Exhibit 10.7

BASIC LEASE INFORMATION

i

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

ii

LEASE AGREEMENT

THIS LEASE AGREEMENT, made and entered into by Alliance Gateway No. 58, Ltd., a Texas limited partnership (“Landlord”) and Victor Equipment Company, a Delaware corporation (“Tenant”);

WITNESSETH:

1.             PREMISES AND TERM.

In consideration of the mutual obligations of Landlord and Tenant set forth herein, Landlord leases to Tenant, and Tenant hereby takes from Landlord, the Premises situated within the County of Denton, State of Texas, more particularly described and indicated by the cross-hatched area on Exhibit "A" attached hereto and incorporated herein by reference (the “Premises”) which Premises are to constitute a portion of the Building to be constructed pursuant to the terms hereof, together with all rights, privileges, easements, appurtenances and annuities belonging to or in any way pertaining to the Premises, to have and to hold subject to the terms, covenants and conditions in this Lease.  Tenant’s rights under this Lease shall be subject to all matters of public record, including, without limitation, all easements, deed restrictions, covenants, conditions and restriction, as may exist from time to time.  The term of this Lease (“Term”) shall commence on the Commencement Date (hereinafter defined) and shall end on the last day of the month that is sixty-three (63) months after the Commencement Date.  The Premises are to be situated on the Land described on Exhibit ”B” attached hereto and made a part hereof.

A.            The “Commencement Date” shall be the date that is the earlier of (i) the date on which Tenant first occupies the Premises for the purpose of conducting its business, or (ii) the date upon which the Leasehold Improvements (hereinafter defined) to be erected in accordance with the Working Drawings (hereinafter defined) described on Exhibit "C" attached hereto and incorporated herein by reference have been substantially completed.  As used herein, the term “substantially completed” shall mean that, in the reasonable opinion of Landlord, (i) such improvements have been completed in accordance with the Working Drawings; (ii) the Premises are in good and satisfactory condition, subject only to completion of minor punch list items; and (iii) a certificate of occupancy (the “CO”) has been issued for the Premises, provided, however, if the CO has not been issued due to the non-completion of work which is required to be done by Tenant in order to obtain the issuance of the CO, then the Leasehold Improvements shall be deemed to be “substantially completed” upon satisfaction of the conditions in the immediately preceding clauses (i) and (ii).  As soon as such improvements have been substantially completed, Landlord shall notify Tenant in writing that the Commencement Date has occurred.  Within ten (10) days thereafter, Tenant shall submit to Landlord in writing a punch list of items needing completion or correction.  Landlord shall complete such items within thirty (30) days after the receipt of such notice.  In the event Tenant, its employees, agents or contractors cause construction of such improvements to be delayed, Landlord shall notify Tenant in writing of such delay and the Commencement Date shall be deemed to be the date that, in the opinion of Landlord, substantial completion would have occurred if such delays had not taken place.  Landlord’s approval of any plans, specifications or working drawings for the Premises shall create no responsibility of liability on the part of Landlord for their completeness, design, sufficiency or compliance with any laws, rules, or regulations of governmental agencies or authorities.  After the Commencement Date, Tenant shall, upon demand, execute and deliver to Landlord a memorandum of acceptance of delivery of the Premises in the form attached hereto as Exhibit "D".

B.            If the Commencement Date has not occurred by the date that is seventy (70) days after the date Landlord receives a building permit for the Work (as hereinafter defined) (which

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seventy (70) day period shall be extended (i) by one day for each day constituting a Force Majeure Delay, and (ii) by one day for each day constituting a Tenant Delay, and which date, as so extended shall be referred to herein as the “First Deadline Date”), then Tenant shall be entitled to receive, as its sole and exclusive remedy, a credit against the first Base Rent due hereunder in an amount equal to $2,340.00 per day for each day that shall elapse from the First Deadline Date until the earlier to occur of the Second Deadline Date (hereinafter defined) or the Commencement Date.  If the Commencement Date has not occurred by the date that is one hundred thirty (130) days after the date Landlord receives a building permit for the Work (which one hundred thirty (130) day period shall be extended (i) by one day for each day constituting a Force Majeure Delay, and (ii) by one day for each day constituting a Tenant Delay, and which date, as so extended, shall be referred to herein as the “Second Deadline Date”, then Tenant shall be entitled to receive, as its sole and exclusive remedy, a credit against the first Base Rent due hereunder in an amount equal to $4,680.00 per day for each day that shall elapse from the Second Deadline Date until the Commencement Date.

C.            Notwithstanding the fact that the Term of this Lease and Tenant’s obligation to pay rent does not commence until the Commencement Date, this Lease shall nevertheless be binding upon the parties in accordance with its terms when executed by Landlord and Tenant.

2.             BASE RENT, SECURITY DEPOSIT AND ESCROW PAYMENTS.

A.            Tenant agrees to pay to Landlord base rent (“Base Rent”) for the Premises, in advance, without demand, deduction or set off, at the following rates and amounts during the Term hereof:

*Annual Base Rent for the first year of the Term of this Lease shall be $379,657.49.

The first monthly installment of Base Rent, plus the other monthly charges set forth in Paragraph 2C below, shall be due and payable on the date hereof and subsequent monthly installments shall be due and payable on or before the first day of each calendar month succeeding the Commencement Date, except that (i) all payments due hereunder for any fractional calendar month shall be prorated and (ii) no Base Rent is due during the first three months of the Term.

B.            In addition, Tenant agrees to deposit with Landlord on the date hereof (i) the sum of Fifty-Three Thousand Eight Hundred Seventeen and 91/100 Dollars ($53,817.91) in cash (“Cash Security Deposit”), and (ii) a letter of credit (“Letter of Credit”) in the sum of One Hundred Seventy-Five Thousand and 00/100 Dollars ($175,000.00) and in the form attached hereto as Exhibit "I" and made a part hereof issued by a financial institution reasonably acceptable to Landlord, provided the Letter of Credit is payable upon presentation for collection at a branch location within the continental United States.  A Letter of Credit shall be maintained in full force and effect at all times during the Term of this Lease.  The Letter of Credit shall have an expiration date no earlier than the last day of the twelfth (12^th) full month following the Commencement Date and shall be renewed for successive one-year terms during the Term of this Lease.  All renewals of the Letter of Credit must be delivered to Landlord at least thirty (30) days prior to the expiration of the Letter of Credit then in effect and, if such renewals are not so timely

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delivered to Landlord, Landlord shall have the right to present and receive payment on the then current Letter of Credit.  The Cash Security Deposit and the Letter of Credit are collectively referred to herein as the “Security Deposit”.  The Security Deposit shall be held by Landlord as security for the performance of Tenant’s obligations under this Lease, it being expressly understood and agreed that this Security Deposit is not an advance rental deposit or a measure of Landlord’s damages in case of Tenant’s default.  Upon each occurrence of an Event of Default (hereinafter defined), Landlord may draw upon the Letter of Credit and use all or part of the proceeds thereof and/or use any portion of the Cash Security Deposit to pay past due rent or other payments due Landlord under this Lease, and the cost of any other damage, injury, expense or liability caused by such Event of Default without prejudice in any other remedy provided herein or provided by law.  On demand, Tenant shall pay Landlord the amount that will restore the Security Deposit to its original amount.  The Security Deposit shall be deemed the property of Landlord, but any remaining balance of such Security Deposit shall be returned by Landlord to Tenant when Tenant’s obligations under this Lease have been fulfilled.

C.            In addition to Base Rent and Tenant’s other obligations hereunder, Tenant agrees to pay its proportionate share (as defined in the Basic Lease Information) of the following costs and expenses (collectively, the “Reimbursable Expenses”):  (i) Taxes (hereinafter defined) payable by Landlord pursuant to Paragraph 4A below, (ii) the cost of jointly metered utilities payable pursuant to Paragraph 9 below, (iii) the cost of maintaining insurance pursuant to Paragraph 10A below, (iv) Common Area Charges (hereinafter defined) payable by Tenant in accordance with Paragraph 3 below, (v) the cost of any repair, replacement, or capital expenditures required under any governmental law or regulation that was not applicable in the Building at time of original construction, and (vi) replacement reserves for capital items and other operating expenses required by this Lease.  During each month of the Term of this Lease, on the same day that Base Rent is due hereunder.  Tenant shall escrow with Landlord an amount equal to 1/12^th of the Tenant’s proportionate share of such Reimbursable Expenses as estimated by Landlord in good faith.  Tenant authorizes Landlord to use the funds deposited with Landlord under this Paragraph 2C to pay such Reimbursable Expenses.  Landlord shall be entitled to revise its projection in good faith of such Reimbursable Expenses at any time and if Landlord so revises such projection, Tenant shall pay to Landlord, on the same day as Base Rent is due hereunder, an amount equal to 1/12^th of Tenant’s proportionate share of such Reimbursable Expenses pursuant to Landlord’s good faith revised estimate thereof.  By April 30 of each calendar year (or as soon thereafter as may be practicable) during the Term hereof Landlord shall determine the actual Reimbursable Expenses for the preceding calendar year and shall notify Tenant thereof and provide Tenant with a copy of the accounting and detail of the Reimbursable Expenses.  If Tenant’s total escrow payments are less than Tenant’s actual proportionate share of all such Reimbursable Expenses, Tenant shall pay the difference to Landlord within twenty (20) days after demand.  If the total escrow payments of Tenant are more than Tenant’s actual proportionate share of all such Reimbursable Expenses, Landlord shall retain such excess and credit it against Tenant’s next annual escrow payments.

3.             COMMON AREA CHARGES.

A.            In addition to other amounts required to be paid by Tenant hereunder, Tenant shall pay to Landlord Tenant’s proportionate share of the following costs and expenses (collectively, the “Common Area Charges”):

i.              The cost of repair, maintenance and replacement of: (i) the exterior of the Building (including painting), other than those structural repairs and replacements for which Landlord is responsible pursuant to Paragraph 5; (ii) all mechanical, electrical,

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plumbing, sewer, sprinkler and other life-safety equipment and systems forming a part of the Building or the Project of which the Building forms a part (other than the cost of repair, replacement and maintenance of the items which are the Tenant’s responsibility pursuant to Paragraph 6 which shall be paid entirely by Tenant as provided in Paragraph 6); and (iii) all other common areas and facilities constituting a part of the Building or the Project of which the Building forms a part (including, but not limited to, all paved areas in and about the Building).

ii.             The cost of maintenance and replacement of the grass, shrubbery and other landscaping in and about the Building and/or the Project.

iii.            The cost of operating and maintaining in a good, neat, clean and sanitary condition all parking areas, driveways, alleys and grounds in and about the Building (including trash removal).

iv.            The cost of assessments under any applicable Declaration of Covenants, Restrictions and Easements (as may be amended from time to time) which are assessed by the applicable property owners association.

v.             Security services (if furnished by Landlord), and the cost of operating and maintaining any property, facilities or services provided for the common use of Tenant and other lessees of the Building or the Project, which costs shall include, without limitation, management fees (or if no management company is engaged by Landlord for the management of the Project, wages and employee benefits payable to employees of Landlord or affiliates of Landlord whose duties are connected with the operation and maintenance of the Building); provided, however, such management fees (or if no management company is engaged by Landlord, such wages and benefits) shall not exceed an amount equal to three percent (3%) of the Base Rent payable under this Lease.

B.            Notwithstanding the foregoing, it is agreed that with regard to Controllable Expenses (hereinafter defined), Tenant’s obligation to pay any increases in Controllable Expenses for any year of the Term of this Lease following the first year of the Term of this Lease, shall be limited to an increase of six percent (6%) (the “Cap”) from the amount paid with respect to Controllable Expenses for the immediately preceding year; provided, however, that if any such increase in Controllable Expenses is less than the maximum amount that Controllable Expenses could have increased pursuant to the foregoing applicable Cap (the difference between the maximum amount that such Controllable Expenses could have increased and the amount that they did in fact increase is referred to herein as the “Unused Cap”), then the Unused Cap shall be applied to increase the Cap that is applicable to the year in question and for all subsequent years until all Unused Cap amounts are exhausted.  Furthermore, the Unused Cap for all years shall be cumulated and be applied to increase the Caps applicable to all subsequent years in the Term of this Lease.  It is the intention of this provision that the Cap provided with respect to Controllable Expense be a “cumulative cap”.  The term “Controllable Expenses” shall mean all Common Area Charges, except for costs described in Paragraph 3A(i) above.

4.             TAXES.

A.            Landlord agrees to pay all taxes, assessments and governmental charges of any kind and nature(collectively referred to herein as “Taxes”) that accrue against the Premises, and/or the land and/or improvements of which the Premises are a part.  (For purposes of this Lease, the term “Taxes” shall include the amount of any taxes that would otherwise be imposed

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but for the provisions of any tax abatement agreement with respect to which Landlord is a party which is entered into pursuant to Chapter 312 of the Texas Tax Code; and for purposes of this Lease, such abated taxes shall be deemed to be payable by Landlord.)  If at any time during the Term of this Lease, there shall be levied, assessed or imposed on Landlord a capital levy or other tax directly on the rents received herefrom and/or a franchise tax, assessment, levy or charge measured by or based, in whole or in part, upon such rents from the Premises and/or the Land and improvements of which the Premises are a part, then all such taxes, assessments, levies or charges, or the part thereof so measured or based, shall be deemed to be included within the term “Taxes” for the purpose hereof.  Landlord shall have the right to employ a tax consulting firm to attempt to assure a fair tax burden on the building and grounds within the applicable taxing jurisdiction.  Tenant agrees to pay its proportionate share of the cost of such consultant which cost shall be allocated on a fair and equitable basis.

B.            Tenant shall be liable for all taxes levies or assessed against any personal property or fixtures placed in the Premises.  If any such taxes are levied or assessed against Landlord or Landlord’s property and (i) Landlord pays the same or (ii) the assessed value of Landlord’s property is increased by inclusion of such personal property and fixtures and Landlord pays the increased taxes, then, upon demand Tenant shall pay to Landlord such taxes.  In addition, if the Building is a multiple occupancy building and the cost of any improvements constructed to Tenant’s Premises is disproportionately higher than the cost of improvements constructed to the premises of other tenants of the Building, then upon demand Tenant shall pay the amount of Taxes attributable to such disproportionately more expensive improvements, in addition to Tenant’s proportionate share of Taxes.

Tenant hereby waives any right it may have under Section 41.413 of the Texas Tax Code to protest the appraised value of all or any portion of the Premises and the Building, and any right it may have under Section 42.015 of the Texas Tax Code to appeal an order of the appraisal review board with respect to all or any portion of the Premises and/or the Building.  Tenant agrees that Landlord shall have the sole right to protest any appraisals of the Premises and the Building.  Tenant also hereby waives any right it may have to receive a copy of any notice received by Landlord of reappraisal of all or any portion of the Premises and/or the Building, including without limitation any notice required under Section 41.413(d) of the Texas Tax Code.  Tenant agrees that Landlord shall not be liable to Tenant for any damages for Landlord’s failure to send to Tenant a copy of any notice of reappraisal concerning the Premises and/or the Building, irrespective of any obligation under applicable law of Landlord to provide such notice.  Notwithstanding the foregoing, if Tenant protests, challenges or appeals any valuation for property tax purposes of all or any portion of the Premises and/or the Building, and such valuation increases from the value protested, appealed or challenged, Tenant agrees to indemnify Landlord on an after-tax basis for any property taxes due as a result of such increase.

C.            Tenant shall have the right (unless Landlord shall in good faith agree to contest, at Tenant’s sole expense, such tax increase) to contest or resist in good faith, diligently and by appropriate proceeding, the validity of the amount or rate of any increase or proposed increase in the Taxes, all at Tenant’s sole expense.  If Landlord shall agree to contest such Taxes, Landlord shall do so at Tenant’s expense (the cost of which contest, if involving the property of Landlord in addition to the Premises, shall be allocated to Tenant on a reasonable and equitable basis), under the direction and control of Landlord (which shall make all decisions in connection therewith, subject to Tenant’s right to monitor Landlord’s conduct of such contest proceeding); if Landlord elects not to contest such Taxes or, having elected to contest such Taxes, fails to contest such Taxes diligently and in good faith, and such failure continues uncured beyond a reasonable time following written notice from Tenant to Landlord, or if Tenant reasonably determines that

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Landlord is not pursuing an adequately aggressive position with respect to such tax contest and Landlord fails to comply with Tenant’s reasonable request with respect thereto, Tenant shall have the right to itself contest such Taxes.  It shall be a condition precedent to Tenant’s right to contest any such Taxes that Tenant provide Landlord with security (in a form reasonably acceptable to Landlord and Landlord’s mortgagee) in an amount reasonably necessary to assure full payment of such Taxes being contested, together with all penalties, fines and interest and other fees and amounts that could be collected by the taxing authority in case the contest is unsuccessful (but in any event not less than the amount reasonably required by Landlord’s mortgagee in connection with such contest of Taxes).  In determining the security required pursuant to the immediately preceding sentence, due regard shall be given to tenant’s contractual obligations with respect to Taxes pursuant to Paragraph 2C above.  Tenant shall in all events pay all such contested Taxes (together with all penalties, fines, interest and such other fees and amounts) at least thirty (30) days prior to the date on which the Premises (or any portion thereof) are scheduled for any unstayed foreclosure on account of nonpayment thereof.  Tenant shall indemnify and hold harmless Landlord from and against any and all expenses, liabilities, and claims (including but not limited to attorneys’ fees) incurred by or asserted against Landlord or the Project arising as a result of any such contest by Tenant.  Landlord and Tenant agree to reasonably cooperate with one another in connection with all contests of Taxes under this Lease.

5.             LANDLORD’S REPAIRS.

Tenant understands and agrees that Landlord’s maintenance, repair and replacement obligations are limited to those expressly set forth in this Paragraph 5.  Landlord, at its own cost and expense, shall be responsible only for repair and replacement of the roof, the foundation and the structural members of the exterior walls of the Building, reasonable wear and tear excluded.  The term “walls” as used herein shall not include windows, glass or plate glass, doors, special store fronts or office entries.  Tenant shall immediately give Landlord written notice of defect or need for repairs after which Landlord shall have reasonable opportunity to repair same or cure such defect.

6.             TENANT’S REPAIRS AND MAINTENANCE.

A.            Tenant, at its own cost and expense, shall (i) maintain all parts of the Premises (including, but not limited to, the floor slab of the Premises and the mechanical, electrical, plumbing, sewer, sprinkler and other life-safety equipment, fixtures and systems forming a part of the Premises), in good, neat, clean, sanitary and operable condition and (ii) promptly make all necessary repairs and replacement to the Premises in a good and workmanlike manner.  In addition to the foregoing, Tenant shall, at its sole expense, repair any damage to the Premises of the Building caused by the negligent or intentional acts or omissions of Tenant or Tenant’s employees, agents or invitees, or caused by Tenant’s default hereunder.

B.            In addition to Tenant’s other obligations hereunder, Tenant, at its own cost and expense, shall enter into a regularly scheduled preventive maintenance/service contract with a maintenance contractor approved by Landlord (such approval not to be unreasonably withheld) for servicing, all hot water, heating and air conditioning and elevator systems and equipment within or serving the Premises.  The service contract must include all services suggested by the equipment manufacturer in its operations/maintenance manual and an executed copy of such contract must be provided to Landlord prior to the date Tenant takes possession of the Premises.

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7.             ALTERATIONS.

Tenant shall not make any alterations, additions or improvements to the Premises without the prior written consent of Landlord.  Tenant, at is own cost and expense, may erect such shelves, bins, machinery and trade fixtures as it desires provided that: (i) such items do not alter the basic character of the Premises or the Building and/or improvements of which the Premises are a part; (ii) such items do not overload or damage the Premises, the Building or such improvements; (iii) such items may be removed without injury to the Premises; and (iv) the construction, erection or installation thereof complies with all applicable governmental laws, ordinances, regulations and with Landlord’s specifications and requirements.  All alterations, additions, improvements and partitions erected by Tenant shall be and remain the property of Tenant during the Term of this Lease.  All shelves, bins, machinery and trade fixtures installed by Tenant shall be removed on or before the earlier to occur of the date of termination of this Lease or vacating of the Premises by Tenant, at which time Tenant shall restore the Premises to their original condition except for reasonable wear and tear.  All alterations, installations, removals and restoration shall be performed in a good and workmanlike manner so as not to damage or alter the primary structure or structure qualities of the Building and other improvements situated on the Premises or of which the Premises are a part.  Notwithstanding anything to the contrary contained herein, it is agreed that the use of and access to the roof of the Building is expressly reserved to Landlord and is expressly denied to Tenant.  Tenant shall not penetrate the roof of the Building in any manner, nor install or construct any alterations, additions or improvements thereon, nor otherwise use or occupy the roof at any time during the Term hereof.

8.             SIGNS.

Any signage, decorations, advertising media, blinds, draperies, window treatments, bars, and security installations Tenant desires for the Premises shall be subject in Landlord’s written consent (not to be unreasonable withheld) and shall be submitted to Landlord prior to installation of such items.  Tenant shall repair, paint, and/or replace the Building fascia surface to which its signs are attached upon vacation of the Premises, or the removal or alteration of its signage, all at Tenant’s sole cost and expense.  Tenant shall not (i) make any changes to the exterior of the Premises; (ii) install any exterior lights, decorations, balloons, flags, pennants, banners or paintings; or (iii) erect or install any signs, windows or door lettering, placards, decorations or advertising media of any type which can be viewed from the exterior of the Premises, without Landlord’s prior written consent.  Notwithstanding anything to the contrary contained herein, all signs, decorations, advertising media, blinds, draperies and other window treatment or bars or other security installations visible from outside the Premises shall conform in all respects to the criteria established by Landlord and to the requirements of all covenants, conditions and restrictions applicable to the Premises and the Building (including, but not limited to, approval by the Development Review Board).

9.             UTILITIES.

Tenant shall timely pay for all water, gas, heat, light, power, telephone, sewer, sprinkler charges and other utilities and services used on or at the Premises, together with any taxes, penalties, deposits, surcharges or the like pertaining to Tenant’s use of the Premises, and any maintenance charges for utilities.  Tenant shall pay all impact or other fees associated with utility hook-ups, meter installations or services to the Premises.  Landlord shall have the right to cause any of said services to be separately metered to tenant, provided the cost of such separate metering is allocated on a fair and equitable basis among all tenants of the Building benefiting from the separate metering.  Notwithstanding anything to the contrary contained herein, if Tenant requests separate metering for the Premises, Landlord shall cause such separate metering at Tenant’s sole cost and expense.  Tenant shall pay its proportionate share of all charges for jointly metered utilities (including, but not limited to the cost of utilities consumed in

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connection with providing electrical power for the Building’s canopy lighting, the lighting of the parking facilities and other common areas and facilities associated with the Building.  The Building’s fire pump room and irrigation system, as well as other electricity gauged by the “house meter”).  Landlord shall no be liable for any interruption or failure of utility service on the Premises.

10.           INSURANCE.

A.            Landlord shall maintain insurance covering the Building of which the Premises are a part in an amount not less than the “replacement cost” thereof insuring against the perils and costs of Fire, Lighting, Extended Coverage, Vandalism and Malicious Mischief and such other insurance as Landlord shall deem necessary.

B.            Tenant, at its own expense, shall maintain during the Term of this Lease a policy or policies of worker’s compensation and comprehensive general liability insurance, including personal injury and property damage, with contractual liability endorsement, in the amount of Two Million Dollars ($2,000,000.00) for property damage and Two Million Dollars ($2,000,000.00) per occurrence for personal injuries or deaths of persons occurring in or about the Premises.  Tenant, at its own expense, also shall maintain during the Term of this Lease (i) fire and extended coverage insurance covering the replacement cost of all alterations, additions, partitions and improvements installed or placed on the Premises by Tenant or by Landlord on behalf of Tenant, and all of Tenant’s personal property contained within the Premises and (ii) business interruption insurance insuring loss of profits in the event of an insured peril damaging the Premises.  Said policies shall (i) name Landlord as an additional insured and insure Landlord’s contingent liability under this Lease (except for the worker’s compensation policy, which instead shall include a waiver of subrogation endorsement in favor of Landlord;) (ii) be issued by an insurance company which is licensed to do business in the State of Texas, and which has a Best’s Rating of A/VII or better, and (iii) provide that said insurance shall not be cancelled unless thirty (30) days prior written notice shall have been given to Landlord.  In addition, such insurance provided by Tenant shall be primary coverage for Landlord when any policy issued to Landlord is similar or duplicate in coverage, and Landlord’s policy shall be excess over Tenant’s policies.  All insurance policies carried by Tenant hereunder shall expressly provide (by endorsement or otherwise) that Landlord’s rights thereunder shall be assignable to Landlord’s mortgagee who shall be shown as an additional insured thereon.  Said policy or policies or certificates thereof shall be delivered to Landlord by Tenant upon commencement of the Term of the Lease and upon each renewal of said insurance.

C.            Tenant will not permit the Premises to be used for any purpose or in any manner that would (i) void the insurance thereon, (ii) increase the insurance risk, or (iii) cause the disallowance of any sprinkler credits, including without limitation, use of the Premises for the receipt, storage or handling of any product, material or merchandise that is explosive or highly inflammable.  In any increase in the cost of any insurance on the Premises or the Building of which the Premises are a part is caused by Tenant’s use of the premises, or because Tenant vacates the Premises, then Tenant shall pay the amount of such increase to Landlord.

11.           FIRE AND CASUALTY DAMAGE.

A.            If the Premises or the Building of which the Premises are a part should be damaged or destroyed by fire or other peril, Tenant immediately shall give written notice to Landlord.  If the Building of which the Premises are a part should be totally destroyed by any peril which would be covered by the insurance which Landlord is required to maintain under Paragraph 10A above, or if they should be so damaged thereby that, in Landlord’s estimation,

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rebuilding or repairs cannot be completed within one hundred eighty (180) days after Landlord’s receipt of all insurance proceeds with respect to such damage, this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease, effective upon the date of the occurrence of such damage.

B.            If the Building of which the Premises are apart should be damaged by any peril which would be covered by the insurance which Landlord is required to maintain under Paragraph 10A above, and in Landlord’s reasonable estimation, rebuilding or repairs can be substantially completed within one hundred eighty (180) days alter the date of such damage, this Lease shall not terminate, and Landlord shall restore the Premises to substantially its previous condition, except that Landlord shill not be required to rebuild, repair or replace any part of the partitions, fixtures, additions and other improvements that may have been constructed, erected or installed in, of about the Premises for the benefit of, or by or for Tenant.  Effective upon the date of the occurrence of such damage and ending upon substantial completion, if the Premises are untenantable in whole or part during such period, the rent shall be reduced to such extent as may be fair and reasonable under all of the circumstances.  If such repairs and rebuilding have not been substantially completed within one hundred eighty (180) days after the date of such damage (subject to Force Majeure Delays [hereinafter defined] and any delays caused by Tenant or its employees, agents or contractors), Tenant, as Tenant’s exclusive remedy, may terminate this Lease by delivering written notice of termination to Landlord in which event the rights and obligations hereunder shall cease and terminate (except as expressly provided to the contrary herein.)

C.            Notwithstanding anything herein to the contrary if the holder of any indebtedness secured by a mortgage or deed of trust covering the Premises requires that the insurance proceeds be applied to such indebtedness, then Landlord shall have the right to terminate this Lease by delivering written notice of termination to Tenant within fifteen (15) days after such requirement is made known by any such holder, whereupon all rights and obligations hereunder shall cease and terminate (except as expressly provided to the contrary herein).

D.            Landlord and Tenant hereby waive and release each other (but only to the extent of the insurance coverage required to be maintained by the respective parties hereunder) of and from any and all rights of recovery, claim, action or cause of action, against each other, their agents, officers and employees, for any liability, loss or damage that may occur to the Premises, improvements or the Building of which the Premises are a part, or personal property (building contents) within the Building and or Premises as the result of any fire or other casualty required to be insured against under this Lease.  Each party to this Lease agrees immediately after execution of this Lease to give each insurance company, which has issued to it policies of fire and extended coverage insurance, written notice of the terms of the mutual waivers contained in this subparagraph and to have the insurance policies properly endorsed to reflect such waivers.

12.           LIABILITY AND INDEMNIFICATION.

EXCEPT FOR ANY CLAIMS, RIGHTS OF RECOVERY AND CAUSES OF ACTION THAT TENANT HAS RELEASED, LANDLORD SHALL HOLD TENANT HARMLESS AND DEFEND TENANT AGAINST ANY AND ALL CLAIMS OR LIABILITY FOR ANY INJURY OR DAMAGE TO ANY PERSON IN, ON OR ABOUT THE PREMISES OR ANY PART THEREOF AND/OR THE BUILDING OF WHICH THE PREMISES ARE A PART, WHEN SUCH INJURY OR DAMAGE SHALL BE CAUSED BY THE ACT, NEGLECT, FAULT, OR OMISSION OF ANY DUTY WITH RESPECT TO THE SAME BY LANDLORD, ITS AGENTS, SERVANTS AND EMPLOYEES (UNLESS THE INDEMNIFIED LOSS IS CAUSED WHOLLY OR IN PART BY TENANT’S

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NEGLIGENCE OR INTENTIONAL ACTS IN WHICH EVENT THIS INDEMNITY SHALL NOT APPLY TO THE ALLOCABLE SHARE OF SUCH LOSS RESULTING FROM TENANT’S NEGLIGENCE OR INTENTIONAL ACTS).  EXCEPT FOR ANY CLAIMS, RIGHTS OF RECOVERY AND CAUSES OF ACTION THAT LANDLORD HAS RELEASED, TENANT SHALL INDEMNIFY, PROTECT, HOLD HARMLESS AND DEFEND LANDLORD, ITS AGENTS, EMPLOYEES, CONTRACTORS, PARTNERS, DIRECTORS, OFFICERS AND ANY AFFILIATES OF THE ABOVE-MENTIONED PARTIES (COLLECTIVELY THE “LANDLORD AFFILIATES”) FROM AND AGAINST ANY AND ALL OBLIGATIONS, SUITS, LOSSES, JUDGMENTS, ACTIONS, DAMAGES, CLAIMS OR LIABILITY (INCLUD1NG, WITHOUT LIMITATION, ALL COSTS, ATTORNEYS’ FEES, AND EXPENSES INCURRED IN CONNECTION THEREWITH) IN CONNECTION WITH ANY LOSS, INJURY OR DAMAGE (I) TO ANY PERSON OR PROPERTY WHATSOEVER OCCURRING IN, ON OR ABOUT THE PREMISES OR ANY PART THEREOF AND/OR OF THE BUILDING OF WHICH THE PREMISES ARE A PART, INCLUDING WITHOUT LIMITATION ELEVATORS, STAIRWAYS, PASSAGE WAYS OR HALLWAYS, THE USE OF WHICH TENANT MAY HAVE IN ACCORDANCE WITH THIS LEASE, TO THE EXTENT SUCH INJURY OR DAMAGE SHALL BE CAUSED BY THE ACT, NEGLECT, FAULT OF, OR OMISSION OF ANY DUTY WITH RESPECT TO THE SAME BY TENANT, ITS AGENTS, SERVANTS, EMPLOYEES, OR INVITEES (II) ARISING FROM THE CONDUCT OF MANAGEMENT OF ANY WORK DONE BY TENANT IN OR ABOUT THE PREMISES, (III) ARISING FROM TRANSACTIONS OF TENANT, OR (IV) ARISING FROM A BREACH, VIOLATION OR NON-PERFORMANCE OF ANY TERM, PROVISION, COVENANT OR AGREEMENT OF TENANT HEREUNDER, OR A BREACH OR VIOLATION BY TENANT OP ANY COURT ORDER OR ANY LAW, REGULATION, OR ORDINANCE OF ANY FEDERAL, STATE OR LOCAL AUTHORITY (COLLECTIVELY, THE “LOSSES” EVEN IF THE LOSSES ARE CAUSED WHOLLY OR IN PART BY THE NEGLIGENCE OF LANDLORD AND/OR LANDLORD AFFILIATES.  IF ANY CLAIM IS MADE AGAINST LANDLORD OR LANDLORD AFFILIATES, TENANT, AT IT’S SOLE COST AND EXPENSE, SHALL DEFEND ANY SUCH CLAIM, SUIT OR PROCEEDING BY OR THROUGH ATTORNEYS SATISFACTORY TO TENANT.  THE PROVISIONS OF THIS PARAGRAPH 12 SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE WITH RESPECT TO ANY CLAIMS OR LIABILITY OCCURRING PRIOR TO SUCH EXPIRATION OR TERMINATION.

13.           USE.

The Premises shall be used only for the purpose of receiving, storing, light manufacturing, shipping and selling (other than retail) products, materials and merchandise made and/or distributed by Tenant and for such other lawful purposes as may be incidental thereto.  Tenant acknowledges that it does not intend to use the Premises to serve the public.  Outside storage, including without limitation, storage of trucks and other vehicles, is prohibited without Landlord’s prior written consent.  Tenant shall comply with (i) all governmental laws, ordinances and regulations applicable to the use and occupancy of the Premises, and promptly shall comply with all governmental orders and directives for the correction, prevention and abatement of nuisances in or upon, or connected with, the Premises, all at Tenant’s sole expense, (ii) the requirements of all deed restrictions, restrictive covenants and other covenants, conditions and restrictions affecting the Building and/or the Land, and (iii) the requirements of “Alliance Development Guidelines” as may exist from time to time, and all amendments thereto.  Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise or vibrations to emanate from the Premises, nor take any other action that would constitute a nuisance or would disturb, unreasonably interfere with, or endanger Landlord or any other lessees of the Building of which the Premises are a part.

Landlord represents that, to its current actual knowledge, the Land is currently zoned “M-1 Light” industrial pursuant to the zoning ordinance of the City of Roanoke, Texas.

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14.           INSPECTION.

Landlord and Landlord’s agents and representatives shall have the right to enter the Premises at any time, upon prior reasonable notice, to (i) inspect the Premises, (ii) make such repairs as may be required or permitted pursuant to this Lease, and (iii) show the Premises to prospective purchasers of, or parties who are anticipated to provide financing with respect to, the Building.  Notwithstanding the foregoing, Landlord shall have the right to enter the Premises at any time, without notice to Tenant in case of an emergency posing a threat to persons or property.  During the period that is six (6) months prior to the end of the Term of this Lease, upon telephonic notice to Tenant, Landlord and Landlord’s representatives may enter the Premises during business hours for the purpose of showing the Premises.  In addition, Landlord shall have the right to erect a suitable sign on the Premises stating the Premises are available.  Tenant shall notify Landlord in writing at least thirty (30) days prior to vacating the Premises and shall arrange to meet with Landlord for a joint inspection of the Premises prior to vacating.  If Tenant fails to give such notice or to arrange for such inspection, then Landlord’s inspection of the Premises shall be deemed correct for the purpose of determining Tenant’s responsibility for repairs and restoration of the Premises.

15.           ASSIGNMENT AND SUBLETTING.

A.            Tenant shall not assign (either voluntarily, nor permit assignment by operation of law), sublet, transfer or encumber this Lease, or any interest therein, to any third party without the prior written consent of Landlord (such consent not to be unreasonably withheld); provided however, Tenant may assign this Lease or sublet the Premises to any entity that controls, is controlled by, or is under common control with Tenant (individually, an “Affiliate”).  Any attempted assignment, subletting, transfer or encumbrance by Tenant in violation of the terms and covenants of this Paragraph shall be void.  No assignment, subletting or other transfer, whether consented to by Landlord or not, shall relieve Tenant of its liability hereunder.  In the event Tenant desires to sublet the Premises, or any portion thereof, or assign this Lease, Tenant shall give written notice thereof to Landlord within a reasonable time prior to the proposed commencement date of such subletting or assignment, which notice shall set forth the name of the proposed sublessee or assignee, the relevant terms of any sublease or assignment and copies of financial reports and other relevant financial information of the proposed sublessee or assignee.  Tenant shall reimburse Landlord for Landlord’s actual reasonable out-of-pocket expenses and attorneys’ fees for processing and reviewing Tenant’s request for any subletting or assignment.

B.            In addition to, but not in limitation of, Landlord’s right to approve of any sublessee or assignee, Landlord shall have the option, in its sole discretion, in the event of any subletting or assignment (other than to an Affiliate), to terminate this Lease, or in case of a subletting of less than the entire Premises (other than to an Affiliate), to recapture the portion of the Premises to be sublet, as of the date the subletting or assignment is to be effective.  The option shall be exercised, if at all, by Landlord giving Tenant written notice thereof within sixty (60) days following Landlord’s receipt of Tenant’s written notice as required above.  If this Lease shall be terminated with respect to the entire Premises pursuant to this Paragraph, the Term of this Lease shall end on the date stated in Landlord’s notice as the effective date of the sublease or assignment as if that date had been originally fixed in this Lease for the expiration of the Term hereof; provided, however, that effective on such date Tenant shall pay Landlord all amounts, as estimated by Landlord, payable by Tenant to such date with respect to taxes, insurance, repairs, maintenance, restoration and other obligations, costs or charges which are the responsibility of Tenant hereunder.  Further, upon any such cancellation Landlord and Tenant shall have no further obligations or Liabilities to each other under this Lease, except with respect to obligations or liabilities which have accrued hereunder as of such cancellation date (in the same manner as if

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such cancellation date were the date originally fixed in this Lease for the expiration of the Term hereof) and except for those obligations and liabilities which, by the express terms of this Lease, are to survive any expiration or termination hereof.  If Landlord recaptures only a portion of the Premises under this Paragraph, the Base Rent during the unexpired Term hereof shall abate proportionately based on the rent per square foot contained in this Lease as of the date immediately prior to such recapture.  Tenant shall, at Tenant’s own cost and expense, discharge in full any outstanding commission obligation on the part of Landlord with respect to this Lease, and any commissions which may be due and owing as a result of any proposed assignment or subletting, whether or not the Premises are recaptured pursuant hereto and rented by Landlord to the proposed tenant or any other tenant.

C.            Upon the occurrence of an assignment or subletting, whether or not consented to by Landlord, or mandated by judicial intervention, Tenant hereby assigns, transfers and conveys to Landlord all rents or other sums received or receivable by Tenant under any such assignment or sublease, which are in excess of the rents and other sums payable by Tenant under this Lease (or in case of a sublease, which are in excess of the rents and other sums payable by Tenant with respect to the portion of the Premises that is subleased), and agrees to pay such amounts to Landlord within ten (10) days after receipt.

D.            If this Lease is assigned to any person or entity pursuant to the provisions of the United States Bankruptcy Code, 11 U.S.C. § 101 et. seq. (the “Bankruptcy Code”), any and all monies or other consideration payable or otherwise to be delivered in connection with such assignment shall be paid or delivered to Landlord, shall be and remain the exclusive property of Landlord and shall not constitute property of Tenant or of the estate of Tenant within the meaning of the Bankruptcy Code.  Any and all monies or other considerations constituting Landlord’s property under the preceding sentence not paid or delivered to Landlord shall be held in trust for the benefit of Landlord and be promptly paid or delivered to Landlord.  Any person or entity to which this Lease is assigned pursuant to the provisions of the Bankruptcy Code, shall be deemed, without further act or deed, to have assumed all of the obligations arising under this Lease on and after the date of such assignment.  Any such assignee shall upon demand execute and deliver to Landlord an instrument confirming such assumption.

E.             Any assignee, sublessee or transferee of Tenant’s interest in this Lease (all such assignees, sublessees and transferees being hereinafter referred to as “Transferees”), by accepting any such assignment, sublease or transfer shall be deemed to have assumed Tenant’s obligations hereunder, and shall be deemed to have assumed liability to Landlord for all amounts paid to persons other than Landlord by such Transferees.  No assignment, subletting or other transfer, whether consented to by Landlord or not or permitted hereunder, shall relieve Tenant of its liability hereunder.  If an Event of Default occurs while the Premises or any part thereof are assigned or sublet, then Landlord, in addition to any other remedies herein provided, or provided by law, may collect directly from such Transferee all rents payable to Tenant and apply such rent against any sums due Landlord hereunder.  No such collection shall be construed to constitute a novation or a release of Tenant from the further performance of Tenant’s obligations hereunder.

16.           CONDEMNATION.

If more than fifty percent (50%) of the Premises are taken for any public or quasi-public use under governmental law, ordinance or regulation, or by right of eminent domain, or by a conveyance in lien thereof, and the taking prevents or materially interferes with the use of the Premises for the purpose for which they were leased to Tenant, this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease, effective on the date of such taking.  If lets than fifty patent (50%) of the

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Premises are taken for any public or quasi-public use under any governmental law, ordinance or regulation, or by right of eminent domain, or by a conveyance in lieu thereof, this Lease shall not terminate, but the rent payable hereunder during the unexpired portion of this Lease shall be reduced to such extent as may be fair and reasonable under all of the circumstances.  All compensation awarded in connection with or as a result of any of the foregoing proceedings shall be the property of Landlord; and Tenant hereby assigns any interest in any such award to Landlord; provided, however, Landlord shall have no interest in any award made to Tenant for loss of business or goodwill or for the taking of Tenant’s fixtures and improvements, if a separate award for such items is made to Tenant.

17.           HOLDING OVER.

At the termination of this Lease by its expiration or otherwise, Tenant immediately shall deliver possession of the Premises to Landlord.  If, for any reason, Tenant retains possession of the Premises or any part thereof alter such termination, then Landlord may, at its option, serve written notice upon Tenant that such holding over constitutes either (i) the creation of a month to month tenancy, upon the terms and conditions set forth in this Lease, or (ii) creation of a tenancy at sufferance, in any case upon the terms and conditions set forth in this Lease; provided, however, that the monthly rental (or daily rental under (ii)) shall, in addition to all other sums which are to be paid by Tenant hereunder, whether or not as additional rent, be equal to double the rental being paid monthly to Landlord under this Lease immediately prior to such termination (prorated in the case of (ii) on the basis of a 365-day year for each day Tenant remains in possession).  If no such notice is served, then a tenancy at sufferance shall be deemed to be created at the rent in the preceding sentence.  Tenant shall also pay to Landlord all damages sustained by Landlord resulting from retention of possession by Tenant, including the loss of any proposed subsequent tenant for any portion of the Premises.  The provisions of this paragraph shall not constitute a waiver by Landlord of any right of re-entry as herein set forth; nor shall receipt of any rent or any other act in apparent affirmance of the tenancy operate as a waiver of the right to terminate this Lease for a breach of any of the terms, covenants; or obligations herein on Tenant’s part to be performed.  No holding over by Tenant, whether with or without consent of Landlord, shall operate to extend this Lease except as otherwise expressly provided.  The preceding provisions of this Paragraph 17 shall not be construed as consent for Tenant to retain possession of the Premises in the absence of written consent thereto by Landlord.

18.           QUIET ENJOYMENT.

Landlord has the authority to enter into this Lease and so long as Tenant pays all amounts due hereunder and performs all other covenants and agreements herein set forth, Tenant shall peaceably and quietly have, hold and enjoy the Premises for the Term hereof without hindrance from Landlord subject to the terms and provisions of this Lease.  If this Lease is a sublease, then Tenant agrees to take the Premises subject to the provisions of the prior leases.

19.           EVENTS OF DEFAULT.

The following events (herein individually referred to as an “Event of Default”) each shall be deemed to be an event of default by Tenant under this Lease:

A.            Tenant shall fail to pay any installment of the Base Rent herein reserved when due, or any other payment or reimbursement to Landlord required herein when due, and such failure shall continue for a period of five (5) days after written notice to Tenant.

B.            Tenant shall: (i) become insolvent (ii) admit in writing its inability to pay its debts; (iii) make a general assignment for the benefit of creditors; (iv) commence any case,

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proceeding or other action seeking to have an order for relief entered on its behalf as a debtor or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or of any substantial part of its property; or (v) take any action to authorize or in contemplation of any of the actions set forth above in this Paragraph.

C.            Any case, proceeding or other action against Tenant or any guarantor of Tenant’s obligations hereunder shall be commenced seeking: (i) to have an order for relief entered against it as debtor or to adjudicate it a bankrupt or insolvent (ii) reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors; (iii) appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property, and such case, proceeding or other action (a) results in the entry of an order for relief against it which is not fully stayed within seven (7) business days after the entry thereof or (b) shall remain undismissed for a period of forty-five (45) days.

D.            Tenant shall (i) fail to take possession of the Premises within thirty (30) days of substantial completion of the Leasehold Improvements, (ii) vacate, desert, or abandon all or a substantial portion of the Premises, or threaten to do so or (iii) fail to continuously operate its business at the Premises for the permitted use set forth herein, whether or not Tenant is in default in payment of the rental payments due under this Lease.

E.             Tenant shall fail to promptly discharge any lien placed upon the Premises in violation of Paragraph 22 hereof.

F.             Tenant shall fail to comply with any term, provision or covenant of this Lease (other than those listed above in this Paragraph 19), and shall not cure such failure within twenty (20) days after written notice thereof to Tenant provided, however, if such failure cannot through the exercise of reasonable diligence be cured within such twenty (20) days, an Event of Default shall not be deemed to have occurred under this Paragraph 19F so long as Tenant commences it curative efforts within such twenty (20)-day period and diligently prosecutes same to completion.

G.            Tenant, its bankruptcy trustee, or any entity authorized by court order to act on behalf of Tenant, shall reject this Lease under 11 U.S.C. sec. 365(a) or any other provision of Title 11 of the United States Code, or the deemed rejection of this Lease by operation of law under 11 U.S.C. sec. 365(d)(4).  Any such rejection of this Lease terminates this Lease, without notice of any kind to Tenant, effective on the later of: (1) the date Tenant vacates the Premises following such rejection; (2) the date the Bankruptcy Court with jurisdiction over Tenant’s bankruptcy case enters an order on its docket authorizing Tenant to reject this Lease; or (3) the date this Lease is deemed rejected under 11 U.S.C. sec. 365(d)(4).

20.           REMEDIES.

A.            Upon each occurrence of an Event of Default, Landlord shall have the option to pursue, without any notice or demand, (except as expressly provided otherwise herein) any one or more of the following remedies and/or any other remedies to which Landlord is entitled at law or in equity:

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i.              Terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord.  If Tenant fails to do so, Landlord may, without any further notice and without prejudice to any other remedy Landlord may have for possession or arrearages in rental, enter upon and take possession of the Premises and remove Tenant and its effects without being liable for prosecution or any claim for damages therefor, and Tenant shall indemnify Landlord for all loss and damage which Landlord may suffer by reason of such termination, whether through inability to relet the Premises or otherwise, including any loss of rental for the remainder of the Term.

ii.             If the Event of Default relates to nonpayment of Base Rent or any other monetary sum due hereunder, or the desertion, vacation or abandonment of the Premises, terminate this Lease, in which event Tenant’s default shall be deemed a total and entire breach of Tenant’s obligations under this Lease and Tenant immediately shall become liable for damages in an amount equal to the excess of (i) the total rental for the remainder of the Term, discounted at the Prime Rate (hereinafter defined) to the then present value, together with all other actual and reasonable expenses incurred by Landlord in connection with Tenant’s default, all sums due pursuant to Paragraph 20B below, and the unpaid rental due as of the date of termination, over (ii) the fair market rental value of the Premises for the balance of the Term, discounted at the Prime Rate to the then present value.  For the purposes of clause (i) above, the components of monthly rent (other than Base Rent) for the remainder of the Term shall be deemed to be equal to the respective monthly amounts thereof as were due and payable during the month in which the Lease was terminated.  It is acknowledged intended and agreed that the amounts which Landlord is entitled to recover under this Paragraph 20A(ii) constitute liquidated damages and not a penalty for Tenant’s defaults related to nonpayment of rental, or the desertion, vacation or abandonment of the Premises.  Such amounts constitute the parties’ best, good faith, and reasonable estimate of the damages which would be suffered by Landlord in the event any such default occurs, the exact amount of such damages being difficult or impractical to calculate.

iii.            Enter upon and take possession of the Premises as Tenant’s agent without terminating this Lease and without being liable for prosecution or any claim for damages therefor, and Landlord may relet the Premises as Tenant’s agent and receive the rental therefor, in which event Tenant shall pay to Landlord on demand all sums due pursuant to Paragraph 20B below, together with any deficiency that may arise by reason of such reletting.

iv.            Do whatever Tenant is obligated to do under this Lease and enter the Premises, without being liable for prosecution or any claim for damages therefor, to accomplish such purpose.  Tenant shall reimburse Landlord immediately upon demand for any expenses which Landlord incurs in thus effecting compliance with this Lease on Tenant’s behalf, together with interest thereon at the highest lawful rate from the date Landlord incurs the expense in question until Landlord is reimbursed therefor.

v.             Require Tenant to pay any rental in quarterly installments in advance of’ each calendar quarter during the Tam by certified or cashier’s check.

vi.            With twenty-four (24) hours prior notice, alter the locks and any other security device or devices which allow Tenant access to the Premises or the Building of which the Premises form a part, and Landlord shall not be required to provide a new key or right of access to Tenant, and restrict or terminate any right to use parking facilities

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associated with the Building as well as utility services to the Premises.  This Paragraph 20A(vi) is intended to and shall supersede the provisions of Section 93.002 of the Texas Property Code.

B.            Upon the occurrence of an Event of Default, in addition to any other sum provided to be paid herein, Tenant also shall be liable for and shall pay to Landlord: (i) brokers’ fees incurred by Landlord in connection with reletting the whole or any part of the Premises to the extent such brokers’ fees (if calculated based on the term of the lease for the reletting) are attributable to the remainder of the Term of this Lease; (ii) the costs of removing and storing Tenant’s or other occupant’s property; (iii) the costs of repairing, altering, remodeling or otherwise putting the Premises into condition acceptable to a new tenant or tenants; (iv) all reasonable expenses incurred in marketing the Premises and (v) all reasonable expenses incurred by Landlord in enforcing or defending Landlord’s rights and/or remedies.  If either party hereto institutes any action or proceeding to enforce any provision hereof by reason of any alleged breach of any provision of this Lease, the prevailing party shall be entitled to receive from the losing party all actual and reasonable attorneys’ fees and all court costs in connection with such proceeding.  If Tenant files a voluntary petition under any chapter of Title 11 of the United Stales Code, or if an involuntary petition is filed against Tenant seeking relief under any chapter of Title 11 of the United States Code, Tenant acknowledges that Landlord may, at its option, retain an attorney to represent Landlord in such bankruptcy case and all attorneys’ fees and expenses (including expenses of consulting or testifying expert witnesses) incurred by Landlord in connection with such bankruptcy case shall be recoverable by Landlord as additional rent under this Lease and shall constitute pars of the cure required under 11 U.S.C. sec. 365(b)(1)(A) if Tenant seeks to assume or assume and assign this Lease.

C.            In the event Tenant fails to make any payment due hereunder when payment is due, to help defray the additional cost to Landlord for processing such late payments, Tenant shall pay to Landlord on demand a late charge in an amount equal to five percent (5%) of such payment; and the failure to pay such amount within five (5) days after demand therefor shall be an additional Event of Default hereunder.  The provision for such late charge shall be in addition to all of Landlord’s other rights and remedies hereunder or at law and shall not be construed as liquidated damages or as limiting Landlord’s remedies in any manner.

D.            Exercise by Landlord of any one or more remedies hereunder granted or otherwise available shall not be deemed to be an acceptance of surrender of the Premises by Landlord, whether by agreement or by operation of law, it being understood that such surrender can be effected only by the written agreement of Landlord and Tenant.  Tenant and Landlord further agree that forbearance by Landlord to enforce its rights pursuant to this Lease, at law or in equity, shall not be a waiver of Landlord’s right to enforce one or inert of its rights in connection with that or any subsequent default.

E.             The term “Prime Rate” as used herein shall mean the per annum “prime rate” of interest as published, on the date on which this Lease is terminated in accordance with this Paragraph 20, by The Wall Street Journal, Southwest Edition, in its listing of “Money Rates”, or if The Wall Street Journal is not published on the date on which this Lease is terminated, then the “prime rate” of interest as published in The Wall Street Journal on the most recent date prior to the date on which this Lease is so terminated or, if The Wall Street Journal has ceased publication and does not have a comparable successor as of the date on which this Lease is terminated, then the “Prime Rate” as used herein shall mean the prime rate of interest announced from time to time by Bank One Texas, N.A.

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F.             If Landlord fails to perform any of its obligations hereunder within thirty (30) days after written notice from Tenant specifying in detail such failure (or if the failure cannot be corrected, through the exercise of reasonable diligence, within such thirty (30)-day period, if Landlord does not commence to correct same within such thirty (30)-day period and thereafter diligently prosecute same to completion), Tenant’s sole and exclusive remedy shall be an action for damages.  Unless and until Landlord fails to so cure any default after such notice, Tenant shall not have any remedy or cause of action by reason thereof.  All obligations of Landlord hereunder will be construed as covenants, not conditions; and all such obligations will be binding upon Landlord only during the period of its possession of the Premises and not thereafter.  The term “Landlord” shall mean only the owner, for the time being of the Premises, and in the event of the transfer by such owner of its interest in the Premises, such owner shall thereupon be released and discharged from all covenants and obligations of Landlord thereafter accruing but such covenants and obligations shall be binding during the Term of this Lease upon each new owner for the duration of such owner’s ownership.  Notwithstanding any other provision hereof, Landlord shall not have any personal liability hereunder.  In the event of any breach or default by Landlord of any term or provision of this Lease, Tenant agrees to look solely to the equity or interest then owned by Landlord in the Premises or of the Building of which the Premises are a part; however, in no event, shall any deficiency judgment of any kind be sought or obtained against Landlord.

G.            If Landlord repossesses the Premises pursuant to the authority herein granted, then Landlord shall have the right to (i) keep in place and use or (ii) remove and store, all of the furniture, fixtures and equipment at the Premises, including that which is owned by or leased to Tenant at all times prior to any foreclosure thereon by Landlord or repossession thereof by any landlord thereof or third party having a lien thereon.  Landlord 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 Landlord a copy of any instrument represented by Claimant to have been executed by Tenant (or any predecessor of Tenant) 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 Landlord to inquire into the authenticity or legality of said instrument.  The rights of Landlord herein stated shall be in addition to any and all other rights that Landlord has or may hereafter have at law or in equity; and Tenant stipulates and agrees that the rights herein granted Landlord are commercially reasonable.

H.            Notwithstanding anything in this Lease to the contrary, all amounts payable by Tenant to or on behalf of Landlord under this Lease, whether or not expressly denominated as rent, shall constitute rent.

I.              This is a contract under which applicable law excuses Landlord from accepting performance from (or rendering performance to) any person or entity other than Tenant.

21.           MORTGAGES.

Tenant accepts this Lease subject and subordinate to any mortgages and/or deeds of trust now or at any time hereafter constituting a lien or charge, upon the Premises or the improvements situated thereon or the Building of which the Premises are a part; provided, however, that if the mortgagee, trustee, or holder of any such mortgage or deed of trust elects to have Tenant’s interest in this Lease superior to any such instrument, then by notice to Tenant from such mortgagee, trustee or holder, this Lease shall be deemed superior to such lien, whether this Lease was executed before or after said mortgage or deed of trust.  Tenant, at any time hereafter on demand, shall execute any instruments, releases or other documents that may be reasonably required by any mortgagee, trustee or holder for the

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purpose of subjecting and subordinating this Lease to the lien of any such mortgage or deed of trust (Tenant hereby agreeing that an instrument in the form of Exhibit ”H” attached hereto and made a part hereof is acceptable to Tenant for such purpose).  If any future mortgagee or beneficiary under a mortgage or deed of trust hereafter placed upon the Building desires to subordinate its mortgage or deed of trust to this Lease, Tenant agrees that it shall promptly execute such instruments as may be reasonably required by such mortgagee or beneficiary in order to effect such subordination.

22.           MECHANICS LIENS.

Tenant has no authority, express or implied, to create or place any lien or encumbrance of any kind or nature whatsoever upon, or in any manner to bind, the interest of Landlord or Tenant in the Premise or to charge the rentals payable hereunder for any claim in favor of any person dealing with Tenant, including those who may furnish materials or perform labor for any construction or repairs.  Tenant covenants and agrees that it will pay or cause to be paid all sums legally due and payable by it on account of any labor performed or materials furnished in connection with any work performed on the Premises and that it will save and hold Landlord harmless from any and all loss, cost or expense based on or arising out of asserted claims or liens against the leasehold estate or against the right, title and interest of Landlord in the Premises or under the terms of this Lease.  Tenant agrees to give Landlord immediate written notice of the placing of any lien or encumbrance against the Premises.

23.           HAZARDOUS MATERIALS.

A.            Tenant shall never incorporate into, or dispose of, at, in or under the Premises, the Building or the Land any toxic or hazardous materials.  Tenant further agrees not to use at, place in, or store at the Premises any toxic or hazardous materials, except for those toxic or hazardous materials that are either (a) office supplies or (b) kitchen cleaning materials that are generally considered to be a household cleaner and are purchased in a container not larger than one (1) gallon and then only if (i) all such toxic or hazardous materials, supplies and materials are properly labeled and contained, (ii) all such toxic or hazardous materials are stored, handled, transported and disposed of in accordance with highest accepted industry standards and all applicable laws, rules and regulations, and (iii) if a material safety data sheet is required under applicable laws to accompany the toxic or hazardous materials, supplies or materials, a copy of such current material safety data sheet is provided to Landlord.  For purposes of this Lease, “toxic or hazardous materials” shall mean hazardous or toxic chemicals or any materials containing hazardous or toxic chemicals at levels or content which cause such materials to be classified as hazardous or toxic as then prescribed by the highest industry standards or by the then current levels or content as set from time to time by the U.S. Environmental Protection Agency (“EPA”) or the U.S. Occupational Safety and Health Administration (“OSHA”) or as defined under 29 CFR 1910 or 29 CFR 1925 or other applicable governmental laws, rules or regulations.  In the event there is a spill of toxic or hazardous materials (other than permitted office supplies and kitchen cleaning supplies) at the Premises, the Building or the Land, Tenant shall notify Landlord of the method, time and procedure for any clean-up and removal of such toxic or hazardous materials; and, Landlord shall have the right to require reasonable changes in such method, time or procedure.  In the event there is a spill of a toxic or hazardous material that comes from office supplies in the Premises, Tenant shall notify Landlord if the spill would in any way endanger or pose a threat to Tenant’s employees, Building maintenance or custodial personnel, other Building tenants or the general public.  In the event of any breath of this provision by Tenant or any contamination of the Premises, the Building or the Land, by Tenant, Tenant shall pay all costs for the removal or abatement or clean-up of any toxic or hazardous materials at the Premises, the Building and the Land.  If any lender or governmental agency shall ever require testing to ascertain whether or nor there has been any release of hazardous materials caused by Tenant, then

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the reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand as additional charges, unless the testing determines the hazardous material was not caused by Tenant or persons acting under Tenant.  In addition, Tenant shall execute affidavits, representations and the like from time to time at Landlord’s reasonable request concerning Tenant’s best knowledge and belief regarding the presence of hazardous substances or materials on the Premises.  In all events, Tenant shall indemnify Landlord in the manner elsewhere provided in this Lease from any release of hazardous materials on the Premises occurring while Tenant is in possession or elsewhere if caused by Tenant or persons acting under Tenant.

B.            Landlord represents and warrants to Tenant as of the date hereof that to Landlord’s current actual knowledge there is no environmental contamination of the Land other than as disclosed in the Phase I Environmental Site Assessment dated July 22, 2002, prepared by HBC Engineering (“Environmental Report”) a copy of which Environmental Report has been provided to Tenant; provided, however, Landlord makes no representation or warranty regarding the accuracy of the findings, conclusions or recommendations contained in the Environmental Report or the qualifications of the consultant who prepared the Environmental Report.  The term “Landlord’s current actual knowledge” and terms of similar import shall he construed to mean the actual knowledge (and not constructive knowledge) of Robert Alter and Tony Creme.

C.            This Paragraph 23 shall survive the expiration or any termination or this Lease.

24.           MISCELLANEOUS.

A.            Words of any gender used in this Lease shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires.  The captions inserted in this Lease are for convenience only and in no way define, limit or otherwise describe the scope or intent of this Lease, or any provision hereof, or in any way affect the interpretation of this Lease.

B.            The terms, provisions aid covenants contained in this Lease shall run with the land and shall apply to, inure to the benefit of, and be binding upon, the parties hereto and upon their respective heirs, executors, personal representatives, legal representatives, successors and assigns, except as otherwise herein expressly provided.  Landlord shall have the right to transfer and assign, in whole or in part, its rights and obligations in the Building and property that are the subject of this Lease.  Upon any Landlord’s conveyance of the Building or the Land, and the assignment of its rights under this Lease, to another party (“Successor”) such Landlord shall be released from its obligations hereunder and the Successor shall become the “Landlord” hereunder from and after the date of any such conveyance and assignment and shall thereafter have all of the rights and obligations of Landlord hereunder, in accordance with the terms hereof, during the period of its ownership of the Building.  Each party agrees to furnish to the other, promptly upon demand, a corporate resolution, proof of due authorization by partners, or other appropriate documentation evidencing the due authorization of such party to enter into this Lease.

C.            Neither Tenant nor Landlord shall be held responsible for delays in the performance of their respective obligations hereunder when such delays are caused by material shortages, weather, acts of God, labor disputes or other causes beyond the reasonable control of Tenant or Landlord, as the case may be (collectively, the “Force Majeure Delays”); provided.  however, the foregoing shall be inapplicable to and shall not in any way excuse Tenant’s or Landlord’s failure to timely pay Base Rent, other rent or other monetary amount, as applicable, due hereunder from one party to the other at the lime such payments are due.

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D.            Tenant agrees, from time to time, within ten (10) days after request by Landlord, to deliver to Landlord or Landlord’s designee, a certificate of occupancy, financial statements and an estoppel certificate stating (1) that this Lease is in full force and effect, (2) the date to which rent is paid, (3) that there is no default on the part of Landlord or Tenant under this Lease, (4) that Tenant does not have any right of offset, claims or defenses to the performance of its obligations under this Lease, and (5) such other factual matters pertaining to this Lease as may be reasonably requested by Landlord.  Tenant hereby irrevocably appoints Landlord as attorney-in-fact for Tenant with full power and authority to execute and deliver in the name of Tenant such estoppel certificate if Tenant fails to deliver the same within such ten (10) day period and such certificate as signed by Landlord or Landlord’s designee, as the case may be, shall be fully binding on Tenant, if Tenant fails to deliver a contrary certificate within five (5) days after receipt by Tenant of a copy of the certificate executed by Landlord or Landlord’s designee, as the case may be, on behalf of Tenant.

E.             This Lease constitutes the entire understanding and agreement of Landlord and Tenant with respect to the subject matter of this Lease, and contains all of the covenants and agreements of Landlord and Tenant with respect thereto.  Landlord and Tenant each acknowledge that no representations, inducements, promises or agreements, oral or written, have been made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant, which are not contained herein, and any prior agreements, promises, negotiations, or representations not expressly set forth in this Lease are of no force or effect.  This Lease may not be altered, changed or amended except by art instrument in writing signed by both parties hereto.

F.             All obligations of Tenant hereunder not fully performed as of the expiration or earlier termination of the Term of this Lease shall survive the expiration or earlier termination of the Term hereof, including without limitation, all payment obligation with respect to taxes and insurance and all obligations concerning the condition and repair of the Premises.  Upon the expiration or earlier termination of the Term hereof, Tenant shall pay to Landlord any amount reasonably estimated by Landlord as necessary to put the Premises, including without limitation, all heating and air conditioning systems and equipment thereon, in good condition and repair, reasonable wear and tear excluded.  Tenant shall also, prior to vacating the Premises, pay to Landlord the amount, as estimated by Landlord, of Tenant’s obligation hereunder for real estate taxes and insurance premiums, common area maintenance, utility and other charges for the year in which the Lease expires or terminates.  All such amounts shall be used and held by Landlord for payment of such obligations of Tenant hereunder, with Tenant being liable for any additional costs therefor upon demand by Landlord, or with any excess to be returned to Tenant after all such obligations have been determined and satisfied as the case may be.  Any security deposit held by Landlord shall be credited against the amounts due from Tenant under this Paragraph 24F.

G.            If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future laws effective during the Term of this Lease, then and in that event, it is the intention of the parties hereto that the remainder of this Lease shall not be affected thereby, and it is also the intention of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal, invalid or unenforceable, there be added, as a part of this Lease, a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and be legal, valid and enforceable.

H.            All references in this Lease to “the date hereof” or similar references shall be deemed to refer to the last date, in point of time, on which all parties hereto have executed this Lease.

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I.              Tenant represents and warrants that it has dealt with no broker, agent or other person in connection with this transaction and that no broker, agent or other person brought about this transaction, other than the broker or agent identified in the Basic Lease Information, and Tenant agrees to indemnify and hold Landlord harmless from and against any claims by any other broker, agent or other person claiming a commission or other form of compensation by virtue of having dealt with Tenant with regard to this leasing transaction.

J.             If and when included within the term “Landlord”, as used in this instrument, there is more than one person, firm or corporation, all shall jointly arrange among themselves for their joint execution of a notion specifying some individual at some specific address for the receipt of notices and payments to Landlord.  If and when included within the term “Tenant”, as used in this instrument, there is more than one person, firm or corporation, all shall jointly arrange among themselves for their joint execution at a notice specifying some individual at some specific address within the continental United States for the receipt of notices and payments to Tenant.  All parties included within the terms “Landlord” and “Tenant”, respectively, shall be bound by notices given in accordance with the provisions of Paragraph 25 hereof to the same effect as if each had received such notice.

K.            By taking possession of the Premises, Tenant shall be deemed to have: (a) acknowledged that the Premises and the improvements to be constructed pursuant to Exhibit ”C” attached hereto are substantially complete except for “punch list” items (if any) and are accepted “as is” and “with all faults”; (b) accepted the Premises as suitable for the purposes for which the Premises are leased, and (c) acknowledged that the Premises are in a good and satisfactory condition.  Landlord expressly disclaims, and Tenant hereby waives to the full extent permitted by law, any implied warranty that the Premises or the Building are suitable for Tenant’s intended commercial purpose, and any and all other implied warranties (whether arising by virtue of statute, case law or otherwise).  The foregoing shall not be construed to relieve Landlord from its obligations which ass expressly set forth in this Lease.

L.             Submission of this Lease shall not be deemed to be a reservation of the Premises.  Landlord shall not be bound hereby until its delivery to Tenant of an executed copy hereof signed by Landlord, already having been signed by Tenant, and until such delivery Landlord reserves the right to exhibit and lease the Premises to other prospective tenants.  Notwithstanding anything contained herein to the contrary, Landlord may withhold delivery or possession of the Premises from Tenant with such time as Tenant has paid to Landlord the security deposit required by Paragraph 2B hereof and one month’s rent as set forth in Paragraph 2A hereof.

M.           Landlord and Tenant agree that the terms and conditions of this Lease are confidential and the parties hereto agree not to disclose the terms of this Lease to any third party (other than to its attorneys and accountants and other than to parties who propose to purchase or finance the Building, or the Project of which the Building forms a part, or who propose to become investors in Landlord) except as may he required by law or by the order of a court of competent jurisdiction.

N.            [Intentionally Omitted]

O.            Tenant agrees that Landlord or an affiliate of Landlord may include Tenant’s name and logo in marketing literature for the Alliance development, the Circle T development, and other developments owned and/or operated by Landlord or an affiliate of Landlord, for the limited purpose of informing third parties that Tenant is occupying the Project or the larger development of which the Project is a part.

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25.           NOTICES.

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

A.            All rent and other payments required to be made by tenant to Landlord hereunder shall be payable to Landlord at the address for Landlord set forth in the Basic Lease Information or at such other address as Landlord may specify from time to time by written notice delivered in accordance herewith.  Tenant’s obligation to pay rent and any other amounts to Landlord under the terms of this Lease shall not be deemed satisfied until such rent and other amounts have been actually received by Landlord. In addition to Base Rent due hereunder, all sums of money and all payments due Landlord hereunder shall be deemed to be additional rental owed to Landlord.

B.            All payments required to be made by Landlord to Tenant hereunder shall be payable to Tenant at the address set forth in the Basic Lease Information, or at such other address within the continental United States as Tenant may specify from time to time by written notice delivered in accordance herewith.

C.            Any written notice or document required or permitted to be delivered hereunder shall be deemed to be delivered, whether actually received or not, when deposited in the United States Mail, postage prepaid, Certified or Registered Mail, addressed to the parties hereto at the respective addresses set out in the Basic Lease Information, or at such other address as they have theretofore specified by written notice delivered in accordance herewith.

26.           LANDLORD’S LIEN.

In addition to any statutory lien for rent in Landlord’s favor, Landlord shall have and Tenant hereby grants to Landlord, subject to any existing liens, a continuing security interest, to secure payment at all rentals and other sums of money becoming due hereunder from Tenant and for the performance of all of its other obligations hereunder, upon all equipment, fixtures, and furniture now or hereafter situated at the Premises, and such property shall not be removed therefrom without the consent of Landlord until all arrearages in rent as well as any and all other sums of money then due to Landlord hereunder shall first have been paid and discharged and all other obligations of Tenant have been fully performed and discharged.  In the event any of the foregoing described property is removed from the Premises in violation of the covenant in the preceding sentence, the security interest shall continue in such property and all proceeds and products, regardless of location.  Upon the occurrence of an Event of Default hereunder, or upon Tenant’s threatened breach of its obligations hereunder (including, without limitation, any threatened vacation or abandonment of the Premises), in addition to all other rights and remedies Landlord shall have all rights and remedies under the Uniform Commercial Code, including without limitation, the right to sell the property described in this Paragraph at public or private sale upon five (5) days’ notice by Landlord.  Tenant hereby agrees to execute such other instruments, necessary or desirable under applicable law, to perfect the security interest hereby created.  Landlord and Tenant agree that this Lease and security agreement serves as a financing statement and that a copy, photographic or other reproduction of this portion of this Lease may be filed of record by Landlord and have the same force and effect as the original.  This security agreement and financing statement also coven fixtures located at the Premises subject to this Lease and legally described in Exhibit "A" attached hereto and incorporated herein by reference and is to be filed lot record in the real estate records.  The record owner of this

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property is Landlord.  Concurrently with the execution hereof, Tenant shall execute and deliver to Landlord a financing statement in the form attached hereto as Exhibit "E".

27.           PARKING.

Landlord shall provide Tenant approximately one hundred twenty (120) vehicular parking spaces on the surface parking lot (the “Parking Lot”) constructed on the Land in front of the Building as generally depicted on Exhibit "A" attached hereto and incorporated herein by reference.  Additional parking will be available to Tenant at the rear of the Building as generally shown on Exhibit "A".  During the Term of this Lease, Tenant shall be permitted to use all of the vehicular parking spaces located on the Parking Lot, subject to such terms, conditions and regulations as are from time to time applicable to patrons of the Parking Lot.  The parking spaces in the Parking Lot shall be made available to Tenant on a first-come first-served basis, it being agreed that Landlord shall have no obligation to patrol, police, or monitor the Parking Lot or to take any other actions to ensure that Tenant has the use of all such parking spaces

28.           ADDITIONAL PROVISIONS.

See Exhibit "A" — “I” attached hereto and incorporated by reference herein.

EXECUTED BY LANDLORD, this 22^nd day of September, 2003.

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