LEASE AGREEMENT

Exhibit 10.7

LEASE AGREEMENT

BY AND BETWEEN

DESTA FIVE PARTNERSHIP, LTD.

As LANDLORD,

and

MATINEE MEDIA CORP.

As TENANT

TABLE OF CONTENTS

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BASIC LEASE PROVISIONS

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The Basic Lease Provisions set forth hereinabove are hereby incorporated into and made a part of the Lease Agreement which is attached hereto (the “Lease”). Each reference in the Lease to any of the provisions or definitions set forth in these Basic Lease Provisions shall mean and refer

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to the provisions and definitions hereinabove set forth and shall be used in conjunction with the provisions of the Lease. In the event of any direct conflict between these Basic Lease Provision and the Lease, these Basic Lease Provisions shall control; provided, however, that those provisions in the Lease (including all exhibits and attachments thereto) which expressly require an adjustment or modification to any of the matters set forth in these Basic Lease Provisions shall supersede the adjusted or modified provisions of these Basic Lease Provisions.

EXECUTED by the undersigned in multiple originals as of the Effective Date set out herein above.

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LEASE AGREEMENT

This Lease Agreement (“Lease”) is entered into as of the Effective Date specified in the Basic Lease Provisions by and between Landlord and Tenant. The Basic Lease Provisions attached hereto and the defined terms set out therein are hereby incorporated herein by reference.

ARTICLE I - LEASED PREMISES

Section 1.01 Leased Premises

The Leased Premises are depicted generally on Exhibit B with Tenant occupying a portion of floor six. The term “Rentable Area”, as used herein with respect to the Leased Premises, refers to the sum of (i) the usable floor area of the Leased Premises, plus (ii) Tenant’s prorate share of all corridors, lobbies, elevator foyers, restrooms, mechanical and electrical rooms, janitor’s closets and other similar facilities of the Building (such areas being herein referred to as “Common Areas”). “Rentable Area” as used herein with respect to the Building, includes all space occupied or to be occupied by tenants, together with the Common Areas. Upon the completion of construction of improvements to the Leased Premises, the usable and rentable area of the Leased Premises will be re-measured and such re-measurement shall be set forth on and incorporated into this Lease on Exhibit B effective on the Commencement Date. Landlord represents that all measurements of square footage provided for herein have been conducted by an engineer or architect using the American National Standard Method for measuring floor area in office building ANSI/BOMA Z65.l -1996 (the “BOMA Method”) and that all future measurements will be performed in the same manner. The re-measurement of the Leased Premises shall be conducted by an engineer or architect reasonably satisfactory to both parties using the BOMA Method. If it is determined that the Rentable Area of the Leased Premises varies from the estimates set forth in the Basic Lease Provisions, then the Rentable Area (and usable area) of the Leased Premises, Tenant’s Percentage and the Base Rent will be appropriately adjusted.

Section 1.02 Lease Grant

For the consideration and subject to the terms, provisions and conditions set out below, Landlord lets and leases to Tenant and Tenant leases from Landlord the Leased Premises.

Section 1.03 Building Core and Shell

Landlord will provide the improvements which are listed and described on Exhibit C which is attached hereto and incorporated herein by reference (the “Building Core and Shell “). The improvements to be constructed by Landlord within the Leased Premises are set forth in a tenant’s work letter which is attached to this Lease (the “Tenant’s Work Letter”). Except as specifically set forth in this Lease and Tenant’s Work Letter, Tenant acknowledges that Tenant is accepting the Lease Premises on an “AS IS,” “WHERE IS” basis.

ARTICLE 11- LEASE TERM

Section 2.01 Lease Term

(a)                                   Subject to and upon the terms and conditions set forth in the Lease, or in any exhibit attached hereto, the primary term of this Lease shall commence on the Commencement Date and shall expire on the last day of the fifty-sixth (56 ^th ) month following the Commencement Date or such earlier date as this Lease may terminate as provided herein, but in no event later than August 31, 2009 (the “Expiration Date”). The “Lease Term” of this Lease shall be the primary term specified in this Section 2.01, as renewed or otherwise extended or earlier terminated pursuant to the terms and provisions set forth herein. If the Commencement Date is not the first day of a calendar month, then the Lease Term shall be extended by the time between the Commencement Date and the first day of the next month.

(b)                                  After the Commencement Date, Landlord and Tenant shall promptly, upon the request of either of them, execute and deliver to each other an agreement setting forth the Commencement and Expiration Dates.

(c)                                   Landlord and Tenant currently anticipate that the Tenant Finish Work (as defined in the Tenant’s Work Letter) will be Substantially Completed and possession of the Leased Premises delivered to Tenant on or before November 15, 2004 (the “Scheduled Commencement Date”). If the Tenant Finish Work is not Substantially Completed on the Scheduled Commencement Date, (1) Landlord shall not be in default hereunder or be liable for damages therefore, (ii) the Commencement Date as defined in the Basic Lease Provisions shall be the date that Landlord tenders the Leased Premises to Tenant Substantially Completed and (iii) Tenant shall accept possession of the Leased Premises when Landlord tenders possession thereof to Tenant Substantially Completed.

Section 2.02 Holding Over

Should Tenant hold the Leased Premises after termination of this Lease, by lapse of time, default, or otherwise, such holding over shall be construed as a tenancy at sufferance only, and Tenant shall pay in advance, as Rent, for each day of such holding, a per diem amount equal to 1/30 of one hundred fifty percent (150%), of the Rent payable for the last month of the Lease Term. No receipt of money by Landlord from Tenant after termination of this Lease shall reinstate or extend this Lease, or affect any prior notice given by Landlord to Tenant, and no extension shall be valid unless in writing, signed by Landlord and Tenant. The foregoing shall not be construed as Landlord’s consent for any such holding over.

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ARTICLE III - RENT

Section 3.01 Base Rent

Tenant shall pay the Base Rent to Landlord in monthly installments in advance on or before the first day of each calendar month during the Lease Term. If the Lease Term is extended for a partial month under the terms of Section 2.01(a) hereinabove, then the Lease Months referenced in the Base Rent table set out in the Basic Lease Provisions will begin on the first day of the next full calendar month of the Commencement Date and Base Rent will be calculated for the partial month at the beginning of the Lease Term at the same rate as is provided with respect to the first Lease Month. Base Rent for any partial calendar month will be prorated on a per diem basis.

Section 3.02 Additional Rent

(a)                                   For purposes of this Lease “Operating Expenses” means all of Landlord’s costs and expenses paid or incurred by Landlord in owning, operating, managing and maintaining the Building for a particular calendar year or portion thereof, determined in accordance with sound accounting principles consistently applied, including by way of illustration but not limitation: (i) all taxes, assessments and governmental charges of any kind and nature whatsoever levied or assessed against the Building;

(ii)      any and all assessments levied by the planned unit development owner’s association; (iii) all premiums for any and all insurance maintained in connection with the ownership, operation, maintenance, and/or management of the Building (including but not limited to property and liability coverage); (iv) water, sewer, electrical and other utility charges; (v) service and other charges incurred in the operation and maintenance of the elevators and the heating, ventilation and air-conditioning system; (vi) cleaning and other janitorial services; (vii) tools and supplies; (viii) repair costs; (ix) landscape maintenance costs; (x) security services; (xi) license, permit and inspection fees other than that required for Tenant’s interior improvements;(xii) reasonable management fees; (xiii) wages and related benefits payable to employees at or below the grade of building manager who render services to or for the benefit of the Building or tenants of the Building and are not managerial services covered by the management fee; (xiv) legal and accounting fees; (xv) trash removal; (xvi) garage maintenance and operating costs; (xvii) the cost of electrical surveys; (xviii) capital improvements costing less than Five Thousand Dollars ($5,000) in the aggregate, which amount shall be amortized over the useful life of the improvement(s), and, in general, all other costs and expenses which would generally be regarded as operating and maintenance costs and expenses based on common industry practices. Also included in Operating Expenses is the cost of any capital improvement made to the Building by Landlord after the date of this Lease that is required under governmental law or regulation not applicable to the Building at the time the Building was constructed, amortized over the useful life of the improvements based on generally accepted accounting principles.

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All references in this Section 3.02(a) to Operating Expenses mean actual Operating Expenses; provided, however, for any calendar year or partial calendar year in which the rentable area of the Building is not one hundred percent (l00%) occupied with all tenants in occupancy and paying full rent, variable Operating Expenses (being management fees, utilities and custodial charges) for that period shall be calculated in a manner, and in the amount, that would have been incurred had the Building been one hundred percent (100%) occupied with all tenants in occupancy and paying full rent. Notwithstanding anything to the contrary in the preceding sentence, in no event will Landlord bill tenants of the Building, or collect from tenants of the Building, amounts for reimbursement of Operating Expenses which exceed, in the aggregate, after all adjustments to correct and conform any estimated billings to actual expenses, the actual amount of Operating Expenses incurred by Landlord in any calendar year. If an adjustment is made pursuant to the foregoing provisions, Landlord shall provide Tenant with written notice specifying in reasonable detail the particulate variable Operating Expense(s) which was adjusted and the related calculation. Said notice shall be provided at the same time Landlord provides the statement(s) of actual Additional Rent as specified in Section 3.02 (f) of this Lease.

If Landlord installs any device, improvement or equipment after the Commencement Date of this Lease(i) which Landlord, reasonably believes will improve the operating efficiency of any system within the Building (e.g. solar collectors) or reduce Operating Expenses and Tenant approves such installation, or (ii) that is required to be installed by any government or governmental agency having authority to order that it be installed, then Landlord may add to the Operating Expenses each year during the useful life of the installed device, improvement, or equipment (as the useful life is determined by generally accepted accounting principles) an amount equal to the annual amortization of the cost of the installed device, improvement, or equipment, but in no event more than the actual cost saved as a result of the installation thereof during the year(s) the cost is added to the Operating Expenses.

(b)                                  Operating Costs shall not include costs for (i) repair, replacements and general maintenance paid by proceeds of insurance or by Tenant or other third parties; (ii) interest, amortization or other payments on loans to Landlord; (iii) leasing commissions, marketing expenses or any other cost associated with the leasing and or marketing of the Building or PUD(defined herein as the planned unit development recorded in Real Property Records, Travis County Texas, Volume 10252, Page 0135, and sometimes also referred to as the “Terrace P.U.D.”); (iv) legal or accounting expenses for services, other than those that benefit the Building tenants generally (e.g., tax disputes); (v) renovating or otherwise improving space for current or future occupants of the Building or vacant space in the Building other than Common Areas; (vi) the costs incurred by Landlord to bring the Building, the Land or any equipment maintained therein in compliance with laws, ordinances, rules, regulations, requirements, directives, guidelines and orders in effect and applicable to the Building as of the Commencement Date;

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(vii) the cost of any services or materials supplied to other tenants and not to Tenant; (viii) the cost of any services or materials for which Landlord receives reimbursement from other sources; (ix) depreciation on the Building; (x) federal, state, county, city or any other income taxes imposed on or measured by the income of Landlord from the operation of the Building; (xi) repairs, alterations, additions, improvements, replacements made to rectify or correct any defect in the design, materials or workmanship of the Building or Common Areas other than repairs, alterations, additions, improvements or replacements made as a result of ordinary wear and tear; (xii) damage and repairs attributable to fire or other casualty; (xiii) damage and repairs necessitated by the gross negligence or willful misconduct of Landlord, Landlord’s employees, contractors or agents; (xiv) executive salaries or salaries of service personnel to the extent that such services of such persons do not relate to the management, operation, repair or maintenance of the Building; (xv) Landlord’s general overhead expenses not related to the Building; (xvi) costs including permit, license and inspection fees incurred in renovating or otherwise improving, decorating or painting or altering space for current or prospective tenants or other occupants or of vacant space (excluding Common Areas) in the Building; (xvii) costs incurred due to a violation by Landlord or any other tenant of the Building of the terms and conditions of a lease; (xviii) cost of any service provided to Tenant or other occupants of the Building for which Landlord should be or is reimbursed or should or has received reimbursement from another source; and (xix) capital improvements made to the Building, other than capital improvements described in Section 3.02(a) and except for items which, though capital for accounting purposes, are properly considered maintenance and repair items, such as painting of common areas, replacement of carpet in elevator lobbies, and the like, with the cost of such maintenance and repair items amortized over their useful life based on generally accepted accounting principles.

For the purposes of calculating Tenant’s obligation for the payment of Additional Rent under this Article, if any tenants of the Building increase the cost of any category of Operating Expense (e.g., separately metered utilities) or receive any services or materials which are in excess of the services or materials which are provided to Tenant at no additional cost the amount of such additional cost will not be included in Operating Expenses. For any category of Operating Expense for which one or more tenants of the Building make(s) separate payments, Tenant’s Percentage will be adjusted for that category of Operating Expense by excluding from the denominator thereof the Rentable Area of all tenants making separate payments with respect to such category.

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 (c)                                In addition to the Base Rent, Tenant shall pay to Landlord as Additional Rent for the Leased Premises, in each calendar year, or partial calendar year, during the Lease Term, an amount equal to Tenant’s Percentage of the Operating Expenses for the calendar year or portion of the calendar year. Tenant shall not be required to pay Additional Rent for the initial three (3) months of the Lease Term.

(d)                                  Landlord shall estimate Tenant’s Additional Rent for each subsequent calendar year based on a budget which is prepared in accordance with typical industry and accounting standards, and give written notice thereof to Tenant as soon as reasonably possible. For each calendar year (or partial calendar year) Tenant shall pay to Landlord each month one twelfth (1/12) of such estimated amount, at the same time the Base Rent is due. For any year during which Additional Rent is due for less than the entire calendar year, Tenant shall pay to Landlord each calendar month during such year, one-twelfth of the estimated Additional Rent that would have been due if Additional Rent had been due throughout that calendar year.

(e)                                   If Operating Expenses increase during a calendar year, Landlord may revise the estimated Additional Rent during such year by giving Tenant at least thirty (30) days written notice to that effect, and thereafter Tenant shall pay to Landlord, in each of the remaining months of that calendar year, an additional amount equal to the amount of the increase in the estimated Additional Rent divided by the number of months remaining in the year.

(f)                                     Within one hundred twenty (120) days after the end of each calendar year, or as soon thereafter as figures are available, Landlord shall prepare and deliver to Tenant a statement showing Tenant’s actual Additional Rent for that calendar year. The statement shall separately set forth the basic components (in reasonable detail) of Additional Rent for the prior calendar year. Within thirty (30) days after receipt of the statements, Tenant shall pay to Landlord, or Landlord shall credit against the next Additional Rent payment or payments due from Tenant, as the case may be or pay immediately to Tenant if no payment is payable by Tenant, the difference between Tenant’s actual Additional Rent for the preceding calendar year and the estimated Additional Rent paid by Tenant during the year.

(g)                                  Tenant will have the right, for a period of one (1) year after Tenant’s receipt of any statement provided for in subsection (f) above, (but not thereafter) to audit Landlord’s books, at Tenant’s cost and expense. If Tenant does not request an audit within one (1) year of Tenant’s receipt of the statements provided for in subsection (f) above, then Tenant will be deemed to have waived any right it may have to an adjustment to Tenant’s Percentage of any Operating Expenses for such calendar year. If it is determined that Tenant’s actual share of Additional Rent is different than Landlord’s computation of Tenant’s share of Additional Rent, then Landlord shall refund to Tenant any overpayment of any such costs for the year in question and for each year during the Term the same error was made or Tenant shall pay to Landlord any underpayment of any such costs for the year in question

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and for each year during the Term the same error was made, as the case may be, within thirty (30) days after notification of the error.

(h)                                  Tenant’s right to verify Operating Expenses shall be subject to the following limitations and conditions: (i) Tenant shall have provided Landlord with written notice of its desire to verify Operating Expenses; (ii) such review or verification shall take place in Landlord’s offices on a mutually acceptable date in Austin, Texas; and (iii) Tenant and any third party auditor or reviewer employed by Tenant shall execute and deliver to Landlord a confidentiality agreement reasonably acceptable to Landlord and which shall include, among other terms, the agreement of Tenant and such third party not to disclose to any other person other than Tenant’s employees, accountants and attorneys the existence of the review, the results of the review and the agreement of any third party not to solicit verifications or reviews on the part of any other tenant of the Building.

Section 3.03 Prepaid Rent

INTENTIONALLY OMITTED.

Section 3.04 Rent Payments

(a)                                   All Rent is payable by Tenant at the times and in the amounts specified in this Lease in legal tender of the United States of America to Landlord at Landlord’s management office in the Building, or to any other person or at any other address as Landlord may from time to time designate by prior notice to Tenant.

(b)                                  Rent is payable by Tenant without notice, demand, abatement, deduction, or set-off, except as expressly specified in this Lease. Tenant’s obligation to pay Rent is independent of any obligation of Landlord under this Lease. If any installment of (i) Base Rent or Additional Rent is not paid within five (5) days after it is due; or (ii) any other Rent is not paid within fifteen (15) days after it is due, Tenant shall pay to Landlord a late charge in an amount equal to five percent (5%) of the delinquent installment of Rent when it pays the delinquent installment. In addition, if Tenant fails to pay any Rent within five (5) days of when the same is due (and which represents amounts not already specified as bearing interest under other provisions of this Lease) then Tenant shall also pay to Landlord interest on the unpaid Rent from the due date until the date paid at the highest rate lawfully permitted to be contracted for, charged or received pursuant to a written contract under applicable federal or state law (whichever is higher) or such lower rate as may be assessed by Landlord (the “Interest Rate”).

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Section 3.05 Security Deposit

(a)                                   Tenant shall deliver the Security Deposit to Landlord upon execution of this Lease as security for the performance by Tenant of its obligations under this Lease. The Security Deposit is not an advance payment of Rent or a measure of Landlord’s damages for a default by Tenant. Upon an Event of Default, Landlord may, without prejudice to any other remedy, use the Security Deposit to the extent necessary to make good any arrearages in Rent or any other sum for which Tenant is in default and any other damage, injury, expense, or liability caused to Landlord by the default. If Landlord so applies any part of the Security Deposit, Tenant shall pay to Landlord on demand the amount necessary to restore the Security Deposit to its original amount.

(b)                                  If Tenant is not then in default under this Lease, Landlord shall return any remaining balance of the Security Deposit to Tenant upon termination or expiration of this Lease and after surrender by Tenant of possession of the Leased Premises to Landlord in accordance with this Lease.

(c)                                   If Landlord assigns its interest in the Leased Premises, Landlord will assign the Security Deposit to the assignee. Landlord will have no further liability for the return of the Security Deposit after the assignment and Tenant shall look solely to the assignee for the return of the Security Deposit. Tenant may not assign or encumber or attempt to assign or encumber the Security Deposit. Landlord and its successors and assigns are not bound by any actual or attempted assignment or encumbrance of the Security Deposit by Tenant.

ARTICLE IV - UTILITIES AND SERVICES

Section 4.01 Services to be Provided

Landlord shall furnish or cause to be furnished to the Leased Premises, the utilities and services described below, subject to the conditions and in accordance with the standards set forth herein:

(a)                                   Landlord shall provide automatic elevator service to the Leased Premises twenty-four (24) hours per day, seven (7) days per week.

(b)                                  During Building Standard Hours, Landlord agrees to ventilate the Leased Premises and furnish heat or air conditioning, at such temperatures and in such amounts as is necessary and appropriate for the comfortable occupancy of the Leased Premises, reasonably consistent with the standards of “Class A” office buildings in Austin, Texas. Landlord’s obligations to provide heating and air conditioning are subject to any governmental requirements or standards relating to, among other things, energy conservation. Landlord shall make available at Tenant’s expense heat or air conditioning at times other than Building Standard Hours per Section 4.02. The minimum charge and the hourly rate for the use of

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after hours heat or air conditioning shall be determined from time to time by Landlord and confirmed in writing to Tenant and shall be the same for all tenants in the Building.

(c)                                   Electric lighting for the Common Areas of the Building.

(d)                                  Toilet facilities and hot and cold water for lavatory purposes (at temperatures prescribed by applicable law).

(e)                                   Replacement, as necessary, of all lamps and ballasts in the Building Standard light fixtures within the Common Areas.

(f)                                     Window washing of exterior windows not less than once each year.

(g)                                  Professional landscaping services for all landscaped areas from time to time on the Land.

(h)                                  Display, throughout the Lease Term and at Landlord’s sole cost and expense, on all Building directories of Tenant’s name and suite number.

(i)                                      Janitorial services at times and comparable and reasonably consistent in quality to those being provided by other Class A office buildings in Austin, Texas.

(j)                                      Landlord shall furnish to the Leased Premises at all times, subject to interruptions beyond Landlord’s control and temporary interruptions necessary or appropriate for Building maintenance or equipment installation, electricity sufficient to operate normal office lighting and equipment up to a maximum of eight (8) watts per square foot of useable area in the Leased Premises. Tenant shall not install or operate in the Leased Premises any electrically operated machinery or equipment which requires electricity consumption beyond that which would be considered to be “normal office use”, regardless of electrical consumption by other tenants in the Building. In no event may Tenant’s use of electricity exceed the capacity of the feeders to the Building or the risers or wiring installation. Electrical consumption in the Leased Premises, or in any portion of the Leased Premises, may, at Landlord’s option, be separately metered at Landlord’s cost. The obligation of Landlord to provide or cause to be provided electricity is subject to the rules and regulations of the supplier of electricity and of any municipal or other governmental authority regulating the business of providing electricity to the Building, except as provided in Section 4.04. Landlord is not liable or responsible to Tenant for any loss, damage or expense Tenant sustains or incurs if either the quality or character of the electricity is changed by the supplier or is no longer available or no longer suitable for Tenant’s requirements for reasons attributable to the supplier. At any time when Landlord is furnishing electricity to the Leased Premises under this subsection, Landlord may, with prior written consent of Tenant, which consent shall not be unreasonably withheld or delayed,

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discontinue the furnishing of electricity. If Landlord gives a notice of discontinuance, Landlord shall make all necessary arrangements with the public utility supplying the electricity to the Building with respect to connecting electrical service to the Leased Premises, but Tenant shall contract directly with the public utility with respect to supplying the electrical service. Tenant shall not, in any event, incur any expense related to the transfer of electrical services.

Section 4.02 Additional Services

Landlord may impose a reasonable charge, not to exceed Landlord’s actual costs, for heating, ventilating and air conditioning provided by Landlord at any time other than the Building Standard Hours or for any use beyond what Landlord agrees to furnish or because of special electrical, cooling, and ventilating needs created by Tenant’s telephone equipment, computers, and other equipment or uses. After hours heating and air conditioning shall be provided via an automated “on-demand” system and shall be charged at actual costs which is currently estimated to be $25.00 per hour, per one-half floor, with a two (2) hour minimum use charge required.

Section 4.03 Tenant’s Obligations

Tenant shall cooperate fully at all times with Landlord and abide by all regulations and requirements Landlord may prescribe for the use of all utilities and services that are consistent with the terms of this Lease and with the use of utilities and service in Class “A” office buildings in Austin, Texas.

Section 4.04 Service Interruptions

(a)                                   Landlord does not warrant that the services provided by Landlord will be free from any slow-down, interruption, or stoppage by governmental bodies, regulatory agencies, utility companies, and others supplying services or caused by the maintenance, repair, replacement, or improvement of any equipment involved in the furnishing of the services or caused by changes of services, alterations, strikes, lockouts, labor controversies, fuel shortages, accidents, acts of God, the elements, or other causes beyond the reasonable control of Landlord.

(b)                                  Landlord shall use diligent and reasonable efforts to restore any service that becomes unavailable; however, such unavailability shall not render Landlord liable for any damages caused thereby, be a constructive eviction of Tenant, constitute a breach of any implied warranty, or, except as provided in the next sentence, entitle Tenant to any abatement of Tenant’s obligations hereunder unless such unavailability is caused by Landlord’s negligence or intentional misconduct. However, if because of the unavailability of any such service Tenant is prevented from making reasonable use of a portion of the Leased Premises for more than fifteen (15) consecutive business days then Tenant’s obligation to pay Base Rent and Tenant’s share of Additional Rent in respect of the portion of the Leased Premises rendered untenantable thereby shall be abated for each

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consecutive day (after such fifteen (15) day period) that Tenant is so prevented from making reasonable use of such portion of the Leased Premises. If any such unavailability or interruption of services occurs rendering the Leased Premises untenantable (other than because of a taking or Casualty, as defined in Section 7.03(a), as to which Article VIII and Section 7.03 shall control), and Landlord fails to restore such services to the Leased Premises within ninety (90) days following delivery of written notice from Tenant to Landlord, Tenant may (a) terminate this Lease by written notice to Landlord, or (b) commence to restore such services unless Landlord is diligently performing the work that may be necessary to restore such services. All actual third-party costs incurred by Tenant in connection with restoring such services shall be paid by Landlord to Tenant within thirty (30) days following written demand therefore to Landlord, accompanied by invoices substantiating such claim. Tenant’s right to perform work under this Section 4.04(b) is subject to the following conditions:

(1)                                       all such work shall be performed in a good and workmanlike manner and in accordance with law;

(2)                                       except in an emergency, all such work shall be performed in accordance with plans and specifications approved by Landlord (which approval shall not be unreasonably withheld), whose approval shall be deemed given if Landlord fails to disapprove any submitted plans and specifications within three (3) business days after Tenant delivers such plans to Landlord;

(3)                                       all such work shall be performed by contractors reasonably acceptable to Landlord which maintain commercial liability insurance in an amount not less than $1,000,000 per occurrence naming Landlord as an additional insured; Landlord’s approval shall be deemed given if Landlord fails to disapprove any contractor within three (3) business days after Tenant delivers to Landlord a request for its consent thereto; and

(4)                                       Tenant delivers to Landlord “as-built” plans of the work performed by Tenant.

Section 4.05 Modification

Landlord reserves the right from time to time to make reasonable and nondiscriminatory modifications to the above standards for utilities and services by giving written notice to Tenant.

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ARTICLE V - USE AND OCCUPANCY

Section 5.01 Use and Occupancy

(a)                                   The Leased Premises may be used and occupied by Tenant only for general business offices and incidental uses and for no other purpose. Tenant shall use and maintain the Leased Premises in an operable, attractive condition (ordinary wear and tear and damage by casualty and condemnation excepted) and shall comply with all laws, ordinances, orders, rules, regulations and requirements of any kind imposed by any governmental authority (state, federal, county and municipal) applicable to or having jurisdiction over the use, occupancy, operation, and maintenance of the Leased Premises, including without limitation, all applicable environmental laws and the Americans With Disabilities Act of 1990 (ADA) (those laws, ordinances, orders, rules, decisions, and regulations hereafter referred to as “Applicable Law” or “Applicable Laws”). Landlord shall comply with all Applicable Laws relating to the use, condition, access to and occupancy of the Building and the Common Areas. Landlord represents that to the best of its knowledge on the Commencement Date the Leased Premises (if planned by Landlord’s architect and constructed by a contractor selected by Landlord and the Building shall comply with Title III of the Americans With Disabilities Act and if the Leased Premises do not so comply, then Landlord (at its cost and not as a part of Operating Expenses) shall cause the Leased Premises and the Building to so comply within a reasonable time thereafter.

(b)                                  Tenant may not deface or injure the Leased Premises or the Building or any part thereof or overload the floors of the Leased Premises. Tenant may not commit waste or permit waste to be committed or cause or permit any nuisance on or in the Leased Premises or the Building. Tenant shall pay Landlord on demand as Rent for any damage to the Leased Premises or to any other part of the Building caused by any negligence or willful act or any misuse or abuse (whether or not the misuse or abuse results from negligence or willful acts) by Tenant or Tenant’s agents, employees, licensees, or contractors (hereafter referred to as “Tenant Party” or “Tenant Parties”). In no event shall Tenant pay for any negligence, willful act, misuse or abuse, damage or other injury or defacement caused by any party that is not a Tenant party, including Landlord or any of its agents, employees, or contractors (hereinafter referred to as “Landlord Party” or “Landlord Parties”).

(c)                                   Tenant may not use or allow the Leased Premises to be used for any purpose prohibited by any Applicable Law applicable to the Building. Tenant and each Tenant Party shall conduct its business and occupy the Leased Premises and control all Tenant Parties so as not to create any nuisance or interfere with, annoy, or disturb any other tenants in the Building or Landlord in its management of the Building (or its occupancy of portions of the Building) so as not to injure the reputation of the Building.

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(d)                                  Except as provided herein, Tenant and each Tenant Party shall not erect, place, or allow to be placed any sign, symbol, advertising matter, stand, booth, or showcase in or upon the doorsteps, vestibules, halls, corridors, doors, walls, windows, or pavement of the Building visible outside the Leased Premises (except for lettering on the door or doors to the Leased Premises as allowed by the Rules and Regulations attached hereto as Exhibit D ) without the prior consent of Landlord.

(e)                                   Tenant may not use or allow or permit the Leased Premises to be used in any way or for any purpose that:

(1)                                is hazardous on account of the possibility of fire or other casualty, or hazardous substances;

(2)                                increases the rate of fire or other insurance for the Building or its contents or in respect of the operation of the Building; or

(3)                                renders the Building uninsurable at normal rates by responsible insurance carriers authorized to do business in the State of Texas or renders void or voidable any insurance on the Building.

If insurance premiums are increased because of a use of the Leased Premises which is not contemplated herein and such increase is documented by Landlord’s insurance provider(s), then, in addition to any other remedies Landlord may have, Tenant shall pay the amount of the increase to Landlord as Rent if Tenant does not modify or eliminate the use related to the increase within ten (10) business days after demand.

Section 5.02 Rules and Regulations

Tenant and each Tenant Party shall comply with the rules and regulations (as changed from time to time as hereinafter provided) attached as Exhibit D (the “Rules and Regulations”). Landlord may at any time change the Rules and Regulations or promulgate other Rules and Regulations as Landlord deems advisable for the safety, care, cleanliness, or orderliness of the Building, and shall promptly provide Tenant with notice of any changes or additions to the Rules and Regulations. Landlord shall use reasonable efforts to enforce compliance by all other tenants with the Rules and Regulations from time to time in effect, but Landlord is not responsible to Tenant for failure of any person other than a Landlord Party to comply with the Rules and Regulations. All such changes and/or additions to the Rules and Regulations must be reasonable and no such change or addition shall alter or amend the terms or provisions of this Lease.

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Section 5.03 Quiet Enjoyment

If Tenant pays the Rent when due and timely performs all other obligations of Tenant under this Lease, then Tenant may peaceably and quietly enjoy the Leased Premises during the Lease Term without any disturbance from Landlord or from any other person claiming by, through, or under Landlord, subject to the terms of this Lease.

ARTICLE VI- REPAIRS, MAINTENANCE AND ALTERATIONS

Section 6.01 Repair and Maintenance by Tenant

(a)                                   Tenant shall keep the Leased Premises and all fixtures installed by or on behalf of Tenant in good and tenantable condition (ordinary wear and tear and damage by casualty and condemnation excepted). Tenant shall promptly make all necessary non-structural repairs and replacements thereto at Tenant’s expense. All repairs and replacements must be equal in quality to the original work, and all contractors and subcontractors performing such repairs and replacements must comply with the conditions specified in Section 6.02(a) herein below. Without diminishing this obligation of Tenant, if Tenant fails to commence to make any repairs and replacements within fifteen (15) days after notice from Landlord and thereafter diligently pursue such repairs or replacements, Landlord may at its option make the repairs and replacements and Tenant shall pay Landlord on demand as Rent the costs incurred by Landlord plus an administrative fee equal to ten percent (10%) of the costs.

(b)                                  Tenant shall pay the cost of repairs and replacements caused by any malfunction or misuse of any equipment installed by or on behalf of Tenant. This amount is payable by Tenant to Landlord with five (5) days of demand as Rent. If Tenant requests Landlord to perform any maintenance or repairs to the Leased Premises, over and above the services required to be performed by Landlord pursuant to Article IV, Tenant shall pay the actual cost thereof, plus a reasonable administrative fee not to exceed ten percent (10%) of the actual cost thereof, to Landlord as Rent within five (5) business days after demand.

Section 6.02 Alterations and Additions by Tenant

(a)                                   Tenant may not make or permit any alterations, improvements (other than cosmetic improvements, such as painting, re-carpeting or similar non-structural improvements) or additions in or to the Leased Premises or the Building without Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed.. All alterations, additions and improvements made to, or fixtures or other improvements placed in or upon, the Leased Premises, whether temporary or permanent in character, by either party (except only Tenant’s movable trade fixtures, office furniture and equipment) are a part of the Building and are the property of Landlord when they are placed in the Leased Premises unless otherwise agreed by Landlord and Tenant. Alterations, improvements and additions in and to the Leased Premises requested by Tenant must be made in

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accordance with plans and specifications approved in advance in writing by Landlord. All work must be performed at Tenant’s expense either by Landlord or by contractors and subcontractors approved in advance by Landlord. If the work is not performed by Landlord, then all work performed by Tenant’s contractors and subcontractors is subject to the following conditions:

(i)                                   Each contractor and subcontractor must deliver evidence satisfactory to Landlord that the insurance specified by Landlord is in force prior to commencing work.

(ii)                                Tenant shall insure that all workers are cooperative with Building personnel and comply with all Building Rules and Regulations.

(iii)                             Tenant must deliver to Landlord evidence that Tenant has obtained all necessary governmental permits and approvals for the improvements or alterations prior to starting any work.

(iv)                            All construction must be done in a good and workmanlike manner and is subject to approval by Landlord during and after construction, in its reasonable discretion.

(v)                               Lien releases from each contractor and subcontractor (subject to final retainage payments) must be submitted to Landlord within five days after completion of the work performed by the contractor or subcontractor.

(vi)                            Within thirty (30) days after completion of any improvements or alterations, Tenant, at its cost, shall deliver to Landlord two reproducible copies of “as-built” plans and specifications (1/8” scale) for each floor where alterations or improvements were made.

(b)                                  All alterations and improvements must comply with all Applicable Laws. If Tenant’s alterations or additions to the Leased Premises causes Landlord to make any alterations or improvements to the Building to comply with the provisions of ADA or any other Applicable Laws, Tenant shall reimburse Landlord for the cost of the alterations or improvements within five (5)  days of demand as additional Rent. Neither Landlord’s approval of Tenant’s plans and specifications for the alterations or improvements nor Landlord’s acceptance of Tenant’s as-built plans is a confirmation or agreement by Landlord that the improvements and alterations comply with Applicable Laws.

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Section 6.03 Mechanics’ Liens - Tenant’s Obligations

Tenant may not cause or permit any mechanic’s or materialman’s lien to be placed upon Landlord’s interest in the Building or the Leased Premises or any part thereof or against Landlord’s interest under this Lease by any architect, contractor, subcontractor, laborer, or materialman performing any labor or furnishing any materials to Tenant for any improvement, alteration, or repair of or to the Leased Premises, the Building, or any part thereof. If any lien is filed on Landlord’s interest in the Building or Tenant’s interest in the Leased Premises, Tenant shall cause the same to be discharged of record or bonded around in accordance with the applicable provisions of Texas law within twenty (20) days after filing. If Tenant does not discharge the lien within the twenty (20) day period, then, in addition to any other right or remedy of Landlord, Landlord may, but is not obligated to, discharge the lien by paying the amount claimed to be due or by procuring the discharge of the lien by deposit in court or bonding. Any amount paid by Landlord relating to any lien not caused by Landlord, and all reasonable legal and other expenses of Landlord, including reasonable attorneys’ fees, in defending any action or in procuring the discharge of any lien, with interest thereon at the Interest Rate from date of payment by Landlord until paid by Tenant, is payable by Tenant to Landlord on demand as Rent.

ARTICLE VII- INSURANCE, FIRE AND CASUALTY

Section 7.01 Tenant’s Insurance

(a)                                   Tenant shall, at its expense, maintain at all times a policy or policies of insurance insuring Tenant against all liability for injury to or death of a person or persons and for damage to or destruction of property occasioned by or arising out of or in connection with the use or occupancy of the Leased Premises or by the condition of the Leased Premises (including Tenant’s contractual liability to indemnify and defend Landlord) with a combined single limit of $1,000,000.00 for bodily injury and property damages or with increased limits as may be reasonably required from time to time by Landlord by giving notice to Tenant not to exceed a combined single limit in excess of $1,000,000.00. Tenant’s policies must be written by an insurance company or companies reasonably satisfactory to Landlord and licensed to do business in the State of Texas with Landlord and Landlord’s manager named as additional insureds without restriction. If Tenant has an umbrella or excess policy, Tenant shall name Landlord and Landlord’s manager as additional insureds without restriction on all layers of umbrella or excess policies. Tenant shall obtain a written obligation on the part of each insurance company to notify Landlord at least fifteen (15) days prior to cancellation of the insurance.

(b)                                  Tenant shall deliver copies of its insurance policies or duly executed certificates of insurance to Landlord prior to occupying any part of the Leased Premises. Tenant shall deliver satisfactory evidence of renewals of the insurance policies to Landlord at least thirty (30) days prior to the expiration of the respective policies. If Tenant fails to comply with these insurance requirements, Landlord may obtain

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the insurance and Tenant shall pay to Landlord on demand as additional Rent the premium cost thereof plus interest at the Interest Rate from the date of payment by Landlord until paid by Tenant.

(c)                                   Tenant shall insure that all contractors, subcontractors, moving companies and others performing work of any type for Tenant in the Building shall comply with the insurance requirements set out on Exhibit E attached hereto and incorporated herein by reference, as such requirements may be revised from time to time by Landlord and Tenant is informed of same.

Section 7.02 Landlord’s Insurance

Landlord shall, at all times during the Lease Term, maintain a policy of insurance insuring the Building against loss or damage by fire, explosion or other hazard and contingencies in amounts determined by Landlord. Tenant agrees that all personal property upon the Leased Premises shall be at the risk of Tenant only and that Landlord shall not be liable for any damage thereto or theft thereof Tenant will not permit anything to be done which will in any way increase the rate of fire and casualty insurance on the building or contents. If by reason of any act or conduct of business of Tenant there shall be any increase in the rate of insurance on the Building or contents created by Tenant’s acts or conduct of business, such act or conduct shall constitute an Event of Default under this Lease and Tenant agrees to pay Landlord the amount of such increase on demand.

Section 7.03 Fire or Other Casualty

(a)                                   If the Leased Premises or any part thereof are damaged by fire or other casualty (a ‘Casualty”), Tenant shall give prompt notice thereof to Landlord. If the Leased Premises or the Building is damaged by a Casualty, subject to the provisions of Section 7.03(b), Landlord shall, within sixty (60) days after such Casualty deliver to Tenant a good faith estimate (the “Damage Notice”) of the date on which the repair of the damage caused by such Casualty will be substantially completed (such date is herein called the “Estimated Restoration Completion Date”). If any portion of the Leased Premises is rendered untenantable by such Casualty (which shall include damage to the Building, but not the Leased Premises, which substantially interferes with the use of the Leased Premises for their intended purposes), then Base Rent and Additional Rent shall abate as of the date of the Casualty with respect to such portion of the Leased Premises until the earlier of(i) substantial completion of repairs to the Leased Premises and elevator access and other services are available to the Leased Premises, or the Building (as applicable) for conduct of Tenant’s business or (ii) the date on which Tenant conducts business in such portion of the Leased Premises.

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(b)                                  If (i) a Casualty damages a material portion of the Building, and (ii) Landlord makes a good faith determination to demolish the remainder of the Building or Landlord’s Mortgagee requires any of the insurance proceeds be applied to the indebtedness secured by its Mortgage, then Landlord or Tenant may terminate this Lease by giving written notice of its election to terminate to the other party within thirty (30) days after the Damage Notice has been delivered to Tenant. In case of any such termination under this Section 7.03(b), Base Rent and Additional Rent shall abate in full as of the date of the Casualty. Landlord will not have the right to terminate this Lease pursuant to this Section 7.03(b) unless Landlord also terminates the leases of all other Tenants in the Building.

(c)                                   If the Leased Premises or the Building is damaged by Casualty, then

(i)                                          if the Estimated Restoration Completion Date is later than one hundred eighty (180) days after the date of the Casualty, Tenant may terminate this Lease by delivering written notice to Landlord of its election to terminate within thirty (30) days after the Damage Notice has been delivered to Tenant or, if no such notice is delivered by Landlord, within ninety (90) days after the Casualty; and

(ii)                                       if Tenant does not or does not have the right to terminate this Lease pursuant to Section 7.03(c)(i) and such damage is not repaired by the Casualty Restoration Termination Date (defined below), Tenant may terminate this Lease by delivering written notice to Landlord of its election to terminate before the earlier of (A) ten days after the Casualty Restoration Termination Date (defined below) or (B) the completion of such repairs.

Any termination right of Tenant not timely exercised shall be deemed waived, time being of the essence with respect thereto. In case of any termination under Section 7.03(c) above, Base Rent and Additional Rent shall abate in full as of the date of the Casualty. In case of any termination under Section 7.03(c) above, the portion of the Base Rent for the portion of the Leased Premises affected thereby not theretofore abated shall abate as of the date of termination. Unless Landlord and Tenant agree in writing otherwise, the “Casualty Restoration Termination Date” shall be thirty (30) days after the later of (i) one hundred eighty (180) days after the Casualty, or (ii) the Estimated Restoration Completion Date, not to exceed one hundred eighty (180) days.

(d)                                  If neither party elects to terminate this Lease following a Casualty, then Landlord shall , within a reasonable time after such Casualty, commence to repair the Building and the Leased Premises and shall proceed with reasonable diligence to restore the Building and Leased Premises to substantially the same condition as they existed immediately before such Casualty (including the work set out in the Work Letter attached hereto); however, Landlord shall not be required to repair or replace any part of the furniture, equipment, fixtures, and other improvements (other than that set forth in the Work Letter attached hereto) which may have been placed by, or at the request of, Tenant or other occupants in the Building or the

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Leased Premises, and Landlord’s obligation to repair or restore the Building or Leased Premises shall be limited to the extent of the insurance proceeds paid for the casualty in question.

(e)                                   Any insurance carried by Landlord or Tenant against loss or damage to the Building or to the Leased Premises is for the sole benefit of the party carrying the insurance and under its sole control.

Section 7.04 Waiver of Subrogation

Each party waives all claims that arise or may arise in its favor against the other party, or anyone claiming through or under them, by way of subrogation or otherwise, during the Lease Term or any extension or renewal thereof, for any injury to or death of any person or persons or the theft, destruction, loss of, or damage to, any of its property (a “Loss”) caused by casualty, theft, fire, third parties, or any other matter, to the extent the same is insured against by it under any insurance policy that covers the Building, the Leased Premises, Landlord’s or Tenant’s fixtures, personal property, leasehold improvements, or business, or is required to be insured against by it under the terms hereof (whether or not the loss or damage is caused by the fault or negligence of the other party or anyone for whom the other party is responsible). These waivers are in addition to, and not in limitation of, any other waiver or release in this Lease with respect to any Loss. Since these mutual waivers preclude the assignment of any claim by way of subrogation (or otherwise) to an insurance company (or any other person), each party shall immediately give each insurance company issuing to it policies of fire and extended coverage insurance written notice of the terms of these mutual waivers, and have the insurance policies properly endorsed, if necessary, to prevent the invalidation of the insurance coverages by reason of these waivers.

ARTICLE VIII - CONDEMNATION

(a)                                   If all or substantially all of the Building is taken for any public or quasi-public use under any governmental law, ordinance or regulation or by right of eminent domain or is sold to the condemning authority in lieu of condemnation, then this Lease will terminate as of the date when physical possession of the portion of the Building is taken by the condemning authority. If less than all or substantially all of the Building is taken or sold, Landlord (whether or not the Leased Premises are affected) may terminate this Lease by giving notice to Tenant within sixty (60) days after the right of election accrues, in which event this Lease will terminate as of the date when physical possession of the portion of the Building is taken by the condemning authority.

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(b)                                  If this Lease is not terminated by Landlord upon any taking or sale of less than all or substantially all of the Building and Tenant does not terminate this Lease as provided below:

(i)                                   The Rent will be reduced by an amount representing that part of the Rent properly allocable to the portion of the Leased Premises taken or sold, if any; and

(ii)                                Landlord shall, at Landlord’s sole expense, restore the Building to substantially its former condition to the extent reasonably deemed feasible by Landlord, but:

(A)                                   Landlord’s restoration obligation does not exceed the scope of the work done by Landlord in originally constructing the Building and installing Tenant finish improvements in the Leased Premises; and

(B)             Landlord is not required to spend for the work an amount in excess of the amount received by Landlord as compensation or damages (over and above amounts going to the mortgagee of the property taken) for the part of the Building so taken.

(c)                                   If such taking prevents Tenant from conducting its business in the Leased Premises in a manner reasonably comparable to that conducted immediately before such taking, then Tenant may terminate this Lease as of the date of such taking by giving Landlord written notice within sixty (60) days after the taking, and Rent shall be apportioned as of the date of such taking.

(d)                                  Landlord is entitled to receive all of the compensation awarded upon a taking of any part or all of the Building, including any award for the value of the unexpired Lease Term. Tenant is not entitled to and expressly waives all claim to any compensation; provided, Tenant is entitled to separately pursue a claim against the condemnor for the value of Tenant’s personal property, moving costs, loss of business, and other claims it may have.

ARTICLE IX - INDEMNIFICATIONS AND WAIVERS

Section 9.01 Limitations on Liability of Landlord: Waiver

(a)                                   Landlord is not liable to any Tenant or any Tenant Party or any other person, and Tenant waives any liability of Landlord, for:

(1)                      any injury or damage to person or property due to the condition or design of, or any defect in, the Leased Premises that exists now or occurs in the future, except for Landlord’s or any Landlord Party’s negligence or willful misconduct;

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(2)                      any injury or damage to person or property due to the Building or related improvements or appurtenances out of repair, or defects in or failure of pipes or wiring, or backing up of drains, or the bursting or leaking of pipes, faucets and plumbing fixtures, or gas, water, steam, electricity, or oil leaking, escaping, or flowing into the Leased Premises, unless caused by Landlord’s willful misconduct or negligence;

(3)                      any loss or damage caused by the acts or omissions of other tenants in the Building or of any other persons, excepting only the willful misconduct or negligence of Landlord or any Landlord’s Party; or

(4)                      any loss or damage to property or person occasioned by theft, fire, act of God, public enemy, injunction, riot, insurrection, war, court order, requisition, order of governmental authority, and any other cause beyond the control of Landlord.

(b)             Notwithstanding the foregoing or anything else to the contrary contained in this Lease, the liability of Landlord to Tenant or any Tenant Party for any default or indemnity by Landlord under this Lease is limited to the interest of Landlord in the Building. No partner, employee, agent, director, or officer of Landlord has any personal liability for any amounts payable or obligations performable by Landlord under this Lease.

Section 9.02 Tenant’s Indemnification of Landlord; Assumption; Employees’ Claims

(a)                                    Tenant shall indemnify, defend, and hold Landlord harmless from:

(i)                         all fines, suits, losses, costs, liabilities, claims, demands, actions, and judgments of every kind and character by reason of any breach by Tenant under this Lease; and

(ii)                     all claims, demands, actions, damages, losses, costs, liabilities, expenses, and judgments suffered by, recovered from, or asserted against Landlord due to injury or damage to person or property to the extent that the damage or injury is caused, either proximately or remotely, wholly or in part, by an act, omission, negligence, or misconduct of Tenant or any Tenant Party, or when the injury or damage is the result, proximate or remote, of the violation by Tenant or any Tenant Party of any Applicable Law, or when the injury or damage in any other way arises out of the occupancy or use by Tenant or any Tenant Party of the Leased Premises or the Building.

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(b)             Tenant is not required to indemnify, defend, or hold Landlord harmless from any claim, demand, fine, suit, loss, liability, action or judgment arising solely from Landlord’s negligence or willful misconduct.

(c)                                    If Landlord is made a party to any litigation commenced by or against Tenant or any Tenant Party or relating to this Lease or to the Leased Premises, then Tenant shall pay all costs and expenses, including attorneys fees and court costs, incurred by or imposed upon Landlord by virtue of the litigation to the extent of comparative responsibility assessed to Tenant. The amount of all costs and expenses, including attorney’s fees and court costs, is a demand obligation payable by Tenant to Landlord as additional Rent, bearing interest at the Interest Rate from the date of payment by Landlord until paid by Tenant.

(d)             Tenant, for itself and all Tenant Parties, assumes all risks of injury or damage to person or property, either proximate or remote, by reason of the condition or design of, or any defects in, the Leased Premises and the Building.

(e)                                    All personal property in the Leased Premises is at the sole risk of Tenant.

(f)                                      The provisions of this Section 9.02 survive the expiration or earlier termination of this Lease.

Section 9.03 No Impl