, less any and
all expenses connected with the taking of possession, holding and selling of the property
(including reasonable attorneys’ fees and other expenses), shall be applied as a credit against the
indebtedness secured by the security interest granted in this paragraph. Any surplus shall be paid
to Tenant or as otherwise required by law, and the Tenant shall pay any deficiencies forthwith.
Upon request by Landlord, Tenant agrees to execute and deliver to Landlord a financing statement in
form sufficient to perfect the security interest of Landlord in the aforementioned property and
proceeds thereof under the provisions of the Uniform Commercial Code in force in the State of
Texas. The statutory lien for Rent is not hereby waived, the security interest herein granted being
in addition and supplementary thereto.

23.
MECHANIC’S LIEN. Tenant shall have no authority, express or implied, to create, place
or allow any lien or encumbrance of any kind or nature whatsoever upon, or in any manner to bind,
the interest of Landlord in the Premises or to charge the Rent payable hereunder for any claim in
favor of any person dealing with Tenant, including those who may furnish materials or perform labor
for any construction or repairs, and each such claim shall attach to, if at all, only the leasehold
interest granted to Tenant by this instrument. Tenant covenants and agrees that it will pay or
cause to be paid all sums legally due and payable by it on account of any labor performed or
materials furnished in connection with any work performed on the Premises on which any lien is or
can be validly and legally asserted against its leasehold interest in the Premises or the
improvements thereon and that it will save and hold Landlord harmless from any and all loss, cost
or expense based on or arising out of asserted claims or liens against the leasehold estate or
against the right, title and interest of the Landlord in the Premises
or under the terms of this
Lease.

24.
WAIVER OF SUBROGATION. Anything in this Lease to the contrary notwithstanding, the
parties hereto waive any and all rights of recovery, claim, action or cause of action, against each
other, their agents, partners, directors, officers, and employees, for any loss or damage that may
occur to the Premises hereby demised, or any improvements thereto, the Building or any improvements
thereto, by reason of fire, the elements, or any other cause which could be insured against under
the terms of standard fire and extended coverage insurance policies, regardless of cause or origin,
including negligence of the parties hereto, their agents, partners, directors, officers, and
employees.

25.
SIGNS. Except for any signage approved by Landlord in connection with the construction of the
Building and the Interior Tenant Improvements, and location, directional or address signage
reasonably required by Tenant for its delivery and shipping operations, Tenant shall have the right
to install signs upon the Premises only when first approved in writing by Landlord and subject to
any applicable governmental laws, ordinances, restrictions, regulations and other requirements.
Tenant shall remove all such signs upon the expiration or other termination of this Lease. Such
installations and removals shall be made in such manner as to avoid injury to or defacement of any
buildings or other improvements on the Premises, and

	 	 	 	 	 
	 

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Tenant shall repair any injury or defacement, including without limitation discoloration,
caused by such installation or removal.

     26. NOTICES. Each provision of this Lease, or of any applicable governmental laws,
ordinances, regulations, and other requirements with reference to the sending, mailing or delivery
of any notice, or with reference to the making of any payment by Tenant to Landlord, shall be
deemed to be complied with when and if the following steps are taken:

     (a) All Rent and other payments required to be made by Tenant to Landlord hereunder shall be
payable to Landlord in Dallas County, Texas, at Post Office Box 802087, Dallas, Texas 75380-2087,
or at such other address as Landlord may specify from time to time by written notice delivered in
accordance herewith.

     (b) Except as otherwise specifically set forth herein, any notice or document required to be
delivered hereunder shall be in writing and shall be deemed effective when delivered and shall be
deemed delivered when actually received, or, if earlier and whether or not received, when deposited
in the United States mail, postage prepaid, certified or
registered mail, return receipt requested, addressed to the parties hereto at the respective
addresses set out opposite their names below, or at such other address as they have theretofore
specified by written notice delivered in accordance herewith:

	 	 	 	 	 
	 

	 	LANDLORD:
	 	Centre Development Co., Inc., or its assigns
	 

	 	 	 	P. O. Box 802087
	 

	 	 	 	Dallas, Texas 75380-2087
	 
	 	 	 	 
	 

	 	With copy to:
	 	Stanley K. Barth
	 

	 	 	 	Andrews & Barth, P.C.
	 

	 	 	 	8235 Douglas Avenue, Suite 1120
	 

	 	 	 	Dallas, Texas 75225
	 
	 	 	 	 
	 

	 	TENANT:
	 	Sports Supply Group, Inc.
	 

	 	 	 	1901 Diplomat Drive
	 

	 	 	 	Farmers Branch, Texas 75234
	 
	 	 	 	 
	 

	 	With copy to:
	 	C. David Zoba
	 

	 	 	 	Hughes & Luce, L.L.P.
	 

	 	 	 	1717 Main Street, Suite 2800
	 

	 	 	 	Dallas, Texas 75201

     27. FORCE
MAJEURE. Whenever a period of time is herein prescribed for action to be taken
by Landlord or Tenant (except for the payment of Rent or with respect to any cure period
specifically set forth in paragraph 18 hereof), neither the Landlord nor Tenant shall be liable or
responsible for, and there shall be excluded from the computation for any such period of time, any
delays due to strikes, riots, acts of God, shortages of labor or materials, war, governmental laws,
regulations or restrictions or any other causes of any kind whatsoever which are beyond the control
of Landlord or Tenant, as the case may be.

     28. SEPARABILITY. If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws, then and in that event, it is the intention of the
parties hereto that the remainder of this Lease shall not be affected thereby.

     29. PERIODIC
PAYMENT OF REIMBURSABLE EXPENSES; ADJUSTMENTS. At
Landlord’s option, Landlord may estimate in advance the amount of
any taxes (other than ad valorem taxes, to which this paragraph 29 shall not apply) and
reimbursable maintenance expenses due from Tenant under this Lease (the “Reimbursable Expenses”)
for each calendar year during the Lease Term, and the same shall be payable monthly or quarterly,
as Landlord shall designate during each twelve (12) month period of the Lease Term on the same day
as Basic Rental is due hereunder, with an adjustment to be made between the parties at a later date
as hereinafter provided. As soon as practicable following the end of each calendar year, but no
later than the first day of May, beginning with the end of the first calendar year in which such
election is made, Landlord shall submit to Tenant a statement setting forth the exact

	 	 	 	 	 
	 

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amount of the Reimburse i.e Expenses for the calender year just completed. Further, Landlord
shall notify Tenant of the difference, if any, between the actual amount of the Reimbursable
Expenses for the calendar year just completed and the estimated amount of the Reimbursable Expenses
(which was paid in accordance with this paragraph) for such year. Such statement shall also set
forth the amount of the estimated Reimbursable Expenses for the new calendar year computed in
accordance with the foregoing provisions. To the extent that the actual Reimbursable Expenses for
any period covered by such statement is greater than the estimated amounts which Tenant previously
paid during the calendar year just completed, Tenant shall pay to Landlord the difference within
ten (10) days following receipt of said statement from Landlord. To the extent that the actual
Reimbursable Expenses for the period covered by the statement is less than the estimated payment
previously paid by Tenant during the calendar year just completed, Landlord shall credit the
difference against the Tenant’s estimated payment of Reimbursable Expenses for the current calendar
year and such credit will be applied to the next payment or payments due from Tenant to Landlord.
In addition, until Tenant receives such statement, Tenant’s payment of the Reimbursable Expenses
for the new calendar year shall continue to be paid at the rate for the previous calendar year, but
Tenant shall commence payment to Landlord of the monthly or quarterly installments (as the case may
be) of Reimbursable Expenses on the basis of the new statement beginning on the first installment
date following the date upon which Tenant receives such statement. If the statement reflects a
change in the reimbursement amount, such difference shall be adjusted by increasing or decreasing
the first reimbursement payment after the statement is given in order to bring the reimbursement
amount for the new calendar year current as of such date.

     30. QUIET ENJOYMENT. Landlord represents, warrants and covenants that it has full right
and lawful authority to enter into and perform Landlord’s obligations under this Lease for the full
term hereof, subject to the provision of paragraph 42 hereof. Provided Tenant has performed all of
the terms, covenants, agreements and conditions of this Lease, including the payment of Rent, to be
performed by Tenant, Tenant shall peaceably and quietly hold and enjoy the Premises and the
appurtenances appertaining thereto for the term hereof, without hindrance from Landlord, subject
to the terms and conditions of this Lease.

     31. EXISTENCE OF BROKER. Tenant represents and warrants that it has not contacted or
dealt with any real estate broker in connection with the execution of this Lease other than George
Clark (the “Broker”). Landlord will be responsible for the payment of a commission to the Broker
pursuant to a separate written agreement.

     Tenant agrees to indemnify and hold harmless Landlord against all liabilities and costs (including
but not limited to attorney’s fees) incurred by Landlord as a result of Tenant’s breach of any
covenant, agreement, warranty or representation contained in this paragraph.

     Landlord represents and warrants that it has not contacted or dealt with any real estate broker in
connection with the execution of this Lease (other than the Broker), and Landlord agrees to
indemnify and hold Tenant harmless against all liabilities and costs (including, but not limited to
attorney’s fees) incurred by Tenant as a result of Landlord’s breach of any covenant, agreement,
warranty or representation contained in this paragraph.

     32. TENANT’S REMEDIES. In the event Landlord defaults in the performance of any of its
obligations to Tenant hereunder, or breaches any warranty or representation, express or implied, to
Tenant in connection with this Lease or the Premises, Tenant shall have no right of set-off against
payments due to Landlord hereunder and shall have no right to terminate this Lease, and Tenant
hereby waives such remedies, and Tenant’s sole remedy shall be to bring suit against Landlord for
damages. It is expressly agreed that the obligations of Landlord hereunder are independent of
Tenant’s obligations. Landlord shall have no personal liability to Tenant for any such default or
breach by Landlord, and have no personal liability to Tenant for any such default or breach by
Landlord, and Tenant specifically agrees to look solely to Landlord’s interest in the Premises for
payment of any damages suffered by Tenant. Notwithstanding the foregoing, if Landlord fails to
perform any of its obligations under this Lease and Tenant recovers a

	 	 	 	 	 
	 

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money judgment against Landlord, such judgment may be satisfied out of (i) the proceeds produced
upon execution of such judgment and levy thereon against Landlord’s interest in the Premises and
the land situated thereunder, (ii) the rents or other income from the Premises receivable by
Landlord, and (iii) the consideration received or receivable by Landlord from any sale or other
disposition (including a condemnation or conveyance in lieu thereof), after the date of the default
or breach that gave rise to such judgment, of all or any part of Landlord’s interests in the
Premises. The foregoing provisions shall not relieve Landlord from the performance of any of
Landlord’s obligations under this Lease, but shall only limit Landlord’s liability in the case of
recovery of a judgment against it, nor shall the foregoing provisions limit or otherwise affect
Tenant’s right to obtain injunctive relief or specific performance or avail itself of any other
right or remedy that this Lease or the law may accord Tenant. Pending resolution of any controversy
hereunder (as evidenced by a final, nonappealable order issued by a court of competent
jurisdiction), Tenant shall continue to pay to Landlord all sums which are and become due to
Landlord hereunder, without deduction or set-off. Tenant hereby expressly waives and disclaims any
lien or claim which Tenant has or may have in and to any property belonging to the Landlord or on
the Rent due to the Landlord under this Lease. If Landlord shall fail to perform any of the terms,
provisions, covenants or conditions to be performed by it pursuant to this Lease, and any such
failure shall, if it relates to a matter which is not of an emergency nature, remain uncured for a
period of thirty (30) days after Tenant shall have given Landlord notice of such failure (or such
longer period of time as is necessary to effect the cure provided Landlord commences the cure
within said thirty (30) day period and proceeds diligently thereafter), or if in Tenant’s judgment
such failure relates to a matter which is of an emergency nature, then Tenant shall have the right
to perform any such term, provision, covenant or condition and the full amount of the reasonable
cost and expenses entailed, shall be owing by Landlord to Tenant within thirty (30) days following
Landlord’s receipt of Tenant’s request for payment, supported by invoices and paid receipts, but in
no event (except as expressly provided in this paragraph 32) shall
Tenant have the right to deduct any portion of the amount thereof from any Rent then due or
thereafter coming due hereunder.

     33. ESTOPPEL CERTIFICATES. Tenant agrees to furnish from time to time (but not more often
than twice per year) when requested by Landlord, the holder of any deed of trust, mortgage, or
other instrument of security, or the lessor under any ground lease or underlying lease covering all
or any part of the Premises or the improvements therein or the land situated beneath the
Premises, or any interest of Landlord therein, a certificate signed by Tenant confirming and
containing such factual certifications and representations reasonably deemed appropriate by the
party requesting such certificate, and Tenant shall, within ten (10) days following receipt of said
proposed certificate from Landlord, return a fully executed copy of said certificate to Landlord.

     34. NOTICE TO LENDER. If the Premises or the Building or any part thereof are at any time
subject to a first mortgage or a first deed of trust or other similar instrument and this Lease or
the rentals are assigned to a mortgagee, trustee or beneficiary and the Tenant is given written
notice thereof, including the post office address of such assignee, then the Tenant shall not take
any action on account of any default on the part of the Landlord without first giving written
notice by certified or registered mail, return receipt requested, to such assignee, specifying the
default in reasonable detail, and affording such assignee a reasonable opportunity to perform, at
its election, for and on behalf of the Landlord.

     35. LANDLORD APPROVALS. Any approval by Landlord or Landlord’s architects and/or
engineers of any of Tenant’s drawings, plans and specifications which are prepared in connection
with any construction of improvements in the Premises shall not in any way be construed or operate
to bind Landlord or to constitute a representation or warranty of Landlord as to the adequacy or
sufficiency of such drawings, plans and specifications, or the improvements to which they relate,
for any use, purpose, or condition, but such approval shall merely be the consent of Landlord as
may be required hereunder in connection with Tenant’s construction of improvements in the Premises
in accordance with such drawings, plans and specifications.

	 	 	 	 	 
	 

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LEASE AGREEMENT — Page 18

 

 

     36. JOINT
AND SEVERAL LIABILITY. If there be more than one Tenant, the obligations
hereunder imposed upon Tenant shall be joint and several. If there be a guarantor of Tenant’s
obligations hereunder, the obligations hereunder imposed upon Tenant shall be the joint and several
obligations of Tenant and such guarantor and Landlord need not first proceed against the Tenant
hereunder before proceeding against such guarantor, nor shall any such guarantor be released from
its guaranty for any reason whatsoever, including without limitation, in case of any amendments
hereto, waivers hereof or failure to give such guarantor any notices hereunder.

     37. GENDER. Words of any gender used in this Lease shall be held and construed to include
any other gender, and words in the singular number shall be held to include the plural, unless the
context otherwise requires.

     38. CAPTIONS. The captions contained in this Lease are for convenience of reference only,
and in no way limit or enlarge the terms and conditions of this Lease.

     39. ENTIRE
AGREEMENT; AMENDMENTS; BINDING EFFECT. Neither party to this Lease has made or
relied on any representations, warranties, covenants or agreements with respect to the Premises or
any other matters affecting or relating to this Lease except as contained
herein and this Lease supersedes and replaces any prior representations, warranties, covenants or
agreements, whether written or oral, which may have been made by either party with respect to the
Premises or other matters contained in this Lease. This Lease contains the entire agreement between
the parties hereto with respect to the Premises and all other matters contained in this Lease and
this Lease may not be altered, changed or amended, except by instrument in writing signed by both
parties hereto. No provision of this Lease shall be deemed to have been waived by either party
unless such waiver be in writing signed by such party and addressed to the other party, nor shall
any custom or practice which may grow up between the parties in the administration of the terms
hereof be construed to waive or lessen the right of either party to insist upon the performance by
the other party in strict accordance with the terms hereof. The terms, provisions, covenants and
conditions contained in this Lease shall apply to, inure to the benefit of, and be binding upon the
parties hereto, and upon their respective successors in interest and legal representatives, except
as otherwise herein expressly provided.

     40. GOVERNING LAW AND PLACE OF PERFORMANCE. This Lease shall be governed by the laws of
the State of Texas. Tenant shall perform all covenants, conditions and agreements contained
herein, including but not limited to payment of Rent, in Dallas County, Texas. Any suit arising
from or relating to this Lease shall be brought in Dallas County,
Texas.

     41. GOOD STANDING/DUE AUTHORIZATION. Contemporaneous with the execution of this
Lease, Tenant shall provide to Landlord the following:

          (a) A copy of Tenant’s Good Standing, or similar certificate, issued by the Secretary of State of
the state of Tenant’s incorporation ;

          (b) A copy of Tenant’s Articles of Incorporation and Bylaws, and any amendments thereto or
modifications thereof, certified by the secretary or assistant secretary of Tenant;

          (c) Evidence that Tenant is qualified to do business in the State of Texas; and

          (d) A copy of the appropriate corporate resolutions, certified by the secretary or the assistant
secretary of the Tenant, evidencing the authorization of the Tenant to execute this Lease.

     42. TITLE ACQUISITION CONTINGENCY. The Tenant hereby acknowledges that at the time of
execution of this Lease, Landlord has not acquired title to the Premises, or any portion thereof.
The Landlord’s obligations arising under this Lease are expressly conditioned upon and subject to
Landlord acquiring title to the Premises. Prior to acquiring title to the Premises, Landlord may
assign its interest in this Lease to any person or entity acquiring title to the Premises or a
portion thereof. Landlord shall have no obligation or liability of whatever nature in the event
Landlord fails, for

	 	 	 	 	 
	 

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INDUSTRIAL
LEASE AGREEMENT — Page 19

 

 

whatever
reason, to acquire title to the Premises, or any portion thereof, except to
reimburse Tenant for its out-of-pocket costs in connection with the preparation and negotiation of
this Lease, including legal fees, not to exceed $3,000.00.

     43. MEMORANDUM
OF LEASE. Upon Tenant’s written request, Landlord shall cause a memorandum
of lease to be recorded in Dallas County, Texas at Tenant’s expense.

     44. COUNTERPARTS. This Lease, and any written instrument modifying or amending this Lease,
may be executed in several counterparts, each of which shall be deemed an original and all of which
shall constitute one and the same instrument.

     45. RENEWAL
OPTIONS. Landlord hereby grants Tenant two (2) options to renew this Lease,
each option to be for a period of sixty (60) months, for a total of one hundred twenty (120) months
in the event both renewal options are exercised. Each said renewal option shall be exercised by
Tenant notifying Landlord thereof in writing not more than two hundred ten (210) and at least one
hundred eighty (180) days prior to the expiration of the then current lease or renewal term, as the
case may be. In the event a renewal agreement has not been executed at least one hundred twenty
(120) days prior to the expiration date of the current lease or renewal term, the option shall
automatically become null and void. Each such renewal shall be
subject to all of the terms and
conditions of this Lease except that (i) the Basic Rental payable during each renewal term shall be
as set forth below and (ii) no further renewal option shall exist during the second renewal term.
It shall be a condition to Tenant’s exercising any renewal option herein granted that (y) Tenant
not be then in default under this Lease and (z) Tenant shall have previously exercised the
immediately preceding renewal option, if any, so that the second renewal option may not be
exercised if Tenant has failed to exercise the first renewal option.

     The Basic Rental for each renewal term shall be based on the then prevailing rental rates for
properties of equivalent quality, size, utility and location in the Dallas/Forth Worth market, with
the length of the lease term and the credit worthiness of the Tenant taken into account.

     Upon notification from Tenant of its intent to exercise each renewal option, Landlord shall, within
fifteen (15) days thereafter, notify Tenant in writing of the Basic Rental for the applicable
renewal term; Tenant shall, within fifteen (15) days following receipt of same, notify Landlord in
writing of the acceptance or rejection of the proposed Basic Rental. In the event of rejection by
Tenant, the Basic Rental for the applicable renewal term shall be determined as follows:

     (a) Within fifteen (15) days following notification of rejection, Landlord and Tenant shall each
select an arbitrator who shall be a Licensed Texas real estate broker having a minimum of five (5)
years experience in leasing industrial space and being a member of the North Chapter of the Texas
Society of Office and Industrial Realtors (or its successor organization); provided, however,
neither party shall be entitled to select an arbitrator to whom that party has paid a real estate
commission or fee within the prior two (2) year period of time. Notice shall be given to the other
party of the name of the arbitrator selected. If either Landlord or Tenant fails to appoint such
an arbitrator within the allocated time, the arbitrator appointed by the other party shall make the
determination of the Basic Rental and this determination shall be final and binding on both
parties.

     (b) If both Landlord and Tenant appoint an arbitrator in accordance with the provisions above and
the two arbitrators cannot agree upon a Basic Rental for the renewal term within thirty (30) days
following their appointment, the two arbitrators shall forthwith select a third disinterested
and qualified arbitrator having like qualifications and each of the original arbitrators will
immediately submit his or her judgment as to the appropriate Basic Rental in writing to the third
arbitrator. Within ten (10) days after such submittal, the third arbitrator shall make the
determination of the Basic Rental for such renewal period and the determination of the third
arbitrator shall

	 	 	 	 	 
	 

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be
final and binding on both parties. In the event the two arbitrators appointed by the Tenant and
Landlord cannot agree upon a third arbitrator, then the third arbitrator shall be appointed by the
then President of the North Chapter of the Texas Society of Office and Industrial Realtors (or its
successor organization). The Basic Rental agreed to by the two appointed arbitrators or, if
applicable, the Basic Rental determined by the third arbitrator shall be final and binding upon the
parties hereto. Landlord and Tenant shall each bear the expense of their arbitrator and the expense
of a third arbitrator, if needed, shall be shared equally by both parties.

Executed by Landlord this 25th day of April, 1994.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 
	 	 	CENTRE DEVELOPMENT CO., INC.	 	 
	 	 	a Texas corporation	 	 
	 
	 

	 	By:
	   /s/ Al Blaine	 	 
	 

	 	 	 	 	 	 
	 	 	Printed Name: AL BLAINE	 	 
	 	 	Title: Vice President	 	 

Executed by Tenant this 22nd day of April, 1994.

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	TENANT:	 	 
	ATTEST:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	SPORTS SUPPLY GROUP, INC.	 	 
	 	 	 	 	 	 	a Delaware corporation	 	 
	                                          
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	By:
	/s/ Peter Blumenfeld	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Printed Name: PETER BLUMENFELD	 	 
	 	 	 	 	 	 	Title: President / COO	 	 

	 	 	 	 	 
	 

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INDUSTRIAL LEASE AGREEMENT — Page 21

 

 

EXHIBIT “A”

Lot 4, Block 1

BEING a tract of land out of the Willam H. Pulliam Survey, Abstract No. 1171, Dallas Country,
Texas, situated in Farmers Branch, Texas, and being all of Lot 4, Block 1, Plat Revision of Block
1, Final Plat showing Lots 1, 2, 3, and 4 Valwood, Park Farmers
Branch • Phase One as recorded in
Volume 84168, Page 3293 of the Plat Records of Dallas County, Texas
and being more particularly
described as follows:

BEGINNING
at a 1/2-inch found iron rod in the north line of Diplomat Drive (70 feet wide), said
point being South 89 degrees 18 minutes 52 seconds West, a distance of 30.00 feet, from the
intersection of said north line extended with the west line of
Benchmark Drive (160 feet wide);

THENCE
South 89 degrees 18 minutes 52 seconds West, along said north line, a distance of 257.78
feet to a 1/2-inch set iron rod for the point of curvature of a circular curve to the left having
radius of 435.00 feet;

THENCE Westerly, along said north line, and along said curve through a central angle of 23 degrees
51 minutes 44 seconds, an are distance of 181.17 feet to a 1/2-inch set iron rod for the point of
tangency;

THENCE
South 65 degrees 27 minutes 08 seconds West, along said north
Line, a distance of 81.69 feet
to a P.K nail found in a railroad tie for a corner said corner being on the Carrollion City Limit
line;

THENCE North 0 degrees 49 minutes 52 seconds West, along said line, a distance of 747.26 feet to a
1/2-inch found iron rod for a corner;

THENCE
North 89 degrees 18 minutes 52 seconds
East,  a distance of
540.36 feet to a l/2-inch found iron rod for a corner said corner being on said west line of Benchmark Drive;

THENCE
South 0 degrees 41 minutes 08 seconds East, along said west line, a distance of 647.03 feet
to a 1/2-inch found iron rod for the point of curvature of a circular curve to the right having a radius of 30.00
feet;

THENCE Southeasterly and Southwesterly, along said curve through a central angle of 90 degrees 00
minutes 00 seconds, an are distance of 47.12 feet to the point of tangency and the POINT OF
BEGINNING AND CONTAINING 371,224 square feet or 8.522 acres of land more or less.

 

 

EXHIBIT “B”

 

 

EXHIBIT “B”

DESIGN CRITERIA 

Sports Supply Group, Inc.

GENERAL

	1.	 	Total buildable area is 180,841 square feet.
	 
	2.	 	Approximately 4,000 square feet will be air conditioned office space and the balance will be
warehouse area. The office area will be a configuration and layout as decided by Sports Supply
Group, Inc.
	 
	3.	 	Land area for the project consists of approximately 8.522 acres.
	 
	4.	 	Parking shall be provided per local city code requirements. Per code, the facility requires
193 parking spaces.

SITEWORK

	1.	 	Horizontal Sitework

	 	a.	 	A soils report shall be obtained from a qualified soils engineer.
	 
	 	b.	 	All vegetation shall be removed from areas that will be under building, paving and sidewalks,
Sitework shall be graded to drain away from buildings,
	 
	 	c.	 	All automobile paving shall be 5" thick reinforced concrete over compacted subgrade. Concrete
shall have a compressive reinforcing of number 3 reinforcing bars at
18" on center. Truck area
paving shall be 6" thick reinforced concrete with number 3
reinforcing bars at 18" on center.
Paving provided shall be as shown on the site plan.
	 
	 	d.	 	All sidewalks shall be 4" thick reinforced concrete over
3" sand cushion and shall receive a
broomed finish.
	 
	 	e.	 	Concrete approaches shall be provided where shown and shall conform to City specifications.
	 
	 	f.	 	Concrete curbs shall be provided adjacent to all sidewalks, around planting areas, and at
all paving perimeters.

	2.	 	Landscaping

	 	a.	 	Landscape design, soil preparation, plants, hardscape, and labor shall be included.
	 
	 	b.	 	A lawn sprinkler system shall be installed at all planting areas. Adequate freeze-proof hose
bibs shall be provided off of this system.
	 
	 	c.	 	A $90,000 allowance shall be provided for the design and installation of the landscaping and
irrigation described in “a” and “b” above.

 

 

Design Criteria

Page 2

	3.	 	Site Lighting

	 	a.	 	Exterior lighting shall be provided by the use of wall-mounted, 400 watt,
high-pressure sodium fixtures on the wall of the building.
	 
	 	b.	 	Recessed can downlights shall be provided in the office area entrance canopy soffits.

BUILDING

	1.	 	Excavation

	 	a.	 	All cut, fill, fine grading, and scraping of site shall be included.
	 
	 	b.	 	Any areas not covered by building or sitework shall be graded for proper drainage and
maintenance.

	2.	 	Foundation

	 	a.	 	Fill under building shall be as specified by testing engineer. The fill shall be placed in
loose lifts of approximately 6" layers and uniformly compacted to 95% standard proctor density at
near optimum moisture content or as directed by the engineer.
	 
	 	b.	 	The foundation shall consist of drilled and belled piers, carried to a suitable bearing
strata or a structural grade beam system as detailed in soils report. Piers shall be 3,000 p.s.i.
concrete and be reinforced as required by the engineer.

	3.	 	Floor Slabs

	 	a.	 	All concrete shall have maximum allowable slump of 5".
	 
	 	b.	 	Floor slabs shall be on grade with 5" thick 4,000 p.s.i.
reinforced concrete. Reinforcing
shall be #3s on 15" centers at approximately 2" from top of slab as required by the engineer.
Placement of concrete shall utilize a vibrating screed.
	 
	 	c.	 	Sawn joints shall be executed at optimum time to help reduce shrinkage cracking.
	 
	 	d.	 	A 10 mil polyethylene vapor barrier shall be installed under the floor slab at office areas.

 

 

Design Criteria

Page 3

	4.	 	Exterior Walls

	 	a.	 	The exterior walls of the building shall be load bearing, reinforced, site-fabricated
concrete panels. The concrete shall have a design strength of 4,000 p.s.i at 28 days.
The exterior side of the panels shall have an exposed aggregate finish.

	 	b.	 	Interior side of the concrete walls shall have all holes patched and have a smooth,
steel trowelled finish.

5. Structure

	 	a.	 	The roof structure shall consist of structural steel joist girders and bar joists,
supported by steel columns on the exterior bays, tilt-up concrete wall panels, and
structural steel framing.
	 
	 	b.	 	The clear height of the building shall be a minimum of 24' to the bottom of the
roof bar joists.
	 
	 	c.	 	Structural steel shall receive one shop coat of light gray
paint. After erection has
been completed, damaged, rusted or scraped metal areas shall be touched up with
same paint.
	 
	 	d.	 	Bay sizes shall be 40' x 40' through the interior of the building.

6. Roof Deck and Roofing

	 	a.	 	Roof deck shall be metal deck sloped at approximately 1/4" per foot.
	 
	 	b.	 	Roofing shall be a three-ply built-up roof utilizing one inch insulation board with
asphalt and gravel topping.
	 
	 	c.	 	Roof shall be drained by roof drains and interior downspouts. Overflow scuppers
shall be provided for emergency situations.
	 
	 	d.	 	Factory Mutual approved smoke exhaust skylights spaced in accordance with local
building codes.

7. Glass and Glazing

	 	a.	 	Fixed glass at office entrance areas shall be 1/4" tinted tempered float glass in
accordance with the City building codes. All other fixed glass shall
be 1/4" tinted float
glass.

 

 

Design Criteria

Page 4

8. Exterior Doors

	 	a.	 	The main office entrance door shall have 1/4" tinted tempered float glass set in
anodized aluminum storefront and have impact bars at 36" above each floor.
	 
	 	b.	 	Exterior personnel doors shall be provided to comply with City codes. These
exterior personnel doors shall be metal, hollow core doors.
	 
	 	c.	 	Steel channel sill protectors and 4' high steel channel jamb protectors shall be
provided at the truck door.
	 
	 	d.	 	Sixteen (16) 9' x 10' truck doors shall be provided.

9. Painting and Caulking

	 	a.	 	Painting and caulking shall include all exterior work complete.
	 
	 	b.	 	All exterior exposed steel, such as personnel doors, overhead doors, handrails, etc.,
shall be given one coat of primer and one coat of exterior paint.
	 
	 	c.	 	All concrete to be painted shall receive one coat of heavy textured paint such as
Dan-Tex or equal. Colors shall be as mutually agreed upon.
	 
	 	d.	 	All parking striping shall be 4" wide white painted lines, 18' long, approximately
9'0"
on center.

10. Plumbing

	 	a.	 	A 2" domestic water line and 6" sanitary sewer line shall be stubbed up into the
building.
	 
	 	b.	 	One water meter shall be provided to serve the domestic water and a second meter
shall be provided to serve the lawn sprinkler system.

11. Fire Sprinkler

	 	a.	 	The facility shall be provided with an ESFR Class IV fire protection sprinkler
system. The system shall be installed in compliance with Texas State Board of Insurance
requirements. The service line shall be sized to provide adequate volumes and pressures.
The system shall include all water mains, connections and meter requirements. Any
additions or modifications to this system shall be made a part of the tenant improvements
or as job extra.

 

 

Design Criteria

Page 5

12. Electrical

	 	a.	 	Electric service shall be coordinated with the utility company to provide for a pad
mounted 277/480 volt, three phase service transformer located adjacent to the building.

13. Ceilings

	 	a.	 	Ceilings in the shell building shall be unfinished and open to deck.

14. Interior Improvements

	 	a.	 	An allowance of $238,710.12/$1.32 per square foot shall be provided for tenant
improvements per Tenant’s requirements. Tenant improvement allowance to include office and
warehouse electrical, mechanical, ventilation, equipment and finishes.

 

 

EXHIBIT “C”

LANDLORD’S AGREEMENT

LANDLORD’S SUBORDINATION AGREEMENT

     THIS LANDLORD’S SUBORDINATION AGREEMENT (the “Agreement”) is entered
into by and among                                          (“Landlord”) and                                                              (“Tenant”) and                                           (“Secured
Party”).

WITNESSETH:

     WHEREAS, Landlord is the owner of certain improved real property located
at
                      ,
                    ,
                                        
County, Texas (the
“Premises”), which are now leased in whole or in part by Tenant; and

     WHEREAS, tenant has heretofore executed and delivered to Secured Party a Security Agreement,
thereby granting unto Secured Party a security interest in the personal property listed on Exhibit
“A” attached hereto (the “Collateral”); and

     WHEREAS, the Collateral is located within the Premises or may be hereafter delivered or
installed within the Premises; and

     WHEREAS, the Secured Party has required as a condition of its acceptance of the Security
Agreement that the Landlord subordinate its landlord’s lien in and to the Collateral to the
Secured Party’s lien in and to the Collateral as granted by the Security Agreement.

     NOW THEREFORE, to assure the Secured Party a first lien in the Collateral, the parties hereto
agree as follows:

     1. Landlord hereby agrees with Secured Party that all the rights and liens in and to the
Collateral now or hereafter existing by virtue of all leases and demises from Landlord to Tenant
(including any contractual landlord’s lien and including the rights of landlord under the Texas
Statutory Owners of Buildings lien, as provided for by
Article 5238, Rev. Tex. Civ. St., as the
same may be amended) shall and by the same are hereby made subordinate, subject and inferior to all
of the rights and liens of Secured Party in and to the Collateral.

     2. Landlord further agrees that none of the Collateral has or will be considered a part of the
realty to which the same has been attached or affixed or to which the same may be attached or
affixed at any time hereafter and that the same may be severed and removed by Secured Party from
the realty to which it is now or may hereafter become attached or affixed upon the foreclosure of
the security interest or upon the exercise of the rights, powers or privileges granted to Secured
Party by the aforesaid Security Agreement. This Agreement applies only to the Collateral listed on
Exhibit “A” and shall not constitute a subordination of Landlord’s lien as to any
other personal property of Tenant.

     3. This Agreement is for the sole benefit of the Secured Party and not the Secured Party’s
assigns or successors. In the event Secured Party assigns its interest in the Collateral to
another party, it will be necessary to receive Landlord’s written acknowledgment of such assignment
before such third party may be protected by this Agreement.

     4. Should Tenant vacate the Premises or be depossessed from the

Premises by Landlord, any repossession of the Collateral by Secured Party or any approved
third party assignee shall be made only during normal business hours
of 9:00 A.M. through 4:00 P.M.
Monday through Friday and being a non-holiday. Also, Secured Party must give Landlord reasonable
notice of such repossession.

     5. Should repossession occur by Secured Party, Secured Party will be liable for any damage or
injury done to the Premises or to persons at the Premises occasioned by such repossession.

	 	 	 	 	 	 	 
	 

	 	 	 	Initial:
	 	 
	 

	 	EXHIBIT “C” — Page 1
	 	 	 	 

 

 

     6. Should
Tenant vacate the Premises or [ILLEGIBLE] dispossessed from the Premises by
Landlord, Secured Party agrees to remove the Collateral described herein within one (1) week
of receipt of written notice to remove same. Should Secured Party fail to remove the
Collateral within the time allowed, such Collateral may be disposed of by Landlord without any
risk, obligation or liability to Secured Party. Should Secured Party not remove the
Collateral within the time allowed and Landlord decides not to remove the Collateral, Secured
Party shall be liable for reasonable rental until the Collateral is removed.

     7. This Agreement shall be binding upon the parties hereto, their

 successors and assigns.

     EXECUTED at Dallas, Texas, this___day of___, 19___.

	 	 	 	 	 	 	 
	 

	 	landlord:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	Printed Name:	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	Address:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	TENANT:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	Printed Name:	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	Address:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	SECURED PARTY:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	Printed Name:	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	Address:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	 	 	Initial:
	 	 
	 

	 	EXHIBIT “C” — Page 2
	 	 	 	 

 

 

FINANCING
STATEMENT

Filing
Office: County Clerk,                    Dallas County, State of Texas

	 	 	 	 	 
	Debtor’s Name
and Address:

	 	SPORTS SUPPLY GROUP, INC.	 	 
	 

	 	1901 Diplomat Drive	 	 
	 

	 	Farmers Branch, Texas 75234	 	 
	 
	 	 	 	 
	Secured Party’s
Name
and Address:
	 	CENTRE DEVELOPMENT CO., INC.	 	 
	 

	 	P.O. BOX 802087	 	 
	 

	 	Dallas, Texas 75380-2087	 	 
	 
	 	 	 	 
	Date:

	 	April                     , 1994	 	 

Description
of Collateral:

     1. All goods, wares, equipment, fixtures, furniture, improvements, accounts, contract
rights, chattel paper and other personal property of Debtor presently, or which may
hereafter be, situated on or within those certain premises (hereinafter referred to as
the “Premises”) as described in that certain Industrial Lease Agreement (hereinafter
referred to as the “Lease”) dated April ___, 1994 between Secured Party, as Landlord, and
Debtor, as Tenant, situated in the City of Farmers Branch, Dallas County, State of Texas;
and

     2. All proceeds arising from any of the Collateral.

	 	 	 
	Record Owner:

	 	Secured Party
	 

	 	Collateral is or may include Fixtures

Filing Office: Secretary of State County Clerk, Dallas County, State of Texas

	 	 	 	 	 	 	 
	 

	 	DEBTOR:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SPORTS SUPPLY GROUP, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	Printed Name:	 	 	 
	 

	 	Title:
	 	 	 	 
	WITNESS:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

 

 

FINANCING
STATEMENT

Filing Office: Secretary of State, State of Texas

	 	 	 	 	 
	Debtor’s Name
and Address:

	 	SPORTS SUPPLY GROUP, INC.	 	 
	 

	 	1901 Diplomat Drive	 	 
	 

	 	Farmers Branch, Texas 75234	 	 
	 
	Secured Party’s Name
and Address:
	 	CENTRE DEVELOPMENT CO., INC.	 	 
	 

	 	P.O. Box 802087	 	 
	 

	 	Dallas, Texas 75380-2087	 	 
	 
	 	 	 	 
	Date:

	 	April ___, 1994	 	 

Description of Collateral:

     1. All goods, wares, equipment, fixtures, furniture, improvements,
accounts, contract rights, chattel paper and other personal property of Debtor
presently, or which may hereafter be, situated on or within those certain premises
(hereinafter referred to as the “Premises”) as described in that certain Industrial
Lease Agreement (hereinafter referred to as the “Lease”)
dated April ___, 1994 between
Secured Party, as Landlord, and Debtor, as Tenant, situated in the City of Farmers
Branch, Dallas County, State of Texas; and

     2. All proceeds arising from any of the Collateral.

	 	 	 
	Record Owner:

	 	Secured Party
	 

	 	Collateral is or may include Fixtures

Filing
Office: Secretary of State County Clerk, Dallas County, State of Texas

	 	 	 	 	 	 	 
	 

	 	DEBTOR:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SPORTS SUPPLY GROUP, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	Printed Name:	 	 	 
	 

	 	Title:
	 	 	 	 
	WITNESS:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

 

 

	 	 	 
	 

	 	13700 Benchmark Drive

Farmers Branch, Texas 75234

AMENDMENT
TO INDUSTRIAL LEASE AGREEMENT

     THIS AMENDMENT TO INDUSTRIAL LEASE AGREEMENT (the “Amendment”) is made and entered into by
and between CENTRE DEVELOPMENT CO., INC., a Texas corporation (“Landlord”) and SPORT SUPPLY
GROUP, INC., a Delaware corporation (“Tenant”).

RECITALS:

     A. Landlord and Tenant have heretofore entered into an
Industrial Lease Agreement executed by the Tenant on April 22,
1994, and executed by the Landlord on April 25, 1994 (the “Lease”)
respecting that certain real property described on Exhibit “A”
attached hereto and made a part hereof, together with the Building
and other improvements now or hereafter located thereon.

     B. The Lease provides for Landlord to construct and install
Leasehold Improvements in accordance with preliminary drawings and
design criteria attached to the Lease which, in part, provide for
a clear height of the building of twenty-four feet (24’) to the
bottom of the roof bar joists; and the Tenant has requested a
modification to the final plans and specifications to provide for
a twenty-eight foot (28’) clear height.

     C. Paragraph 5 of the Lease sets forth that the Basic Rental
has been computed by budgeting an Allowance of $238,710.12 for
Interior Tenant Improvements and should the total cost of the
Interior Tenant Improvements exceed the Allowance, the annual Basic
Rental shall be automatically increased by an amount equal to 10%
of such excess.

     D. The purpose of this Amendment is to (i) increase the
Basic Rental to account for the increased cost attributable to
raising the clear height of the Building and the excess costs
attributable to the Interior Tenant Improvements and (ii) clarify
the Tenant’s obligation for maintenance of the Premises, and (iii)
effect certain other modifications as expressly set forth herein.

	 	 	 	 
	AMENDMENT
TO INDUSTRIAL

	 	Initial:	 
	LEASE AGREEMENT — Page 1

	 	 	 

 

 

          NOW, THEREFORE, for and in consideration of the above recitals and the mutual covenants of the
parties hereto, Landlord and Tenant do hereby agree as follows:

1. Subparagraph 5b. of the Design Criteria attached as
Exhibit “B” to the Lease is hereby amended to read as follows:

“b. The clear height of the building shall be a minimum of 28’ to the bottom of the roof
bar joists.”

2. The additional cost of the Leasehold Improvements
attributable to raising the clear height of the Building is
$105,900.00.

3. As of the date of this Amendment, the excess of the total
cost of the Interior Tenant Improvements over the Allowance is
$87,000.00.

4. The term “Basic Rental”, as defined in subparagraph 1(e)
of the Lease, is hereby amended to be $45,612.14.

5. Paragraph 8 of the Lease is hereby amended to read, in
its entirety, as follows:

“8. REPAIRS AND MAINTENANCE.

     (a) Except as hereinafter expressly provided in this paragraph 8(a), Tenant shall at its own
cost and expense keep and maintain all parts of the Premises in good condition (reasonable wear and
tear and casualty damage excepted), promptly making all necessary repairs and replacements,
interior and exterior, ordinary and extraordinary, including but not limited to, windows, glass and
plate glass, doors, and special office entries, interior walls and finish work, floors and floor
coverings, downspouts, gutters, heating, air conditioning and ventilation systems, dock boards,
truck doors, dock bumpers, irrigation systems, paving, parking lot improvements, plumbing work and
fixtures, pest extermination, exterior lighting fixtures, regular removal of trash and debris,
regular mowing of any grass, trimming, weed removal, landscape replacement, general landscape
maintenance, keeping the parking areas, driveways, alleys and the whole of the Premises in a clean
and sanitary condition. Landlord shall, at its own cost and expense, keep and maintain the roof,
foundation and structural portions of the Building in good condition (except in the event of
casualty or other damage contemplated by paragraph 15 hereof). Tenant shall give immediate written
notice to Landlord of the need for repairs, and Landlord shall proceed within a reasonable time

	 	 	 	 
	AMENDMENT
TO INDUSTRIAL

	 	Initial:	 
	LEASE
AGREEMENT — Page 2

	 	 	 

 

 

after receiving such notice to make such repairs. Landlord’s liability hereunder shall be limited
to the cost of such repairs, and Landlord shall not be liable for consequential damages. Tenant
shall have no obligation to repair, maintain or contribute to Landlord’s expense of replacing,
repairing or maintaining the roof, foundation or other structural portions of the Premises.
Tenant’s maintenance obligations shall include any rail spur areas and any spur track serving the
Premises if Tenant, at any time during the Lease Term, makes use of any rail spur track. In this
regard, Tenant agrees to sign a joint maintenance agreement with the railroad company servicing
the Premises, if requested by the railroad company. Tenant shall not be obligated to repair any
damage caused by fire, tornado or other casualty covered by the insurance to be maintained by
Landlord pursuant to the provisions of this Lease, except that Tenant shall be obligated to repair
all wind damage to glass except with respect to tornado or hurricane damage.

     (b) In the event Tenant fails to perform or have performed
the following services after written notice from Landlord and a ten
(10) day opportunity to cure, Landlord reserves the right to
perform or have performed the paving and landscape maintenance,
landscape replacement, exterior painting, maintenance of exterior
lighting fixtures, and the maintenance of the irrigation systems
and common sewerage line plumbing which are otherwise Tenant’s
obligations under paragraph 8(a) above and in such event, Tenant
shall, in lieu of the obligations set forth under paragraph 8(a)
above with respect to such items, be liable to Landlord for the
reasonable cost and expense of same, including but not limited to,
the reasonable cost for mowing of grass; care of shrubs; landscape
replacement; general landscaping; maintenance (but not replacement)
of parking areas, parking lot improvements, driveways and alleys;
exterior repainting, maintenance of the exterior lighting fixtures
and the maintenance of the irrigation systems. In the event
Landlord is permitted by the terms of this Lease and elects to
perform or cause to be performed such work, Tenant shall pay when
due such costs and expenses.

     (c) Tenant shall, at its own cost and expense, enter into a
regularly scheduled preventive maintenance/service contract with a
maintenance contractor for servicing all hot water, heating and air
conditioning systems and equipment within or serving the Premises.
The maintenance contractor and the contract must be approved by
Landlord (which approval will not be unreasonably withheld ox
delayed). The service contract must include all services suggested
by the equipment manufacturer within the operation/maintenance
manual and must become effective (and a copy thereof delivered to

	 	 	 	 
	AMENDMENT
TO INDUSTRIAL

	 	Initial:	 
	LEASE
AGREEMENT — Page 3

	 	 	 

 

 

Landlord) within thirty (30) days of the date Tenant takes possession of the Premises.

     (d) If Tenant should fail to perform any of its obligations hereunder with respect to
repairs and maintenance within ten (10) days after receipt of written notice form Landlord, then
Landlord may, if it so elects, in addition to any other remedies provided herein, effect such
repairs and maintenance. Any sums expended by Landlord in effecting such repairs and maintenance
shall be due and payable, on demand, together with interest thereon at the Maximum Rate from the
date of each such expenditure by Landlord to the date of repayment by
Tenant.”

     6. The first sentence of Paragraph 11 of the Lease is hereby amended to read as follows:

     “Landlord shall not be liable to Tenant or Tenant’s employees, agents, patrons or visitors,
or to any person whomsoever, for any injury to person or damage to property on or about the
Premises, resulting from and/or caused in part of whole by the negligence or misconduct of Tenant,
its agents, servants or employees, or of any other person entering upon the Premises, or caused by
the Building or other improvements becoming out of repair, or caused by leakage of gas, oil, water
or steam or by electricity emanating from the Premises, or due to any cause whatsoever, except
injury to persons or damage to property the sole cause of which is the negligence, gross
negligence or willful misconduct of Landlord, and Tenant hereby covenants and agrees that it will
at all times indemnify and hold safe and harmless the Premises, the Landlord, Landlord’s agents
and employees from any loss, liability, claims, suits, costs, expenses, including without
limitation attorney’s fees and damages, both real and alleged, arising out of any such damage or
injury.”

     7. Paragraph 14 of the Lease is hereby amended by deleting the second grammatical paragraph
thereof and inserting in lieu thereof the following:

     “In the event of any such taking or private purchase in lieu thereof, Landlord shall be
entitled to receive the entire price or award from any such taking or private purchase in lieu
thereof without any payment to Tenant, and Tenant hereby assigns to Landlord Tenant’s interest, if
any, in such award. Landlord shall have full power and authority to negotiate with any public
authority and to direct and control any legal proceedings involving or related to any such taking
or private purchase in lieu thereof. Tenant shall have the right, to the extent that same shall
not

	 	 	 	 
	AMENDMENT
TO INDUSTRIAL

	 	Initial:	 
	LEASE
AGREEMENT — Page 4

	 	 	 

 

 

diminish Landlord’s award, to make a separate claim against the condemning authority (but not
Landlord) for such compensation as may be separately awarded or recoverable by Tenant for loss of
business or good will or for the taking of Tenant’s trade
fixtures, if a separate award for such
items is made to Tenant.”

     Except as amended hereby, the Lease shall remain unchanged and in full force and effect.

     EXECUTED by Landlord this 8th day of July, 1994.

	 	 	 
	 

	LANDLORD:
	 
	 	 
	 

	CENTRE DEVELOPMENT CO., INC.,
	 

	a Texas corporation
	 
	 	 
	 
	By 	/s/ 
	 	 	 
	 

	Printed Name: 
	 

	Title: 

     EXECUTED by Tenant this 8th day of July, 1994.

	 	 	 	 	 	 	 	 
	 	 	 	 	 	TENANT:
	 
	 	 	 	 	 	 	 
	 	 	 	 	 	SPORT SUPPLY GROUP,
INC.,

a Delaware corporation
	ATTEST:
	 	 	 	 	 
	 

	 	 	 	 	By:
	 	/s/ Peter Blumenfeld
	 

	 	 	 	 	 	 	 
	Printed Name:	 	 	Printed Name: Peter Blumenfeld
	 

	 	 	 	 	 	 	 
	Title:	 	 	 	 	Title: President/COO
	 

	 	 	 	 	 	 

	 	 	 	 	 
	AMENDMENT TO INDUSTRIAL

	 	Initial: 	 
	LEASE AGREEMENT — Page 5
	 	 	 	 

 

 

EXHIBIT
“C”

List of Landlord’s Unperformed Obligations

 

 

EXHIBIT
“D”

Insurance Certificates

 

 

SECOND AMENDMENT TO LEASE

          THIS SECOND AMENDMENT TO LEASE (this “AMENDMENT”) is entered into as of the 10th day of
June, 2004, by and between ProLogis (successor-in-interest to APT-Cabot Texas, Inc., a Delaware
corporation, as successor-in-interest to Centre Development Co., a Texas corporation) (the
“Landlord”) and Sport Supply Group, Inc., a Delaware corporation (the “Tenant”).

W I T N E S S E T H:

          WHEREAS, Landlord and Tenant have entered into a Lease, dated as of the 25th day
of April, 1994, as amended by the First Amendment to Industrial Lease Agreement dated as of the
8th day of July, 1994, pursuant to which Landlord leased to Tenant certain premises
located at 13700 Benchmark Drive, Farmers Branch, Texas, containing approximately 180,841 square
feet of space (such Lease, as heretofore and thereafter modified, being herein referred to as the
“Lease”).

          WHEREAS, Landlord and Tenant desire to extend the Term of the Lease on the terms and
conditions set forth below:

          NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Landlord and
Tenant agree as follows:

	1.	 	The Term of the Lease is hereby extended so that the expiration date of the Lease shall be
December 31, 2007 (the “Extension Period”).
	 
	2.	 	Effective February 1, 2005 and continuing through the Extension Period, the monthly Basic
Rental due and payable by Tenant in accordance with the terms of the Lease shall be as
follows:

	 	 	 	 	 
	 

	 	02/01/05-3/31/05:
	 	$0.00 *
	 

	 	04/01/05-12/31/07:
	 	$45,210.25 per month ($3.00 p.s.f./annum)

 

			
	 	* Tenant will continue to pay any and all Additional Rent during the free rent
period (February 1, 2005 — March 31, 2005) in accordance with the provisions of the
Lease, except as otherwise provided for herein.

	3.	 	Tenant shall be responsible for the payment of Additional Rent in accordance with the
provisions of the Lease. The parties hereby acknowledge and agree that Additional Rent shall
include, but not be limited to, certain operating expenses as described herein, and Tenant
shall be responsible for its pro rata share thereof. Further, the parties acknowledge that
such operating expenses are estimates only and Landlord makes no guaranty that such estimates
are accurate. Landlord shall provide Tenant within 90 days following the final day of the
calendar year Landlord’s itemized year-end common area maintenance reconciliation reports
which reference and include the operating expenses for such year. If Tenant’s total payments of such operating expenses for any year are
less than Tenant’s pro rata share of actual operating expenses for such year, then Tenant shall
pay the difference to Landlord within 30 days after demand, and if more, then Landlord shall
retain such excess and credit it against Tenant’s next payments or, if no further payments are
due, refund such excess to Tenant within 30 days after the expiration or termination of the
Lease.
	 
	4.	 	Tenant may make certain tenant improvements to the Premises
(“Tenant Improvements”) subject
to Landlord’s approval of the plans and specifications related thereto, such approval not to
be unreasonably withheld or delayed. Upon surrender of the Premises, all Tenant Improvements
shall remain on the Premises as Landlord’s property, except to the extent Landlord requires
removal at Tenant’s expense of any such items or Landlord and Tenant have otherwise agreed in
writing in connection with Landlord’s approval to any Tenant Improvements. Tenant shall repair
any damage caused by such removal.

Landlord shall contribute up to a maximum amount of $70,000 (the “TI Allowance”) toward those
certain Tenant Improvements which shall remain as Landlord’s property upon surrender of the
Premises, which such payment shall be made by Landlord to Tenant within 45 days following (i)
completion of the Tenant Improvements, (ii) Landlord’s receipt of Tenant’s invoice
substantiating the costs related thereto, (iii) Landlord’s receipt of final lien waivers from
all contractors and subcontractors who did work on the Tenant Improvements, and (iv) Landlord’s
receipt of a copy of the final permit approved by the applicable governing authority to the
extent required for such Tenant Improvements. Landlord shall be under no obligation to pay for
such Tenant Improvements to the Premises in excess of the TI Allowance. Further, such TI
Allowance shall only be available for Tenant’s use through December 31, 2004, and Tenant hereby
waives any and all rights to any unused portion of the TI Allowance remaining as of January 1,
2005.

	5.	 	Insofar as the specific terms and provisions of this Amendment purport to amend or modify or
are in conflict with the specific terms, provisions and exhibits of the Lease, the terms and
provisions of this Amendment shall govern and control; in all other respects, the terms,
provisions and exhibits of the Lease shall remain unmodified and in full force and effect.
	 
	6.	 	Tenant warrants that it has had no dealings with any broker or agent, other than Kurt
Griffin, Cushman & Wakefield (“CW”), in connection with this Amendment, and covenants
to pay, hold harmless and indemnify Landlord from and against any and all costs, expenses of
liability for any compensation, commissions, and charges claimed by any other broker or agent,
with respect to this Amendment or the negotiation thereof claiming by, through or under
Tenant. Landlord shall pay CW a commission in accordance with a separate agreement between
Landlord and CW.
	 
	7.	 	Any obligation or liability whatsoever of ProLogis which may arise at any time under the
Lease or this Amendment or any obligation or liability which may he incurred by it pursuant
to any other instrument, transaction or

Second Amendment to Lease

 

 

undertaking contemplated hereby, shall not be personally binding upon, nor shall resort for the
enforcement thereof be had to the property of its trustees, directors, shareholders,
officers, employees, or agents regardless of whether such obligation or liability is in the
nature of contract, tort or otherwise.

	8.	 	In Section 24 of the Lease, the words “including negligence of the parties hereto,
their agents, partners, directors, officers and employees” are hereby modified to read
“INCLUDING NEGLIGENCE HEREUNDER OF THE PARTIES HERETO, THEIR AGENTS, PARTNERS, DIRECTORS,
OFFICERS AND EMPLOYEES.

THIS SECTION RELEASES A PARTY FROM THE CONSEQUENCES OF ITS OWN NEGLIGENCE AS THE SAME RELATES TO
SUCH CAUSES WHICH COULD BE INSURED AGAINST UNDER SUCH INSURANCE POLICIES”.

	9.	 	In Section 26 of the Lease, the reference to “C. David Zoba” shall be replaced by a
reference to “Real Estate Section Head”.

               IN WITNESS WHEREOF, the parties hereto have signed this SECOND AMENDMENT TO LEASE as of the
day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	TENANT:	 	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Sport Supply Group, Inc.	 	 	 	ProLogis, a Maryland real estate investment trust	 	 
	 	 	a Delaware Corporation	 	 	 	 	 	 	 	 
	 
	 

	 	By:
	 	/s/ TM Babilla
	 	 	 	By:
	 	/s/ Eric D. Brown	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	Its: 	 	COO	 	 	 	Its:	 	 SENIOR VICE PRESIDENT	 	 

Second
Amendment to Leaseexv10w9

 

LEASE AGREEMENT

     THIS
LEASE AGREEMENT (hereinafter referred to as “Lease” or “Agreement),
dated this 28th day of July, 1989, is made by and between MERIT INVESTMENT PARTNERS,
L.P. , A Delaware limited partnership, hereinafter referred to as
“Lessor,” and SPORT SUPPLY GROUP,
INC., a Delaware corporation, hereinafter referred to as “Lessee.”

     Lessor hereby leases to Lessee, and Lessee does hereby lease from Lessor, subject to the terms
and conditions set forth herein, the real property described on Exhibit A attached hereto and made
part hereof, the land, the 137,670 square foot building and other improvements situated on said
property and the fixtures attached thereto and owned by Lessor (except those items listed on
Exhibit B which are owned by BSN Corp.), all of which is hereinafter collectively referred to as
the “Premises” together with all rights, easements,
appurtenances belonging or in anyway pertaining to the foregoing. It is the intention of Lessor and Lessee that this
Lease be a net Lease and that Lessee shall bear the cost of operating (including taxes, assessments
and dues), maintaining, repairing and insuring the Premises except as otherwise provided herein.

ARTICLE 1. TERM.

     1.01 INITIAL TERM.

     The term of this Lease shall commence on July 28, 1989, and end on July 31, 1999, unless
sooner terminated as herein provided.

ARTICLE 2. FIXED RENT & SECURITY.

     2.01
MINIMUM FIXED RENT.

	 	a.	 	Lessee shall pay to Lessor (at its offices at 14001 Dallas
Parkway, Dallas,
Texas 75240, or at such other place as Lessor may from time to time designate in
writing) as fixed rent for the Premises for the initial term of this lease, without
right of offset or deduction except as herein provided , the sum of Five Million Four
Hundred Ninety-Three Thousand Thirty-Five and No/100 Dollars ($5,493,035.00), payable
as follows:

(1) $43,595.50 each month commencing on the date hereof and
thereafter on the first day of August, 1989, through July 31, 1994.

(2) The minimum fixed rent shall increase during years 6-10 of the
term of this Lease starting August 1, 1994. The increased rent during years 6-10
shall be due and payable in the following amounts and for the following periods:

August 1,
1994, through July 31, 1999, $47,955.08, monthly.

If the term hereof commences on a day other than the first day of a calendar month,
or ends on a day other than the last day of a calendar month, rent for any such
partial month following the commencement of preceding the end of the term shall be
prorated by days.

b.
Rent paid after the day of the month on which such rent is due and payable shall be
deemed as late and delinquent. If fixed rent is not paid
on or before the fifth
(5th) day
after date on which the same is due and payable (“Grace Period”). Lessee shall pay a late
charge of $1,000.00. Further, Lessee agrees to pay a $25.00 charge for each returned check.
All such charges shall be secured as rent.

c. All monies received by Lessor shall be applied first to non-fixed rent obligations,
then to the fixed rent.

d. At its option, Lessor may, at any time following an Event of Default as defined in Article 8,
require all rent and other sums be paid by either cash, bank cashier’s check, or money order.
Notwithstanding any term or provision hereof, Lessor and Lessee agree that if all Events of
Default are subsequently cured, Lessee may continue the means of payment by corporate check.

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LESSEE’S RIGHT TO POSSESSION OF THE PREMISES AND ALL OF LESSOR’S OBLIGATIONS ARE EXPRESSLY
CONDITIONED UPON THE NON-EXISTENCE OF AN UNCURED EVENT OF DEFAULT. PAYMENT OF RENT AND ALL SUMS SECURED AS RENT, IS AN
INDEPENDENT COVENANT.

     2.02 SECURITY DEPOSIT.

     Lessee shall deposit with Lessor upon execution hereof $10.00 as
security for Lessee’s faithful performance of Lessee’s obligations hereunder.
If an Event of Default should occur, Lessor may use, apply or retain all or
any part of the deposit for the payment of any other sum to which Lessor may
become obligated by reason of such Event of Default, or to compensate Lessor
for any loss or damage which Lessor may suffer thereby. If Lessor so
uses or applies all or any portion of the deposit. Lessee shall
within ten (10) days
after written demand therefore deposit cash with Lessor in an amount
sufficient to restore said deposit to the full amount hereinabove stated and
Lessee’s failure to do so shall be a material breach of this Lease Agreement.
Lessor shall not be required to keep the deposit separate from its general
accounts. If there is not an Event of Default in existence two
(2) months prior to the expiration of the
initial term hereof, said deposit shall be credited against the
rental due hereunder for said last two (2) months of the initial term of the Lease. If Lessor shall file a voluntary petition in
bankruptcy or have an involuntary petition in bankruptcy filed against it
then Lessee shall have the right to a credit against Lessee’s obligations
hereunder. Any interest accruing on the security deposit shall belong to
Lessor.

     2.03 LESSOR’S LIEN.

     Lessor hereby agrees to subordinate its statutory landlord’s lien to the
lien of any person or entity providing financing to Lessee from time to time.
In furtherance thereof Lessor agrees to promptly execute such subordination
agreements as may be required by any such person or entity to further
evidence such subordination.

ARTICLE 3. USE OF PREMISES.

     3.01 IN GENERAL.

     Lessee is hereby permitted to use the leased Premises for any lawful
purpose. In connection with the use of and activities in and about the
Premises, Lessee, at its expense, will comply, and will cause its employees,
agents, and invitees to comply in all material respects with all applicable
laws and regulations of governmental agencies. Provided no Event of Default
is in existence, Lessee shall peaceable and quietly hold and enjoy the
Premises for the term hereof, without hindrance from Lessor or parties
claiming by, through or under Lessor.

     3.02 NO USE THAT INCREASES INSURANCE RISK.

     Lessee shall not use the Premises in any manner that will materially
increase risks covered by insurance on the building constituting a portion of
the Premises beyond the risks existing at this time or to cause cancellation
of any insurance policy covering the building. Lessee shall not keep, use,
or sell from Premises anything prohibited by the policy of fire insurance.
Lessee shall comply, at its own expenses, with all requirements of insurers
necessary to keep in force the fire and public liability insurance covering
the Premises. Lessee shall provide Lessor with a certificate of Lessee’s
liability insurance. Notwithstanding any provision herein, Lessee shall
secure and maintain all insurance coverage required by the terms hereof.

     3.03 SIGNS AND AWNINGS.

     Lessee agrees that he will not construct or place, or permit to be
constructed or placed, permanent signs, awnings, marquees, or other
structures projecting from the exterior of the Premises without Lessor’s
written consent thereto (which consent shall not be unreasonably withheld or
delayed by Lessor), other than those signs, awnings, marquees and
other structures in place as of the date hereof.

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ARTICLE 4. MAINTENANCE, REPAIR AND ALTERATIONS.

     4.01 CONDITIONS OF PREMISES.

     Lessee, having inspected the Premises, hereby accepts the Premises in their present condition, “AS
IS ,” “WHERE IS,” AND “WITH ALL FAULTS” AND LESSOR DOES NOT WARRANT OR MAKE ANY REPRESENTATION,
EXPRESSED OR IMPLIED, AS TO MERCHANTABILITY, QUALITY, CONDITION,
SUITABILITY, OR FITNESS FOR ANY PURPOSE WHATSOEVER. Notwithstanding the foregoing, Lessee shall commence
to remedy the items set forth in the correspondence from John H. Haynes & Associates, Incorporated
in Mr. Jeff Howle, Merit Equity Partners, Inc., dated
July 17, 1989, which items are indicated by
the initials of Lessee and Lessor thereon (collectively, the “Cure Items”), a copy of Such
correspondence being attached hereto as Exhibit “C”. Lessee shall commence the remedial action for
each Cure Item within a reasonable time (taking into consideration factors such as the urgency of
remedying the required Cure Item in question, the time period within which John H. Haynes &
Associates, Incorporated has recommended such Cure Item be remedied, the creditworthiness of BSN
Corp. and Lessee, and the unelapsed portion of the Lease term) after the execution of this Lease.
Lessee shall complete the remedial action for each Cure Item, to the
reasonable satisfaction of Lessor, within a reasonable period of time
after the commencement of the remedial action in question.

     4.02 LESSEE’S REPAIRS.

     Except as provided in paragraph 4.03, Lessee, shall keep the Premises in good condition and
repair (reasonable wear and tear excepted) including without limitation, the maintenance, repair
and replacement of such Portions of the Premises as may constitute doors, windows, locks, interior
partitions, roof, interior and exterior walls, or other structural portions, floor covering,
ceilings, light fixtures (including bulbs), glazing, heating and air-conditioning system, plumbing,
fire and irrigation sprinklers, pipes, electrical wiring and conduits, parking lots, truck courts,
loading areas and any and all other machinery and equipment now or hereafter constituting the
Premises. At the expiration or earlier termination of this Lease, Lessee shall deliver the
premises in good order and condition (less normal wear and tear ), broom clean and free of material
contamination caused by all toxic or hazardous substances from Lessee’s use or occupancy of the
Premises. In the event Lessee should neglect to so maintain the Premises, Lessor shall have the
right after ten (10) days written notice to Lessee (except in the case of emergency), but not the
obligation, to cause such repairs to be made and any reasonable costs
therefore shall be paid by the Lessee to Lessor, as additional rent, upon demand, on the next
rental installment date.

     4.03
LESSOR’S REPAIRS AND RENT ABATEMENT.

     See
2nd Amendment for changes to this paragraph 4.03

     4.04
ALTERATIONS, ADDITION AND IMPROVEMENTS.

     Lessee shall not make any structural alterations, additions, or improvements to the Premises
without the prior written consent of Lessor, which consent shall not be unreasonably withheld or
delayed. Lessee shall have the right at all times to make
non-structural alterations, additions and
improvements without Lessor’s consent, including but not
limited to the right to erect or install furniture and trade fixtures and to remove at the
termination of this lease such items, provided there is no Event of Default in existence, but
Lessee shall repair any damage cause by such removal, prior to the termination of this lease or
promptly thereafter. Notwithstanding anything to the contrary contained herein, Lessee shall be
entitled to remove

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at any time, or at the expiration or earlier termination of this Lease, all personal property,
furniture and trade fixtures that can be removed without material damage to the Premises, said
removable trade fixtures  to include, without limitation, the machinery and equipment utilized by
Lessee and BSN Corp. in their manufacturing and other operations at the Premises, display racks
and similar items used in Lessee’s and BSN Corp.’s business to store, handle or display Lessee’s
and BSN Corp.’s goods.

     4.05 MECHANIC’S LIENS.

     Lessee will not permit any mechanic’s lien to be placed upon the Premises, and in case of the
filing of any affidavit claiming a lien through work commissioned by Lessee, Lessee will cause it
to be released or bonded within twenty (20) days after notice thereof from Lessor to Lessee. If
such affidavit of lien remains of record or unbonded for twenty (20) days or more after notice
thereof from Lessor, Lessor shall have the option of causing such
claims to be released, and any amounts so paid shall be due from
Lessee to Lessor and shall be repaid to
Lessor as additional rent, on the next rental installment date.

     4.06 LESSOR’S ENTRY.

     Lessor reserves the right to enter the Premises at reasonable times upon prior reasonable written
notice to Lessee (or in case of an emergency, at nay time) to inspect, to perform required
maintenance and repair in accordance with the terms hereof, or to display the premises to
prospective tenants, lenders, and investors, or to enforce any provision of this Agreement;
provided that Lessor agrees to take all such actins without
unreasonably interfering with Lessee’s and BSN’s (BSN Corp.
is also known as “BSN”)business operations.

     4.07 SURRENDER.

     On the last day of term, or any option period, Lessee shall surrender the Premises to Lessor
and those items listed on Exhibit B in the same condition as
when received, broom clean, ordinary
wear and tear and damage by fire or other casualty excepted, provided, however, that with respect
to damage by fire or other casualty, if such damage exists as of the last day of term, hereof,
Lessor shall receive proceeds from Lessee’s insurance carrier recoverable with respect to repair or
restoration of such restoration required pursuant to the terms hereof and Lessor will execute all
instruments necessary to recover these proceeds.

ARTICLE 5. OBLIGATIONS OF LESSOR AND LESSEE.

     5.01 TAXES.

     Lessee shall be liable for all ad valorem taxes levied or assessed against the Premises and
all personal property, furniture, or fixtures placed by Lessee in the Premises (including without limitation, ad
valorem taxes on the land, building improvements and other property described in Exhibit “B”
attached hereto). Lessee shall pay all such taxes to the appropriate taxing authority before such
taxes become delinquent unless Lesseee elects, at its sole expense, to contest any such taxes by
appropriate proceedings diligently conducted on good faith. All such
taxes shall be prorated by the Lessor and  Lessee with respect to the tax years in which this lease terminates . Lessee
will pay that part of the taxes as is attributable to the portion of the tax year covered by this
lease.

     5.02 UTILITIES.

     Lessee shall pay for all utilities including electricity, gas, water, sanitary sewer, trash
removal and association dues.

     5.03 DAMAGE OR DESTRUCTION.

     If the premises and/or the property described on Exhibit “B” attached hereto should be totally
destroyed by fire, tornado, or other casualty, of if they should be so damaged that rebuilding or
repairs cannot reasonably be completed within 120 working days from the date of the occurrence of
the damage, either Lessor or Lessee may terminate this Lease by written notice to the other party
given within thirty (30) days after the occurrence of the casualty
in question, whereupon this Lease shall terminate and all building

4

 

insurance proceeds payable as it relates to damage to the Premises shall be retained by Lessor and
rent shall be abated for the unexpired portion of this Lease, effective as of the date of said
occurrence. In the event Lessor or Lessee does not terminate, Lessee may retain all insurance
proceeds and shall repair all of the damaged or destroyed portion of the Premises at Lessee’s sole
cost and expense and the Lease shall continue for the remainder of the unexpired term with
abatement of rent during the period the Premises are rendered untenantable.

     Each party hereto waives any and every claim which arises or may arise in its favor against
the other party hereto during the term of this Lease or any renewal or extension thereof for any
and all loss of, or damage to, any of its property located within or upon, or constituting a part
of, the Premises, which loss or damage is covered by valid and collectible fire and extended
coverage insurance policies. Such mutual waivers shall be in addition
to, and not in limitation or derogation of, any other waiver or
release contained in this Lease
with respect to any loss of, or damage to, property of the parties hereto.

     In
as much as such mutual waivers will preclude the assignment of any aforesaid claim by way of
subrogation or otherwise to an insurance company (or any other
person), each party hereby agrees
immediately to give to each insurance company which has issued to it
policies of fire and extended
coverage insurance, written notice of the terms of such mutual waivers, and to cause such insurance
policies to be property endorsed, if necessary, to prevent the invalidation of such insurance
coverages by reason of such waivers. If the Premises and/or the property described on Exhibit “B”
attached hereto should be damaged by fire, tornado or other casualty but such that rebuilding or
repair can reasonably be completed within 120 working days from the date of the occurrence of the
damage, then:

          (a) Lessee
shall give immediate notice thereof to Lessor;

          (b) all building insurance payable with respect to such damage or casualty shall be made
available to Lessor for the purpose of repairing and restoring the portion of the Premises and the
property described on Exhibit “B” attached hereto so
damaged;

          (c) Lessor shall at its sole cost and expense proceed with reasonable diligence to rebuild and
repair such portion of the Premises and the property described on Exhibit “B” attached hereto
substantially the condition in which they existed prior to such
damage or casualty, except that Lessor shall not be required to
rebuild, repair or replace any part of the
partitions, fixtures, additions and other improvements which may have been placed in, on or about
the Premises by Lessee subsequent to the execution of this Lease; and

          (d) Lease shall be entitled to a reasonable abatement of rent during any period when the
Premises are untenantable due to said fire, tornado or other casualty. Lessee understands that
Lessor will carry no insurance on the Property that will cover the Property or Lessee’s property,
and that Lessee shall carry all such insurance.

     5.04 INSURANCE.

     Notwithstanding the foregoing, througout the term of this Lease, Lessee shall maintain
a policy or policies of building insurance naming Lessor as the loss payee with the premiums
paid in advance by Lessee issued by

insurance companies insuring the Premises against all risks of loss equal to the full
replacement cost of the building as of the date of the loss with a deductible of not more
than $10,000.00.

     Throughout the term of this Lease, Lessee shall maintain a policy or policies of
insurance insuring both Lessee and Lessor for any and all liabilities for injury to or death
of any person or persons and for damage to or destruction of property occasioned by or
arising out of or in connection with the use and occupancy of the Premises the limits of
such policy or policies to be in an amount of not less than $1,000,00
per occurrence in respect of personal injury and in an amount not
less than $1,000,000 in respect of property
damaged or destroyed.

     All insurance policies required hereunder shall be written by solvent insurance
companies reasonably acceptable to Lessor duly licensed o transact business in the State of
Texas, and shall provide for at least ten (10) day’s

5

 

written notice prior to cancellation thereof and Lessee shall provide certificates evidencing the renewals
of each policy at least thirty (30) days prior to the expiration of the respective policy
terms.

     5.05 CONDEMNATION.

     If during the terms of the Lease or any extension or renewal thereof, any portion of the
Premises is condemned or held under threat of condemnation, at the option of the Lessor or Lessee
this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease,
effective as of the taking of said taking of said Premises by the condemning authority. Lessor
shall receive the entire award from any such taking, and Lessee shall have no claim thereto (except
for the value of any property owned by Lessee or BSN), or for the value of any unexpired term of
this Lease.

ARTICLE
6. INDEMNITY.

     6.01 HOLD HARMLESS.

     Lessee agrees to indemnity and hold Lessor harmless against any and all claims, demands,
damages, costs and expenses, including reasonable attorney’s fees, arising from the conduct of
Lessee’s business or its use of the Premises or from any breach on the part of Lessee of any
conditions of this Lease, or from any act or negligence of Lessee, its agents, servants,
contractors, employees, guests, licensees of invitees in or about the Premises, in the case of any
claim, action or proceeding brought or asserted against Lessor by reason of any such claim. Lessee,
upon notice from Lessor, covenants to defend such claim, action or proceeding by counsel acceptable
to Lessor. Lessee, as a material part of the consideration to Lessor,
hereby assumes all risks of
damage to property or injury to persons in, upon or about the
Premises, from any cause other than
Lessor’s negligence or intentional misconduct, or the negligence or intentional misconduct of
Lessor’s agents, contractors, licensees, invitees, guests, servants or employees. Lessee herby
waives all claims in respect thereof against Lessor other than claims for which Lessor is liable
under the preceding sentence. Lessee shall give prompt notice to
Lessor in case of casualty or accidents in the Premises. Lessor, or its agents servants or
employees, shall not be liable for any loss or damage to persons or property resulting from fire,
explosion, break-ins, or burglaries, gas, electricity, water or rain which may leak from any part
of the building or from the roof, street or subsurface or from any other place resulting from
dampness or any other cause whatsoever except for loss or damage attributable to the negligence or
intentional misconduct of Lessor or its agents, servants, employees, contractors, invitees,
licensees and /or guests. Lessor shall not be liable for interference with the light or air except
for loss or damage attributable to the negligence or intentional misconduct of Lessor or its
agents, servants, employees, contractors, invitees, licensees and/or guests or for any latent defect
in the Premises whether known or unknown to Lessor. Lessor agrees to indemnify and hold Lessee
harmless against any and all claims, demands, damages, costs and expenses, including reasonable
attorneys’ fees, arising from the activities of Lessor on or about the Premises, and for any breach
on the part of Lessor of any conditions of this Lease, and from any act or negligence of Lessor,
its agents, servants, contractors, employees, guest, licenses or invitees in or about the Premises,
in the case of any claim, action or proceeding brought or asserted against Lessee by reason of any
such claim. Lessor, upon notice from Lessee covenants to defend such claim, action or proceeding by
counsel acceptable to Lessee.

ARTICLE
7. ASSIGNMENT AND SUBLEASE.

     7.01 LESSOR’S CONSENT REQUIRED:

     Except as otherwise provided herein, Lessee shall not voluntarily or by operation of law
assign, transfer, sublet, or otherwise transfer or encumber any part of Lessee’s interest in this
Lease or in the Premises, without Lessor’s prior written consent which consent shall not be
unreasonably withheld or delayed. Any such attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void. Notwithstanding anything to the contrary contained
herein, Lessee shall have the right to assign this Lease or subject the Premises (or portion
thereof), without Lessor’s consent, to any subsidiary or affiliate of Lessee. If there is an
assignment or sublease and Lessor approves such assignment or sublease

6

 

in writing in accordance with the terms herein, then the Lessee, in its capacity as Lessee shall be relieved of its obligations hereunder.

     7.02 EXPENSE OF LESSOR.

     In the event Lessee shall assign or sublet the Premises, other than to a
subsidiary or an affiliate of Lessee, or request the consent of Lessor to any
assignment or subletting or if Lessee shall request the consent of Lessor for
any act that Lessee proposes to do then Lessee shall pay Lessor’s reasonable
out-of-pocket expenses, including Attorney’s fees, incurred in connection
therewith in the event Lessor shall consent thereto.

     7.03 ASSIGNMENT AND TRANSFER BY LESSOR.

     Lessor expressly reserves the right to assign, transfer or convey any or
all of its interest in this Agreement, the Guaranty and/or the Premises

provided that notice is given to Lessee.

ARTICLE 8. DEFAULT AND REMEDIES.

     8.01
LESSEE’S DEFAULTS.

     The occurrence of any one or more of the following events shall be an “Event of Default”:

(1) The use of the Premises for an illegal use. So long as Lessee
continues to pay rent and otherwise comply with the terms hereof
abandonment of the Premises by Lessee shall not be an Event of Default.

(2) The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee herein, as and when due, where
such failure shall continue for a period of (10) days after written
notice thereof from Lessor to Lessee.

(3) The failure by Lessee to observe or perform any of the provisions
of this Lease to be observed or performed by Lessee, other than
described in paragraphs (1) and (2) above, where such failure shall
continue for a period of thirty (30) days after written notice hereof
from Lessor to Lessee provided, however, that should such failure not be
susceptible to cure within such thirty (30) days, Lessee shall be allowed
such additional time as is necessary for such cure if Lessee commences
such cure within such thirty (30) day period and thereafter diligently
proceeds to completion.

(4) (i) The making by Lessee of any general assignment, or general
arrangement for the benefit of creditors; (ii) the filing by or against
Lessee of a petition to have Lessee adjudged a bankrupt or for
reorganization or arrangement under any law relating to bankruptcy or
insolvency; (iii) the appointment of a trustee or receiver to take
possession of substantially all of Lessee’s assets located at the
Premises or of Lessee’s interest in this Lease; or (iv) the attachment,
execution or other judicial seizure of substantially all of Lessee’s
assets located at the Premises or of Lessee’s interest in this Lease;
provided, however, if any of the actions set forth in subparagraphs
(i)–(iv) above occur involuntarily (i.e., are taken by a third party
rather than by Lessee itself) then an Event of Default will not be
deemed to have occurred if any such filing, appointment, attachment,
execution or seizure is dismissed or stayed within sixty (60) days.

     8.02 LESSOR’S REMEDIES.

     If an Event of Default occurs, Lessor shall have the following remedies
in addition to its other rights and remedies at law or equity:

(1) Re-entry. Lessor may re-enter the Premises immediately and take
possession of the Premises and remove all Lessee’s personnel and
property therefrom. Lessor may store the property in a public warehouse
or at another place of his choosing at Lessee’s expense or to Lessee’s
account. Any such action by Lessor shall not be a conversion or a
breaking of the peace in any manner.

(2) Termination. Lessor may terminate the Lease after five (5) days
prior written notice of such termination to Lessee. Re-entry only,
without notice of termination, will not terminate this Lease.

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(3) Reletting Premises. After or without re-entering, Lessor may relet Premises any part
thereof , for any part thereof, for any term, without terminating the Lease as follows:

(a) Liability
of Lessee on Reletting, Lessee is liable to lessor in addition
to all other liability for breach of the Lease for all reasonable expenses of the
reletting, and of the reasonable alterations and repairs made, which Lessor may
incur. In addition, Lessee shall be liable to Lessor for the difference between the
rent due for the unelspsed term of this Lease and the rent received by Lessor under
the reletting.

(b) Application of Rent on Reletting, Lessor shall apply the rent received
from reletting the Premises as follows:

(i) To reduce Lessee’s indebtedness to Lessor under the Lease, not including
indebtedness for rent;

(ii) To reasonable expenses for the reletting and alterations and
repairs made to the Premises;

(iii) To rent due under this Lease; and

(iv) To payment of future rent under this
Lease as it becomes due.

     Lessor
may recover from Lessee on terminating the Lease for an Event of Default all
damages to which Lessor may be entities at law or in equity, proximately resulting from the
Event of Default, including the coast of recovering the Premises and
reasonable attorneys’
fees.

     8.03
LESSOR’S DEFAULT.

     Lessor shall not be in default unless Lessor fails to perform the obligations herein
required of Lessor, within thirty (30) days after written notice by Lessee to Lessor in writing,
specifying wherein Lessor has failed to perform  such obligations; provided, however, that if the nature of Lessor’s
obligations is such that more than thirty (30) days are required
for performance then Lessor shall not be in default if Lessor
commences performance within such thirty
(30) day period and thereafter diligently prosecutes the same to completion.

ARTICLE 9. MISCELLANEOUS.

     9.01 HOLDING OVER.

     Should Lessee remain in possession of the Premises, or any part thereof, after the
expiration of the term of this Lease, unless otherwise agreed in
writing, such holding over shall constitute and be construed as
tenancy from month-to-month only, at a rental
equal to 120% the rent payable for the last month of the term of this Lease.

     9.02 SUBORDINATION.

     At Lessor’s option, this Lease shall be subordinate to any ground lease, mortgage, deed
of trust, or any other hypothecation for security now existing or hereafter executed by Lessor and
to any and all advances made on the security thereof and to all renewals, modifications,
consolidation, replacements and extensions thereof provided that any such subordination shall be
ineffective unless and until Lessee has entered into a written nondisturbance, subordination and
attornment agreement with the holder and beneficiary of any such
mortgage, or deed of trust or other secured party or with any such ground lessor , as the case may be.
Notwithstanding such subordination, Lessee’s right to quiet
possession of the Premises shall not be disturbed if no Event of Default is in existence, unless this Lease is
otherwise terminated pursuant to its terms.

     9.03 GENDER AND NUMBER.

     Words of any gender used herein shall be construed to include any other gender, and words
in the singular number shall be held to include the plural, unless the context otherwise requires.

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     9.04 PARTIES BOUND.

     This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, executors, administrators, legal representatives, successors, and assigns
where permitted by this Agreement.

     9.05 LAW TO APPLY.

     This Agreement shall be construed under and in accordance with the laws of the State of
Texas, and all obligations of the parties created hereunder are performable in the county in which
the Premises are located.

     9.06 SEVERABILITY.

     If any provisions in this Agreement shall be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not effect any other provision,
and this Agreement shall be construed as if such provision had never been contained herein.

     9.07 PRIOR AGREEMENTS SUPERSEDED.

     This Agreement constitutes the sole and only agreement of the parties hereto and
supersedes any prior covenant, condition, representation or warranty, written or oral, between the
parties respecting the subject matter.

     9.08 AMENDMENT.

     No amendment, modification, or alteration of the terms hereof shall be binding unless the
same be in writing, dated concurrent or subsequent to the data hereof and duly executed by the
parties hereto.

     9.09 JOINT AND SEVERAL LIABILITY.

     If there be more than one Lessee, the obligations hereunder imposed upon Lessee shall
be joint and several. If there be a guarantor of Lessee’s obligations hereunder, the obligations
hereunder imposed upon Lessee shall be the joint and several obligations of Lessee and such
guarantor and lessor need not first proceed against such guarantor, nor shall any such guarantor
be released from its guaranty except as provided therein.

     9.10 RIGHTS AND REMEDIES CUMULATIVE.

     The rights and remedies provided by this Agreement are cumulative and the use of any
one by either party shall not preclude or waive its right to pursue any or all other remedies. Said
rights and remedies are given in addition to any other lawful rights the parties may have.

     9.11 WAIVER OF DEFAULT.

     No waiver by a party of any default or breach of any term, condition, or covenant of this
Lease shall be deemed to be waiver of any other or subsequent breach of the same or any other term,
condition or covenant herein.

     9.12 ATTORNEY’S FEES.

     In the event either party breaches this Agreement whereby the other party employs an
attorney to protect or enforce its rights hereunder, then the nonprevailing party agrees to pay the
prevailing party its reasonable attorney’s fees, costs and expenses as incurred.

     9.13 TIME OF ESSENCE.

     Time is of the essence of this Agreement.

     9.14 RECORDING.

     Lessee shall not record this Lease without Lessor’s prior written consent, and such
recordation without such consent shall be void, and at the option of the Lessor, constitute a
non-curable default of Lessee hereunder.

9

 

     9.15
INTEREST ON PAST-DUE OBLIGATIONS.

     Except as expressly provided herein, any amount due Lessor not paid when due shall bear interest at
the rate of 18% per annum following the expiration of the Grace Period as defined in paragraph
2.01(b) above. Payment of such interest shall not excuse or cure any default by Lessee under this
Lease; provided, however, that interest shall not be payable on late charges incurred by Lessee
nor on any amounts upon which late charges are paid by Lessee.

     9.16 NOTICE.

     Any notice to be given hereunder by either party to the other shall be in writing personally
delivered, or mailed as certified mail, return receipt requested. Notice to Lessee shall
be sufficient if made or addressed to 1901
Diplomat, Farmers Branch, Texas 75234, Attention: Michael J. Blomenfeld, and to
Lessor at 14001 Dallas Parkway, Dallas, Texas 75240. Attention: Jeff P. Howle. Each party may
change the address for notice to him by giving notice of such
change in accordance with the provision of this paragraph.

     9.17 CONTRACTING AUTHORITY.

     If either party is corporation or partnership, each party executing this Lease
on behalf of Lessor or Lessee as the case may be represents and warrants that he
is duly authorized to execute and deliver this Lease on behalf of the Lessor or
Lessee as the case may be.

     9.18 LIMITATION OF LIABILITY.

     In consideration of the benefits accruing hereunder, Lessee and its successors and
assigns covenant and agree that, in the event of any actual or alleged failure,
breach or default hereunder by Lessor:

(1) Lessor’s liability shall be limited to its interest in the Premises
and no additional liability shall be sought against lessor.

(2) These
covenants and agreements are binding upon and enforceable by both Lessor and Lessor’s successors assigns.

     9.19 ESTOPPEL CERTIFICATE.

     Lessee
shall at any time upon ten (10) days’ prior written notice from Lessor, execute,
acknowledge and deliver to Lessor a statement in writing (1) certifying that this
Agreement is unmodified and in full force and effect if such is the case, or, if
modified, stating the nature of such modifications and certifying that this
Agreement, as so modified is in full force and effect if such is the
case, and the date to which the rents and other charges are paid in
advance, if any, and
(ii) acknowledge that there are not, to Lessee’s knowledge, any uncured defaults,
and if any are claimed setting forth such defaults. Any such statement may be
conclusively relied upon by Lessor and any prospective purchaser of encumbrancer
of the Premises.

     Lessee’s failure to deliver such certificate within such time shall be conclusive upon Lessee (i)
that this Agreement is in full force and effect, without modification, except as may be represented
by Lessee, (ii) that there are no uncured defaults in Lessor’s performance, and (iii) that no
rents have been paid more than one (1) month in advance.

ARTICLE 10. OPTION TO RENEW.

     Provided that at the end of the initial term of this Lease, an Event of Default is not then in
existence under this Lease, Lessee (or any permitted assignee of sublessee) shall have the right
and option to renew this Lease, by written notice delivered to Lessor no later than 485 days prior
to the expiration of the initial term, for the additional term of five (5) years (“Renewal Term”),
under the same terms, conditions, and covenants contained herein, except:

     A. It is the intent of Lessor and Lessee that Lessee shall have one five-year renewal option.

10

 

     B. The rent for each Renewal term shall be based on the then Prevailing net effective rental
rates for properties of equivalent quality, size, utility, age and location, with the length
of the lease term, and the amount of free rent and other concessions then being granted to
tenants of properties of such equivalent quality, size, utility and location, together with
the financial status of Lessee, to be taken into account, but in no event shall the rent be
less than the rent paid in the immediately preceding term.

     C. Upon notification from Lessee of the exercise of the renewal option in question,
Lessor shall within fifteen (15) days thereafter notify Lessee in writing of the proposed
rent for such Renewal Term; Lessee shall within fifteen (15) days following receipt of same
notify Lessor in writing of the acceptance or rejection of the proposed rent. In event of
rejection by Lessee, the rent for the Renewal Term shall be determined as follows:

     (1) Within fifteen (15) days following notification of Lessee’s rejection, Lessor
and Lessee shall each appoint a disinterested, licensed and qualified real estate
appraiser. If these two appraisers cannot agree upon rent for the applicable
Renewal Term within thirty (30) days following their appointment, the two
appointees shall forthwith select a third disinterested, licensed and qualified
real estate appraiser, and the decision of such third appraiser shall be made
within thirty (30) days thereafter. If such third appraiser is appointed, the rent
for the Renewal Term in questions shall be the arithmetic mean of the two values
which are numerically closest to one another; provided, however, that if the
highest and the lowest values are numerically equidistant to the middle value, then
rent for such Renewal Term shall be the middle value. Each party shall pay the fees
and expenses of the appraiser appointed by such party and one-half (1/2) of the fees
and expenses of the third appraiser.

     The term “term” as used throughout this Lease shall be understood to refer to the term
stated in Article 1 hereof as well as the Renewal Terms, if applicable.

ARTICLE II. COMMISSIONS.

     It is understood and agreed that no real estate commission is payable to any party in
connection with the Lease. Each party hereby indemnifies the other party from and against any and
all liabilities for real estate commissions asserted against such other party by reason of the
acts, statements, or representations of the indemnifying party.

     IN WITNESS WHEREOF, the undersigned Lessor and Lessee hereto execute this Agreement as of
the day and year first above written.

	 	 	 	 	 	 	 	 	 
	LESSEE:	 	 	 	LESSOR:
	 
	 	 	 	 	 	 	 	 
	SPORT SUPPLY GROUP, INC.	 	 	 	MERIT INVESTMENT PARTNERS, L.P.
	a Delaware corporation	 	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	MERIT EQUITY PARTNERS, INC.,
	 	 	 	 	 	 	General Partner
	 
	 	 	 	 	 	 	 	 
	By:
	 	/s/ Michael J.
Blumenfeld	 	 	 	By:	 	/s/ Jeff P. Howle
	 

	 	 
	 	 	 	 	 	 
	NAME: Michael J.
Blumenfeld	 	 	 	NAME: Jeff P. Howle
	TITLE: President	 	 	 	TITLE: V.P.

11

 

EXHIBIT A

TO LEASE AGREEMENT

Land:

     Being a tract or parcel of land situated in the City of Farmers Branch, Dallas County, Texas
and being in the William B. Pulliam Survey, Abstract No. 1171 and also being part of Block 3 of
Valwood Park Farmers Branch Phase One, an addition to the City of Farmers Branch, Dallas County,
Texas as recorded in Volume 81122, Page 2233 of the Deed Records of Dallas County, Texas and
subsequently re-platted as Lot 2, Block 3 of Valwood Park Farmers Branch Phase One as recorded in
Volume 87007, Page 3097 of the Deed Records of Dallas County, Texas and being more particularly
described as follows:

BEGINNING at an iron rod for corner at the intersection of the southerly right-of-way line of
Diplomat Drive (70 feet wide) and the easterly line of Farmers Branch Carrollton Flood Control
District Benchmark Sump as recorded in Volume 82246, Page 0457 of the Deed Records of Dallas
County, Texas;

THENCE
North 89'18'52" East along said southerly line of Diplomat Drive a distance of 621.99 feet
to an iron rod with cap for corner;

THENCE
South 0'41'08" East along a common line with Lot 3 of said Valwood Park Farmers Branch Phase
One Addition a distance of 536.41 feet to an iron rod with cap for corner in the northerly line of
Farmers Branch Carrollton Flood Control District Cooks Branch Sump;

THENCE
South 85'39'03" West along said northerly line a distance of 623.26 feet to an iron rod for
corner at the intersection of said Cooks Branch Sump northerly line and said Benchmark Sump
easterly line;

THENCE
North 0'41'08" West along said Benchmark Sump easterly line a distance of 576.23 feet to the
POINT OF BEGINNING and containing 344,027 square feet or 7,944 acres, more or less.

Improvements:

     One 137,670 square feet building located at 1901 Diplomat, Farmers Branch, Texas.

     SAVE AND EXCEPT THOSE items listed on Exhibit B. Notwithstanding this exception, Lessor shall
have a security interest in such items but not in any other property of Lessee or BSN Corp. or
other occupant of the Premises, and the ownership of such items listed on Exhibit B shall revert to
Lessor without cost at the expiration or termination of the Lease, whichever occurs first.

12

 

EXHIBIT “B”

TO LEASE AGREEMENT

MERIT INVESTMENT PARTNERS, L.P., LESSOR,

SPORT SUPPLY GROUP, INC., LESSEE

1. All of the following situated in the building located on the real property
described on Exhibit “A” attached hereto and made a part hereof, and being commonly known
as 1901 Diplomat, Farmers Branch, Dallas County, Texas: (a) interior walls, (b) floors,
(c) duct work for spray booths, (d) foam fit dock pad, (e) window shades, (f) mirrors,
(g) wall coverings, (h) toilet partitions, tile-work and fixtures, (i) heating,
ventilation and air conditioning conduits, fixtures and systems, (j) plumbing pipes,
conduits, fixtures and systems, (k) fire sprinkler fixtures and systems, (l) kitchen
fixtures, (m) cabinetry and other items of mill-work, (n) carpeting, (o) doors and
windows, (p) electrical wiring, fixtures and systems, and (q) telephone and data
processing wiring.

2. All of the following situated on or about the real property described on Exhibit
“A” attached hereto and made a part hereof: (a) parking lot surfacing and light fixtures
and systems, and (b) landscape sprinkler fixtures and systems.

 

 

EXHIBIT “C” TO LEASE AGREEMENT

JOHN H. HAYNES & ASSOCIATES, incorporated

Geotechnical Engineers

July 17, 1989

Project No. 278

Mr. Jeff Howle

Merit Equity Partners, Inc.

14001 N. Dallas Parkway

Suite 1150, LB 122

Dallas, Texas 75240

			
	Re:	 	Structural and Architectural Costs and comments 
Existing Office/Warehouse

1901 Diplomat

Farmers Branch, Texas

Dear Jeff:

The following represents our observations of the conditions of the structural, architectural,
and foundation components of the above referenced building during inspection in July, 1989. These
were accomplished without destructive entry into any portion of the structure. For convenience,
they are separated into components, although some overlapping of items occurs. In areas where
problems are found, they are separated into four general categories relating to priority and into
immediacy of need of correction or attention. These are the following:

Structural or life safety hazard — Immediate need
Functional — Immediate, 2 year need, 5-10 year need
Cosmetic — According to Owner’s Desires
Routine maintenance

2424
Stutz Drive • P.O. Box 35481 • Dallas, Texas 75235 • 12141350-5600

 

 

JOHN H.
HAYNES & ASSOCIATES,
Inc.

Geotechnical Engineers

Merit Equity Partners, Inc.

Project No. 278

July 17, 1989

Page 2

Roof

Generally in excellent condition. Leak reported in warehouse plus or minus three months ago -
repaired (patches seen) and no trouble since.

Water ponding as much as 3/4” deep in strips next to east and west warehouse walls. This will cause
early breakdown of roof. Should be built up with crickets to get water to the roof drains which are
a little high.

	 	 	 	 	 
	Functional Item - 2 year need
	 	 	 	 
	Cost - 2400
sf @ $2.50/sf -
	 	$	6,000.00	 
	 
	 	 	 	 
	1 Pitch pan at a roof top A/C unit on north side — not filled.
	 	 	 	 
	Functional
Item — Immediate need 
Cost
	 	$	20.00	 
	 
	 	 	 	 
	Several wire baskets over roof drains were loose or bent. One has much mastic as if a problem.
	 	 	 	 
	Maintenance Item — Immediate to 2 year need
	 	 	 	 
	Cost - 4 Locations @ $25.00/each
	 	$	100.00	 
	 
	 	 	 	 
	Roof Flashings
	 	 	 	 
	 
	 	 	 	 
	Details are good, but not done quite right on about half the building.
	 	 	 	 
	 
	 	 	 	 
	Hold-down bars on counterflash overlap instead of butting -
	 	 	 	 
	Results in improper function.
	 	 	 	 
	Functional Problem - 2 to 5 year need
	 	 	 	 
	Cost - 710 If @ $3.00/If -
	 	$	2,100.00	 
	 
	 	 	 	 
	In a few areas where adjacent panels did not align, the counterflashing at panel joints is bent
and/or functioning improperly.
	 	 	 	 
	Functional Item - 2 year need
	 	 	 	 
	Cost - 10 Locations @ $150.00/each -
	 	$	1,500.00	 
	 
	 	 	 	 
	There are three locations with slight tears in flashings.
	 	 	 	 
	Functional Item — Immediate need
	 	 	 	 
	Cost - 3 Locations @ $20.00/each -
	 	$	60.00	 

 

 

FIRST AMENDMENT TO LEASE

     This FIRST AMENDMENT TO LEASE (this “First Amendment”), is made and entered into as of this
13th day of July, 1998 by and between ACQUIPORT DFWIP, Inc., a Delaware corporation
(“Landlord”), and SPORT SUPPLY GROUP, INC., a Delaware corporation (“Tenant”).

W I T N E S S E T H:

     WHEREAS, Landlord’s predecessor and Tenant entered into that certain lease (the “Lease”)
dated July 28, 1989, whereby Landlord leased to Tenant the premises described as 1901 Diplomat,
farmers Branch, Texas measuring approximately 137,670 rentable square feet (the “Premises”), for a
term ending July 31, 1999, (the “Term”);

     WHEREAS, the parties desire to extend the Term of the Lease and to make certain other
modifications to the Lease as provided herein.

     NOW, THEREFORE, for Ten Dollars and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledge, Landlord and Tenant agree that the Lease shall be and
is amended as follows:

     1. Incorporation of Lease Terms. The terms, conditions and covenants of the Lease are
incorporated herein by this reference except to the extent expressly modified herein.

     2. Term. The Termination Date is hereby extended to July 31,
2001.

     3. Rent. Subsequent to July 31, 1999, the monthly payment of minimum fixed rent shall
be $47,955.08.

     4. Full Force and Effect. Except as modified herein, all other terms and conditions
of the Lease shall continue in full force and effect. Any conflict between the provisions of this
First Amendment and the provisions of the Lease will be resolved in favor of this First Amendment.

     5. Limitation of Landlord’s Liability. Redress for any claim against Landlord under
this Lease shall be limited to and enforceable only against and to the extent of Landlord’s
interest in the Premises. The obligations of Landlord under this Lease are not intended to and
shall not be personally binding on, nor shall any resort be had to the private properties of, any
of its trustees or board of directors and officers, as the case may be, its investment manager, the
general partners thereof, or any beneficiaries, stockholders, employees, or agents of Landlord or
the investment manager.

     IN WITNESS HEREOF, Landlord and Tenant have respectively signed this First Amendment as of the
date first hereinabove set forth.

	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SPORT SUPPLY GROUP, INC.,

a Delaware corporation	 	 	 	ACQUIPORT DFWIP, Inc.,

a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Peter S. Blumenfeld
	 	 	 	By:
	 	/s/ Robert W. Rice	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	Peter S. Blumenfeld
	 	 	 	Title:
	 	Robert W. Rice	 	 
	 

	 	President and Chief Operating Officer
	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: July 17, 1998	 	 	 	Date: 5/6/98	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	WITNESSED:	 	 	 	WITNESSED:	 	 
	 
	/s/	 	 	 	/s/	 	 

 

 

SECOND AMENDMENT TO LEASE AGREEMENT

     THIS SECOND AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is executed on and to be
effective as of July 31,2000, by and between ACQUIPORT DFWIP, INC., a Delaware corporation, as
landlord (“Lessor”) and SPORT SUPPLY GROUP, INC., a Delaware corporation, as tenant (“Lessee”).

R E C I T A L S

     WHEREAS, Merit Investment Partners, L.P. (predecessor in interest to Lessor) (“Merit”)
and Lessee entered into that certain Lease Agreement dated July 28,1989, as amended by that
certain First Amendment to Lease dated as of July 13, 1998, by and between Lessor and Lessee (as
amended, the “Lease”), pursuant to which Lessee leases from Lessor certain real property more
particularly described on Exhibit A to the Lease, together with the improvements thereon,
consisting of a 137,670 square foot building located at 1901 Diplomat, Farmers Branch, Texas (the
“Premises”); and

     WHEREAS, Lessee desires to extend the term of the Lease, and Lessor and Lessee desire to set
forth the terms and conditions upon which the term of the Lease will
be extended.

     NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Lessor and Lessee hereby agree that the Lease should be, and hereby is,
amended as follows:

     1. Lease
Term. The term of the Lease is hereby extended to December 31,2004. The
period of time from August 1, 2001 through December 31, 2004 is referred to herein as the
“Extended Term”.

     2. Minimum
Fixed Rent. The minimum fixed rent, as such term is used in the Lease,
for the Extended Term, shall be equal to $43,021.88 per month. The minimum fixed rent from
August 1,2000 through July 31,2001 shall be reduced to $43,021.88 per month. The minimum
fixed rent for the period prior to August 1,2000 shall remain as currently set forth in the
Lease.

     3. Improvements to Premises. Lessee shall take the Premises in its “as-is” condition
for
the Extended Term except for certain Leasehold Improvements (herein so called) to the Premises
which shall be completed in accordance with the specifications attached hereto as Exhibit
A (the
“Approved Plans”), which have been approved by both Lessor and Lessee.

     Lessor shall cause the Leasehold Improvements to be installed or constructed in accordance
with the Approved Plans by Lessor’s contractor. So long as no Event of Default (or event which
with notice or lapse of time could become an Event of Default) has occurred under the Lease,
Lessor agrees to provide Lessee an allowance equal to One Hundred Fifty-Three Thousand One Hundred
Nineteen and No/100 Dollars ($153,119.00) (the “Improvement Allowance”), which allowance is to be
used solely for completion of the Leasehold Improvements in accordance with the Approved Plans,
and an additional allowance equal to Three Thousand Two Hundred and No/100 Dollars ($3,200.00)
(the “Architectural Allowance”), which allowance is to be used solely for space planning and
design services for the Premises. In the event that any alterations or modifications to the
Premises are required in order to comply with applicable law, including, without limitation, the
Americans with Disabilities Act of 1990, as amended, or the State of Texas equivalent laws and
regulations, the cost of any such alterations or modifications shall be satisfied out of the
Improvement Allowance. The cost of the Leasehold Improvements and the space planning and design
fees is to be paid by Lessor out of the Improvement Allowance and the Architectural Allowance,
respectively.

     Any completed work (labor or materials) outside the scope of the Approved Plans or the cost of
which is in excess of the Improvement Allowance or the Architectural Allowance, as the case may

 

 

be, shall be at Lessee’s sole cost and will be billed to Lessee by Lessor and will be due and
payable within ten (10) days after Lessee’s receipt of an invoice therefor. Notwithstanding the
foregoing, Lessee will not be liable for work outside the scope of the Approved Plans or excess
costs over the amount of the Improvement Allowance or the Architectural Allowance unless Lessee has
consented in writing to such work outside the scope of the Approved Plans or excess costs prior to
the commencement of such work or the incurring of such excess costs. Any portion of the Improvement
Allowance or the Architectural Allowance remaining upon the completion of the Leasehold
Improvements shall be deemed forfeited by Lessee.

     Lessor further acknowledges and agrees that Section 4.07 of the Lease is hereby amended
to provide that Lessee shall not be required to surrender possession of the Premises to Lessor “in
the same condition as when received”, but rather shall be entitled to surrender possession of the
Premises in the same condition as exists upon the completion of the Leasehold Improvements
described in Paragraph 3 above, subject to any and all other requirements set forth in Section 4.07
of the Lease.

     4. Lessor’s
Repairs. Section 4.03 is hereby modified by the addition of the following
language at the end of the first sentence:

“provided,
however, that Lessor shall repair and maintain the structural
soundness of the roof (including any repair
or replacement as determined by Lessor), exterior walls (excluding windows, window
glass, plate glass and doors), and foundation of the Premises, excluding any repair or
maintenance to any such items (whether
structural or nonstructural) resulting from or caused in whole or in part by the
negligence or misconduct of Lessee, its agents, employees or
contractors.”

     5. Insurance. Section 5.04 of the Lease is hereby deleted in its entirety and the following is
hereby substituted therefor:

     “Lessee shall keep in force throughout the term of this Lease: (a) a Commercial General
Liability insurance policy or policies to protect the Lessor Entities (as hereinafter defined)
against any liability to the public or to any invitee of Lessee or a Lessor Entity incidental to
the use of or resulting form any accident occurring in or upon the Premises with a limit of not
less than $1,000,000.00 per occurrence and not less than $2,000,000.00 in the annual aggregate,
covering bodily injury and property damage liability and $1,000,000.00 products/completed
operations aggregate; (b) Business Auto Liability covering owned, non-owned and hired vehicles with
a limit of not less than $1,000,000.00 per accident; (c) insurance protecting against liability
under Worker’s Compensation Laws with limits at least as required by statute; (d) Employers
Liability with limits of $500,000 each accident, $500,000 disease policy limit,
$500,000 disease—each employee; and (e) Business Interruption Insurance with limit of
liability representing loss of at least approximately six months of income. In addition, Lessee
shall maintain a policy or policies of insurance covering “all risks” perils to the extent of the
full replacement cost of the Premises and Lessee’s leasehold improvements and personal property
situated therein as of the date of the loss (provided that the replacement cost for the building
itself shall be provided by Lessor to Lessee from time to time and the replacement cost of Lessee’s
leasehold improvements, fixtures, inventory, and other business personal property situated in or
about the Premises shall be determined by Lessee), with a deductible or self insured retention of
no more than $50,000.00. The term “Lessor Entities”, as used herein, shall mean Lessor, Lessor’s
investment manager, and the trustees, boards of directors, officers, general partners,
beneficiaries, stockholders, employees and agents of each of them.

     Each of the aforesaid policies shall (a) be provided at Lessee’s expense; (b) name the Lessor
and the building management company, if any, as additional insureds; (c) be issued by an insurance
company with a minimum Best’s rating of “A; VII” during the term of this Lease (provided that if
the rate of any insurance company in compliance at the time of

2

 

issuance of any policy thereafter has a reduction in its rating below a Best’s rating
of “A:VII”, Lessee shall be provided ninety (90) days to obtain a replacement policy with
an insurance company with a Best’s rating of “A:VII”); and (d) provide that said insurance
shall not be cancelled unless thirty (30) days prior written notice (ten days for
non-payment of premium) shall have been given to Lessor; and said policy or policies or
certificates thereof shall be delivered to Lessor by Lessee upon the commencement date and
at least thirty (30) days prior to each renewal of said insurance.

     Whenever Lessee shall undertake any alterations, additions or improvements in, to or
about the Premises (“Work”), the aforesaid insurance protection must extend to and include
injuries to persons and damage to property arising in connection with such Work, without
limitation including liability under any applicable structural work act, and such other
insurance as Lessor shall require; and the policies of or certificates evidencing such
insurance must be delivered to Lessor prior to the commencement of
any such Work.”

     6. Indemnification. Section 6.01 of the Lease is hereby deleted in its
entirety and the following is hereby substituted therefor:

     “None of the Lessor Entities shall be liable and Lessee hereby waives all claims
against them for any damage to any property or any injury to any person in or about the
Premises by or from any cause whatsoever (including without limiting the foregoing, rain or
water leakage of any character from the roof, windows, walls, basement, pipes, plumbing
works or appliances, the Premises not being in good condition or repair, gas, fire, oil,
electricity or theft), except that Lessor will protect, indemnify and hold the Lessee
Entities (as hereinafter defined) harmless from such claims to the extent caused by or
arising from the gross negligence or willful misconduct of Lessor or its agents, employees
or contractors or any breach or default on the part of Lessor in the performance of any
covenant or agreement on the part of Lessor to be performed pursuant to this Lease. Lessee
shall protect, indemnify and hold the Lessor Entities harmless from and against any and all
loss, claims, liability or costs (including court costs and reasonable attorney’s fees)
incurred by reason of (a) any damage to any property (including but not limited to property
of any Lessor Entity) or any injury (including but not limited to death) to any person
occurring in, or about the Premises to the extent that such injury or damage shall be
caused by or arise from any actual or alleged act, neglect, fault, or omission by or of
Lessee, its agents, servants, employees, invitees, or visitors to meet any standards
imposed by any duty with respect to the injury or damage; (b) the conduct or management of
any work or thing whatsoever done by the Lessee in or about the Premises or from
transactions of the Lessee concerning the Premises; (c) Lessee’s failure to comply with any
and all governmental laws, ordinances and regulations applicable to the condition or use of
the Premises or its occupancy; or (d) any breach or default on the part of Lessee in the
performance of any covenant or agreement on the part of Lessee to be performed pursuant to
this Lease. The provisions of this Section shall survive the termination of this Lease with
respect to any claims or liability accruing prior to such termination. The term “Lessee
Entities”, as used herein, shall mean Lessee and its directors, officers, general partners,
stockholders, employees and agents.”

     7. Notice. The address of Lessor set forth in Section 9.16 of the Lease is hereby
modified to be Acquiport DFWIP, Inc., 1406 Halsey Way, Suite 110, Carrollton, Texas 75007.
The
address of Lessee set forth in Section 9.16 of the Lease is hereby modified to be Sport Supply
Group,
Inc., 1901 Diplomat Drive, Farmers Branch, Texas 75234, Attention: President.

     8. Hazardous
Materials. The following is hereby added to the Lease as Article 12:

“ARTICLE
12. HAZARDOUS MATERIALS.

     Lessee shall not, and shall not direct, suffer or permit any of its agents,
contractors, employees, licensees or invitees to at any time handle, use, manufacture,
store or dispose of

3

 

in or about the Premises any flammables, explosives, radioactive materials, hazardous wastes
or materials, toxic wastes or materials, or other similar substances, petroleum products or
derivatives or any substance subject to regulation by or under any federal, state and local
laws and ordinances relating to the protection of the environment or the keeping, use or
disposition of environmentally hazardous materials, substances, or wastes, presently in
effect or hereafter adopted, all amendments to any of them, and all rules and regulations
issued pursuant to any of such laws or ordinances (collectively “Environmental Laws”) (all of
such items being collectively referred to as “Hazardous Materials”), nor shall Lessee suffer
or permit any Hazardous Materials to be used in any manner not fully in compliance with all
Environmental Laws, in the Premises or appurtenant land or allow the environment to become
contaminated with any Hazardous Materials. Notwithstanding the foregoing, Lessee may (a)
store and use on the Premises those items described on Exhibit B attached hereto in
the quantities set forth next to such items, and (b) handle, store, use or dispose of
products containing small quantities of Hazardous Materials (such as aerosol cans containing
insecticides, toner for copiers, paints, paint thinner, paint remover and the like) to the
extent customary and necessary for the use of the Premises for general office purposes;
provided that Lessee shall always handle, store, use, and dispose of any such Hazardous
Materials in a safe and lawful manner and never allow such Hazardous Materials to contaminate
the Premises, appurtenant land, or the environment. Lessee shall protect, defend, indemnify
and hold each and all of the Lessor Entities harmless from and against any and all loss,
claims, liability or costs (including court costs and reasonable attorney’s fees) incurred by
reason of any actual or asserted failure of Lessee to fully comply with all applicable
Environmental Laws, or the presence, handling, use or disposition in or from the Premises of
any Hazardous Materials (even though permissible under all applicable Environmental Laws or
the provisions of this Lease), or by reason of any actual or asserted failure of Lessee to
keep, observe, or perform any provision of this Article.”

     9. Renewal Options. Any and all renewal options contained in the Lease are hereby
deleted in their entirety, and in lieu thereof, Lessee shall have, at its option (the “Renewal
Option”), the right to renew and extend this Lease for one term of five (5) years (the “Renewal
Term”). The Renewal Term shall commence immediately upon the expiration of the Extended Term by
Lessee’s giving written notice thereof to Lessor no earlier than nine (9) months, and no later than
six (6) months, prior to the expiration of the Extended Term. Once Lessee shall exercise any
Renewal Option, Lessee may not thereafter revoke such exercise, except as expressly set forth
below. Lessee shall not have the right to exercise the Renewal Option at a time that an Event of
Default (or an event which with notice and/or lapse of time could become an Event of Default) under
this Lease has occurred and is continuing. Lessee’s failure to exercise timely the Renewal Option
for any reason whatsoever shall conclusively be deemed a waiver thereof. At Lessor’s option, Lessor
may adjust the minimum fixed rent for the Renewal Term at an annual rate equal to the Fair Market
Value Rate (as hereinafter defined) as of the commencement of the Renewal Term. As used in this
Lease, “Fair Market Value Rate” shall mean the fair market value rental rate per square foot of
rentable area per year in effect at the commencement of the Renewal Term for comparable tenants
taking comparable space in comparable conditions under comparable terms in comparable buildings in
the same rental market (hereinafter called “Comparable Buildings”); provided, however, that in no
event shall the minimum fixed rent for the Renewal Term be less than ninety percent (90%) of the
minimum fixed rent for the last twelve (12) months of the Extended Term. It is also agreed and
understood that the Fair Market Value Rate shall include: (a) rent; and (b) rental operating
expenses, property tax, and utility and expense adjustments that are being included as part of the
terms and conditions of industrial tenant leases for comparable tenants in Comparable Buildings as
of the time of determination of the Fair Market Value Rate. Lessor shall advise Lessee within
twenty (20) days after Lessee exercises the Renewal Option of the Fair Market Value Rate which
shall be in effect as of the commencement date of the Renewal Term.

     Lessee shall then have fifteen (15) days to notify Lessor of its acceptance or rejection of
the Fair Market Value Rate for the Renewal Term and if rejecting the Fair Market Value Rate, of
its election to proceed using third-party appraisers, as hereinafter described. In the event
Lessee fails

4

 

to so
notify Lessor within such fifteen (15) day period or if Lessee rejects the Fair Market
Value Rate and does not elect to proceed using third-party appraisers, Lessee shall be deemed to
have rejected the Fair Market Value Rate proposed by Lessor and to have rejected its right to use
third-party appraisers to determine the Fair Market Value Rate. Notwithstanding the prohibition on
Lessee’s right to revoke its exercise of the Renewal Option, in
the event Lessee rejects (or is
deemed to have rejected) the Fair Market Value Rate proposed by Lessor and rejects (or is deemed to
have rejected) its right to use third-party appraisers, Lessee shall be deemed to have revoked the
Renewal Option, and the Renewal Option shall be deemed null and void
and of no further force or effect. If Lessee notifies Lessor of its
election to appoint third-party appraisers to determine the Fair
Market Value Rate within the time period set forth above, Lessee may
no longer revoke the respective Renewal Option. Lessor and Lessee shall each appoint, by notice to the
other within ten (10) business days after Lessee’s election to use third-party appraisers, a
qualified disinterested MAI appraiser doing business in the area. If the appraisers so appointed
are unable to agree upon the Fair Market Value Rate within thirty (30) days after the appointment of
the second appraiser, they shall, within ten (10) business days thereafter appoint a third
disinterested MAI appraiser and the majority shall decide upon the Fair Market Value Rate for the
Renewal Term, such decision to be rendered within forty-five (45) days after the appointment of the
third appraiser. If a majority are unable to agree within the allotted time, the two determinations
of Fair Market Value Rate nearest to one another in amount shall be added together, divided by
two (2), and the resulting quotient shall be the Fair Market Value Rate. If either party fails to
appoint its appraiser within the time period provided, the determination of the Fair Market Value
Rate shall be made by the other appraiser alone and if the two appraisers are unable to agree upon
a third appraiser within the time period and the parties are unable to mutually agree within ten
(10) business days thereafter upon a third appraiser, either party may request the President or
equivalent officer of the Dallas Texas Chapter of the American Institute of Real Estate Appraisers
or if none, an equivalent body, to appoint the same. Lessor and Lessee shall share equally the
expense of the third appraiser, if any. The determination of the appraisers shall be final and
binding and shall be enforceable by court order.

     Lessee shall take the Premises “as is” for the Renewal Term and Lessor shall have no
obligation to make any improvement or alterations to the Premises. Except as set forth in this
paragraph, the leasing of the Premises for the Renewal Term shall be upon the same terms and
conditions as the leasing of the Premises for the Extended Term and shall be upon and subject to all
of the provisions of this Lease. Any Renewal Option granted to Lessee under this paragraph shall be
personal to Lessee and shall not be transferred, encumbered, or assigned by Lessee or in any manner
transferred to, or exercised by, any subtenant of Lessee.

     10. Brokerage
Commissions. Each of the parties hereto represents and warrants to the
other that it has not dealt with any broker or finder in connection with this Lease except Cushman
& Wakefield of Texas, Inc. and RREEF Management Company. Lessor acknowledges that the commissions
of Cushman & Wakefield of Texas, Inc. and RREEF Management Company payable in connection with this
Amendment will be paid by Lessor, and Lessor agrees to indemnify and hold Lessee harmless from and
against any claims by such brokers for such commissions.

     11. Effectiveness. Except as modified herein, all other terms and conditions of the
Lease shall remain unchanged and shall continue in full force and effect.

     12. Governing Law. The laws of the State of Texas and of the United States of
America shall govern the rights, remedies, and duties of the parties hereto and validity,
construction, enforcement, and interpretation hereof.

     13. Successors and Assigns. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.

     14. Illegality. If any provision of this Amendment is held to be illegal, invalid, or
unenforceable under present or future laws, such provision shall be fully severable; this Amendment

5

 

shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect
and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance
herefrom.

15.
Limited Liability. Redress for any claims against Lessor under this
Amendment or the Lease shall only be made against Lessor to the extent of Lessor’s interest in the
Premises, including, to the extent received after a final judgment against Lessor has been obtained
by Lessee, the proceeds of any sale or refinancing of Lessor’s interest in the Premises (net of any
actual costs incurred in connection therewith). The obligations of Lessor under this Amendment and
the Lease shall not be personally binding on, nor shall any resort be had to the private properties
of, any of its trustees or board of directors and officers, as the case may be, the general
partners thereof, or any beneficiaries, stockholders, employees or agents of Lessor, or the
investment manager.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year
first above written.

	 	 	 	 	 
	 	 	LESSOR:
	 
	 	 	 	 
	 	 	ACQUIPORT DFWIP, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Craig M. Gotthardt
	 

	 	 	 	 
	 	 	Name: Craig M. Gotthardt
	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	LESSEE:
	 
	 	 	 	 
	 	 	SPORT SUPPLY GROUP, INC., a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Terrence M. Babilla
	 

	 	 	 	 
	 	 	Name: Terrence M. Babilla
	 	 	Title: Chief Operating Officer

 

 

1901 Diplomat, BSN Sport Supply

Exhibit “A” Tenant Improvement Items

			
	q	 	Concrete repair-sink holes in various locations throughout parking/truck loading areas. 33LF Curb
Line repair, 436 Square Feet of Parking Lot repairs

			
	q	 	Install 10’0” chain link fence enclosure and gates for outside scrap steel Dumpster. 12’X20’

			
	q	 	Inside concrete repair at columns. (6 + areas)

			
	q	 	Services all existing overhead doors, replace damaged lower panels. Replace 3 panels and service 19
doors

			
	q	 	Pour one concrete ramp, location to be determined. 11’X 30’ Ramp with rails.

			
	q	 	New paint and VCT flooring in restrooms and break room (offices and warehouse office areas). See
worksheets for specific areas.

			
	q	 	Dock bumper repair-replace missing or damaged. Re-secure 2 bumpers

			
	q	 	Concrete repair — exit stairs (Southwest corner of building) Remove and replace

			
	q	 	Exterior building band needs painting 

Painting of all exterior metal to include personnel doors, overhead doors, handrails, dock
plates etc.

Painting of all columns and soffit at entry and overhangs

			
	q	 	Acid wash/ treatment to kill surface fungus throughout employee parking lot. Areas identified

			
	q	 	Employee parking lot, correct drainage problem

			
	q	 	Re-stripe parking lot

			
	q	 	Full inspection/ repair of all existing lighting, plumbing & electrical systems needed inside and
out

			
	q	 	Potential gas leak on the West Side of the building. Repair completed by TXU Gas

			
	q	 	Perform inside painting, wall repair and wallpaper/replacement throughout existing offices. See
worksheets for specific areas.

			
	q	 	Perform rodent/insect extermination (one time service) (Proposal attached form Ogburn pest Control)

			
	q	 	Replacement of water stained and or broken ceiling tile throughout office and warehouse areas. 602
Ceiling titles identified for replacement.

			
	q	 	Replace “yellowed” lay-in plastic lens covers, Replace 140 parabolic lens covers and 100 acrylic
covers

			
	q	 	Major pipe cleaning with a hydro-jet all sewer lines

 

 

			
	q	 	Carpet cleaning or

			
	q	 	Replacement throughout majority of offices (areas to be designated)

			
	q	 	All HVAC needs to be (balanced) for even distribution of heated and cooled air throughout
the offices

			
	q	 	Replace one (1) ten (10) ton units in MIS area with one (1) twelve
(12) ton unit work completed by tenant.

			
	q	 	Foundation repair-floor is cracked and leaking in room
164/epoxy injection required for repair.

 

 

THIRD AMENDMENT TO LEASE AGREEMENT

     THIS THIRD AMENDMENT TO LEASE AGREEMENT (“Amendment”) is entered on and to be effective as of
April 15, 2004, by and between ACQUIPORT DFWIP, INC., a Delaware corporation, as lessor (“Lessor”)
, and SPORT SUPPLY GROUP, INC., a Delaware corporation, as lessee (“Lessee”).

R E C I T A L S

     WHEREAS, Merit Investment Partners, L.P. (“Original Lessor”), predecessor in interest to
Lessor, and Lessee entered into that certain Lease Agreement dated July 28, 1989, as amended by
(i) that certain First Amendment to Lease dated as of July 13, 1998, by and between Lessor and
Lessee, and (ii) that certain Second Amendment to Lease Agreement dated as of July 31, 2000 (the
“Second Amendment), by and between Lessor and Lessee (as amended, the “Lease”), pursuant to which
Lessee leases from Lessor certain industrial space known as 1901 Diplomat, Farmers Branch, Texas
(the “Premises”); and

     WHEREAS, Lessee has requested to extend the term of the Lease, and Lessor and Lessee desire to
set forth the terms and conditions upon which the Lease will be extended.

     NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Lessor and Lessee hereby agree that the Lease should be, and hereby is,
amended as follows:

     1. Term of Lease. The term of the Lease shall be extended to December 31,
2007 (unless terminated sooner pursuant to the Lease). As used herein, the term
“Extended Term” shall mean the period from January 1, 2005 through December 31, 2007.

     2. Minimum Fixed Rent. The minimum fixed rent, as such term is used in
the Lease, shall be amended to mean, for each month in the time periods specified, the
following: (a) for that certain ninety (90) day period commencing on the date hereof
(the “Rent Abatement Period”), $-0- per month, and (b) from the day following the
expiration of the Rent Abatement Period through December 31, 2007, $37,286.00 per
month. Minimum fixed rent prior to the Rent Abatement Period shall remain as currently
set forth in the Lease. Notwithstanding the fact that Lessee is not paying minimum
fixed rent for the Rent Abatement Period, Lessee shall continue to pay all other
charges under the Lease, including, without limitation, taxes, utility charges, and
insurance costs attributable to such time period.

     3. Improvements to Premises. Lessee shall take the Premises in its
“as-is” condition except for certain improvements to the parking area, landscaped beds
and driveways (collectively, the “Leasehold Improvements”) which shall be completed in
accordance with the terms of this Paragraph 3. Within thirty (30) days following the
date hereof, Lessor agrees to submit plans and specifications for the Leasehold
Improvements to Lessee for written approval. Lessee shall advise Lessor, no later than
seven (7) business days after receipt of such plans and specifications, of its
approval of such plans and specifications or, if applicable, of any matters which are
unsatisfactory or require change. Lessor and Lessee shall proceed in good faith to
resolve any dispute which may arise between the parties as to the plans and
specifications. The approved plans and specifications, including all changes required
by Lessor, shall be referred to herein as the “Approved Plans”.

Lessee shall complete the Leasehold Improvements by hiring a contractor to install or construct the
Improvements. Lessor will charge a construction management fee (the “Construction Management Fee”)
equal to three percent (3%) of the total cost incurred by Lessor and Lessee in completing the
Leasehold Improvements, including the cost for preparation of plans and specifications for the
Leasehold
Improvements. All work with respect to the Leasehold Improvements shall (a) be performed
substantially in accordance with the Approved Plans; (b) be performed in such a manner as to
maintain harmonious labor relations and not to interfere with or delay any other work and
activities being carried on by Lessor or Lessor’s contractors; (c) be designed, performed, and
completed in strict compliance with the Lease and with all building standards and regulations
established by Lessor; (d) be completed by contractors and subcontractors reasonably approved by

1

 

Lessor; (e) be coordinated by all contractors and subcontractors engaged by Lessee so as to insure
timely completion thereof; (f) be coordinated with Lessor with respect to the movement of equipment
and materials; (g) not adversely affect the structure or safety of the building; (h) comply with
all building, safety, fire, plumbing, electrical, and other codes and governmental and insurance
requirements; (i) not result in any usage in excess of services provided by Lessor under the Lease
for the Premises, including water, electricity, gas, heating, ventilating, and air conditioning
(either during or after such work), unless prior written arrangements satisfactory to Lessor are
made with respect thereto; and (J) be completed promptly and in a good and workmanlike manner. Any
warranties issued in connection with the Leasehold Improvements shall be issued in the name of
Lessor.

So long as no Event of Default (as defined in the Lease) (or any event which with notice and/or
lapse of time could become an Event of Default) has occurred under the Lease, Lessor agrees to make
available an amount equal to Fifty Thousand and 00/100 Dollars ($50,000,00) (the “Improvement
Allowance”) to be used solely for completion of the Leasehold Improvements, the satisfaction of any
architectural and design fees (including fees for the preparation of the plans and specifications
obtained by Lessor), and the payment of the construction Management Fee. Upon completion of the
Leasehold Improvements, and within thirty (30) days after Lessee’s request, Lessor shall reimburse
Lessee, from the Improvement Allowance, the portion thereof requested by Lessee, provided that
Lessee’s request is accompanied by (a) invoices of the general contractor aggregating at least the
amount requested, and (b) a final lien waiver and/or release of lien from the general contractor
associated with the Leasehold Improvements (collectively, the “Construction Documentation”); and
provided further, however, Lessee’s reimbursement shall be no greater than the remaining amount of
the Improvement Allowance after satisfaction of all architectural and design fees and payment of
the Construction Management Fee. Any work (labor or materials) outside the scope of the Approved
Plans or the cost of which is in excess of the portion of the Improvement allowance available for
Lessee’s use shall be at Lessee’s sole cost and expense. Any portion of the Improvement Allowance
remaining upon completion of the Leasehold Improvements shall be deemed forfeited by Lessee.

     4. Lessee’s Repairs. Notwithstanding anything contained in Section 4.02
of the
Lease to the contrary, Lessee shall have no obligation to maintain, keep in good condition, repair,
or replace the skylights and the heating, ventilation and air conditioning system serving the
office portion of the Premises, unless such repairs result from or are caused in whole or in part
by the negligence or misconduct of Lessee, its agents, employees or contractors.

     5. Lessor’s Repairs. Paragraph 4 of the Second Amendment is hereby
delected in its entirely. In lieu thereof, Section 4.03 of the lease is hereby
modified by the addition of the following language at the end of the first sentence:

“;Provided however, that Lessor shall repair and maintain the structural soundness of the roof
(including any repairs or replacement necessary due to leaks in the roof and any other
necessary replacement as reasonably determined by Lessor), exterior walls (excluding windows,
window glass, plate glass and doors), and foundation of the Premises, and shall additionally
repair and maintain the skylights and the heating, ventilation and air conditioning system
serving the office portion of the Premises, excluding any repair or maintenance to any such
items (whether structural or nonstructural) resulting from or caused in whole or in part by the
negligence or misconduct of Lessee, its agents, employees or contractors.”

     7. Renewal Option. Any and all renewal options presently set forth in the Lease,
including, without limitation, the option described in Paragraph 9 of the Second Amendment, are
hereby deleted in their entireties. In lieu thereof, Lessee shall have, at its option (the
“Renewal Option”), the right to renew
and extend the Lease for one term of three (3) years (the “Renewal Term”). The Renewal Term
shall commence immediately upon the expiration of the Extended Term by Lessee’s giving written
notice thereof to Lessor no earlier than nine (9) months, and no later than

2

 

six (6) months, prior to the expiration of the Extended Term. Once Lessee shall exercise any
Renewal Option, Lessee may not thereafter revoke such exercise, except as expressly set forth
below. Lessee shall not have the right to exercise the Renewal Option at a time that an event of
Default (or an event which with notice and/or lapse of time could become an Event of Default) under
the Lease has occured and is continuing. Lessee’s failure to exercise timely the Renewal Option for
any reason whatsoever shall conclusively be deemed a waiver thereof. Lessor shall adjust the
minimum fixed rent for the Renewal Term at an annual rate equal to
ninety-five percent (95%) of the
Fair Market Value Rate (as hereinafter defined) as of the commencement of the Renewal Term
(“Lessor’s Proposed Rate”). As used in the Lease, “Fair Market Value Rate“ shall mean the fair
market value rental rate per square foot of rentable area per year in effect at the commencement of
the Renewal Term for comparable tenants taking comparable space in
comparable conditions under
comparable terms in comparable buildings in the same rental market (hereinafter called “Comparable
Buildings”); provided, however, that in no event shall the minimum fixed rent for the Renewal Term
be less than ninety percent (90%) of the minimum fixed rent for the last twelve (12) months of the
Extended Term. It is also agreed and understood that the Fair Market Value Rate shall include: (a)
rent; and (b) rental operating expenses, property tax, and utility and expense adjustments that are
being included as part of the terms and conditions of industrial tenant leases for comparable
tenants in Comparable Buildings as of the time of detemination of the Fair Market Value Rate.
Lessor shall advise Lessee within twenty (20) days after Lessee exercises the Renewal Option of the
Fair Market Value Rate and Lessor’s Proposed Rate which shall be in effect as of the commencement
date of the Renewal Term.

Lessee shall then have fifteen (15) days to notify Lessor, in writing, of its acceptance or
rejection of the Fair Market Value Rate and Lessors Proposed Rate for the Renewal Term and if
rejecting the Fair Market Value Rate, of its election either to proceed using third-party
appraisers, as hereinafter described, or not to proceed using third-party appraisers. In the event
Lessee fails to so notify Lessor within such fifteen (15) day period or if Lessee rejects the Fair
Market Value Rate and does not elect to proceed using third-party appraisers, Lessee shall be
deemed to have rejected the Fair Market Value Rate and Lessor’s Proposed Rate and to have rejected
its right to use third-party appraisers to determine the Fair Market Value Rate. Notwithstanding
the prohibition on Lessee’s right to revoke its exercise of the Renewal Option, in the event Lessee
rejects (or is deemed to have rejected) the Fair Market Value Rate proposed by Lessor and rejects
(or is deemed to have rejected) its right to use third-party appraisers, Lessee shall be deemed to
have revoked the Renewal Option and the Renewal Option shall be deemed null and void and of no
further force or effect.

If Lessee
notifies Lessor of its election to appoint third-party appraisers to determine the Fair
Market Value Rate within the time period set forth above, Lessee may no longer revoke the Renewal
Option. Lessor and Lessee shall each appoint, by notice to the other within ten (10) business days
after Lessee’s election to use third-party appraisers, a
qualified disinterested MAI appraiser
doing business in the area. If the appraisers so appointed are unable to agree upon the Fair Market
Value Rate within thirty (30) days after the appointment of the second appraiser, they shall,
within ten (10) business days thereafter, appoint a third disinterested MAI appraiser and the
majority shall decide upon the Fair Market Value Rate for the Renewal Term, such decision to be
rendered within forty-five (45) days after the appointment of the third appraiser. If a majority
ate unable to agree within the allotted time, the two determinations of Fair Market Value Rate
nearest to one another in amount shall be added together, divided by two (2), and the resulting
quotient shall be the the Fair Market Value Rate. If either party fails to appoint its appraiser
within the time period provided, the determination of the Fair Market Value Rate shall be made by
the other appraiser alone and if the two appraisers are unable to agree upon a third appraiser
within the time period and the parties are unable to mutually agree within ten (10) days thereafter
upon a third appraiser, either party may request the President or equivalent officer of the Dallas
Texas Chapter of the American Institute of Real Estate Appraisers or if none, an equivalent body,
to appoint the same. Lessor and Lessee shall each pay the cost of the appraiser appointed by each
such party, and Lessor and Lessee shall share equally in the expense of the third appraiser, if
any. The determination of the appraisers shall be final and binding and shall be enforceable by
court order.

Lessee shall take the Premises “as is” for the Renewal Term and Lessor shall have no obligation to
make any improvements or alterations to the Premises. Except as set forth in this Paragraph 7, the
leasing of the Premises for the Renewal Term shall be upon the same terms and conditions as the

3

 

leasing of the Premises for the Extended Term and shall be upon and subject to all of the
provisions of the Lease. Any Renewal Option granted to Lessee under this Paragraph 7 shall be
personal to Lessee and shall not be transferred, encumbered, or assigned by Lessee or in any manner
transferred to, or exercised by, any subtenant of Lessee.

     8. Termination Option. Lessee shall have a one-time only option “Termination Option”)
to terminate the Lease, exercisable upon at least one hundred eighty (180) days prior written
notice to Lessor, which termination shall be effective as of
December 31, 2006 (the “Early
Termination Date”). Lessee shall pay to Lessor, upon its exercise of the Termination Option, an
amount equal to $80,576.37, which amount represents the unamortized portion, as of the Early
Termination Date, of (i) the ninety days of rent abatement which Lessee is receiving pursuant to
Paragraph 2 of this Amendment, and (ii) the brokerage commissions incurred by Lessor in connection
with this Amendment. Once Lessee shall exercise the Termination Option, Lessee may not thereafter
revoke such exercise. Lessee shall not have the right to exercise the Termination Option at a time
that an Event of Default (or an event which with notice or lapse of time could become an Event of
Default) under this Lease has occurred, and any exercise of the Termination Option shall be deemed
null and void if an Event of Default (or an event which with notice
or lapse of time could become
an Event of Default) has occurred and is continuing on the Early
Termination Date. Lessee’s failure
to timely exercise the Termination Option for any reason whatsoever shall conclusively be deemed a
waiver of such Termination Option. The Termination Option is not transferable; the parties hereto
acknowledge and agree that they intend the aforesaid rights to terminate this Lease to be
“personal” to Lessee and that in no event shall any assignee or sublessee exercise the aforesaid
option.

     9. Financial Statements and Credit Reports. At Lessor’s request, Lessee shall deliver to
Lessor a copy, certified by an officer of Lessee as being a true and correct copy, of Lessee’s most
recent audited financial statement, or, if unaudited, certified by Lessee’s chief financial officer
as being true, complete and correct in all material respects. Lessee hereby authorizes Lessor to
obtain one or more credit reports on Lessee at any time, and shall execute such further
authorizations as Lessor may reasonably require in order to obtain a credit report.

     10. Lessee’s Authority. If Lessee signs as a corporation, partnership, trust of other legal
entity, each of the persons executing this Amendment on behalf of Lessee represents and warrants
that Lessee has been and is qualified to do business in the state in which the Premises are
located, that the entity has full right and authority to enter into this Amendment, and that all
persons signing on behalf of the entity were authorized to do so by
appropriate actions.

     11. Brokerage Commissions. Each of the parties hereto represents and warrants to the other that it has
not dealt with any broker or finder in connection with this Amendment, except Cushman & Wakefield
of Texas, Inc. and RREEF Management Company (collectively, “the Brokers”), which Brokers are being
paid by Lessor pursuant to a separate agreement.

     12. Effectiveness.
Except as modified herein, all other terms and conditions of the Lease
shall remain unchanged and shall continue in full force and effect.

     13. Governing Law. The laws of the State of Texas and of the United States of America shall
govern the rights, remedies, and duties of the parties hereto and the validity, construction,
enforcement, and interpretation hereof.

     14. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.

     15. Illegality. If any provision of this Amendment is held be illegal, invalid, or unenforceable
under present or future laws, such provision shall be fully severable; this Amendment shall be
construed and enforced as if such illegal, invalid, or unenforceable provision bad never comprised
a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall
not be affected by the illegal, invalid, or unenforceable provision
or by its severance herefrom.

4

 

     16. Limited Liability. Redress for any claim against Lessor under this Amendment or the
Lease shall be limited to and enforceable only against and to the extent of Lessor’s interest in
the Premises. The obligations of Lessor under this Amendment and the Lease are not intended to be
and shall not be personally binding on, nor shall any resort be had to the private properties of,
any of its or its investment manager’s trustees, directors, officers, partners, beneficiaries,
members, stockholders, employees, or agents, and in no case shall
Lessor be liable to Lessee hereunder
for any lost profits, damage to business, or any form of special, indirect or consequential
damages.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year
first above written.

	 	 	 	 	 
	 	 	LESSOR:
	 
	 	 	 	 
	 	 	ACQUIPORT DFWIP, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Bryan B. Marsh
	 

	 	 	 	 
	 	 	Name: Bryan B. Marsh III
	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	LESSEE:
	 
	 	 	 	 
	 	 	SPORT SUPPLY GROUP,
INC., a Delaware corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Terrence M. Babilla
	 

	 	 	 	 
	 	 	Name: Terrence M. Babilla
	 	 	Title:
  COO

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00093-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00093-of-00352.parquet"}]]