Lease Agreement

ASSIGNMENT AND ASSUMPTION OF LEASE


THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") is made and entered into this 18th day of December 1998 (the "Effective Date'), between PINACOR INC., a Delaware corporation ("Assignee"), having an office at 3001 South Priest Drive, Tempe, Arizona 85282-3492, Attention: Robert G. O'Malley, and, ELECTRONIC DATA SYSTEMS CORPORATION, a Delaware corporation ("Assignor"), having an office at 5400 Legacy Drive, H3-2F-53, Plano, Texas 75024-3105, Attention: Real Estate Leasing.


RECITALS


WHEREAS, Assignor, as tenant, and KREG-SW, L.P., a California limited partnership, as Landlord, entered into a lease (the "Original Lease"), dated October 29, 1996, as amended by a (a) First Amendment to Lease (the "First Amendment"), dated April 24, 1997 and (b) Second Amendment to Lease (the "Second Amendment"), dated September 18, 1997 (the Original Lease as amended by the First Amendment and Second Amendment is herein called, the "Lease"), covering the building and property (collectively the "Leased Property") located at 105 Bethany Road, Allen, Texas, as more particularly described in the Lease, which is attached hereto as Exhibit "A".


WHEREAS, the Lease and the Leased Property were conveyed by KREG-SW, L.P. to TriNet Corporate Partners 11, L.P. ("TriNet") and TriNet is presently the Landlord under the Lease.


WHEREAS, the parties desire to provide herein for the assignment of all rights, titles and interests of Assignor to Assignee, in and to the Lease as herein contained.


NOW, THEREFORE, Assignor and Assignee, in consideration of the sum of $10.00, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and confessed, effective as of December 31, 1998 (the "Effective Date"), agree as follows:


1. Assignor hereby grants, sells, conveys, assigns, transfers, sets over
and delivers to Assignee all rights, titles and interests of Assignor
in and to the Lease and any security deposits delivered to Landlord,
together with all its rights, privileges and benefits in the Lease for
the remainder of the Lease term, subject to the terms and conditions
set forth in the Lease.


2. As of the Effective Date, Assignee assumes any and all rights and
obligations of Assignor under the Lease which are to be performed
after the Effective Date and shall comply with all of the covenants,
terms, conditions and obligations under the Lease so assumed.


3. Pursuant to the terms and conditions of the Lease, Assignor shall
remain liable under the Lease notwithstanding the assignment and
assumption stated herein.


A. Assignee hereby agrees to fully indemnify and hold Assignor
harmless from and against any and all costs, claims, liabilities,
actions or causes of action incurred by Assignor, resulting from and
related to the obligations under the Lease so assumed, including, but
not limited to, claims arising from negligence, willful actions or
breach of the Lease by Assignee.


B. Assignee hereby agrees to deliver to Assignor copies of all
notices requiring remedial actions by Assignee and all notices of
default delivered to Assignee under the Lease. Assignor will have,
among any other remedies available to Assignor, the right to cure any


1
defaults by Assignee under the Lease and to receive full reimbursement
from Assignee for all costs incurred by Assignor in making any such
cure.


4. Assignor hereby agrees to fully indemnify and hold Assignee harmless
from and against any and all costs, claims, liabilities, actions or
causes of action incurred by Assignee resulting from or related to the
negligence, willful actions or breach of the Lease by Assignor prior
to the Effective Date.


5. Pursuant to the Lease, this Assignment is not be valid until
Landlord's written consent is obtained and delivered to each party.


6. This Assignment may not be changed, modified, discharged or terminated
orally or in any other manner than by an agreement in writing signed
by the parties hereto or their respective successors and assigns.


7. This Assignment has been executed and delivered pursuant to that
certain Asset Purchase Agreement (the "Asset Purchase Agreement"),
dated December 18, 1998, by and between Assignor, Assignee and EDS
Technical Products Corporation, a Delaware corporation. All
warranties, representations and covenants set forth in the Asset
Purchase Agreement concerning the Premises, the Lease and this
Assignment shall survive the execution and delivery of this Assignment
and shall not be affected hereby.


INTENTIONALLY BLANK


2
IN WITNESS WHEREOF, the parties have hereunto set their hands on the day and year below their respective signatures.


ASSIGNOR: ASSIGNEE:


ELECTRONIC DATA SYSTEMS CORPORATION PINACOR INC.


By: /s/ Daniel F. Busch By /s/ F. G. Mantori
------------------------------ --------------------------- Name: Daniel F. Busch Name: F. G. Mantori
------------------------ Title: Real Estate - Division Manager Title: President
------------------------
LEASE AGREEMENT


BY AND BETWEEN


KREG-SW, L.P., a California limited partnership
(Landlord)


AND


ELECTRONIC DATA SYSTEMS CORPORATION, a
Delaware corporation
(Tenant)


FOR PREMISES LOCATED AT


THE SOUTHEAST CORNER OF BETHANY DRIVE AND
ENTERPRISE BOULEVARD
ALLEN, TEXAS
TABLE OF CONTENTS


PAGE


1. DEFINITIONS AND BASIC PROVISIONS .....................................1


2. GRANTING CLAUSE ......................................................2


3. USE ..................................................................2


4. PARKING ..............................................................2


5. RENT .................................................................3


6. REAL ESTATE TAXES ....................................................3


7. PERSONAL PROPERTY TAXES ..............................................4


8. DELIVERY OF PREMISES .................................................4


9. BUILDING SHELL AND TENANT IMPROVEMENTS ...............................4


10. COMMENCEMENT DATE ....................................................6


11. BUILDING SERVICES ....................................................6


12. LANDLORD'S REPAIR AND MAINTENANCE RESPONSIBILITIES ...................7


13. TENANT'S REPAIR AND MAINTENANCE RESPONSIBILITIES .....................7


14. ALTERATIONS ..........................................................7


15. ENTRY BY LANDLORD ....................................................8


16. LOCKED DOCUMENTATION ROOMS ...........................................8


17. INSURANCE - REQUIREMENTS .............................................8


18. WAIVER OF SUBROGATION ................................................9


19. FIRE OR OTHER CASUALTY ...............................................9


20. INDEMNIFICATION .....................................................10


21. CONDEMNATION ........................................................10


22. ASSIGNMENT AND SUBLETTING ...........................................11


23. DEFAULT AND REMEDIES ................................................11


24. LANDLORD WAIVERS ....................................................13


25. TENANT'S SECURITY REQUIREMENTS ......................................13


26. SUBORDINATION AND ATTORNMENT ........................................13 27. ESTOPPEL CERTIFICATE ................................................13


28. SURRENDER OF POSSESSION .............................................14


29. NON-WAIVER ..........................................................14


30. BUILDING COMPLIANCE .................................................14


31. HAZARDOUS MATERIALS .................................................14


32. TRANSFER OF PROPERTY BY LANDLORD ....................................Is


33. CIPHER LOCKS AND SECURITY SYSTEM ....................................15


34. CONFIDENTIALITY/MEDIA RELEASES ......................................15


35. COMMUNICATIONS EQUIPMENT ............................................15


36. LANDLORD REPRESENTATIONS AND WARRANTIES .............................16


37. DISADVANTAGED OR WOMEN-OWNED BUSINESSES .............................16


38. FORCE MAJEURE .......................................................17


39. BROKERS .............................................................17


40. SIGNAGE .............................................................17


41. HOLDING OVER ........................................................17


42. ATTORNEYS' FEES .....................................................17


43. QUIET ENJOYMENT .....................................................17


44. NOTICES .............................................................17


45. ENTIRE AGREEMENT ....................................................17


46. AMENDMENTS ..........................................................17


47. LEGAL INTERPRETATION ................................................17


48. OPTION TO RENEW .....................................................18


49. AUTHORITY TO ENTER INTO LEASE .......................................18


50. PARTIES BOUND .......................................................18


51. TRANSFER OF LANDLORD'S INTEREST .....................................18


52. RIGHT TO PERFORM ....................................................18


53. LIMITATION ON LIABILITY .............................................19


54. GENERAL PROVISIONS ..................................................19 EXHIBITS:


"A" Legal Description


"B" Building Shell Outline Specifications


"C" Site Plan


"D" Tenant Improvements Outline Specifications


"E" Change Order


"F" Estoppel Certificate
LEASE AGREEMENT


This Lease Agreement (this "Lease") is entered into as of the 29th day of October, 1996, by and between Landlord and Tenant. This Lease is not binding between the parties stated herein until Landlord and Tenant have executed and delivered an original of this Lease. Upon the terms and conditions hereinafter set forth, Landlord and Tenant agree as follows:


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


A. "Landlord": KREG-SW, L.P., a California
limited partnership, or its
successors and/or assigns


B. Landlord Notice Address: c/o Koll Real Estate Group
8411 Preston Road, Suite 700
Dallas, Texas 75225


C. Landlord Payment Address: 8411 Preston Road, Suite 700
Dallas, Texas 75225


D. Landlord Federal Tax ID: 33-0580212
-------------------------
E. "Tenant": ELECTRONIC DATA SYSTEMS
CORPORATION, a Delaware
corporation


F. Tenant Notice Address: 5400 Legacy Drive (H3-2F-53)
Plano, Texas 75024-3105
Attention: Real Estate Leasing


G. "Property": That certain tract or parcel of land located in Collin
County, Texas consisting of approximately 13.67 acres, more
particularly described and shown on Exhibit "A", attached hereto and
incorporated herein by reference.


H. "Building Shell": The building to be constructed by Landlord at
Landlord's expense, in consideration of the Base Rent (hereafter
defined), consisting of approximately 261,700 rentable square feet as
more particularly described in the outline specifications in Exhibit
"B" ("Building Shell Outline Specifications), attached hereto and
incorporated herein by reference.


I. "Site Work": The earth work, parking lot, sidewalks and landscaping to
be constructed by Landlord at Landlord's expense, in consideration of
the Base Rent, as more fully described in the Site Plan (hereafter
defined), attached hereto as Exhibit "C", and incorporated herein by
reference.


J. "Tenant Improvements": The interior improvements to the Building Shell
to be constructed by Landlord at Landlord's expense, in consideration
of the Base Rent and in accordance with the "Tenant Improvements
Outline Specifications" (herein so called) described on Exhibit "D",
attached hereto and incorporated herein by reference. The Building
Shell Outline Specifications and the Tenant Improvements Outline
Specifications are sometimes referred to herein collectively as the
"Outline Specifications".


K. "Building": The completed Building Shell and the Tenant Improvements.


-1-
L. "Premises": The Property, the Site Work, the Building Shell, the
Tenant Improvements and the Building.


M. "Completion Date": The date upon which Landlord substantially
completes the Tenant Improvements, the Site Work and any other work
required of Landlord in accordance with the Working Drawings and
Specifications.


N. "Outside Completion Date": October 13, 1997.


0. "Scheduled Completion Date": June 13, 1997.


P. "Term": A period of 7 years, commencing on the 13th day of June, 1997
(the "Commencement Date"), subject to the provisions of Paragraph 10
of this Lease, and expiring on June 12, 2004 (the "Expiration Date").


Q. "Base Rent": Base Rent shall be $1,112,225.00 per year payable in the
amount of $92,685.42 per month for years 1 through 7 of the Term.


R. "Landlord's Taxes": Landlord's Taxes shall include only income, excess
profits, capital stock, estate, inheritance, succession, gift, gross
receipts, personal property and franchise taxes.


S. "Tenant's Representatives": Tenant's agents, representatives and
employees.


T. "Landlord's Representatives": Landlord's agents, representatives and
employees.


U. "Building Architect": Good, Fulton and Farrell Architects.


V. "Land Closing Date": November 30, 1996.


2. GRANTING CLAUSE. Landlord, in consideration of the covenants and agreements
to be performed by Tenant, and upon the terms and conditions contained in
this Lease, does hereby lease, demise and let unto Tenant, and Tenant in
consideration of the covenants and agreements to be performed by Landlord
and upon the terms and conditions contained in this Lease, does hereby
lease from Landlord, the Premises, to have and to hold for the Term (except
as sooner terminated as provided herein).


3. USE. The Premises are to be used only for general office and computer data
processing purposes ("Permitted Uses") and for no other business or purpose
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed. No act shall be done in or about the
Premises that is unlawful. In the event such use is determined to be
unlawful, causing a breach of this covenant, Tenant shall immediately cease
the performance of such unlawful act. Tenant shall not commit or allow to
be committed any waste upon the Premises, or any public or private
nuisance. Tenant shall not, without Landlord's prior written consent, which
consent shall not be unreasonably withheld or delayed, install any
equipment, machine, device, tank or vessel which is subject to any federal,
state or local permitting requirement, nor shall Tenant overload the floors
or surpass the Utility Specifications (as hereinafter defined) for the
Building. Tenant, at its sole expense, shall comply with all laws,
statutes, ordinances and governmental rules, regulations or requirements
governing the installation, operation, maintenance and removal of any such
equipment, machine, device, tank or vessel. Tenant, at its sole expense,
shall comply with all laws, statutes, ordinances, governmental rules,
regulations or requirements, and the provisions of any recorded documents
now existing or hereafter in effect relating to its use, operation or
occupancy of the Premises.


4. PARKING. Landlord also hereby grants to Tenant during the Term and any
renewals or extensions, at no additional cost or pass through to Tenant,
the right to use parking spaces in the surface parking area, as depicted on
the Site Plan attached as Exhibit "C".


-2- 5. RENT.


A. BASE RENT. In consideration of this Lease, and as a covenant
independent from the other terms and covenants contained herein,
Tenant agrees and promises to pay to Landlord equal monthly
installments of Base Rent. Such monthly installments shall be due and
payable in advance on or before the 1st day of each calendar month
(without demand, notice, deduction or offset except as otherwise
provided in this Lease), commencing as of the Commencement Date and
continuing through the Term. Base Rent for any fractional month at the
beginning or end of the Term shall be prorated on a per them basis.


B. OPERATING EXPENSES. Except as otherwise provided in this Lease, it is
intended that the Rent shall be a net return to Landlord (exclusive of
any debt service and Landlord's Taxes) for the Term and for any
renewals or extensions thereof, free of any expenses or charges
whatsoever with respect to the Premises, including, without
limitation, insurance premiums, utility charges, real estate taxes,
assessments and except as otherwise provided herein, all maintenance,
repairs or replacements to all elements of the Building, including,
without limitation, HVAC, plumbing and electrical systems. Tenant
shall coordinate directly with the applicable supplying utility
companies to obtain service and directly make payments for water, gas,
heat, light, power, telephone and other utilities used and consumed by
Tenant.


C. INSURANCE PREMIUMS. Landlord shall maintain loss of rental income
insurance on the Premises, and Tenant shall reimburse Landlord for the
premiums to maintain such insurance, within thirty (30) days of
presentation of an invoice to Tenant for Landlord. Tenant's
reimbursement obligations hereunder shall be designated as additional
rent.


6. REAL ESTATE TAXES.


A. PAYMENT OF TAXES. Tenant shall directly pay all Real Estate Taxes
assessed and payable against the Premises during the Term prior to
delinquency. "Real Estate Taxes" shall mean any form of assessment,
license, fee, rent, tax, excise imposition, charge, levy, penalty (if
a result of Tenant's delinquency), or tax (other than Landlord's
Taxes) including, without limitation, all ad valorem, sales and use,
value added, single business, gross receipts, transactions, sewer,
privilege or similar taxes, imposed by any authority having the direct
or indirect power to tax, or by any city, county, state or federal
government or any improvement or other district or division thereof.
Notwithstanding anything to the contrary contained in this Lease,
Tenant acknowledges that the Premises will be periodically reassessed
by governmental authorities, and any increased ad valorem taxes as a
result of said reassessment shall be paid by Tenant. Notwithstanding
anything to the contrary contained herein, Tenant shall not be liable
for any "rollback" or similar taxes affecting the Premises. Tenant
shall be responsible for making annual application for tax exemption
to the City of Allen and Landlord shall fully cooperate with Tenant's
application therefor.


B. CONTEST OF REAL ESTATE TAXES. Tenant shall have the right, before
delinquency occurs, of protesting, contesting, objecting to or
opposing the legality or amount of any such taxes or assessments in
coordination with Landlord. If Tenant deems, in good faith, that the
Real Estate Taxes are illegal or excessive, and in the event of any
such contest, Tenant shall to the extent provided by Law, defer the
payment of any such Real Estate Taxes. Landlord will fully cooperate
with Tenant and shall make available to Tenant, and to any taxing
authority, any records, information, documentation, or other
reasonable assistance (at minimal cost and expense to Landlord),
relevant in connection with any audit or other examination by any
authority or any judicial or administrative proceeding relating to
Tenant's liability for the Real Estate Taxes. Landlord and Tenant
shall each promptly notify the other of any claims or assessments for
Real Estate Taxes that may be asserted by applicable taxing
authorities that could result in a potential liability or expense for
the other, and coordinate with the other the response to and
settlement of such claims or assessments for Real Estate Taxes. Tenant


-3-
shall be entitled to any refunds or rebates of Real Estate Taxes (and
any interest thereon) to the extent such refunds or rebates relate to
Real Estate Taxes that were paid by Tenant.


7. PERSONAL PROPERTY TAXES. Tenant shall be liable for all personal property
taxes for personal property of Tenant placed in the Premises (and any
personalty installed by Landlord as part of the Tenant Improvements) and
shall pay them directly, prior to delinquency.


8. DELIVERY OF PREMISES.


A. REMEDIES OF TENANT. If Landlord is unable to deliver possession of the
Premises to Tenant on the Scheduled Completion Date this Lease shall
not be void or voidable (except as expressly stated hereinafter) nor
shall Landlord be liable to Tenant for any loss or damage resulting
therefrom, but the Commencement Date and the Expiration Date of the
Term shall be extended, as provided below, and in such event Tenant
shall not be liable for any Base Rent or other charges due under this
Lease until such time as Landlord tenders delivery of possession of
the Premises to Tenant. Tenant shall, upon failure of Landlord to
deliver the Premises on the Scheduled Completion Date, immediately
deliver written notice to Landlord, with a copy to any mortgagee of
Landlord, (provided Tenant has been given notice of the identity of
the mortgagee and its address) advising Landlord (and mortgagee) of
the failure to deliver, and granting Landlord (and/or its mortgagee)
until the Outside Completion Date to substantially complete and
deliver the Premises to Tenant. Beginning on July 13, 1997 (subject to
Force Majeure and Tenant Delays), damages for failure to deliver the
Premises shall accrue against Landlord, and Landlord shall pay (or
credit against Base Rent at Tenant's option) to Tenant a sum of money
equivalent to two (2) days pro rated Base Rent for each one (1) day
beyond July 13, 1997 that the Premises are not delivered ('Delay
Sums"). Notwithstanding anything to the contrary contained herein, if
the Landlord has not delivered the Premises to Tenant on or before the
Outside Completion Date (subject to Tenant Delays and Force Majeure)
either Landlord or Tenant may, in their sole discretion, terminate
this Lease without further obligations hereunder, except Landlord's
obligation to pay the Delay Sums. The Delay Sums shall in no event
accrue after the Outside Completion Date, unless Tenant and Landlord
mutually elect not to terminate and grant Lan ...