Document:

Exhibit 10.11

 

Sealy Properties

Standard Lease

Multi-Tenant

Net August 2002

(Summit Tech)

 

LEASE AGREEMENT

 

PARTIES

 

This Lease Agreement (“Lease”), is entered into on the
date of the last execution by the parties hereto, between Sealy Summit Tech
L.P., a Georgia limited partnership (“LESSOR”); and Xplore Technologies
Corporation, a corporation organized under the laws of Canada (“LESSEE”), and
includes all pages and exhibits attached hereto and incorporated by reference
herein, and all amendments, modifications, renewals, extensions, restatements,
additions and deletions subsequently effected pursuant to Article 35 herein.

 

1.                                      LEASED PREMISES

 

LESSOR hereby leases to LESSEE, and LESSEE hereby
leases from LESSOR, on the terms, conditions and covenants in this Lease, the
space described, outlined and/or set forth on Exhibit “A”, consisting of 16,485
rentable square feet, and all fixtures, systems and equipment located thereon
(the “Leased Premises”). The municipal address of the Leased Premises is 14000
Summit Drive, Suite 900, Austin, Texas 78728 and is located on the land more
particularly described on Exhibit “B” (the “Land”). The term “Building” in this
Lease shall mean the physical structure(s) and all other improvements located
on the Land in which the Leased Premises is located, known as Sealy Tech Center
@ Summit, 14000 Summit Drive, Austin, Texas 78728. Following Substantial
Completion of the improvements, LESSOR will measure the rentable square footage
in accordance with the standards promulgated by the Building Owners and
Managers Association (BOMA). If it is determined that the actual rentable
square footage varies from the rentable square footage stated herein by more
than a three percent (3%) variance, then in that event the Monthly Base Rent
(and any other provisions of this Lease based upon a specific rentable square
footage) shall be adjusted at the applicable square foot rental figure and an
Amendment of Lease will be executed by the parties memorializing same.

 

2.                                      TERM

 

TO HAVE AND TO HOLD said Leased Premises for a period
of Forty-eight (48) months, commencing on June 1, 2003 or on such
earlier date as LESSEE may take actual possession of the Leased Premises (the “Commencement
Date”), and ending on the later to occur of May 31, 2007 or the last day of the
month that is Forty-eight (48) full calendar months following the Commencement
Date (the “Expiration Date”), unless sooner terminated, renewed or extended as
provided for herein (such period as renewed, extended or terminated hereinafter
referred to as the “Term”). If there is work to be performed by LESSOR pursuant
to Exhibit “C”, the Commencement Date shall be subject to adjustment as
provided in Article 3.

 

 

3.                                      ACCEPTANCE OF LEASED PREMISES; CONDITION AND
SUITABILITY

 

A.             Except
for work required to be performed by LESSOR as provided for pursuant to Exhibit
“C”, LESSEE acknowledges that: (i) it has fully inspected the Leased Premises;
(ii) it is fully aware of the physical condition of the Leased Premises; (iii)
it hereby accepts the Leased Premises in its present AS IS condition with no
express warranties nor promises to repair, replace or maintain (except as
expressly set forth in this Lease) and no implied warranties; (iv) the Leased
Premises is fully suitable for LESSEE’S uses, purposes and occupancy; (v) the
Leased Premises is in good and satisfactory condition.

 

B.              If
the Leased Premises or any part thereof is to be constructed or modified by
LESSOR prior to the Commencement Date, in accordance with Exhibit “C”, the
Lease Commencement Date shall be the date which the improvements required to be
performed by LESSOR pursuant to Exhibit “C” have been substantially completed
in accordance with the terms of Section 5 of the Work Agreement attached hereto
and made a part hereof as Exhibit C.

 

4.                                      BASE RENT, SECURITY DEPOSIT AND ESCROW

 

A.             As
rental for the Leased Premises, LESSEE agrees to pay as rent to LESSOR, without
notice, reduction, deduction or offset, at LESSOR’s office at P.O. Box 1634,
Shreveport, Louisiana 71105, or at such other place as LESSOR may from time to
time designate in writing in advance, the “Base Monthly Rent” as set forth in
Article 4.E. herein on or before the first day of each calendar month through
the Term.

 

B.              LESSEE
has deposited with LESSOR upon delivery of this Lease, $26,376.00 to be
applied as follows: $14,836.50 as the first Total Monthly Payment as
defined herein and $11,539.50 as a Security Deposit. Any amount
designated herein as “Security Deposit” shall not bear interest, may be
commingled with LESSOR’S general funds, and shall not be considered an advance
payment of rent or a measure of LESSOR’s damages. In the event of a Default (as
defined in Article 20), including but in no way limited to the non-payment of
rent, LESSOR may, from time to time without forfeiting, compromising,
releasing, novating or waiving any right or remedy, use the Security Deposit to
the extent necessary to pay past due rent and other amounts due LESSOR.
Following any such application of the Security Deposit, LESSEE shall pay to
LESSOR the amount so applied in order to restore the Security Deposit to its
original amount within five (5) days after written request.

 

C.              If
LESSEE is not in Default, the balance of the Security Deposit shall be returned
by LESSOR (or, in the event of an assignment of LESSOR’s interest in the Leased
Premises and the Security Deposit during the Term, by LESSOR’s assignee) within
sixty (60) days after the later of: (i) the end of the Term or (ii) delivery of
possession of the Leased Premises to LESSOR in accordance with this Lease.

 

D.              In
addition to the Base Monthly Rent, LESSEE agrees to pay to LESSOR as additional
rent its Proportionate Share (as defined in Article 30) of expenses with
respect to the Building and/or project of which the Leased Premises are a part,
including: (i) taxes pursuant to Article 13; (ii) insurance costs pursuant to
Article 8; (iii) utility costs pursuant to Article 12; (iv) Common Area costs
pursuant to Article 11.D.; and (v) the operating expenses set forth in 

 

2

 

Articles 4.D.6. and 4.D.7., (all of the
foregoing expenses being collectively referred to herein as the “Operating
Expense” or “Operating Expenses”). During each month of the Term, on the same
day that rent is due hereunder and without notice or demand, LESSEE shall pay
to LESSOR an amount equal to 1/12 of the estimated annual cost of LESSEE’S
Proportionate Share of the Operating Expenses as reasonably determined by
LESSOR. The initial monthly payments are based upon the estimated amounts for
the first calendar year of the Lease, and subject to the First Year Cap and the
Cap on Controllable Expenses described in Paragraph 4.F. below, may be
increased or decreased by LESSOR to reflect the projected actual cost of all
such items during each calendar year. Subject to the First Year Cap and the Cap
on Controllable Expenses described in Paragraph 4.F. below, if LESSEE’S total
Operating Expense payments applicable to a calendar year are less than LESSEE’s
Proportionate Share of all such items, LESSEE shall pay the difference to
LESSOR within thirty (30) days after written request. If after such adjustment,
the payments for Operating Expenses by LESSEE applicable to a calendar year are
more than LESSEE’S actual Proportionate Share of all such items, LESSOR shall
retain such excess and credit such excess payment against LESSEE’s future
Operating Expense payments due. So long as LESSEE is not in default under this
Lease at the termination of said Lease, then any excess payment, not already credited
to payments for Operating Expenses due during the lease term, shall be refunded
to LESSEE within sixty (60) days after the later of: (i) the termination of the
Term or (ii) delivery of possession of the Leased Premises to LESSOR. LESSOR
shall maintain reasonably detailed books and records accurately documenting
Operating Expenses. Upon written request by LESSEE, LESSOR shall provide LESSEE
with a statement of the actual Operating Expenses incurred by LESSOR during the
preceding calendar year. Within ninety (90) days of LESSEE=s receipt of the
statement and upon reasonable notice from LESSEE, LESSOR shall make available
for LESSEE=s (or by an independent certified accountant) inspection (which
inspection shall be at LESSEE=s sole cost and expense) at LESSOR=s office,
during normal office hours, LESSOR=s records relating to LESSOR=s Operating
Expenses for the preceding calendar year. If LESSEE=s inspection proves that
LESSOR=s calculation of LESSEE=s share of Operating Expenses for the inspected
calendar year was incorrect, then any determined increase or decrease shall be
treated as provided in this Article 4.D.

 

The following shall not be considered Operating
Expenses:

 

1.             Cost
incurred in connection with the original construction of the Building, unless
required under any governmental law that was not applicable to the Leased
Premises as of the Commencement Date;

 

2.             Costs,
including permit, license and inspection costs, incurred with respect to the
installation of tenant improvements for lessees in the Building (including the
original tenant improvements for the Leased Premises), or incurred in
renovating or otherwise improving, decorating, painting, or redecorating space
for lessees or other occupants of the Building, including space planning and interior
design costs and fees, unless required under any governmental law that was not
applicable to the Leased Premises as of the Commencement Date;

 

3.             Costs
arising from LESSOR’s charitable contributions or political donations;

 

4.             Depreciation,
interest and principal payments on mortgages;

 

3

 

5.             Costs
of correcting defects in or inadequacy of the initial design or construction of
the Building and/or Leased Premises, unless required under any governmental law
that was not applicable to the Leased Premises as of the Commencement Date;

 

6.             Costs
of repairs, alterations, additions, improvements or replacements to the leased
premises of other tenants (specifically excluded by this paragraph 4.D.6. is
the cost of repairs, alterations, additions, improvements or replacements to
any portion of the Common Area or any portion of the Building which serves
and/or services more than one tenant in the Building);

 

7.             Any
capital expenditure according to generally accepted accounting principles,
unless required under any governmental law that was not applicable to the
Leased Premises as of the Commencement Date;

 

8.             Related
to the original development or original leasing of the Building, or related to
disputes that involve the Building generally or disputes which involve other
tenants of the Building (other than LESSEE) or are associated with the
enforcement of leases of other tenants, legal fees, planner’s fees, real estate
brokers- leasing commissions and advertising expenses;

 

9.             Costs
for which LESSOR is reimbursed by its insurance carrier or any tenant’s
insurance carrier;

 

10.           Any
uncollectible debt, rent toss, or reserves for bad debts or rent loss;

 

11.           The
expense of extraordinary services provided to other lessees in the Building;

 

12.           Costs
associated with the operation of the business of the partnership or entity
which constitutes LESSOR, as the same are distinguished from the cost of
operation of the Building, including partnership accounting and legal matters,
costs of defending any lawsuits with any mortgagee (except as the actions of
LESSEE may be the issue), costs of selling, syndicating, financing, mortgaging
or hypothecating any of LESSOR’s interest in the Building, costs of any
disputes between LESSOR and its employees (if any) not engaged in Building
operation or otherwise not related to Building operation either directly or
indirectly, or outside fees paid in connection with disputes with other
lessees;

 

13.           Fines,
penalties and interest assessed as a result of LESSOR’s commercially
unreasonable actions or inactions;

 

14.           Amounts
paid as ground rental by LESSOR;

 

15.           Any
recalculation of or any additional Operating Costs actually incurred more than
two (2) years prior to the year in which LESSOR proposed that such costs be
included;

 

16.           Costs
of complying with laws, codes, regulations or ordinances relating to Hazardous
Materials in building materials or otherwise in the Building or Hazardous
Materials in the soil or groundwater under the Building which exist in
violation of laws, codes, regulations or ordinances on the date the Leased
Premises are delivered to LESSEE;

 

4

 

17.           Insurance
deductible amounts in excess of reasonable and customary deductible amounts; and

 

18.           Cost
of services or benefits provided for the exclusive benefit of a particular
tenant.

 

Notwithstanding anything contained in the Lease to the
contrary, in no event shall LESSOR collect greater than one hundred percent
(100%) of the actual Operating Expenses and Operating Expenses shall be net of
all rebates, discounts and credits.

 

E.              The
amount of the Base Monthly Rent and the monthly Operating Expense payments are
as follows:

 

	
   

  	
   

  	
  Months

  	
   

  
	
   

  	
   

  	
  1-2

  	
   

  	
  3-12

  	
   

  	
  13-48

  	
   

  
	
  (1) Base Monthly Rent

  	
   

  	
  $

  	
  0.00

  	
   

  	
  11,539.50

  	
   

  	
  11,539.50

  	
   

  
	
  (2) Taxes

  	
   

  	
  $

  	
  0.00

  	
   

  	
  2,143.05

  	
   

  	
  TBD

  	
   

  
	
  (3) Insurance

  	
   

  	
  $

  	
  0.00

  	
   

  	
  82.43

  	
   

  	
  TBD

  	
   

  
	
  (4) Utilities

  	
   

  	
  $

  	
  0.00

  	
   

  	
  329.70

  	
   

  	
  TBD

  	
   

  
	
  (5) Common Area Maintenance (CAM)

  	
   

  	
  $

  	
  0.00

  	
   

  	
  280.24

  	
   

  	
  TBD

  	
   

  
	
  (6) Management

  	
   

  	
  $

  	
  0.00

  	
   

  	
  461.58

  	
   

  	
  TBD

  	
   

  
	
  Total Monthly Payment

  	
   

  	
  $

  	
  0.00

  	
   

  	
  14,836.50

  	
   

  	
  TBD

  	
   

  

 

F.              Monthly
Operating Expenses for the first twelve (12) months of the Lease Term will not
exceed those sums which equal the amounts shown on the table in Paragraph E.
above (the “First Year Cap”). The CAM charges and the Management fee will not
increase more than five percent (5%) on a cumulative basis from the prior
calendar years actual cost for same (“Cap on Controllable Expenses”).

 

G.              As
used herein, the term “Total Monthly Payment” shall include all subsequent
adjustments pursuant to this Article 4. If this Lease shall commence on any
date other than on the first day of a calendar month, or end on any date other
than the last day of a calendar month, rent for such month shall be prorated on
a daily basis. In the event of a partial calendar year LESSEE’s Proportionate
Share of the Operating Expenses shall be proportionately adjusted based on the
number of days comprising such partial calendar year.

 

5.                                      LATE CHARGES

 

Time is of the essence regarding all amounts payable
to LESSOR. All amounts due under this Lease shall be paid on or before the date
due. LESSEE acknowledges that the late payment of Base Monthly Rent or any
other amounts payable by LESSEE to LESSOR hereunder (all of which shall
constitute additional rent to the same extent as the Base Monthly Rent) will
cause LESSOR to incur administrative costs and other damages, the exact amount
of which would be impracticable or extremely difficult to ascertain. LESSEE AND
LESSOR agree that on the third (3rd)

 

5

 

instance in each calendar
year that LESSOR does not receive any payment on or before five (5) business
days after the date payment is due, LESSEE shall pay to LESSOR, as additional
rental, a late charge equal to five percent (5%) of the overdue amount to cover
such additional administrative costs On other words, LESSEE can be late on
making payment under this Lease two (2) times each 12 months before the late
charge described in this Paragraph is assessed). This provision for a late
charge shall be in addition to all of LESSOR’s other rights and remedies
hereunder or at law or equity, and shall not be construed as liquidated
damages.

 

6.                                      PURPOSE, USE AND OCCUPANCY; COMPLIANCE WITH LAWS

 

A.             The
Leased Premises are leased for the purpose of, and shall be used and occupied
for Office/Warehouse and for no other purpose. The Leased Premises shall not be
used for any unlawful purpose nor in any manner creating a public or private
nuisance or trespass. Neither sidewalks nor loading docks nor any other area
outside the Leased Premises shall be used for sale, storage or display in any
manner whatsoever.

 

B.              LESSEE
shall, at its sole cost and expense, obtain all licenses, certificates, permits
and all other approvals necessary for LESSEE’s use and occupancy of the Leased
Premises, and shall provide LESSOR with copies of same with thirty (30) days of
LESSEE’s occupancy and additional copies as may be reasonably requested within
five (5) days after written request. LESSEE shall comply with all governmental
statutes, laws, ordinances, orders, decrees, decisions, rules and regulations
applicable to LESSEE’s use and occupancy of the Leased Premises, including but
in no way limited to the correction, prevention and abatement of public or private
nuisances or Hazardous Substances (as defined in Article 28.A.), in, upon, or
connected with the Leased Premises as a result of the actions or inactions of
LESSEE, its employees, agents, contractors, patrons, invitees, licensees or
others under LESSEE’s control, all at LESSEE’s sole expense. LESSEE will not
permit the Leased Premises to be used for any purpose or in any manner, or take
or allow any action or inaction, which would not be covered by the insurance
described in Articles 8 or 9 or which would render the insurance thereon void
or voidable or the insurance risk more hazardous or the premium therefor more
expensive. If there is any increase in the cost of any such insurance described
in Article 8 or 9 because of LESSEE’s proposed or actual actions or inactions,
LESSEE shall pay the full amount of such increase within thirty (30) days after
written request.

 

C.              LESSEE
and LESSEE’s agents, employees, contractors and invitees will comply fully with
all requirements of the rules and regulations of the Building and/or project
and related facilities which are attached hereto as Exhibit “D”, and made a
part hereof as though fully set out herein. LESSOR shall at all times have the
right to reasonably change such rules and regulations or to promulgate other
rules and regulations in such manner as may be deemed advisable for safety,
care, or cleanliness of the Building and/or project and related facilities or
premises, and for preservation of good order therein, all of which rules and
regulations, changes and amendments will be forwarded to LESSEE in writing and
shall be carried out and observed by LESSEE, provided same do not abrogate any
of LESSEE’s rights under this Lease and are applicable to all tenants of the
Building. LESSEE shall further be responsible for the compliance with such
rules and regulations by the employees, servants, agents, visitors and invitees
of LESSEE.

 

6

 

7.                                      RELEASE AND INDEMNITY AND WAIVER OF SUBROGATION

 

A.             LESSEE
assumes full responsibility to LESSOR and all third parties for the condition
and security of the Leased Premises, and agrees to keep the Leased Premises in
a safe condition and to defend, indemnify and hold LESSOR, its employees,
representatives, agents, contractors, patrons, invitees, and licensees harmless
from any and all liability for and against any injury or damage relating to,
arising from or connected with: (i) the condition of and the use and occupancy
of the Leased Premises, including but not limited to any injury or damage
caused by, relating to, connected with, or arising from the condition of the
Leased Premises or the actions or inaction’s of LESSEE, its employees, agents,
contractors, patrons, invitees, licensees or others under its control, or by
fire, explosion, falling plaster, or other materials, Hazardous Substances,
steam, gas, electricity, water, rain, sleet, snow, hail, or from leaks from any
parts of the Leased Premises, or from pipes, appliances, or plumbing works,
from the roof, street, or subsurface or from any other place, or by dampness,
or from any damage caused by operations in connection with any construction or
demolition by LESSEE; (ii) all actions or inaction’s of LESSEE, its employees,
agents, contractors, patrons, invitees, licensees or others under its control,
in or about the Leased Premises; (iii) all costs, attorney’s fees, expenses and
liability incurred by LESSOR in connection with any suit, claim or action or
proceeding brought on account of the events and transactions described in Articles
7.A.(i) and (ii); provided, however, LESSEE shall not be required to indemnify
and hold LESSOR harmless from or against any such injury or damage caused by
the negligence of LESSOR, its agents, employees or contractors. LESSOR shall
not be liable or responsible for any loss of or damage to the property of
LESSEE or others by theft, all of which property shall be insured or
self-insured by LESSEE, at LESSEE’s sole cost and expense.

 

B.              LESSOR
and LESSEE each hereby release each other from all loss or damage caused by
perils required by this Lease to be insured through, by or under them by way of
subrogation or otherwise, even if such loss or damage shall have been caused by
the actions or inaction’s of the other party or anyone for whom such party may
be responsible; provided, however, that this release shall be applicable and in
effect only with respect to loss or damage occurring during such times as the
releasor’s policies shall contain a clause or endorsement to the effect that
any such release shall not adversely affect or impair said policies or
prejudice the right of the releaser to recover thereunder and then only to the
extent of the insurance proceeds paid under such policies. LESSOR and LESSEE
agree that they will request their respective insurance carriers to include in
their policies such a clause or endorsement and shall notify in writing each
other if they are unable to obtain same or if same is cancelled subsequent to
issuance.

 

C.              The
provisions of Articles 7.A. and 7.B. shall survive the lease Term with respect
to all events, occurrences, series of events or occurrences, transactions,
suits, claims or actions occurring during the Term of this Lease.

 

8.                                      LESSOR’S INSURANCE

 

LESSOR shall procure insurance policies and charge a
Proportionate Share of the premium cost to the LESSEE pursuant to Articles 4.D.
and 4.E. of, casualty, liability and other insurance coverage for the Leased
Premises, Land, Building and/or project of which the Leased Premises are a
part, as is commercially practicable. Such insurance shall include, but in no
way 

 

7

 

be limited to, casualty
insurance covering the Building in an amount of not less than one hundred
percent (100%) of the replacement cost thereof, excluding foundation and
excavation costs as reasonably determined by Landlord.

 

9.                                      LESSEE’S INSURANCE

 

LESSEE, at its sole expense, shall obtain and maintain
in full force and effect at all times during the Term the following insurance
coverage: (a) workers compensation insurance; (b) “All Risk” fire and extended
coverage insurance covering all contents, fixtures and improvements in the
leased Premises in an amount not less than 100% of their full replacement cost;
(c) public general liability insurance against liability for property damage
and personal injury suffered by anyone by reason of the use or occupancy of the
Leased Premises with minimum limits of $1,000,000 on account of bodily injury
to or death of one person, $1,000,000 on account of any one occurrence affecting
more than one person and $500,000 on account of damage to property; and (d)
insurance covering the releases and indemnities of LESSEE set forth in this
Lease. All of such insurance shall be provided by an insurance company or
companies with A.M. Best ratings of A-VII or better and licensed to do business
in the state in which the property is located, shall include LESSOR as an
additional insured, and shall be non-cancelable except upon thirty (30) days’
written notice to LESSOR and any designees of LESSOR. Within ten (10) days
after the date of this Lease, and thereafter within ten (10) days after written
request, LESSEE shall provide copies of certificates of insurance evidencing
the aforementioned coverage, or other such evidence acceptable to LESSOR in its
sole discretion.

 

10.                               MAINTENANCE AND REPAIR BY LESSOR

 

A.             LESSOR,
at its own cost and expense, shall maintain the Building’s roof, foundation,
the exterior walls, structure and mechanical and electrical systems and the
Common Areas (as defined in Article 11.D. in a manner generally consistent with
the maintenance and repair of comparable properties in the submarket in which
the City of Pflugerville is contained, reasonable wear and tear excepted. The
term “exterior walls” as used herein shall not include windows, glass or plate
glass, doors, special storefronts, or office entries.

 

B.              LESSEE
shall repair and pay for any damage caused by the actions or inactions of
LESSEE, and LESSEE’s employees, agents, contractors, invitees, licensees,
patrons and others under its control, or caused by LESSEE’s Default or failure
to discharge its obligations and duties to repair and maintain the Leased
Premises as provided in this Lease.

 

C.              LESSEE
shall promptly give LESSOR written notice of any defect or need for repairs
after which LESSOR shall have reasonable opportunity to repair same or cure
such defect LESSOR’s liability with respect to any defects, repairs or
maintenance for which LESSOR is responsible under any of the provisions of this
Lease shall be limited to the cost of such repairs or maintenance or the curing
of such defect. LESSOR shall be allowed reasonable access following reasonable
oral notice at all times to the Leased Premises by LESSEE for the purpose of
fulfilling or attempting to fulfill its obligations under this Article 10.

 

D.              Notwithstanding
anything to the contrary contained herein, if any action taken by LESSOR, its
agents, employees or contractors (specifically not included in this Paragraph
10.D. 

 

8

 

is any action, whether direct or indirect, of
any municipality, utility, other tenant in the Building or any other third
party which results in LESSEE’s inability to operate its business) prohibits
LESSEE from operating its business in the Leased Premises for a period in
excess of two (2) consecutive days after notice from LESSEE to LESSOR that
LESSEE is unable to operate as a result of such action, then, rent in the
proportion which the area of the Leased Premises which is not usable by LESSEE
bears to the total area of the Leased Premises shall abate until the date
LESSOR determines (utilizing commercially reasonable standards) that any
interference with the operation of LESSEE’s business in the Leased Premises
resulting from such action by LESSOR, its agents, employees or contractors has
been remedied.

 

11.                               MAINTENANCE AND REPAIR BY LESSEE; COMMON AREA
MAINTENANCE

 

A.             LESSEE
shall, at its sole expense, repair and maintain all parts of the Leased
Premises, ordinary wear and tear excepted and except those for which LESSOR is
expressly responsible under this Lease or unless damage is caused by the
negligence or willful misconduct of LESSOR, its agents, employees or
contractors, in good condition, making all necessary repairs and maintenance,
including but not limited to, ceiling tiles, interior windows or glass, doors,
signs, office entries, railings, interior walls and finish work, floors and
floor covering, heating and ventilation systems, air conditioning systems
serving solely the Leased Premises, dock boards and ramps, truck doors, dock
bumpers, plumbing fixtures, termite and pest extermination, removal of trash
and debris, handicap access areas, and shall keep the whole of the Leased
Premises in a safe, clean and sanitary condition. LESSEE shall not cause or
permit trash to accumulate in or around the Building.

 

B.              In
addition, LESSEE shall at its sole expense, repair and maintain, those portions
of the Leased Premises, to the extent that such items serve the Leased Premises
exclusively, not in common with other LESSEEs; including but not limited to,
plumbing, drains, electrical systems, fire sprinkler systems, loading areas,
lighting, utility consumption, hallways, and other areas and improvements
exclusive of the roof, foundation, grounds, parking areas, and other structural
components or building systems not dedicated exclusively to the Leased
Premises.

 

C.              LESSEE
shall not damage any demising wall or supports or disturb the integrity or
support provided by any demising walls or supports and shall, at its sole
expense, promptly repair any damage or injury to any demising wall or support
caused by LESSEE or its employees, agents, contractors, invitees, licensees,
patrons or others under its control.

 

D.              In
multiple occupancy buildings, LESSOR shall operate and perform maintenance,
repair, and replacement as necessary to the Common Areas. The Common Areas are
the parts of the Land and Building as designated by LESSOR from time to time
for the common use of the tenants, including, but not limited to, plumbing,
drains, electrical systems, fire sprinkler systems, gutters, downspouts,
exterior painting, trees, shrubs, Landscaping, parking areas, driveways,
sidewalks, curbs, bollards, loading areas, rail spur areas, private streets and
alleys, lighting, hallways, and other areas and improvements provided by LESSOR
for the common use of all tenants, exclusive of the roof, foundation and other
structural components of the Building, all of which shall be operated and
maintained by LESSOR in such manner as set forth in Article 10 above. LESSOR
reserves the right to change from time to time the dimensions 

 

9

 

and location of the Common Areas. Subject to
the First Year Cap and the Cap on Controllable Expenses, LESSOR shall charge to
LESSEE pursuant to Articles 4.D. and 4.E. LESSEE’s Proportionate Share of the
cost of operation and maintenance of the Common Areas (including, but not
limited to, commercially reasonable costs incurred for management fees (not to
exceed four percent [4%] of gross rental receipts), maintenance, personnel,
lighting, utility consumption, owners association dues, heating, air
conditioning, water, sewerage, painting, termite control, pest extermination,
trash and debris removal, cleaning, inspecting, landscaping, lawn sprinkler
systems, repairing, replacing, policing, guarding and protecting) which may be
incurred by LESSOR in its discretion.

 

E.              LESSOR
reserves the right after ten (10) days’ prior written notice to LESSEE (except
in the event of an emergency), but is not obligated to make repairs,
maintenance and replacements which are otherwise LESSEE’s obligation under this
Article 11., and LESSEE shall, with respect to such items, be liable for and
pay to LESSOR the actual cost of same within ten (10) days after written
request. Provided that if any other particular tenant of the Building can be
clearly identified as being responsible for the actions or inaction’s leading
to the need for such repair, maintenance or replacement as described in this
Article 11., then LESSOR shall seek from such other tenant, if responsible, to
pay for entire cost thereof.

 

F.              LESSEE
shall, at its sole expense, enter into a regularly scheduled preventive
maintenance/service contract with a maintenance contractor for servicing all
hot water, heating, ventilation and air conditioning systems and other
equipment within the Leased Premises. LESSOR reserves the right to approve or
disapprove (which approval shall not be unreasonably withheld, delayed or
conditioned) of any maintenance contract and the contractor(s) performing work
on equipment serving the Leased Premises, The service contract must include all
services recommended by the equipment manufacturer and must become effective
and a copy thereof delivered to LESSOR without demand within thirty (30) days
of the date of this Lease.

 

12.                               UTILITIES

 

LESSOR agrees to provide, at its sole expense, the
connections to the Leased Premises for sewer, water, electricity, natural gas
and telephone service; but LESSEE shall pay for all charges for water, gas,
heat, light power, telephone, sewer, fire sprinklers and all other utilities
and services used on or from the Leased Premises, together with any taxes,
assessments, deposits, surcharges or other additional charges, penalties or the
like pertaining thereto and any repair and maintenance charges for utilities
exclusively serving the Leased Premises, and LESSEE shall furnish all electric
light bulbs and tubes and elements. If any such services are not separately
metered to LESSEE, LESSEE shall pay its Proportionate Share (which amount shall
be adjusted for any disproportionate user[s]) of the cost of such services
pursuant to Articles 4.D. and 4.E. of all charges jointly metered with other
tenants of the Building; provided, however, LESSOR shall have the right to
charge LESSEE with a greater share of the cost of such services on an equitable
basis following written verification of same or a sub meter placed in the
Leased Premises at LESSEE’s sole expense, to the extent LESSEE is using a
disproportionately large amount of the services in relation to the other
tenants of the Building and/or project. LESSOR reserves the right to cause any
of said services to be separately metered to LESSEE at LESSEE’s sole expense.
LESSOR shall not be liable or pay for any interruption, re-establishment or
failure of utility services to the Leased Premises.

 

10

 

A.             Notwithstanding
anything to the contrary contained in this Article 12, if by reason of the
intentional act or omission or negligence of LESSOR, its agents, employees or
contractors (not included in the provisions of this Paragraph 12.A. is any
action (whether direct or indirect) of any municipality, utility, other tenant
in the Building or any other third party which results in an interruption or
discontinuance in LESSEE’s utilities or other services) there is an
interruption or discontinuance in the utilities furnished by LESSOR or other
services LESSOR is required to provide under this Lease which results in LESSEE
being unable to conduct business from all or a substantial portion of the
Leased Premises, and LESSEE does in fact cease the conduct of business in the
Leased Premises or such substantial portion thereof for a period in excess of
two (2) consecutive business days, then rent shall abate beginning on the third
(3rd) consecutive business day of the interruption or discontinuance
and ending on the services are restored such that LESSEE is again reasonably
able to conduct business at the Leased Premises or such portion thereof. Such
abatement shall be in an amount bearing the same ratio to the total amount of
rent for such period as the portion of the rentable square feet of the Leased
Premises from which LESSEE is unable to and does not conduct business from time
to time bears to the rentable square feet of the entire Leased Premises, it
being acknowledged that LESSEE may be unable to conduct business from portions
of the Leased Premises, even if not directly affected by an interruption or
discontinuance of services, if they cannot be occupied for the conduct of
LESSEE’s business as a result of an interruption or discontinuance of services
to other areas of the Leased Premises which are critical to LESSEE’s business
operations.

 

13.                               TAXES

 

A.             LESSEE
shall pay, in advance, LESSEE’s Proportionate Share pursuant to Articles 4.D.
and 4.E., of all taxes, assessments and governmental charges of any kind and
nature imposed upon the Leased Premises, Land, Building and/or project of which
the Leased Premises are a part (referred to herein as “Taxes”). If at any time
during the Term, there shall be levied, assessed or imposed on LESSOR a capital
levy or other tax directly on the rents received from the Leased Premises,
Land, and/or a franchise tax, assessment, levy or charge measured by or based,
in whole or in part upon such rents from the Leased Premises, Land or Building,
in which the Leased Premises is located, 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.” Taxes shall not include any net income,
capital stock, succession, transfer, franchise, gift, estate or inheritance
taxes. If LESSOR receives a refund of any Taxes of which LESSEE paid LESSEE’s
Proportionate Share hereunder, within sixty (60) days after receipt thereof
LESSOR shall reimburse LESSEE for LESSEE’s Proportionate Share of such refund
applicable at the time LESSEE paid LESSEE’s Proportionate Share thereof.

 

B.              LESSEE
shall be liable for and pay all taxes, assessments, levies and governmental
charges imposed against any personal property or fixtures placed in the Leased
Premises. If any such taxes, assessments, levies or governmental charges are
against LESSEE’s property and (i) LESSOR pays same or (ii) the assessed value
of LESSOR’s property is increased by inclusion of LESSEE’s personal property
and fixtures and LESSOR pays all or part of same, then, within fifteen (15)
days after written request, LESSEE shall pay same to LESSOR.

 

11

 

C.              LESSOR
shall have the option, but not the obligation, to pay any and all taxes,
assessments, levies and charges (whether or not included in the aforementioned
definition of Taxes) payable by LESSEE under this Lease or by law. If LESSOR
does so, LESSEE shall pay to LESSOR the amount so paid within fifteen (15) days
after written request.

 

D.              LESSOR
shall have the right to employ a tax consulting firm to attempt to assure a
fair tax burden on the Leased Premises, Land and Building within the applicable
taxing jurisdiction, and LESSEE’s Proportionate Share of the cost of such
consultant shall be included as taxes to be charged to LESSEE pursuant to this
Article.

 

14.                               ALTERATIONS AND FIXTURES

 

LESSEE shall not make any alterations, additions or
improvements (“Alterations”) to the Leased Premises, Land or Building
(including but in no way limited to roof and wall penetrations) without the
express prior written consent of LESSOR, which consent shall not be unreasonably
withheld, delayed or conditioned. LESSEE may, without the consent of LESSOR but
with written notice to LESSOR of same, and at LESSEE’s sole expense and in a
good workmanlike manner, (a) erect such shelves, bins, machinery and trade
fixtures (“Fixtures”), without altering the structural soundness, aesthetics or
basic character of the Leased Premises, Land or Building or its walls and (b)
make additional non-structural alterations to the Leased Premises which in the
aggregate do not exceed $10,000 in any twelve (12) month period, and in all
cases complying with all applicable governmental laws, ordinances, decisions,
orders, decrees, regulations and other requirements. All Alterations and
Fixtures erected by LESSEE that are affixed to the Leased Premises or the
Building shall be and remain the property of LESSOR during the Term of this
Lease; however, if LESSOR elects, in writing, LESSEE shall remove Alterations
and Fixtures erected by LESSEE and restore the Leased Premises to its original
condition by the end of the Term or upon earlier vacating of the Leased
Premises, whichever comes first, provided LESSEE shall not be required to
remove any improvements existing as of the Commencement Date or which were not
identified at the time of LESSEE’S request or notice of such Alteration. Any
Alterations and Fixtures remaining in the Leased Premises shall remain the
property of LESSOR upon and after such end of the Term or LESSEE’s earlier
vacating of the Leased Premises. All removals and restorations by LESSEE shall
be accomplished in a good and workmanlike manner so as not to damage the Leased
Premises, Land or Building or their structural, aesthetic or functional
qualities, and LESSEE shall repair any such damage at its sole cost and
expense.

 

15.                               SIGNS AND SIGN REMOVAL

 

After first obtaining express written approval from
LESSOR, LESSEE shall have the right to erect signs on the exterior walls of the
Building in accordance with signage specifications established by LESSOR. Any
such signs to be securely attached parallel to the walls and shall be in
keeping with the general scheme of the signs and aesthetic characteristics in
the immediate vicinity of the Leased Premises and shall not be other than
customary trade signs identifying the business of LESSEE. LESSEE shall not
erect any sign over the public way, over the roofline or on the roof, nor paint
or otherwise deface or alter the exterior walls of the Building or Leased
Premises. The erection of any signs by LESSEE shall be subject to and in
conformity with all applicable laws, zoning ordinances, and building
restrictions, covenants of 

 

12

 

record and in accordance
with LESSOR’s signage standards. On or before the end of the Term, LESSEE shall
remove all signs thus erected, and shall repair any damage or disfigurement,
and close any holes, caused by such removal.

 

16.                               ASSIGNMENT OR SUBLETTING

 

LESSEE may not assign this Lease or sublease the
Leased Premises in whole or in part without LESSOR’s prior express written
consent (which consent shall not be unreasonably withheld if the prospective
assignee or sublessee is financially comparable to LESSEE by commercially
reasonable standards, and then only in accordance with and subject to the
following conditions, the satisfaction of which shall be in the reasonable
discretion of LESSOR:

 

A.             If
LESSEE desires to assign this Lease or sublet the Leased Premises in whole,
then, at least sixty (60) days prior to the proposed effective date of any
assignment or sublease, the LESSEE shall deliver to LESSOR a written notice of
intention to assign or to sublease, setting forth a proposed commencement date
for the assignment or sublease and shall attach to such notice a copy of the
proposed assignment or sublease agreement and all agreements collateral
thereto. The LESSOR shall then have the right, to be exercised by giving
written notice to LESSEE within thirty (30) business days after receipt of
LESSEE’s notice of intention to assign or sublease, to cancel and terminate
this Lease, as of the day before the proposed effective date of the assignment
or sublease.

 

B.              In
the event of the assignment of this Lease or sublease of all or any portion of
the Leased Premises where the rental reserved in the assignment or sublease
exceeds the rental or the pro-rata portion of the rental, as the case may be,
for such space reserved in this Lease, LESSEE shall pay the LESSOR monthly, as
additional rent, at the same time and at the same place as the monthly
installments of rent hereunder, the excess of the rental reserved in the
assignment or sublease over the rental reserved in this Lease applicable to the
assigned or subleased space after deducting LESSEE’S expenses, including
brokerage commissions, legal fees, improvement costs, and rent concessions and
advertising costs.

 

C.              None
of LESSEE’s obligations to LESSOR under this Lease shall be waived, forfeited,
compromised, released or novated regardless of any assignment or sublease, and
any assignment or sublease shall be expressly subject to and in compliance with
the provisions of this Lease. Further, the terms and conditions of this Lease
shall take precedence over and control the provisions of any sublease or
assignment to the extent of conflict or differing interpretation.

 

D.              Notwithstanding
anything contained herein to the contrary, LESSEE may, upon written notice to
LESSOR, but without obtaining LESSOR’s consent, assign this Lease or sublease
all or any part of the Leased Premises (“Permitted Transfers”) to (a) a
wholly-owned subsidiary of LESSEE, (b) the parent of LESSEE, (c) any entity
into or with which LESSEE may be reorganized, merged or consolidated, (d) an
affiliate of LESSEE (for purposes hereof an affiliate shall mean any business
entity controlling, controlled by or under common control with LESSEE), or (e)
any person or entity which acquires all of the assets of LESSEE as a going
concern of the business that is being conducted on the Leased Premises,
provided that such transferee assumes in full the obligations of LESSEE under
the Lease (“Permitted Transferee”).

 

13

 

17.                               DAMAGE OR DESTRUCTION

 

A.             If,
at any time prior to the Commencement Date or during the first one half (1/2)
of the Term, the Leased Premises or the Building should be destroyed or damaged
to any extent which may require repairs in an amount in excess of twenty (20%)
percent of the replacement cost, less reasonable depreciation under the
straight line method, of the Leased Premises or the Building after having been
verified to LESSEE in writing by the project’s architect, LESSOR shall have the
right and option of either.

 

(1)           Terminating
this Lease upon reasonable days’ prior written notice, in which case neither
party shall have any rights against the other party from and after the
occurrence or destruction except those arising from this Lease; or

 

(2)           Repairing
or rebuilding such damaged or destroyed portions of the Leased Premises or
Building in substantially the same or better condition as immediately prior to
the destruction or damage, in which event rental shall be reduced
proportionately to the loss of actual physical occupancy suffered by LESSEE,
provided that, if such damage was the result of the actions or inactions of
LESSEE, its employees, agents, contractors, invitees, licensees, patrons or
others under its control, rental shall not be reduced during such period.

 

B.              If
during the first one half (1/2) of the Term there should be any such damage or
destruction, but to an extent less than the said twenty (20%) percent of the
depreciated replacement cost as discussed above, this Lease shall continue and
LESSOR shall repair or rebuild the damaged or destroyed portions of the Leased
Premises as set forth in Article 17.A. above, and the rent shall be reduced in
proportion to the actual loss of physical occupancy suffered by LESSEE for the
period of the repair or rebuilding, provided LESSOR shall have no obligation to
spend or incur costs for such repair or rebuilding in excess of the insurance
proceeds actually paid to LESSOR.

 

C.              If
during the last one-half (1/2) year of the Term, there should be any damage or
destruction (without any regard to whether the percentage of replacement cost
exceeds twenty (20%) percent) to the Leased Premises or the Building, LESSOR
shall have the same option to repair or rebuild or terminate this Lease (such
termination to occur only after giving LESSEE reasonable prior written notice
of same).

 

D.              If
during sixty (60) days after the occurrence of any damage or destruction which
gives rise to the option of LESSOR either to terminate, repair or rebuild,
LESSOR should not give LESSEE notice of its decision, then this Lease shall
continue in full effect, the option to terminate this Lease shall be deemed to
have been waived, and LESSOR shall repair or rebuild the Leased Premises,
provided LESSOR shall have no obligation to spend or incur costs for such
repair or rebuilding in excess of the insurance proceeds actually paid to
LESSOR.

 

E.              If
LESSOR elects to rebuild or lease is not terminated, and the Leased Premises
are not repair and accessible within two hundred seventy (270) days from the
date of casualty, LESSEE may terminate this Lease.

 

14

 

18.                               CONDEMNATION

 

A.             If,
at any time during the Term, (a) title to the entire Leased Premises should
become vested in a public or quasi-public authority by virtue of the exercise
of expropriation, condemnation or other power in the nature of eminent domain,
or by voluntary transfer from the owner of the Leased Premises under threat of
such a taking, or (b) if less than the entire Leased Premises be thus taken, or
transferred in lieu of such a taking, but it would be legally and commercially
impossible for LESSEE to occupy the portion of the Leased Premises remaining,
and impossible for LESSEE reasonably to conduct his trade or business therein,
or then in either event, the Term shall end as of the time of such vesting of
title, after which neither party shall be further obligated to the other except
for occurrences antedating such taking.

 

B.              Should
there be such a partial taking or transfer in lieu thereof, but not to such an
extent as to make such continued occupancy and operation by LESSEE an
impossibility, then this Lease shall continue on all of its same terms and
conditions subject only to a reduction in rent proportionate to such taking. It
is provided, however, that LESSOR shall have the right and option to terminate
this Lease in the event there is a partial taking or transfer in lieu thereof
which affects a portion of the Building and/or the project to the extent that,
in LESSOR’s reasonable opinion, it is commercially impractical to continue the
operation of the Building or the project in a manner that will justify the
continuation of this Lease.

 

C.              In
the event of any such taking or private purchase in lieu thereof, all
compensation awarded for any taking (or sale proceeds in lieu thereof) of the
fee or leasehold interest shall be the property of LESSOR, and LESSEE shall
have no claim thereto, the same being hereby expressly waived by LESSEE. Any
amounts specifically awarded or agreed upon by LESSEE and the expropriating
authority for the taking of LESSEE’s removable trade fixtures or
moving/relocation expenses shall be the property of LESSEE. LESSEE further
grants LESSOR exclusive authority to negotiate with any such authority for
payment both with respect to the interest of LESSOR and the leasehold interest
of LESSEE in the Leased Premises.

 

19.                               ENTRY DURING TERM

 

A.             LESSOR
shall have the right to enter the Leased Premises throughout the Term for the
following purposes: (1) inspecting the general condition and state of repair of
the Leased Premises; (2) performing such maintenance and other obligations as
may be required or permitted by this Lease of LESSOR; (3) showing the Leased
Premises to any prospective purchasers, lenders; (4) showing the leased
premised to prospective tenants during the last six (6) months of the Term or
in the event of Default by LESSEE, at any time; (5) taking any emergency action
which LESSOR in its sole discretion deems necessary to protect the Leased
Premises, Land or Budding; (6) determining whether there has been a Default
under this Lease; and (7) any other reasonable purposes. Except in the event of
emergency action, LESSOR’s entry shall be upon prior reasonable notice to
LESSEE. In all instances, LESSOR shall minimize interference with LESSEE’s
business operations during any such entry.

 

B.              If
this Lease is not renewed or extended within one hundred twenty (120) days
prior to the end of the Term, LESSOR, its officers, agents or assigns, shall
have the right to erect on or about the Leased Premises a customary sign
advertising the Leased Premises, Building 

 

15

 

and/or Land for tease or for sale; and shall
likewise have the right to enter the Leased Premises for the purpose of showing
the Leased Premises to prospective tenants as set forth above.

 

20.                               DEFAULT

 

The following, whether one or more and whether
occurring together or separately, shall each be considered a breath and default
by LESSEE under and of this Lease (“Default”): (i) failure to timely pay all or
part of any amount payable under this Lease within five (5) days after LESSEE’s
receipt of written notice that same is past due; (ii) failure, for any reason
whatsoever, of LESSEE to perform or effect performance of any of the other
terms, conditions, obligations, agreements or covenants to be observed or
performed by LESSEE under this Lease, within thirty (30) days after written
notice to LESSEE of its failure to do so, subject to extension if such breach
or default cannot be cured within thirty (30) days and LESSEE is diligently
prosecuting cure; (iii) failure to immediately comply with the provisions of
Article 28 entitled “Environmental Hazards”; (iv) LESSEE or any officer, agent,
successor, employee, director, legal representative or assign of LESSEE shall
falsify any report or information furnished to LESSOR; (v) LESSEE or any
guarantor of this Lease shall become bankrupt or insolvent or file or have
filed against it any debtor or bankruptcy proceeding pursuant to any statute,
either of the United States or of any state, or for the reorganization or for
the appointment of a receiver or trustee of all or a portion of its property
and not dismissed within sixty (60) days; (vi) LESSEE or any guarantor of this
Lease makes an assignment for the benefit of creditors, or petitions for or
enters into a plan of arrangements; and (vii) LESSEE shall abandon the Leased
Premises without continuing to pay rent or suffer this Lease to be seized or
otherwise taken under any levy, turnover order, writ of execution or any other
order, decree, writ or judgment

 

21.                               REMEDIES

 

A.             Upon
each occurrence of Default, LESSOR shall have the option to lawfully pursue, at
any time and from time to time, any one or more of the following remedies,
and/or any other remedy provided by law or in equity, with notice as required
by any municipal, county, state or federal law to the contrary:

 

(1)           Terminate
this Lease; and/or

 

(2)           Enter
upon and take possession of the Leased Premises with or without terminating
this Lease; and/or

 

(3)           Alter
and/or change all locks and other security devices at the Leased Premises with
or without terminating this Lease;

 

and in any such event LESSEE immediately shall
surrender possession of the Leased Premises to LESSOR, and if LESSEE fails so
to do, LESSOR may enter upon and take possession of the Leased Premises and
expel or remove LESSEE and LESSEE’s property and any other person and property
occupying such Leased Premises or any part thereof, without further notice
unless required by law and without being liable for prosecution or any claim of
damages therefore, including but in no way limited to trespass or loss or
damage to persons or property.

 

16

 

B.              If
LESSOR terminates this Lease, LESSEE shall be liable for and shall pay to
LESSOR within five (5) days after written request the sum of all base monthly
rental and other payments owed to LESSOR hereunder accrued through the date of
such termination, plus an amount equal to (1) the present value (using a
discount rate equal to the 90 day U.S. Treasury Bill rate at the date of such
determination) of the remaining Total Monthly Payment payments for the
remaining portion of the Lease, calculated as if the Term expired on the date
set forth in Article 2, less (2) the then present fair market rental value of
the Leased Premises remaining for such period.

 

C.              If
LESSOR repossesses the Leased Premises without terminating this Lease, LESSEE,
at LESSOR’s option, shad be liable for and shall pay LESSOR within five (5)
days after written request all of the Total Monthly Payment and other payments
owed to LESSOR accrued through the date of such repossession, plus on a monthly
basis all amounts required to be paid by LESSEE to LESSOR under this Lease
through the date of expiration of the Term diminished by all amounts received
by LESSOR through reletting the Leased Premises for the remainder of the Term.
Actions to collect amounts due by LESSEE to LESSOR under this Article 21.C. may
be brought from time to time, on one or more occasions, without the necessity
of LESSOR’s waiting until expiration of the Term.

 

D.              Upon
Default, in addition to any amount provided to be paid herein, LESSEE also
shall be liable for and shall pay to LESSOR (i) brokers’ fees incurred by
LESSOR in connection with reletting the whole or any part of the Leased
Premises; (ii) the costs of removing and storing LESSEE’S or other occupant’s
property; (iii) the costs of repairing, altering, remodeling or otherwise
putting the Leased Premises and the fixtures, equipment and systems located
therein into condition acceptable to a new tenant; and (iv) all reasonable
expenses and fees, including but in no way limited to attorney’s fees, incurred
by LESSOR in enforcing or defending LESSOR’S rights and/or remedies; (v)
interest at the rate of eighteen percent (18%) per annum on all sums due and
owed to LESSOR by virtue of any provision of this lease including without
limitation, Base Monthly Rent and late charges, from the time they are due and
payable until they are paid. Notwithstanding the above, if LESSOR relets the
Leased Premises for a term (the “Relet Term”) that extends past the Expiration
Date of this Lease, the costs of reletting which may be included in LESSOR’s
damages under this Lease shall be limited to a prorated portion of the costs of
retelling, based on the percentage that the length of the Term remaining on the
date LESSOR terminates this Lease or LESSEE’s right to possession bears to the
length of the Relet Term. For example, if there are two (2) years left on the
Term at the time that LESSOR terminates possession and, prior to the expiration
of the two (2)-year period, LESSOR enters into a lease with a Relet Term of ten
(10) years with a new tenant, then only twenty percent (20%) of the costs of
reletting shall be included when determining LESSOR’s damages.

 

E.              In
the event of termination and/or possession of the Leased Premises for a
Default, LESSOR shall use reasonable efforts to re-let the Leased Premises and
to collect rental after retelling; provided that LESSEE shall not be entitled
to a credit or reimbursement from any proceeds in excess of the rental or other
amounts owed under this Lease. LESSOR may relet the whole or any portion of the
Leased Premises for any period, to any tenant and for any use and purpose.

 

17

 

F.              If
LESSOR repossesses the Leased Premises, and LESSEE has not removed all of the
furniture, fixtures, equipment and other contents located at the Leased
Premises, including that which is owned by or leased to LESSEE at all times
prior to any foreclosure or repossession by LESSOR or third party having a lien
thereon. LESSOR also shall have the right to relinquish possession of all or
any portion of such furniture, fixtures, equipment and other property to any
person (“Claimant”) who presents to LESSOR a copy of any instrument represented
by Claimant to have been executed by LESSEE (or any predecessor of LESSEE)
granting Claimant the right under various circumstances to take possession of
such furniture, fixtures, equipment or other property, without the necessity on
the part of LESSOR to inquire into the authenticity or legality of said
instrument. The rights of LESSOR herein stated shall be in addition to any and
all other rights that LESSOR has or may hereafter have at law or in equity; and
LESSEE stipulates and agrees that the rights granted LESSOR are commercially
reasonable.

 

G.              Should
LESSOR fail to perform any of its obligations hereunder, LESSOR will have a
period of thirty (30) days (unless a shorter or longer time is specifically set
forth in another provision of this Lease) after its receipt of written notice
from Tenant of a failure of performance, within which to commence a cure of
that failure. Failure of LESSOR to commence that cure within the 30-day period
or to effect the cure within the 30-day period (unless such cure will, due to
the nature of the obligation, require a period of time in excess of thirty (30)
days, then after such period of time as is reasonably necessary), shall
entitled LESSEE, at its option, to elect to: (a) bring an action to require
specific performance of LESSOR’s; (b) provide LESSOR with an additional period
of time within which to effect that cure; (c) commence such cure itself, and
require that LESSOR immediately reimburse LESSEE for its expenses; provided,
however, in the event of an emergency, LESSEE may immediately effect a cure of
LESSOR’s failure should LESSOR fail to act immediately to do so, without the
requirement of any notice by LESSEE to LESSOR; and/or (d) pursue any other
remedies provided herein or provided by law. Notwithstanding anything to the
contrary contained herein, LESSEE’s self-help remedies under this Paragraph
21.G. shall not include the right to set off from its Base Monthly Rent
payments any expenses incurred in remedying LESSOR’S failure to take any
action.

 

22.                               CONDITION AT TERMINATION AND KEYS

 

The Leased Premises and keys to same shall be
surrendered to LESSOR, broom clean (free of all debris and property of LESSEE),
no later than midnight on the last day of the Term, with the entire Leased
Premises in good repair, reasonable wear and tear excepted (except as provided
to the contrary in this Lease), and with all equipment and systems in good
operating condition. Should LESSEE surrender the Leased Premises or the
equipment or systems in other than the above specified condition, LESSEE hereby
grants LESSOR the right to have the Leased Premises placed in such condition
and LESSEE agrees to pay the cost of such reconditioning, within thirty (30)
days after written request to LESSEE. At the end of the Term, LESSEE shall
surrender all keys to LESSOR at the place then fixed for the payment of rent or
such other location as specified by LESSOR in writing. All obligations of the
LESSEE contained in this Article 22 shall survive the end of the Term.
Notwithstanding any provision in this Lease to the contrary, all personal
property of LESSEE that shall remain in the Leased Premises after the vacation
of the Leased Premises by LESSEE shall be deemed abandoned, shall thereupon, at
the election of LESSOR, become the property of LESSOR, and the LESSOR may
dispose of such 

 

18

 

property in any way at
any time, without notice, as LESSOR sees fit without liability or payment for
same or damage thereto to LESSEE, at LESSEE’s sole expense.

 

23.                               HOLDING OVER

 

Should LESSEE fail to surrender the Leased Premises or
any part thereof at the end of the Term, such holding over shall constitute a
month to month lease under the same terms and conditions as this Lease, except
at a monthly rental for the first three (3) months of the holdover equal to
125% of the rent due for the last full month of the Term and then, equal to
150% of the rent due for the last full month of the Term. This Paragraph 23
shall not e construed as consent for LESSEE to retain possession of the Leased
Premises.

 

24.                               FINANCIAL STATEMENTS

 

On no more than two occasions per twelve month period
and upon the written request of LESSOR, LESSEE shall within ten (10) days of
said request, furnish to LESSOR a copy of LESSEE’S income statements and
balance sheets covering LESSEE’s last fiscal year for which statements have
been completed and which shall include all corresponding notes, comments,
opinions and statements. Such financial information shall be certified by
LESSEE or a Certified Public Accountant to be materially accurate.

 

25.                               SUBORDINATION AND ATTORNMENT

 

A.             LESSEE
agrees that this Lease is and shall remain subject to and subordinate to all
present and future mortgages, deeds to secure debt, deeds of trust, security
agreements, financing statements and all other security instruments and other
similar encumbrances (the “Encumbrances”) affecting the Land or the Building,
or any part thereof, and within ten (10) business days after written request,
LESSEE shall execute, acknowledge, verify and deliver to LESSOR such
certificate(s), letters, representations and agreements in writing as LESSOR or
its lender may reasonably request, acknowledging the subordination of this
Lease to such Encumbrances. Notwithstanding anything contained herein to the
contrary, the subordination of this Lease to any current or future mortgages
hereafter affecting the Leased Premises is subject to the express condition
that so long as the Lease is in effect and no Default exists, this Lease shall
not be terminated nor shall LESSEE’S use, possession or enjoyment of the Leased
Premises be interfered with, nor shall the leasehold estate granted by this
Lease be affected in any other manner, in any foreclosure or any action or
proceeding instituted under or in connection with such mortgages. LESSOR,
LESSEE and any current or future mortgagee shall enter into a commercially
reasonable form of subordination, non-disturbance and attornment agreement (“SNDA”)
reasonably acceptable to LESSEE.

 

B.              Nothing
in this Lease shall in any manner restrict LESSOR’s right to assign or encumber
this Lease in its sole discretion. Should the LESSOR assign this Lease or
should LESSOR enter into Encumbrances affecting all or any portion of the
Leased Premises and should the holder(s) of such Encumbrances succeed to the
interest of LESSOR, LESSEE shall be bound to any such holder under all the
terms, covenants and conditions of this Lease, and LESSEE shall promptly attorn
to such holder as LESSOR under this Lease.

 

19

 

26.                               EXCULPATION

 

LESSEE agrees that LESSEE shall look solely to LESSOR’S
interest in the Leased Premises, Land and Building (or proceeds thereof) for
the satisfaction of any claim, judgment, decree, decision, or ruling lawfully
requiring the payment of money by LESSOR, and no other property or assets of
LESSOR, its officers, directors, agents, employees, partners, owners,
shareholders, successors, assigns or legal representatives, shall be subject to
lien, levy, execution or other enforcement procedure for the satisfaction of
any such claim, judgment, injunction, decree, decision or ruling, nor shall any
of the foregoing individuals or entities have any liability, whether jointly,
individually or derivatively, for any obligation of or any claim against
LESSOR.

 

27.                               ESTOPPEL REPRESENTATIONS

 

Within ten (10) business days after written request
from LESSOR, LESSEE shall execute, acknowledge, verify and deliver to LESSOR
written statements certifying that this Lease in full force and effect (and, if
there has been a modification thereof, that the same is in full force and
effect as modified), that to the best of LESSEE’s knowledge there are no
uncured defaults on the part of LESSOR (or of any such default exists, the
specific nature and extent thereof), the date to which any rent or other
charges have been paid in advance, if any, and such other matters as LESSOR may
reasonably request.

 

28.                               ENVIRONMENTAL HAZARDS

 

A.             The
term “Hazardous Substances”, as used in this Lease shall mean all pollutants,
contaminants, explosives, flammable materials, compressed materials, corrosives
and toxic, radioactive and hazardous materials, and all other substances, the
use, containment, existence, monitoring, transporting, maintenance prevention
and/or removal of which is monitored, restricted, prohibited or penalized by an
“Environmental Law”, which term shall mean all federal, state or local laws,
ordinances, statutes, orders, directives and decrees, and all orders,
directives, rulings, rules, regulations and decisions of a governmental or
quasi-governmental authority, and all decisions, orders, decrees and judgments
of a judicial or quasi-judicial body, and all rules, regulations, rulings,
orders, directives and decisions of any regulatory or quasi-regulatory body
relating to the foregoing or the pollution, contamination, regulation,
monitoring, cleansing or protection of the environment. LESSEE hereby agrees
that: (i) no activity or inactivity will be conducted on the Leased Premises
that will produce any Hazardous Substances, except for such activities that are
part of ordinary course for LESSEE’S business activities and which are
conducted in accordance with all Environmental Laws and have been expressly and
specifically approved in advance in writing by LESSOR in its sole discretion (“Permitted
Activities”); LESSEE shall be responsible for obtaining any required permits,
certificates variances and all approvals and for paying any fees and providing
any testing required by any governmental agency; (ii) the Leased Premises will
not be used in any manner for the storage of any Hazardous Substances except
for the temporary storage of “Permitted Materials” (as defined in Article
28.B.), which are properly stored in a manner and location meeting all
Environmental Laws and are expressly and specifically approved in advance in
writing by LESSOR in its sole discretion; (iii) no portion of the Leased
Premises will be used as a landfill, waste disposal facility, waste storage
facility or a dump; (iv) there will be no installation of any above ground or
underground tanks or other storage facilities of any type; (v) no surface or
subsurface conditions 

 

20

 

will exist or come into existence that
constitute, or with the passage of time may constitute a public or private
nuisance; (vi) there will be no Hazardous Substances brought onto the Leased
Premises, except for the Permitted Materials and items customarily found in an
office setting, and if so brought or found located thereon, the same shall be
immediately removed by LESSEE, with proper disposal pursuant to all
Environmental Laws, and all required cleanup procedures shall be diligently
undertaken pursuant to all Environmental Laws. LESSOR shall have the right but
not the obligation to enter the Leased Premises for the purpose of inspecting
the storage, use and disposal of Permitted Materials to ensure compliance with
this Lease and all Environmental Laws. Should it be determined, in LESSOR’s
sole discretion, that said Permitted Materials are being improperly stored,
used, or disposed of, then LESSEE shall take such corrective action within 24
hours after written demand from LESSOR. If such corrective action is not so
taken, LESSOR shall have the right, but not the obligation, to perform such
work and LESSEE shall reimburse LESSOR for all costs associated with said work
within five (5) days after written request. If at any time during or after the
Term, the Leased Premises are found to be so contaminated or subject to said
conditions existing as a result of LESSEE’s actions or inactions, LESSEE shall
immediately institute proper and thorough cleanup procedures at LESSEE’s sole
cost, and LESSEE agrees to indemnify and hold LESSOR harmless from all claims,
demands, actions, liabilities, costs, expenses, damages and obligations of any
nature arising from, in connection with or as a result of said conditions
existing as a result of LESSEE’S actions. If such corrective action is not so
taken, LESSOR shall have the right, but not the obligation, to perform such work
and LESSEE shall reimburse LESSOR for all costs associated with said work
within thirty (30) days after written request. The foregoing indemnification
and the responsibilities of LESSEE in this Article 28 shall survive the end of
the Term.

 

B.              PERMITTED
MATERIALS:

 

 

C.              LESSOR
hereby represents and warrants to LESSEE that as of the date hereof no
Hazardous Substances are contained in any part of, nor exist in, the Leased
Premises, the Building or the Land.

 

29.                               PROHIBITION OF LIENS

 

LESSEE has no authority, express or implied, to
create, place or allow any lien or encumbrance of any kind or nature whatsoever
upon the Leased Premises, Land or Building, or in any manner to bind the
interest of LESSOR or LESSEE in the Leased Premises, Land or Building or to charge
any amount payable under this Lease for any claim in favor of any person
dealing with LESSEE, including those who may furnish materials or perform labor
for any construction or repairs. LESSEE agrees that it will pay or cause to be
paid all sums for labor performed or materials furnished in connection with any
work performed on the Leased Premises, and that it will save and hold LESSOR
harmless from any and all loss, cost or expense based on or arising out of
asserted claims or liens against the Leased Premises, Land or Building or against
the right, title and interest of the LESSOR in the Leased Premises, Land or
Building or 

 

21

 

under this Lease. LESSEE
agrees to give LESSOR written notice within five (5) days of the placing of any
lien or encumbrance against the Leased Premises, Land or Building.

 

30.                               PROPORTIONATE SHARE

 

“Proportionate Share”, as used in this Lease, shall
mean 16.9%, the percentage which is the ratio of the square feet of the
Leased Premises to the total rentable square feet contained in the Building
(i.e., 16,485 rsf/97,525 rsf).

 

31.                               SEVERABILITY

 

If any term, covenant or condition of this Lease or
the application thereof to any person or circumstance shall, to any extent and
for any reason, be declared invalid or unenforceable by a court of law or
regulatory agency, the remainder of this Lease and the application of such
term, covenant or condition to persons or circumstances other than those which
or to which such may be held invalid or unenforceable, shall not be affected
thereby, and each term, covenant or condition of this Lease shall be valid and
enforceable to the fullest extent permitted by law.

 

32.                               FURNISHING NOTICE

 

Any notice, demand, request or writing which shall be
required or permitted under this Lease must be in writing and (i) delivered in
person or by courier or (ii) deposited, postage prepaid, return receipt
requested in the US Mail, certified or registered, or (iii) via a nationally
recognized overnight delivery service, and addressed to:

 

	
   

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  Sealy Summit Tech L.P.

  
	
   

  	
  Attn: Mark P. Sealy

  
	
   

  	
  Sealy & Company, Inc.

  
	
   

  	
  333 Texas Street, Suite 1050 

  
	
   

  	
  Shreveport, Louisiana 71101

  
	
   

  	
  Telephone No.:

  	
  318-222-8700

  
	
   

  	
  Telecopier No.:

  	
  318-222-4124

  
	
   

  	
   

  
	
   

  	
  LESSEE:

  	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Xplore Technologies Corp.

  
	
   

  	
  Attn: Mr. Michael Ross

  
	
   

  	
  14000 Summit Drive, Suite 900

  
	
   

  	
  Austin, Texas 78728

  
	
   

  	
  Telephone No.:

  
	
   

  	
  Telecopier No.:

  
				

 

or such other address as LESSOR or LESSEE shall have
most recently designated by written notice. Any notice, demand or request
hereunder shall be deemed to have been received on the 

 

22

 

date of delivery, if delivered in person or by
courier, or on the date of receipt or rejection on the return receipt, if delivered
by US Mail or overnight delivery service.

 

33.                               TITLES

 

Notations or titles appearing in this Lease are
provided merely for ease of reference, and the parties hereto expressly
acknowledge and agree that such notations and titles do not constitute a part
of this Lease, have no legal effect whatsoever in determining the rights or
obligations of parties and shall have no bearing upon the meaning or
interpretation of this Lease or any portion of it.

 

34.                               NON-WAIVER

 

The failure by LESSOR to act upon a specific Default,
failure or breach of any term, covenant or condition in this Lease (whether
once or more) is not and will not be intended to be, and shall not be deemed to
be a surrender of the Leased Premises or a waiver, forfeiture, compromise,
release or novation of such term, covenant, or condition nor of any subsequent
Default, failure or breach of the same or any other term, covenant or condition
of this Lease. Any acceptance by LESSOR of any amount of money is not intended
to be, nor shall be deemed to be a surrender of the Leased Premises or a
waiver, forfeiture, compromise, release or novation of any Default, failure or
breath by LESSEE of any term, covenant or condition of this Lease, regardless
of LESSOR’s knowledge of such Default, failure or breach at the time of
acceptance of such amount. No covenant, term or condition of this Lease shall
be deemed to have been compromised, forfeited, released, novated or waived by
LESSOR unless specifically expressed in writing by LESSOR.

 

35.                               ENTIRE AGREEMENT

 

This Lease constitutes the entire agreement between
the parties, and there are no other agreements or covenants by either LESSOR or
LESSEE other than set forth in this Lease. No subsequent amendment,
modification, renewal, extension, restatement, addition or deletion to this
Lease shall be binding upon or inure to the benefit of LESSOR or LESSEE unless
reduced to writing, signed by their authorized representatives.

 

36.                               RECORDATION OF LEASE OR SHORT FORM

 

Within ten (10) days after written request by LESSOR
or LESSEE each party shall join in the execution of a memorandum or “short form”
of this Lease for the purposes of recordation. The memorandum shall describe
the parties, the Leased Premises, and the Term of this Lease and any options
granted to LESSEE, and shall incorporate this Lease by reference.

 

37.                               TIME OF ESSENCE

 

Time is the essence with respect to the performance of
each of the payments, covenants and agreements in this Lease.

 

23

 

38.                               GOVERNING LAW; JURISDICTION; VENUE

 

The laws of the State of Texas shall govern the
validity, performance, interpretation and enforcement of this Lease and all
claims, suits, demands and actions relating to, in connection with and arising
from this Lease and its subject matter, and all such claims, suits, demands and
actions shall be made and brought in Travis County, Texas.

 

39.                               ACTS OF GOD; FORCE MAJURE

 

Except for all monetary obligations under this Lease,
including, but not limited to, LESSEE’s obligation to pay Rent hereunder, no
party shall be required to perform any term, condition or covenant of this
Lease, or be liable for any damages, so long as the performance or
nonperformance of the term, condition or covenant is delayed, caused by or
prevented by an Act of God or Force Majeure. For purposes of this Lease, Act of
God and Force Majeure are defined as strikes, lock-outs, sit-downs, material or
labor restrictions by any governmental authority, unusual transportation delay,
riots, floods, washouts, explosions, earthquakes, fire, storms, weather
(including wet grounds or inclement weather which prevents construction), acts
of the public enemy, wars, insurrections or any other cause not reasonably
within the control of the party and which by the exercise of due diligence is
unable, fully or in part, to prevent or overcome.

 

40.                               AUTHORITY

 

The individual(s) signing on behalf of LESSOR and
LESSEE below hereby represent and warrant that they are duly authorized to
execute and deliver this Lease and bind LESSOR or LESSEE, as applicable, to the
terms thereof without the consent of any other individual, entity or group of
individuals and/or entities.

 

41.                               COMPLIANCE WITH LAW

 

All agreements between LESSOR and LESSEE, whether now
existing or hereafter arising, are hereby limited so that in no contingency,
whether by reason of demand or acceleration or otherwise, shall any amount
contracted for, charged, received, paid or agreed to be paid to LESSOR exceed
the maximum amount permissible under applicable law. If, from any circumstances
whatsoever, any amount would otherwise be payable to LESSOR in excess of the
maximum lawful amount, such payable to LESSOR shall be reduced to the maximum
amount permitted under applicable law; and if from any circumstances LESSOR
shall ever receive anything of value deemed interest by applicable law in
excess of the maximum lawful amount, an amount equal to any excessive interest
shall be applied to the reduction of the amounts due and to become due under
this Lease and not the payment of interest, or if such excessive amount exceeds
amounts due and to become due under this Lease, such excess shall be refunded
to LESSEE. This Article 40 shall control all agreements between the LESSOR and
LESSEE.

 

42.                               QUIET ENJOYMENT.

 

LESSEE, on paying the Rent and keeping and performing
the conditions and covenants herein contained, shall and may peaceably and
quietly enjoy the Leased Premises for the Term, 

 

24

 

subject to the aforesaid
underlying leases, mortgages, deed of trust and security agreements, all
applicable laws and other governmental and legal requirements, applicable
insurance requirements and regulations, and the provisions of this Lease.

 

43.                               REAL ESTATE BROKERS/COMMISSIONS.

 

Broker’s Commissions shall be paid by LESSOR as
specified in the written commission agreement entered into by and between
LESSOR and CB Richard Ellis, Inc. its Lease-Listing Agent, and between LESSOR
and Hill Partners Corporate Services, as LESSEE=s agent. Except as set forth in
the preceding sentence, LESSOR and LESSEE represent and warrant to each other
that no other real estate brokerage or leasing commission, finder’s fee or
other similar compensation shall be due and owing in connection with this
Lease. LESSOR and LESSEE agree to indemnify and hold one another harmless from
any cost or claim or any agent, broker or person, other than the Brokers
identified herein, alleging to be acting for the indemnifying party for fee,
commission or other compensation by reason of this Lease. The indemnity
obligations set forth herein shall survive the expiration and any termination
or cancellation of this Lease notwithstanding any contrary provision.

 

44.                               PARKING RATIOS.

 

At all times pertinent hereto, LESSOR shall maintain,
at a minimum, the parking ratios set by the City of Austin, Texas as to the
number of parking spaces per square foot of space in the Building. The current
parking ratios set by the City of Austin are one parking space for each 450
square feet of rentable space.

 

45.                               ACCESS TO BUILDING.

 

LESSEE shall, through keys, codes or otherwise, have
access to the Leased Premises twenty-four (24) hours per day, seven (7) days
per week.

 

46.                               ATTORNEY’S FEES.

 

In the event either party to this Lease commences
legal action of any kind to enforce the terms and conditions of this Lease, the
prevailing party in such litigation shall be entitled to collect from the other
party all reasonable costs, expenses and attorneys’ fees incurred in connection
with such action.

 

25

 

This Lease Agreement is executed as of the dates
indicated below.

 

	
   

  	
   

  	
  LESSEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  XploreTechnologies
  Corporation, a

  
	
   

  	
   

  	
  corporation
  organized under the laws of

  
	
   

  	
   

  	
  Canada

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael A.
  Ross

  
	
   

  	
   

  	
  Printed
  Name:

  	
  Michael A.
  Ross

  
	
   

  	
   

  	
  Its:

  	
  COO

  
	
   

  	
   

  	
  Date:

  	
  3/26/03

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LESSOR:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SEALY SUMMIT
  TECH L.P.

  
	
   

  	
   

  	
  a Georgia
  limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Sealy G.P.
  Summit Tech, L. P., a 

  Georgia limited partnership, its general 

  partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Summit Tec Investors,
  L.L.C. 

  a Georgia limited liability company, 

  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Mark P.
  Sealy

  
	
   

  	
   

  	
   

  	
   

  	
  Mark P. Sealy,
  Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
  4/10/03

  	
   

  	 

										

 

26

 

	
   

  	
  Re:

  	
    14000 Summit Drive

  
	
   

  	
   

  	
    Austin, Texas

  

 

FIRST AMENDMENT TO LEASE

 

	
  THE STATE OF TEXAS

  	
  §

  	
   

  
	
   

  	
  §

  	
  KNOW ALL MEN BY THESE PRESENTS:

  
	
  COUNTY OF TRAVIS

  	
  §

  	
   

  

 

THIS FIRST AMENDMENT TO LEASE (this “Amendment”)
has been executed as of this 18th day of May, 2003, by SEALY SUMMIT TECH, L.P.,
a Georgia limited partnership (“Landlord”) and XPLORE TECHNOLOGIES
CORPORATION, a Canadian corporation, (“Tenant”).

 

R E C I T A L S:

 

A.            Landlord
and Tenant have heretofore entered into that certain Lease Agreement dated
April 10, 2003 (the “Lease”), pursuant to which Tenant leased from Landlord
approximately 16,485 square feet of rentable area located in Suite 900 (the “Premises”)
in that certain building known as “Sealy Tech Center @Summit” and located at
14000 Summit Drive, Austin, Texas and more particularly described in the Lease
(the “Building”). Unless otherwise defined herein, all initially
capitalized terms will have the respective meanings assigned thereto in the
Lease.

 

B.            Landlord
and Tenant desire to execute this Amendment in order to evidence their agreement
to amend the Lease subject to, and in accordance with, the terms more
particularly set forth in this Amendment.

 

NOW THEREFORE, in consideration of the foregoing and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant agree as follows:

 

ARTICLE I

CERTAIN AMENDMENTS

 

SECTION 1.01       Base
Monthly Rent. Tenant has requested and Landlord has agreed to amortize
$15,707.80 of the cost of certain additional improvements made by Tenant to the
Premises (such cost, the “Additional Cost”) over the Term. Landlord
agrees that the Additional Cost shall be added to the Allowance and paid in the
same manner as the Allowance is paid for in Exhibit “C” to the Lease. Tenant
agrees that the Base Monthly Rent set forth in Article 4E of the Lease shall be
modified as follows: (a) the Base Monthly Rent due during each of the first two
(2) months of the Term shall he increased by $409.55 from $0.00 to $409.55 per
month; and (b) the Base Monthly Rent due during each of months 3 to 48,
inclusive, of the Term shall be increased by $409.55 from $11,539.50 to
$11,949.05 per month.

 

 

SECTION 1.02       Further
Amendments. The Lease shall be and hereby is further amended wherever
necessary, even though not specifically referred to herein, in order to give
effect to the terms of this Amendment.

 

ARTICLE II

MISCELLANEOUS

 

SECTION 2.01       Ratification.
The Lease, as amended hereby, is hereby ratified, confirmed and deemed in full
force and effect in accordance with its terms. Each party represents to the
other that such party (a) is currently unaware of any default by the other
party under the Lease; and (b) has full power and authority to execute and
deliver this Amendment and this Amendment represents a valid and binding
obligation of such party enforceable in accordance with its terms.

 

SECTION 2.02       Notices.
All notices to be delivered to Landlord under the Lease or otherwise with
respect to the Premises shall, unless Landlord otherwise notifies Tenant, be
delivered to Landlord at the address and otherwise in accordance with Article
32 of the Lease, but with an additional copy at the same time to the following
address:

 

c/o Sealy & Company, Inc.

8401 North Central Expressway

Suite 150, LB 29

Dallas, Texas 75225

Attn: Scott P. Sealy, Jr.

 

or to such other person at such other address as
Landlord may designate by notice to Tenant.

 

SECTION 2.03       Governing
Law. This Amendment shall be governed by and construed in accordance with
the laws of the State of Texas.

 

SECTION 2.04       Counterparts.
This Amendment may be executed in multiple counterparts each of which is deemed
an original but together constitute one and the same instrument. This Amendment
may be executed by facsimile and each party has the right to rely upon a
facsimile counterpart of this Amendment signed by the other party to the same
extent as if such party had received an original counterpart.

 

 

IN WITNESS WHEREOF, this Amendment has been executed
as of (but not necessarily on) the date and year first above written.

 

	
  Dated: May 18, 2003

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  SEALY SUMMIT TECH, L.P., 

  a Georgia limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Sealy G.P. Summit Tech, LP., 

  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Summit Tech Investors, L.L.C., 

  Its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   /s/ Mark P. Sealy 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Mark P. Sealy, its manager

  

 

 

	
  Date: May 17, 2003

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  XPLORE TECHNOLOGIES CORPORATION, a 

  Canadian corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shelley Lance

  	
   

  
	
   

  	
  Name: Shelley Lance

  
	
   

  	
  Title: Corporate Secretary

  

 

 

SECOND AMENDMENT
OF LEASE

 

This
Second Amendment of Lease (“Second Amendment”) is entered into to be effective
on the date of the last execution by the parties hereto as shown on the
signature page below (“Effective Date”) by and between Sealy Summit Tech L.P.,
a Georgia limited partnership (“LESSOR”) and Xplore Technologies Corporation, a
corporation organized under the laws of Canada (“LESSEE”).

 

Recitals

 

WHEREAS, LESSOR and LESSEE entered into
that certain Lease Agreement dated effective April 10, 2003 (the “Lease”) for
16,485 square feet in the industrial park known locally as Sealy Tech Center @
Summit, 14000 Summit Drive, Austin, Texas (the “Original Premises”).

 

WHEREAS, and pursuant to the terms of the
Lease, the term of the Original Premises commenced on June 1, 2003 and expires
on May 31, 2007 (the “Expiration Date”).

 

WHEREAS and under the terms of the Lease,
LESSEE agreed to pay as Base Rent for the Original Premises the monthly amount
of $11,539.50 or $.70 per square foot of space in the Original Premises.

 

WHEREAS, LESSEE later requested and LESSOR agreed
to amortize an additional $11,902.80 in costs for additional tenant
improvements to the Original Premises, resulting in a $409.55 increase in Base
Rent for months 3 through 48 of the Original Term, or a Base Rent of $11,949.05
per month or $.72 per square foot of space in the Original Premises. This
increase in Base Rent was memorialized by that certain First Amendment to Lease
dated May 18, 2003 between LESSOR and LESSEE (the “First Amendment”).

 

WHEREAS, and pursuant to the terms of the
Expansion Option attached to the Lease as Exhibit “G”, LESSEE was granted a
one-time right of first refusal (“ROFR”) on all or a portion of the 8,160
square feet directly adjacent to the Original Premises (the “Expansion Premises”).

 

WHEREAS by letter dated January 14, 2004,
LESSOR notified LESSEE of LESSOR’s receipt of a bona-fide third party offer for
the Expansion Premises. By letter dated February 3, 2004, LESSEE exercised its
ROFR rights as to 5,192 rentable square feet of the Expansion Premises (the “Additional
Space”) and under the terms and conditions more specifically described below.

 

NOW THEREFORE, for
and in consideration of the mutual premises set forth below and for other good
and valuable consideration the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

 

2

 

Agreement

 

1.             Incorporation of Recitals. The
foregoing recitals shall be incorporated into the parties’ agreement as if
copied herein in full.

 

2.             Leased Premises. Paragraph 1 of the
Lease shall be amended and in each instance in said Lease, except as
specifically provided herein, reference to the Leased Premises shall mean that
certain 21,677 square feet consisting of the Original Premises plus the
Additional Space (collectively referred to hereinafter as the “Leased Premises”).

 

3.             Term. Paragraph 2 of the Lease shall be
amended to extend the Expiration Date under the Lease as to all of the Leased
Premises to July 31, 2009 (“Extended Term”).

 

4.             Lease Commencement Date for Additional Space.
LESSEE shall take possession of the Additional Space on the date that the
Tenant Improvements described in Paragraph 6 below have been substantially
completed (the “Lease Commencement Date for the Additional Space”). Notwithstanding
anything to the contrary contained herein, LESSOR and LESSEE intend and agree
that each shall have vested rights on the Effective Date and that it is
intended that this Second Amendment shall be fully binding upon the parties and
shall be in full force and effect from the Effective Date to the Expiration
Date of the Extended Term.

 

5.             Base Rent Commencement on Additional Space.
Paragraph 4 of the Lease shall be amended to include in LESSEE’s obligation to
pay rent, LESSEE’s obligation to pay rent on the Additional Space in the Base
Monthly Rent amount of $3,634.40 commencing on the first day of the third full
month following the Lease Commencement Date for the Additional Space and
continuing in each successive month thereafter through July 2009. If the Lease
Commencement Date for the Additional Space falls on a day other than the first
day of a calendar month, Base Monthly Rent for that month shall be prorated on
a daily basis (the intention of the parties being to allow LESSEE two (2) free
months of Base Monthly Rent. LESSEE’s obligation to pay, as additional rent,
the Proportionate Share of Operating Expenses chargeable to the Additional
Space as set forth in the Lease shall commence on the Lease Commencement Date
for the Additional Space.

 

6.             Tenant Improvements for Additional Space.
The Work Agreement attached to the Lease as Exhibit “C” shall be amended to
include the tenant improvements to be made to the Additional Space in
accordance with this Second Amendment (“Tenant Improvements”) to the extent applicable
thereto and as specifically modified hereby. In that regard, LESSOR agrees to
construct the Tenant Improvements in the Additional Space in substantial
accordance with plans to be provided by LESSEE to LESSOR no later than May 1,
2004. LESSOR shall pay for a portion of the cost of the Tenant Improvements for
the Additional Space (the “Allowance”).

 

(a)           Allowance.
Subject to paragraph 6(b) below, the Allowance for the Additional Space will be
in an amount up to Ninety-Eight Thousand Six Hundred Forty-Eight and No/100
Dollars ($98,648.00).

 

(b)           Excess
Funds. In the event that the cost of the Tenant Improvements exceeds the
Allowance, LESSOR shall loan LESSEE such additional amounts up to an additional
$4.00 per square foot (“Excess Funds”). The Excess Funds shall be amortized
over the 60 month term at 

 

3

 

10%
interest per annum. In the event that LESSOR contributes Excess Funds to the
construction of the Tenant Improvements, the parties shall, within 20 days of
substantial completion of such Tenant improvements, execute an amendment to the
Lease modifying the amount of Base Monthly Rent for the Additional Space to
include the Excess Funds as set forth herein. LESSEE’s failure to execute the
rent amendment in the time required will be an event of default under the Lease
entitling LESSOR to exercise all of the remedies set forth in the Lease.

 

7.             Adjustment of Base Rent for Original Premises.
Beginning August 1, 2007 and continuing through the end of the Extended Term,
LESSEE shall pay as Base Rent for the Original Premises, the amount of
$11,539.50 per month or $.70 per square foot of space in the Original Premises.
The parties agree and acknowledge that (unless otherwise amended by a written
agreement signed by all parties hereto) beginning August 1, 2007, the Base Rent
for the Leased Premises shall be in the amount of $15,173.90.

 

8.             Reserved Parking Spaces. LESSEE shall
have the exclusive use of up to ten (10) parking spaces immediately in front of
the Leased Premises (“Reserved Spaces”). These Reserved Spaces shall be
identified by signs or other markings on the Reserved Spaces themselves. LESSEE
shall also have the non-exclusive use of all of the parking areas on the Land
(as defined in the Lease), except for the spaces reserved for the exclusive use
of the other tenants.

 

9.             Expansion Option. LESSEE shall have the
right of first refusal on the ROFR Space (as defined in the attached Exhibit “A”)
as provided and in accordance with the terms of the Expansion Option attached
hereto as Exhibit “A” and incorporated herein by reference for all purposes.

 

10.           Miscellaneous.

 

(a)           In
all other respects, the Lease is ratified and affirmed. Each party represents
to the other that such party (a) is currently unaware of any default by the
other party under the Lease, (b) has full power and authority to execute and
deliver this Second Amendment, and (c) this Second Amendment represents a valid
and binding obligation of such party enforceable in accordance with its terms.

 

(b)           All
capitalized terms, unless otherwise defined herein, shall have the meaning
given to such term in the Lease.

 

(c)           This
Second Amendment shall bind LESSOR and LESSEE and their respective successors
and assigns. The provision of this Second Amendment shall prevail over any
conflicting provisions of the Lease and/or the First Amendment.

 

(d)           This
Second Amendment may be executed in identical original counterparts, each of
which for all purposes, is deemed to be an original, and all of which
constitute, collectively one amendment.

 

4

 

(e)           This
Second Amendment shall be governed by and construed in accordance with the laws
of the State of Texas.

 

EXECUTED to be effective as of the Effective Date.

 

LESSOR:

 

Sealy Summit Tech L.P., a Georgia limited partnership

 

By: Sealy G.P. Summit Tech L.P., a Georgia limited
partnership

 

	
   

  	
  By:

  	
  Summit Tech Investors, L.L.C.,

  
	
   

  	
   

  	
  a Georgia limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mark P. Sealy

  	
   

  
	
   

  	
   

  	
   

  	
   Mark P. Sealy, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  May 26, 2004

  	
   

  
						

 

LESSEE:

 

Xplore Technologies Corporation,

a corporation organized under the laws of Canada

 

 

	
  By:

  	
  /s/ B. Groh

  	
   

  
	
  Print Names:

  	
  B. Groh

  	
   

  
	
  Date:

  	
  May 17, 2004

  	
   

  
					

 

5

 

THIRD AMENDMENT OF
LEASE

 

This
Third Amendment of Lease (“Third Amendment”) is entered into on this the 29th
day of June, 2004 (“Effective Date”) by and between Sealy Summit Tech L.P., a
Georgia limited partnership (“LESSOR”) and Xplore Technologies Corporation, a
corporation organized under the laws of Canada (“LESSEE”).

 

Recitals

 

WHEREAS, LESSOR and LESSEE entered into
that certain Lease Agreement dated effective April 10, 2003 (the “Lease”) for
16,485 square feet in the industrial park known locally as Sealy Tech Center @
Summit, 14000 Summit Drive, Austin, Texas (the “Original Premises”).

 

WHEREAS, by way of that certain First
Amendment to Lease dated May 18, 2003, the Base Rent was increased in order to
amortize an additional $11,902.80 in costs for additional tenant improvements
to the Original Premises, resulting in a $409.55 increase in Base Rent for
months 3 through 48 of the Original Term, or a Base Rent of $11,949.05 per
month or $.72 per square foot of space in the Original Premises.

 

WHEREAS, by way of that certain Second
Amendment of Lease dated effective May 26, 2004 (the “Second Amendment”) and
following LESSEE’s exercise of its Expansion Option, the Original Premises were
expanded to include an additional 5,192 rentable space feet, the Base Rent was
increased to include the Additional Space and LESSEE was granted an additional
$98,648.00 in additional tenant finish allowance.

 

WHEREAS, the Second Amendment contemplated
that the cost of the Tenant Improvements might exceed the Allowance, and if so,
LESSOR agreed to loan LESSEE that part of any excess up to $4.00 per square
foot of the Additional Space or $20,768.00 (the “Excess Funds”) as more
particularly set forth therein.

 

WHEREAS, the cost of the Tenant
Improvements did exceed the Allowance by a total of $99,206.86 and this Third
Amendment is entered into in order to memorialize the parties’ agreement in
regard to same.

 

NOW THEREFORE, for and in consideration of
the mutual premises set forth below and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

 

1

 

Agreement

 

1.             Incorporation of Recitals. The
foregoing recitals shall be incorporated into the parties’ agreement as if
copied herein in full.

 

2.             Base Rent. Paragraph 4 of the Lease
shall be amended to include in LESSEE’s obligation to pay rent, the Excess
Funds amortized over the remainder of the Extended Term for the Additional
Space at 10% per annum, or an increase in the Base Monthly Rent amount of
$441.26 commencing on August 1, 2004 and continuing in each successive month
thereafter through July 2009. LESSOR and LESSEE agree and acknowledge that
beginning August 1, 2004, its Base Monthly Rent obligation throughout the Term of
the Lease shall be as follows:

 

	
  Original Premises

  	
   

  	
  Rent

  	
   

  
	
  August 1, 2004 thru July 31, 2006

  	
   

  	
  $

  	
  11,949.05

  	
   

  
	
  August 1, 2007 thru August 31, 2009

  	
   

  	
  $

  	
  11,539.50

  	
   

  

 

	
  Expansion
  Premises

  	
   

  	
  Rent

  	
   

  
	
  August 1, 2004 thru August 31, 2009

  	
   

  	
  $

  	
  4,075.66

  	
   

  
					

 

3.             Remainder of Cost of Tenant Improvements.
The remaining $78,438.86 in amounts spent by LESSEE on tenant improvements for
the Additional Space over the Allowance ($99,206.86 - $20,768.00) shall be paid
by LESSEE to LESSOR within thirty (30) days of its receipt of an invoice
showing the work completed through the date of the invoice and the cost of
same. Beginning on the 31st day after LESSEE’s receipt of each
invoice, any unpaid amounts shall accrue interest at the rate of 15% per annum
until paid.

 

4.             Miscellaneous.

 

(a)           In
all other respects, the Lease is ratified and affirmed. Each party represents
to the other that such party (a) is currently unaware of any default by the
other party under the Lease, (b) has full power and authority to execute and
deliver this Third Amendment, and (c) this Third Amendment represents a valid
and binding obligation of such party enforceable in accordance with its terms.

 

(b)           All
capitalized terms, unless otherwise defined herein, shall have the meaning
given to such term in the Lease.

 

(c)           This
Third Amendment shall bind LESSOR and LESSEE and their respective successors
and assigns. The provision of this Third Amendment shall prevail over any
conflicting provisions of the Lease and/or the First and/or Second Amendment.

 

(d)           This
Third Amendment may be executed in identical original counterparts, each of
which for all purposes, is deemed to be an original, and all of which
constitute, collectively one amendment.

 

2

 

(e)           This
Third Amendment shall be governed by and construed in accordance with the laws
of the State of Texas.

 

EXECUTED to be effective as of the Effective Date.

 

LESSOR:

 

Sealy Summit Tech L.P., a Georgia limited partnership

 

By: Sealy G.P. Summit Tech L.P., a Georgia limited partnership

 

	
   

  	
  By:

  	
  Summit Tech Investors, L.L.C., 

  a Georgia limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Mark P. Sealy

  	
   

  
	
   

  	
   

  	
   

  	
  Mark P. Sealy, Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  8/04/04

  	
   

  
						

 

LESSEE:

 

Xplore Technologies Corporation,

a corporation organized under the laws of Canada

 

 

	
  By:

  	
  /s/ David Belbeck

  	
   

  
	
  Print Names:

  	
  David Belbeck

  	
   

  
	
  Date:

  	
  July 29, 2004

  	
   

  
					

 

3Exhibit
10.13

 

 

REPAYMENT AND STOCK PLEDGE AGREEMENT

[Subscription]

 

This REPAYMENT AND STOCK
PLEDGE AGREEMENT, dated as of March  30, 2001, is made and entered into by
and between Dayton Superior Corporation, an Ohio corporation (the “Company”),
and the party listed as “Pledgor” on the signature page hereto (the “Pledgor”).

 

RECITALS

 

A.                                   The
Company and the Pledgor have entered into a Subscription Agreement, dated the
date hereof (the “Subscription Agreement”), whereby the Company has agreed to
issue and sell to the Pledgor certain Class A Common Shares, without par value,
of the Company (the “Common Stock”).

 

B.                                     In
payment of the purchase price for the Shares, the Pledgor is delivering to the
Company a promissory note of the Pledgor, dated the date hereof (the “Note”).

 

C.                                     The
Pledgor wishes to grant further security and assurance to the Company in order
to secure the payment of the Note and, to that effect, to pledge to the Company
the Pledged Securities (as defined below).

 

D.                                    The
Company, the Pledgor, Odyssey Investment Partners Fund, L.P. (“Odyssey”) and
certain management employee shareholders of the Company have entered into a
certain Management Stockholders Agreement, dated as of June 16, 2000 (as
amended from time to time, the “Management Stockholders Agreement”), which
contains certain restrictions and other provisions applicable to the Common
Stock.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:

 

1.             Pledge.

 

(a)           As security for the payment and
performance of all obligations of the Pledgor on the Note, including the
payment of the principal of and interest on the Note, and in order to secure
the Pledgor’s obligations under this Agreement, the Pledgor hereby delivers,
pledges and assigns the Pledged Securities to the Company and creates in the
Company a security interest in the Pledged Securities.

 

 

(b)           The “Pledged Securities” under this
Agreement shall consist of the Common Stock held by the Pledgor and all
securities, certificates and instruments representing or evidencing ownership
of the Pledged Securities hereunder, and all proceeds and products of any
Pledged Securities hereunder, including, without limitation, stock, cash,
property or other dividends, securities, rights and other property now or
hereafter at any time or from time to time received, receivable or otherwise
distributed or distributable in respect of or in exchange for any or all of
such Pledged Securities including proceeds delivered to the Company pursuant to
Section 2 and any substituted or additional Pledged Securities required to be
supplied under the terms of this Agreement.

 

2.             Repayment.
The Pledgor hereby agrees that at any time if the Pledgor shall have received
any cash payment or other distribution in respect of, or upon transfer, sale or
other disposition of, the Pledged Securities, then and in each case until the
Note (including interest) is paid in full, the Pledgor shall immediately
deliver to the Company such amount in partial or full payment of the principal
of and interest of the Note.

 

3.             Administration
of Pledged Securities. The following provisions shall govern the
administration of the Pledged Securities:

 

(a)           So long as no Event of Default (as
defined below) has occurred and is continuing the Pledgor shall be entitled to
act with respect to the Pledged Securities in any manner not inconsistent with
this Agreement, the Subscription Agreement, the Management Stockholders
Agreement, the Note, or any document or instrument delivered or to be delivered
pursuant to or in connection with any of them.

 

(b)           The Pledgor shall immediately upon
request by the Company and in confirmation of the security interests hereby created,
execute and deliver to the Company such further instruments, deeds, transfers,
assurances and agreements, in form and substance as the Company shall request,
including any financing statement and amendments thereto, or any other
documents, as required under Ohio law and other applicable law to protect the
security interests created hereunder.

 

4.             Defaults.
The occurrence of any one or more of the following events or conditions shall
constitute an “Event of Default” under this Agreement:

 

(a)           The Pledgor fails to make any
principal or interest payment required pursuant to the Note within 30 days of
the due date therefor.

 

(b)           The Pledgor makes or has made or
furnishes or has furnished, any material written warranty, representation or
statement to Company in connection with this Agreement or the Subscription
Agreement which is or was false or misleading when made or furnished.

 

(c)           Any lien or encumbrance other than
that created by this Agreement is placed on, or any levy is made on, the
Pledged Securities, or any portion thereof, or the

 

2

 

Pledged
Securities, or any portion thereof, is seized or attached pursuant to legal
process, and such lien, encumbrance, levy, seizure, or attachment is not
removed or released within thirty (30) days from the time such lien or
encumbrance was placed thereon or such levy, seizure or attachment was
effected.

 

(d)           The Pledgor commences any bankruptcy,
reorganization or insolvency proceeding, or other proceeding under any federal,
state or other law for the relief of debtors.

 

(e)           The Pledgor fails to obtain
dismissal, within sixty (60) days after commencement thereof, of any
bankruptcy, insolvency, or reorganization proceeding or other proceeding for
relief under any bankruptcy law, including, without limitation, the Federal
Bankruptcy Code, or any law for the relief of debtors, instituted against the
Pledgor by one or more third parties, fails to oppose actively such proceeding,
or, in any such proceeding defaults or files an answer admitting the material
allegations upon which the proceeding was based, or alleges its willingness to
have an order for relief entered or its desire to seek liquidation,
reorganization or adjustment of its debts.

 

(f)            Any receiver, trustee or custodian
is appointed by a court of competent jurisdiction to take possession of all or
any substantial portion of the assets of the Pledgor and such order is not
vacated within sixty days of the entry thereof.

 

(g)           The Pledgor shall fail generally to
pay his or her debts as such debts become due.

 

(h)           The Pledgor shall effect or there
shall otherwise occur a Transfer (as such term is defined in the Management
Stockholders Agreement) not permitted under the Management Stockholders
Agreement.

 

5.             Remedies
in Case of an Event of Default.

 

(a)           In case an Event of Default shall
have occurred and be continuing, the Company shall have all of the remedies of
a secured party under the Ohio Uniform Commercial Code, and, without limiting
the foregoing, shall have the right, subject to any necessary regulatory
approvals, to sell, assign and deliver the whole or, from time to time, any
part of the Pledged Securities, or any interest in any part thereof, at any
private sale or at public auction, with or without demand of performance or
other demand, advertisement or notice of the time or place of sale or
adjournment thereof or otherwise (except the Company shall give ten (10) days’
notice to the Pledgor of the time and place of any sale pursuant to this
Section 5), for cash, and credit or for other property, for immediate or future
delivery, and for such price or prices and on such terms as the Company shall,
in its sole discretion, determine, the Pledgor hereby waiving and releasing any
and all right or equity of redemption whether before or after sale hereunder. At
any such sale the Company may bid for and purchase the whole or any part of the
Pledged Securities so sold free from any such right or equity of redemption. The
Company shall apply the

 

3

 

proceeds
of any such sale first to the payment of all costs and expenses, including
reasonable attorneys’ fees, incurred by the Company in enforcing its rights
under this Agreement and then to the payment of interest on and principal of
the Note, with such payments to be applied in such order as the Company
determines in its sole discretion.

 

(b)           The Pledgor recognizes that the
Company may be unable to effect a public sale of all or a part of the Pledged
Securities by reason of certain prohibitions contained in the Securities Act of
1933, as amended (the “Act”), or in the rules and regulations promulgated
thereunder, but may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other
things, to acquire the Pledged Securities for their own account, for investment
and not with a view to the distribution or resale thereof. The Pledgor agrees
that private sales so made may be at prices and on other terms less favorable
to the seller than if the Pledged Securities were sold at public sale, and that
the Company has no obligation to delay the sale of the Pledged Securities for
the period of time necessary to permit the registration of the Pledged
Securities for public sale under the Act; provided, however, that no private sale shall be made of the Pledged
Securities to any Affiliate (as defined in the Management Stockholders
Agreement) of the Company or Odyssey at a price per share of Common Stock less
than the lesser of (i) the then Fair Market Value per share or (ii) the Initial
Price per share of such Common Stock (as each term is defined in the Management
Stockholders Agreement), subject to adjustment to reflect any stock split,
stock dividend, combination of shares, merger or other adjustment to the Common
Stock. The Pledgor agrees that a private sale or sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable
manner.

 

(c)           If any consent, approval or
authorization of any state, municipal or other governmental department, agency
or authority should be necessary to effectuate any sale or disposition by the
Company of the Pledged Securities pursuant to this Section 5, or any partial
disposition of the Pledged Securities, the Pledgor will execute all such
applications and other instruments as may be required in connection with
securing any such consent, approval or authorization, and will otherwise use
his or her best efforts to secure the same.

 

(d)           Neither failure nor delay on the part
of the Company to exercise any right, remedy, power or privilege provided for
herein or by statute or at law or in equity shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, remedy, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.

 

6.             Pledgor’s
Obligations Not Affected. The obligations of the Pledgor under this
Agreement shall remain in full force and effect without regard to, and shall
not be impaired or affected by: 
(a) any subordination, amendment or modification of or addition or
supplement to the Management Stockholders Agreement or the Note, or any
assignment or transfer of either thereof; (b) any exercise or non-exercise by
the Company of any right, remedy, power or privilege under or in respect of
this Agreement, the Subscription Agreement, the Management

 

4

 

Stockholders Agreement or the Note,
or any waiver of any such right, remedy, power or privilege; (c) any waiver,
consent, extension, indulgence or other action or inaction in respect of this
Agreement, the Subscription Agreement, the Management Stockholders Agreement or
the Note, or any assignment or transfer of any thereof; or (d) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition, liquidation
or the like, of the Company or its successors, whether or not the Pledgor shall
have notice or knowledge of any of the foregoing.

 

7.             Transfers
by Pledgor. The Pledgor will not sell, assign, transfer or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber the Pledged Securities or any interest therein, except pursuant to the
Management Stockholders Agreement.

 

8.             Attorney-in-Fact.
The Company or its successor is hereby appointed the attorney-in-fact of the
Pledgor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument which the Company reasonably may
deem necessary or advisable to accomplish the purposes hereof, including
without limitation, the execution of the applications and other instruments
described in Section 5(c), which appointment as attorney-in-fact is irrevocable
as one coupled with an interest.

 

9.             Termination.
Upon payment in full of principal of and interest on the Note and upon the due
performance of and compliance with all of the provisions of the Note, this
Agreement shall terminate, and the Pledgor shall be entitled to the return of
such of the Pledged Securities as has not theretofore been sold, released
pursuant to Section 5 or otherwise applied pursuant to the provisions of this
Agreement.

 

10.           Notices.
All notices or other communications required or permitted to be given hereunder
shall be delivered as provided in the Management Stockholders Agreement.

 

11.           Miscellaneous.
The Company and its assigns shall have no obligation in respect of the Pledged
Securities, except to hold and dispose of the same in accordance with the terms
of this Agreement. This Agreement and any provisions hereof may be amended,
modified, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the amendment, modification,
waiver, discharge or termination is sought. The provisions of this Agreement
shall be binding upon the successors and assigns of the Pledgor. The captions
in this Agreement are for convenience of reference only and shall not define or
limit the provisions hereof. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Ohio, without regard
to the conflicts of laws rules thereof. This Agreement may be executed
simultaneously in several counterparts, each of which is an original, but all
of which together shall constitute one instrument.

 

[Signature
Page Follows]

 

5

 

IN WITNESS WHEREOF, the
parties hereto have caused this Repayment and Stock Pledge Agreement to be
executed and delivered on the date first above written.

 

 

	
   

  	
  DAYTON SUPERIOR
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Alan F. McIlroy

  	
   

  
	
   

  	
   

  	
  Name: Alan F. McIlroy

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PLEDGOR:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
     /s/ John A. Ciccarelli

  	
   

  
	
   

  	
  John A. Ciccarelli

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