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LEASE OF INDUSTRIAL PREMISES

601 WEST SECOND STREET, TAYLOR, TEXAS 76574

This lease Agreement (“Lease”) made and entered into by and between

Southern Mattress Company of Texas, Inc., a Texas corporation, hereinafter referred to

as “Landlord” and HDI Plastics, Inc., hereinafter referred to as “Tenant”, who agree as

follows:

PREMISES

Commencing on the Commencement Date and

continuing throughout the remainder of the Lease Term, said

Landlord hereby leases to Tenant and Tenant

period hereinafter referred to as the “Rent Term”, Tenant

leases from Landlord the buildings, parking lot and grounds

shall pay to Landlord as minimum rent for the premises the

located at 601 West Second Street, Taylor, Texas 76574,

following amounts per month:

hereinafter referred to as the “Premises”. The Premises

consist of a main building of approximately 65,000 square

Period

Minimum Rent

feet together with all furniture, fixtures, equipment and other

property owned by Landlord at 601 West Second Street,

Commencement Date-

Taylor, Texas 76574.

2/9/2013

$3,000.00

3/1/2013-2/28/2015

$8,500.00

TERMS OF LEASE

3/1/2015-2/28/2016

$12,750.00

3/1/2016-2/29/2017

$20,625.00

The Lease Term shall commence on the date

signed by the last of Landlord or Tenant to sign

Said sums shall be paid in advance on the first

(“Commencement Date”) and end on February 29, 2017.

day of each calendar month during the periods indicated. All

rent to the be paid by Tenant to Landlord shall be in lawful

RENT COMMENCEMENT DATE

money of the United States of America and shall be paid

without deduction, offset or abatement, prior notice or

The Rent Commencement Date for Minimum Rent

demand, and at such place or places as may be designated

shall be the Commencement Date and the Rent

from time to time by Landlord.

Commencement Date for Additional Rent shall be March 1,

2013.

If the Rent Term commences on any day other

than the first day of a calendar month, a pro rata fraction of a

SUPERSEDES

AND

REPLACES

PRIOR

full month’s rent shall be paid for the period beginning with

LEASES

such day and ending with the first day of the next following

month. If the Rent Term ends on any day other than the last

As of the Commencement Date, this Lease

day of a calendar month, a corresponding pro rata fractional

supersedes and replaces that certain Lease of Industrial

sum shall be paid for such partial month. The rent shall be

Premises dated ____________________, 2012 between

increased by any sales or rent tax which is or may be

Landlord and Tenant covering a portion of the Premises and

chargeable against the Premises for minimum rent,

that certain Lease of Parking Lot dated August 23, 2012

additional rent or percentage rent (if payable hereunder) as

between Landlord and Tenant covering a portion of the

defined in this Lease.

Premises

Tenant shall be given credit for rent paid under the

USE; OCCUPANCY

leases referenced in Section 4 if the Commencement Date

occurs prior to the expiration of such leases.

The Premises shall be used solely for industrial

purposes.

ADDITIONAL RENT

Tenant shall have the right to occupy the entire

In addition to and separate from the foregoing

Premises as of the Commencement Date, subject to the

minimum rent, commencing March 1, 2013, Tenant shall pay

rights of the existing third party tenant now occupying part of

to Landlord as additional rent the Cost of Taxes and Cost of

the Premises. Landlord shall make reasonable efforts to

Insurance as hereinafter defined.

relocate the current third party tenant as soon as reasonably

practical. Landlord shall provide such third party tenant with

Cost of Taxes

written notice of the existence of this lease and of

termination of such third party tenant’s lease in accordance

During the Rent Term Tenant agrees to pay as

with the lease between Landlord and such third party tenant

additional rent all real property taxes and all extraordinary

upon Tenant’s written notice to Landlord that it has entered

and/or special assessments (and all costs and fees incurred

into a written agreement with the Taylor Economic

in contesting the same) which may be levied or assessed by

Development Council concerning the Premises.

any lawful taxing authority and the community or property

owners association(s) against the Premises, hereinafter

MINIMUM RENT

collectively referred to as “Taxes”.

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Should any taxing authority include in such Taxes

Proof of Payment of taxes by Landlord

the value of any improvement made by Tenant, or include

machinery, equipment, fixtures, inventory or other personal

Tenant acknowledges that Landlord will be filing

property or assets of Tenant, then Tenant shall also pay the

for protection under Chapter 11 of the United States

entire personal and real estate taxes for such items.

Bankruptcy Code and will likely request that it be allowed to

pay all property and ad valorem taxes then due on the

Should any governmental taxing authority acting

Premises as allowed under Chapter 11 through Landlord’s

under any present or future law, ordinance, or regulation,

Chapter 11 plan. As each payment for ad valorem taxes on

levy, assess or impose a tax, excise and/or assessment

the Premises is made, Landlord shall provide Tenant with

(other than an income or franchise tax) upon or against or in

written evidence that such payment has been made, both

any way related to the Premises, either by way of

taxes for the years 2013 forward and for those prior year

substitution for or in addition to any existing tax on the

taxes that may be paid out over time through the Chapter 11

Premises, Tenant shall be responsible for and shall pay to

plan.

Landlord, as additional rent, all of such tax, excise and/or

assessment.

PAST DUE RENT

Any such tax due and payable shall be

apportioned and adjusted for partial years. With respect to

The rent provided for in Paragraphs 6 and 7 is due

any assessment which may be levied against or upon the

at the address of Landlord in paragraph 39 on or before the

Premises and which under the laws then in force, may be

first day of each month during the Rent Term. Any payment

evidenced by improvement or other bonds, or may be paid in

received after the fifth day of the month shall be considered

annual installments, Tenant shall be required to pay each

a late payment and liquidated damages of TWENTY-FIVE

year only the amount of such annual installment or portion

DOLLARS ($25.00) per day after the first day of the month

thereof constituting Tenant’s share (with appropriate

shall become due and payable to Landlord upon demand.

proration for any partial year) and shall have no obligation to

The date the rent payment is received shall be considered

continue payments after the termination of this Lease.

the effective date for purposes of determining liquidated

damages.

Cost of Insurance

LIMITATION ON USE

During the Rent Term Tenant shall maintain “All

Risk” Property Insurance insuring the Premises (but not the

Tenant agrees not to commit or suffer to

contents thereof) against physical loss or damage for the full

be committed on the Premises any nuisance or other act or

replacement cost thereof, together with general liability

thing against public policy or which violates any law or

insurance, naming Landlord as loss payee. Tenant shall not

governmental regulation or which may disturb the quiet

be named as an insured and shall have no right to any part

enjoyment of any other tenant in the Building. Tenant

of the proceeds of coverage for physical damage to or loss

agrees not to use or permit the use of the Premises or any

of the Premises. Tenant may be a co-insured and additional

part thereof as living quarters.

loss payee under general liability coverage. During the Rent

Term, if Tenant does not maintain such insurance, Tenant

No goods, merchandise or materials

covenants and agrees to pay Landlord, as additional rent,

shall be kept, stored or sold by Tenant on or about the

the cost of such insurance.

Premises which are unreasonably hazardous. Hazardous

goods, merchandise or materials shall be as defined in the

Estimate for First Calendar Year

Electronic Code of Federal Regulations: CFR 40, Chapter I,

Subchapter I, Part 261 (*Identification and Listing of

During the first calendar year or portion thereof of

Hazardous Waste*). Tenant shall be responsible for all

the Rent Term, whichever is applicable, the estimated

damages, claims, and liabilities related to such, including

expenses for Taxes shall be $1667.00 per month payable in

liability for fines and penalties to governmental entities.

advance on the first day of each calendar month or portion

Tenant agrees to suffer or permit no act of omission or

thereof.

commission to be done on or about the Premises which will

increase the existing rate of insurance. If the insurance rate

Adjustments and Definitions

is increased by such an act, the increased cost of such

insurance shall be paid by Tenant to Landlord upon demand.

(i)

During

each

succeeding

Tenant agrees to comply with all requirements necessary for

calendar year of this Lease or portion thereof, Landlord shall

the maintenance of “All Risk” Property Insurance and

estimate Tenant’s costs of (a), (b) and (c) above and

comprehensive general liability insurance covering the

Tenant’s monthly payment of said amount shall be adjusted

Premises and the Building as required in this Lease.

accordingly and shall be payable in advance on the first day

of each calendar month.

10.

UTILITIES AND SERVICES

(ii)

During

the

Rent

Term

Landlord agrees to furnish to Tenant annually an itemized

Tenant agrees to pay for all utility and

statement in reasonable detail setting forth the total costs

other services and materials rendered or furnished to the

referred to in subparagraphs (a), (b) and (c) above for each

Premises, including, but not limited to, heat, water, gas,

calendar year. Based on said itemized statement Landlord

electricity, telephone, power, trash removal, garbage and

shall make adjustments for underpayment of said expenses,

other waste removal, cleaning, maintenance and janitorial

which underpayment Tenant shall pay with Tenant’s next

services, sewer rent, sewage treatment facility charges,

monthly payment of said costs, and for overpayments of said

drainage fees, street cleaning fees and the like, together with

costs, which overpayment shall be credited against Tenant’s

its share of all taxes and governmental charges levied on

next monthly payment of said costs.

such utilities.

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Landlord shall not be liable to Tenant for

Tenant shall not make any alterations to the

any interruption in service of water, electricity, heating, air

Premises without Landlord’s prior written consent. Any

conditioning or other utilities and services caused by an

alterations made shall remain on and be surrendered with

unavoidable delay, by the making of any necessary repairs

the Premises on expiration or termination of this Lease,

or improvements, or by any cause beyond Landlord’s

except that Landlord can elect within twenty-five (25) days

reasonable control.

before expiration of this Lease, or upon termination thereof,

to require Tenant to remove any alterations that Tenant has

Tenant agrees that it will not install any

made to the Premises. If Landlord so elects, Tenant, at its

equipment which will exceed or overload the capacity of any

expense, shall restore the Premises to the original condition,

utility facilities and that if any equipment installed by Tenant

or to such other condition as agreed between the parities,

shall require additional utility facilities, the same shall be

before the last day of this Lease, or within thirty (30) days

installed at Tenant’s expense in accordance with plans and

after notice of election is given, whichever is later.

specifications to be approved in writing by Landlord.

Notwithstanding the foregoing, Tenant shall have

the right to connect its equipment to water, wastewater and

11.

COMMON AREA

electrical utilities and upon prior written consent of Landlord

make such roof penetrations above the Premises as are

Intentionally deleted.

reasonably necessary for Tenant’s operations.

12.

ACCEPTANCE OF PREMISES

Upon termination of this Lease, Tenant shall close

and repair all roof penetrations that it has made, leaving

Landlord shall deliver the Premises, except for that

such penetrations sealed and in a good, workmanlike

portion of the Premises currently leased to Tenant under the

condition.

leases described in Section 4, in “broom clean” condition.

Tenant’s taking possession of the Premises shall constitute

its acknowledgment that it has inspected the Premises, is

17.

FREE FROM LIENS

satisfied therewith and that the Premises, including all

equipment and improvements, are acceptable to Tenant as

Tenant shall keep the Premises free from any

reflected by execution by the Tenant of this Lease. Tenant

liens arising out of any work performed, material furnished or

accepts the Premises in “as is” condition.

obligations incurred by Tenant, and agrees to indemnify and

hold Landlord harmless from all loss, cost or expense arising

13.

LANDLORD’S MAINTENANCE

therefrom.

Landlord shall not be responsible for any

Tenant agrees to provide Landlord with lien

maintenance whatsoever of the Premises, structural or

waivers from any and all general contractors,

otherwise.

subcontractors, and material suppliers in the event that

Tenant constructs, or makes alterations to the Premises.

14.

TENANTS’ MAINTENANCE

18.

DESTRUCTION OF PREMISES

At all times during the Lease Term, at Tenant’s

In the event of a substantial or total

sole expense, Tenant shall keep, maintain and repair the

destruction of the Premises during the Lease Term from any

Premises in good and sanitary order and condition,

cause, Landlord shall elect within thirty (30) days after the

including, but not limited to, the maintenance and repair of

occurrence, by notice in writing to Tenant, either to repair

the foundation, roof, exterior walls, doors, window

and restore the foundation, exterior walls and roof of any the

casements, glazing, heating and air conditioning systems,

buildings on the Premises (the “Shell”) or to terminate this

plumbing, pipes, electrical wiring, conduits or parking lot. In

Lease. As used herein the term “substantial destruction”

maintaining the aforesaid equipment and improvements,

shall mean destruction of at least twenty-five (25%) percent

Tenant shall exercise reasonable care to protect the shell of

of the Premises or the main building on the Premises. If

the buildings located on the Premises. Tenant shall make

Landlord elects to repair or restore the Shell, Landlord shall

no penetration to the exterior of any building on the

complete the work within one hundred eighty (180) days

Premises without the prior consent of Landlord. If such

after the aforesaid notice to Tenant, or may elect to

consent is granted, Tenant hereby agrees to maintain and

terminate this Lease by notice in writing to Tenant. If

protect the area surrounding said penetration and further

Landlord elects to terminate this Lease by such written

agrees to hold Landlord harmless from any damage

notice to Tenant, Tenant shall surrender all interest in this

occurring as a result thereof.

Lease and the Premises, all subsequent rent obligations

shall cease and this Lease shall terminate on the date

15.

TENANT’S FAILURE TO REPAIR

specified in such notice from Landlord without any liability for

damages against Landlord as a result of such termination.

If Tenant refuses or neglects to fulfill its obligations

pursuant to Paragraph 14, Landlord shall have the right, but

In the event of less than substantial

shall not be obligated, to perform the same on behalf of and

destruction to the Premises or the buildings during the Lease

for the account of Tenant. In such event, the cost of such

Term from any cause, Landlord shall promptly repair and

work shall be paid for in full by Tenant, plus fifteen (15%)

restore the Shell and this Lease shall remain in full force and

percent thereof as an allowance for Landlord’s supervision,

effect.

as additional rent promptly upon receipt of a bill therefore.

Unless this Lease is terminated by

16.

ALTERATIONS

Landlord, Tenant shall repair and refixture the Premises

(except as to Landlord’s obligations as set forth above) in a

manner and to at least a condition equal to that existing prior

Taylor Bedding\2012-12-3 HDI Lease

to its destruction, and the proceeds of all insurance carried

by Tenant on its property and improvements shall be held in

Landlord, at any time after Tenant commits a

trust by Tenant for the purposes of said repair or

default, can cure the default at Tenant’s expense. If

replacement.

Landlord, at any time, by reason of Tenant’s default, pays

any sum or does any act that requires the payment of any

19.

CONDEMNATION

sum, the sum paid by Landlord, plus fifteen percent (15%) of

said sum as an allowance for Landlord’s supervision, shall

In the event all or a portion of the Premises shall

be due within five (5) calendar days from Tenant to Landlord

be taken under the right of eminent domain by any authority

at the time the sum is paid and an appropriate invoice for

having the right of condemnation, the following shall apply:

same is submitted to Tenant, and if paid at a later date shall

bear interest at 18% per year or the maximum rate allowed

If twenty-five percent (25%) or more of

by law, whichever is less from the date the sum is paid by

the Premises shall be taken, this Lease and all obligations

Landlord until Landlord is reimbursed by Tenant. The sum,

hereunder shall terminate on the date title vests pursuant to

together with accrued interest, shall be additional rent.

such proceedings.

If a portion of the Premises is taken

22.

LANDLORD’S ENTRY ON PREMISES

such that the Premises are reduced to a level insufficient to

reasonably accommodate Tenant’s business (hereinafter

Landlord and its authorized representative shall

called a “Substantial Portion”), this Lease and all obligations

have the right to enter the Premises at all reasonable times

hereunder shall terminate on the date title vests pursuant to

for any of the following purposes:

such proceedings.

to determine whether the Premises are

If less than twenty-five percent (25%) of

in good condition and whether Tenant is complying with its

the Premises or less than a Substantial Portion of the

obligations under this Lease;

Premises shall be taken, then this Lease shall continue in full

force and effect, but the rent shall be adjusted to provide a

to perform any necessary maintenance

fair and equitable amount mutually agreeable to the parties.

and to make any restoration to the Premises;

20.

SURRENDER OF PREMISES

to serve, post or keep posted any

notices required or allowed under the provisions of this

On expiration or termination of this

Lease;

Lease for any reason, Tenant shall surrender to Landlord the

Premises and all Tenant’s improvements and alterations in

to shore the foundations, footings and

good condition other than ordinary wear and tear occurring

walls of any building on the Premises and to erect

after the performance of necessary maintenance by Tenant

scaffolding and protective barricades around and about such

pursuant to Paragraph 14, roof penetrations as set for in

buildings, but not so as to prevent entry to the Premises, and

paragraph 16 and destruction to the Premises as set forth in

to do any other act or thing necessary for the safety or

Paragraph 18, except for alterations-that Tenant has the

preservation of the Premises or the buildings on the

right to remove or is obligated to remove under the

Premises. Landlord shall not be liable in any manner for any

provisions of Paragraph 16. Tenant shall remove all its

inconvenience, disturbance, loss of business, nuisance, or

personal property within the time stated in Paragraph 16.

other damage arising out of Landlord’s entry on the premises

Tenant shall perform all restoration made necessary by the

as provided in this Paragraph, except damage resulting from

removal of any alterations or Tenant’s personal property

the acts or omissions of Landlord or its authorized

within said time periods.

representatives;

Landlord can elect to retain or dispose

if Tenant abandons the Premises or has

of, in any manner, any of Tenant’s improvements, alterations

failed to exercise its right to purchase the Premises by

or personal property that Tenant does not remove from the

December 1, 2016, to post “For Rent”, “For Lease”, or “For

Premises on expiration or termination of the term as allowed

Sale” signs as appropriate and to show the Premises to

or required by this Lease. Title to any such improvements,

prospective brokers, agents, buyers, tenants or persons

equipment and personal property that Landlord elects to

interested in an exchange.

retain or dispose of shall vest in Landlord. Tenant waives all

claims against Landlord for any damage to Tenant resulting

Landlord shall conduct its activities

on the

from Landlord’s retention or disposition of any such

Premises as allowed in this Paragraph in a manner that will

improvements, equipment and personal property. Tenant

cause the least possible inconvenience, annoyance or

shall be liable to Landlord for Landlord’s costs for storing,

disturbance to Tenant.

removing, and disposing of any such improvements,

alterations or personal property.

Tenant shall not be entitled to an abatement or

reduction of rent if Landlord exercises any rights reserved in

If Tenant fails to surrender the Premises

this Paragraph.

to Landlord on expiration or termination of this Lease as

required by this Paragraph, Tenant shall hold Landlord

23.

SIGNS

harmless from all damages resulting from Tenant’s failure to

surrender the Premises, including, without limitation, claims

Tenant shall not place or permit to be placed any

made by a succeeding tenant resulting from Tenant’s failure

sign, advertisement or other display on any part of the

to surrender the Premises.

outside of the Premises, and visible from the outside, except

of such color, size and style and in such locations as

21.

LANDLORD’S RIGHT TO CURE TENANT’S

approved by Landlord in advance. Tenant shall be soley

DEFAULT

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responsible for the installation and maintenance of its

signage, both on any building itself and on any pole signs.

(ii)

the affidavit of the contractor or

contractors performing Tenant’s work, to the effect that

24.

CONTRACTUAL LIEN FOR RENTAL

Tenant’s work has been fully completed in accordance with

plans and specifications previously approved by Landlord,

Intentionally Deleted

and that all subcontractors, laborers and material suppliers,

supplying labor or material for Tenant’s work, have been

25.

CONSTRUCTION

paid in full; and

Other than the alterations allowed by

(iii)

written certification by tenant

Paragraph 16 which do not require Landlord’s prior written

that Tenant has completed all of Tenant’s work in

consent, only with the prior, written consent of Landlord,

accordance with the terms of this Lease and approved plans

Tenant may at its sole cost and expense, commence and

and specifications.

pursue to completion any major remodeling of the Premises,

provided that the contractor used by the Tenant for such

With respect to any labor performed or

construction shall first be approved by Landlord; provided,

materials furnished by Tenant at the Premises, the following

however, that Tenant may commence work on the

shall apply: labor and material used in the installment of

alterations allowed by Paragraph 16 upon execution of this

Tenant’s equipment and fixtures, and in any other work on

Lease. Such approval will be based on a favorable review

the premises performed by Tenant will be subject to

by Landlord of a Contractors Qualification Statement (A.I.A.

Landlord’s prior written approval. Any such approval of

document 305), contractor’s balance sheet and income

Tenant’s labor shall constitute a license authorizing Tenant

statement.

Tenant will provide and install all trade

to permit such labor to enter upon the Building and Premises

equipment, furniture, fixtures, and effects of every

prior to the commencement of the Lease Term, however, the

description necessary or appropriate for Tenant’s

continued effectiveness of such license is conditioned upon

businesses; and all such items to be provided and

Tenant’s aforesaid labor working in harmony with and not

constructed by Tenant shall be new and modern and of first

interfering with labor utilized by any other tenant or such

class quality.

tenant’s agents or contractors or contractors of Landlord.

Accordingly, if at any time in Landlord’s sole opinion, such

At least thirty (30) days prior to the date

entry of Tenant’s labor shall cause disharmony or

Tenant desires to begin any major remodeling of the

interference therewith, this license may be withdrawn by

Premises, Tenant shall submit complete plans and

Landlord upon forty-eight (48) hours written notice to Tenant,

specifications for the major remodeling of the Premises,

upon expiration of which Tenant shall have caused all of

describing all the work which is to be performed by Tenant

tenant’s labor (as to whom Landlord shall have given such

under this Lease, and showing in sufficient detail the location

notice) to have been removed from the Premises and from

of all utilities and partitions, the storefront and any other

the Building. With respect to any contract for any such labor

matters which may affect such the remodeling work to be

or materials, Tenant acts as a principal and not as the agent

performed in the Premises and in the Building. In the event

of Landlord. Tenant agrees to indemnify and hold Landlord

that said plans and specifications are, in the sole judgment

harmless from all claims (including costs and expenses of

of Landlord, incomplete, inadequate or inconsistent with the

defending against such claims) arising or alleged to arise

terms of this Lease, Landlord may elect to have said plans

from any act or omission of Tenant or Tenant’s agents,

and specifications revised, corrected and/or completed at

employees,

contractors,

subcontractors,

laborers,

Tenant’s expense.

Upon completion and approval by

materialmen, or invitees or arising from any bodily injury or

Landlord of final plans and specifications, Tenant shall

property damage occurring or alleged to have occurred

complete such remodeling of the Premises in accordance

incident to Tenant’s work at the Premises. Tenant shall

with the said approved plans and specifications.

have no authority to place any lien upon the Premises or any

interest therein nor in any way bind Landlord, and any

With respect to a minor remodeling of

attempt to do so shall be void and of no effect. Landlord

the Premises, the provisions of paragraph 25 (a) and (b) of

expressly disclaims liability for the cost of labor or materials

this Lease do not apply. “Minor remodeling” consists of

furnished by, to or for Tenant. If, because of any actual or

painting, replacement and installation of floor coverings, wall

alleged act or omission of Tenant, any lien, affidavit, charge,

coverings and similar work. All of such minor remodeling

or order for the payment of money shall be filed against

projects shall be tenant’s sole responsibility. At least ten

Landlord, the premises or the Building, whether or not such

(10) days prior to the commencement of any minor

lien, affidavit, charge or order is valid or enforceable, Tenant

remodeling, Tenant shall provide Landlord with written notice

shall, at its own cost and expense, cause same to be

of work to be done, including the color of paint to be used,

discharged of record by payment, bonding or otherwise no

the type of material to be used (for example, neutral color

late than fifteen (15) days after notice to Tenant of the filing

industrial grade carpeting) and the date work is expected to

thereof, but in all events, prior to foreclosure thereof.

commence and end.

Acceptance of the Premises by Tenant

Within fifteen (15) days after full

will constitute acknowledgment by Tenant that Landlord has

completion of any improvements to be made by Tenant

performed all of Landlord’s obligations relating to

(which have been approved in writing by Landlord), Tenant

construction.

shall furnish Landlord with the following:

26.

DISTRIBUTION

RISK

BETWEEN

(i)

Tenant’s

affidavit

that

LANDLORD AND TENANT

Tenant’s work has been completed in strict accordance with

approved plans and specifications, which affidavit may be

Except as provided otherwise herein,

relied upon by Landlord, it being understood that any

Tenant shall indemnify, defend and hold Landlord harmless

deliberate or negligent misstatement by Tenant therein shall

for all claims, demands and causes of action asserted by

constitute a breach of this Lease;

any person (including, without limitation, Landlord’s and

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Tenant’s employees, invitees and guests) for personal injury

and upon request have its insurance carrier(s) furnish to

or death or for loss or damage to property occurring on or

landlord certified copies of such insurance policies and/or

about the Premises resulting from Tenant’s negligence or

insurance certificates specifying that no insurance will be

willful misconduct. Where personal injury, death or loss of or

canceled or materially-changed while this Lease is in effect

damage to the property is the result of the joint negligence or

without thirty (30) days prior written notice to Landlord.

misconduct of Landlord and Tenant, each party’s duty shall

be in proportion to its allocable share of such joint

The minimum limits of any insurance

negligence or misconduct. In the event Landlord shall be

coverage required herein shall not limit Tenant’s liability

made a party to any litigation commenced by or against

under this Lease.

Tenant, then Tenant shall protect and hold Landlord

harmless and shall pay all costs, expenses and attorney’s

28.

INCREASE IN INSURANCE PREMIUMS

fees incurred or paid by Landlord in connection with such

litigation.

Tenant shall not stock, use or sell any article or do

anything in or about the Premises which may be prohibited

Tenant shall indemnify, defend, and hold Landlord

by Tenant’s or Landlord’s insurance policies or any

harmless for any and all claims, demands, and causes of

endorsements or forms attached thereto. Tenant shall pay

action asserted by any person or governmental entity related

on demand any increase in premiums for Landlord’s

in any manner to hazardous substances used in connection

insurance that may be charged on such insurance carried by

with Tenant’s business at the Building.

Landlord resulting from Tenant’s use and occupancy of the

Premises or any portion thereof, whether or not Landlord has

Tenant, as a material part of the

consented to the same. In determining whether increased

consideration to Landlord under this Lease, waives all claims

premiums are the result of Tenant’s use, occupancy or

against Landlord for damage to goods, wares and

vacancy of the Premises, a schedule issued by the

merchandise in, upon or about Leased Premises and for

organization on malicious mischief, special extended

injuries to persons in or about the Premises, from any cause

coverage or any all-risk insurance rates for said Premises, or

arising at any time. Landlord shall also not be liable for any

any rule books issued by the rating organization or similar

loss of or damage to property of Tenant, its invitees or

bodies or by rating procedures of rules of Landlord’s

guests or of others located on the Premises, by theft or

insurance companies shall be conclusive evidence of the

otherwise, nor for any loss or damage to any property which

several items and charges which make up the insurance

Tenant could remove at the end of the Lease Term.

rates and premiums on the Premises and the Building. If

due to:

Tenant shall give prompt notice to

Landlord in case of fire or accident in the Premises or on the

(i)

Occupancy;

parking area or of defects therein or in any fixtures or

equipment. Such notice will be given orally within twenty-

(ii)

Abandonment; or

four (24) hours followed by written confirmation within five (5)

days.

(iii)

Tenant’s failure to occupy the

Premises as herein provided, any insurance shall be

27.

INSURANCE

canceled by the insurance carrier or of the premiums for any

such insurance shall be increased, then Tenant shall

At all times during the Lease Term,

indemnify and hold Landlord harmless from any and all

Tenant shall carry and maintain in force the following types

claims that the canceled insurance would have covered, and

of insurance:

shall pay on demand the increased cost of such insurance.

(i)

Worker’s

Compensation

29.

PERSONAL PROPERTY TAXES

Insurance in accordance with law and Employer’s Liability

Insurance with minimum limits of $100,000 any one

During the term hereof, Tenant shall pay prior to

accident;

delinquency all taxes assessed against and levied upon

fixtures, furnishings, equipment, and all other personal

(ii)

Comprehensive

General

property of Tenant contained on the Premises, and when

(including contractual liability coverage) and Automobile

possible, Tenant shall cause said fixtures, furnishings,

Liability Insurance with minimum limits of not less than

equipment, and other personal property to be assessed and

$1,000,000 single limit, combined Bodily Injury and Property

billed separately from the real property of Landlord.

Damage each occurrence;

30.

DEFAULT BY TENANT AND REMEDIES

(iii)

Standard Fire and Extended

Coverage Insurance with Vandalism and Malicious Mischief

The following events shall be deemed to

Endorsements insuring the Premises and Tenant’s

be events of default by Tenant under this Lease:

decorations, contents and all improvements on the Premises

for the full replacement cost thereof; and

(i)

Tenant shall fail to pay any

installment of rental or any other expense demanded by

(iv)

Comprehensive casualty and

Landlord as herein provided and such failure shall continue

damage insurance covering the Premises against loss or

for a period of ten days;

destruction by fire, wind, or other casualty in the full

replacement cost of the buildings and all other improvements

(ii)

Tenant shall fail to comply

on the Premises, naming Landlord as the insured and loss

with any term, provision or covenant of this Lease, other

payee.

than the payment of rental or expenses demanded by

Landlord and shall not cure such failure within ten days after

Tenant agrees to purchase such insurance, at its

written notice thereof to Tenant;

cost and expense, from companies satisfactory to Landlord

Taylor Bedding\2012-12-3 HDI Lease

(iii)

Tenant or any guarantor of

Exercise by landlord of any one or more

Tenant’s obligations under this Lease shall become

remedies hereunder granted or otherwise available shall not

insolvent, or shall make a transfer in fraud of creditors, or

be deemed to be an acceptance of surrender of the

shall make an assignment for the benefit of creditors;

Premises by Tenant, whether by agreement or by operation

of law, it being understood that such surrender can be

(iv)

Tenant or any guarantor of

effected only by the written agreement of Landlord and

Tenant’s obligations under this Lease shall file a petition

Tenant. No such alteration of locks or other security devices

under any section or chapter of the Bankruptcy Code, as

and no removal or other exercise of dominion by Landlord

amended, or under any similar law or statute of the United

over the property of Tenant or others at the Premises shall

States of any state thereof, or Tenant or any guarantor of

be deemed unauthorized or constitute a conversion. Tenant

Tenant’s obligations under this Lease shall be adjudged

hereby consents after any event of default to the aforesaid

bankrupt or insolvent in proceedings filed against Tenant or

exercises of dominion over Tenant’s property within the

any guarantor of Tenant’s obligations under this Lease;

Premises. All claims for damages by reason of such re-entry

and/or repossession and/or alteration of locks or other

(v)

A receiver or Trustee shall be

security devices are hereby waived, as are all claims for

appointed for all Premises or for all or substantially all of the

damages by reason of distress, warrant, forcible detainer

assets of Tenant or any guarantor of Tenant’s obligations

proceedings, sequestration proceedings or other legal

under this Lease;

process. Tenant agrees that any re-entry by Landlord may

be pursuant to judgment obtained in forcible detainer

(vi)

Tenant shall desert or vacate

proceedings or other legal proceedings or without the

any portion of the Premises;

necessity for any legal proceedings as Landlord may elect

and Landlord shall not be liable in trespass or otherwise.

(vii)

Tenant shall do or permit to

Any remedy available to Landlord, whether specified herein

be done anything which creates a lien upon the Premises; or

at law or equity shall be deemed cumulative and not

exclusive.

(viii)

The Business operated by

Tenant shall be closed for failure to pay any federal income

If Landlord elects to terminate the Lease

or payroll tax or any State sales tax as required or for any

by reason of an event of default, then notwithstanding such

other reason.

termination Tenant shall be liable for and shall pay to

Landlord at the address specified for notice to Landlord

Upon the occurrence of any such events

herein the sum of all rental and other indebtedness accrued

of default, Landlord shall have the option to pursue any one

to date of such termination, plus, as damages, an amount

or more of the following remedies without any notice or

equal to the difference between (1) the total rental plus

demand whatsoever:

Tenant’s Common Area Maintenance Charge, Insurance

Escrow Payment and Tax Escrow Payment hereunder for

(i)

Terminate this Lease in which

the remaining portion of the Lease Term (had such term not

event Tenant shall immediately surrender the Premises to

been terminated by Landlord prior to the date of expiration

Landlord, and if Tenant fails to do so, Landlord may, without

stated in Article 1), and (2) the then present value of the then

prejudice to any other remedy which he may have for

fair rental value of the Premises for such period.

possession or arrearages in rental enter upon and take

possession of the Premises and expel or remove Tenant and

If Landlord elects to repossess the

any other person who may be occupying the Premises or

Premises without terminating the Lease, then Tenant shall

any part thereof, by force if necessary, without being liable

be liable for and shall pay to Landlord at the address

for prosecution of any claim of damages therefore;

specified for notice to Landlord here, all rental and other

indebtedness accrued to the date of such repossession plus

(ii)

Enter

upon

and

take

rental required to be paid by Tenant to Landlord during the

possession of the Premises and expel or remove Tenant and

remainder of the Lease Term until the date of expiration of

any other person who may be occupying said Premises or

the Lease Term diminished by any net sums thereafter

any part thereof, by force if necessary, without being liable

received by Landlord through reletting the Premises during

for prosecution or any claim for damages therefore with or

said period (after deducting expenses incurred by Landlord).

without having terminated the Lease;

In no event shall Tenant be entitled to any excess of any

rental obtained by reletting over and above the rental herein

(iii)

Enter upon the Premises by

reserved. Actions to collect amounts due by Tenant to

force if necessary without being liable for prosecution or any

Landlord as provided herein may be brought from time to

claim for damages therefore and do whatever Tenant is

time, on one or more occasions, without the necessity of

obligated to do under the terms of this Lease, and Tenant

Landlord’s waiting until expiration of the Lease Term.

agrees to reimburse Landlord on demand for any expenses

which Landlord may incur in thus effecting compliance with

If any event of default or breach of

Tenant’s obligations under this Lease, and Tenant further

Tenant occurs, Tenant shall also be liable for an shall pay to

agrees that Landlord shall not be liable for any damages

Landlord, at the address specified for notice to Landlord

resulting to the Tenant from such action;

herein, in addition to any sum provided to be paid above,

brokers’ fees incurred by Landlord in connection with

(iv)

Alter all locks and other

reletting the whole or any part of the Premises, the costs of

security devices at the Premises without terminating the

removing and storing Tenant’s or other occupant’s property,

Lease; and

the costs of repairing, altering, remodeling or otherwise

putting the Premises into condition acceptable to a new

(v)

Exercise any other remedy

tenant or tenants, and all reasonable expenses incurred by

available to Landlord, at Landlord’s sole discretion, at law or

Landlord in enforcing or defending Landlord’s rights and/or

equity.

remedies including reasonable attorneys’ fees which shall be

Taylor Bedding\2012-12-3 HDI Lease

not less than ten percent (10%) of all sums then owing by

to Landlord for cost incurred by Landlord in connection with

Tenant to Landlord.

such removal and storage and shall indemnify and hold

Landlord harmless for all loss, damage, cost, expense and

If an event of default occurs leading to

liability in connection with such removal and storage.

the termination or repossession of the Premise, Landlord

Landlord shall also have the right to relinquish possession of

shall not have any obligation to relet or attempt to relet the

all or any portion of such furniture, fixtures, equipment and

Premises, or any portion thereof, or to collect rental after

other property to any person (“claimant”) claiming to be

reletting, and in the event of reletting Landlord may relet the

entitled to possession thereof who presents to Landlord a

whole or any portion of the Premises for any period, to any

copy of any instrument represented to Landlord by Claimant

tenant, and for any use and purpose.

to have been executed by Tenant (or any predecessor of

Tenant) granting Claimant the right under various

If Tenant should fail to made any

circumstances to take possession of such furniture, fixtures,

payment or cure any default hereunder within the time herein

equipment or other property, without the necessity on the

permitted, Landlord, without being under any obligation to do

part of Landlord to inquire into the authenticity of said

so and without thereby waiving such default, may make such

instrument’s copy of Tenant’s or Tenant’s predecessor’s

payment and/or remedy such other default for the account of

signature thereon and without the necessity of Landlord’s

Tenant (and enter the Premises for such purpose) and

making any nature of investigation or inquiry as to the

thereupon Tenant shall be obligated to, and hereby agrees,

validity of the factual or legal basis upon which Claimant

to pay Landlord, upon demand, all costs, expenses and

purports to act and Tenant agrees to indemnify and hold

disbursements (including reasonable attorneys’ fees)

Landlord harmless from all cost, expense, loss, damage and

incurred by Landlord in taking such remedial action.

liability incident to Landlord’s relinquishment of possession

of all or any portion of such furniture, fixtures, equipment or

If Landlord shall default on any provision

other property to Claimant. The rights of Landlord herein

of this Lease, Tenant’s exclusive remedy shall be an action

stated shall be in addition to any and all other rights which

for damages (Tenant hereby waiving the benefits of any laws

Landlord has or may hereafter have at law or in equity, and

granting it a lien upon the property of Landlord and/or upon

Tenant stipulates and agrees that the rights herein granted

rent due Landlord), but prior to any such action Tenant will

Landlord are commercially reasonable.

give Landlord written notice specifying such default with

particularity, and Landlord shall thereupon have thirty days in

31.

FORCE MAJEURE

which to cure any such default. Unless and until Landlord

fails to so cure any default after such notice Tenant shall not

If either party hereto shall be delayed or prevented

have any remedy or cause of action by reason thereof. All

from the performance of any act required hereunder by

obligations of Landlord hereunder will be construed as

reason of acts of God, strikes, lockouts, labor troubles,

covenants, not conditions, and all such obligations will be

inability to procure materials, restrictive governmental laws

binding upon Landlord only during the period of its

or regulations, or other cause without fault and beyond the

ownership of the Building and not thereafter.

control of the party obligated (financial inability excepted),

then upon written notice, the performance of such act shall

The term “Landlord” shall mean only the owner of

be excused for the period- of the delay and the period for the

the Building, and in the event of the transfer by such owner

performance of any such act shall be extended for a period

of its interest in the Building, such owner shall thereupon by

equivalent to the period of such delay; provided, however,

released and discharged from all covenants and obligations

Tenant or Landlord shall exercise its best efforts to remedy

of the Landlord thereafter accruing, but such covenants and

any such cause of delay or cause preventing performance,

obligations shall be binding during the Lease Term upon

and nothing in this Paragraph shall excuse Tenant from the

each new owner for the duration of such owner’s ownership.

prompt payment of any rent or other charges required of

Tenant except as may be expressly provided elsewhere in

Notwithstanding any other provision hereof,

this Lease.

Landlord shall not have any personal liability hereunder. In

the event of any breach of default by Landlord in any term or

32.

COMPLIANCE WITH LAWS, ETC.

provision of this Lease, Tenant agrees to look solely to the

equity interest then owned by Landlord in the land and

Tenant shall, at its own cost and expense:

improvements which constitute the Building; however, in no

event shall any deficiency judgment or any money judgment

comply with all governmental laws,

of any kind be sought or obtained against Landlord (or any

ordinances, orders and regulations affecting the Premise

partner or shareholder, as applicable, having an ownership

now in force or which may be in force hereafter,

interest in Landlord).

comply with and execute all rules,

If Landlord shall take possession of the

requirements and regulations of the Board of Fire

Premises pursuant to the authority herein granted, then

Underwriters, Landlord’s insurance companies and other

Landlord shall have the right to keep in place and use all of

organizations establishing insurance rates,

the furniture, fixtures, and equipment at the Premises,

including that which is owned by or leased to Tenant at all

install fire extinguishers in accordance

times prior to any foreclosure, thereon by Landlord or

with insurance requirements, and

repossession thereof by any Landlord thereof or third party

having a lien thereon. Landlord shall also have the right to

in the event that energy conservation

remove from the Premises (without the necessity of

measures should be required, comply with same or, at

obtaining a distress warrant, writ of sequestration or other

Landlord’s option, pay Landlord Tenant’s share of the

legal process) all or any portion of such furniture, fixtures,

compliance costs for the Building.

equipment or other property located thereon and place same

in storage at any premises within the County in which the

33.

ATTORNEYS’ FEES

Premises is located and in such event, Tenant shall be liable

Taylor Bedding\2012-12-3 HDI Lease

If any action shall be brought on account of any

that Tenant will not amend, terminate or

breach of, or to enforce or interpret any of the terms,

make prepayment of more than one (1) month’s rent under

covenants or conditions of this Lease, or for the recovery of

this Lease or subordinate this Lease to any lien subordinate

possession of the Premises, the prevailing party in any

to any mortgage;

related litigation shall be entitled to recover from the other

party, as part of the prevailing party’s costs, reasonable

that any notice required hereunder to be

attorney’s fees, the amount of which shall be fixed by the

given to Landlord shall be given also to such mortgagee or

court and shall be made a part of any judgment rendered.

assignee and any right of Tenant hereunder which is

dependent on such notice shall take effect only after notice

34.

HOLDING OVER

so given; and

In the event of holding over by Tenant

such other matters as may reasonably

after expiration or termination of this Lease without the

be requested by Landlord or such mortgagee or assignee.

written consent of Landlord, Tenant shall pay as liquidated

damages 125% of the Minimum Rent due for the last month

37.

DEPOSIT

of the Lease Term plus 125% of the Additional Rent for the

last month of the Lease Term per month for the entire

As additional consideration for this

holdover period. No holding over by tenant after the term of

Lease, the security deposits previously provided by Tenant

this Lease shall operate to extend this Lease. In the event of

to Landlord under the leases described in Section 4 shall be

any unauthorized holding over, Tenant shall indemnify

held by Landlord as a security deposit. On or before March

Landlord against all claims for damages by any other tenant

1, 2013 Tenant shall provide Landlord an additional security

to whom Landlord may have leased all or any part of the

deposit of $5,500.00.

Premises effective upon the termination of this Lease.

In no event shall the Deposit be applied

In the event of any holding over with the

towards payment of any month’s rent under this Lease.

consent of Landlord in writing, this Lease shall become a

lease from month-to-month cancelable upon thirty (30) days

38.

QUIET ENJOYMENT

written notice by Landlord. The rent for such holdover period

shall be the Minimum Rent due for the last month of the

Landlord agrees that, upon Tenant’s paying the

Lease Term plus the Additional Rent due for the last month

rent and performing and observing the agreements,

of the Lease Term, subject to adjustment of the Additional

conditions and other provisions on its part to be performed

Rent per paragraph 7(d).

and observed, Tenant shall and may peaceably and quietly

have, hold, and enjoy the Premises during the Lease Term

without any manner of hindrance or molestation from

35.

SUBORDINATION

Landlord, subject, however, to the terms of this Lease.

Landlord expressly reserves the right at any time

to place liens and encumbrances on and against the

39.

NOTICES

Premises and the land and Building comprising the Building,

superior in lien and effect to this Lease and the estate

All notices, demands or other writing to be given,

created hereby, and Tenant agrees, provided it is given

made or sent by either party to the other shall be deemed to

written assurance by any mortgagee or other entity for

have been fully given, made or sent when made in writing

whose benefit Tenant’s leasehold interest is subordinated,

and received by the other party or when deposited in the

that Tenant’s leasehold rights will not be reduced or

United States mail, postage prepaid and addressed as

otherwise adversely affected so long as Tenant is not in

follows:

default under this Lease, to execute and deliver upon

demand such instrument or instruments subordinating this

TO LANDLORD:

Lease to any such lien or encumbrance as shall be

requested by Landlord.

Southern Mattress Company of Texas, Inc.

Attn: Rodney Frazier

36.

ESTOPPEL CERTIFICATE

1712 Woods Blvd.

Round Rock, TX 78681

At Landlord’s request Tenant will execute, within a

reasonable period of time, either an estoppel certificate

With a copy to Frank Lyon, Attorney at Law

addressed to Landlord’s mortgagee or assignee or a three-

3508 Far West Boulevard, Suite 170

party agreement

among Landlord, Tenant and said

Austin, TX 78731

mortgagee or assignee stating:

And via email to [email protected]

whether or not this Lease is in full force

TO TENANT:

and effect;

HDI Plastics, Inc.

whether or not this Lease has been

Attn: Ken Brimmer

amended and certifying as to copies of such amendments, if

10501 Wayzata Blvd.

any;

Suite 102

Minnetonka, MN 55305

whether or not there are any existing

defaults under this Lease to the knowledge of Tenant and

The address to which any notice, demand or other

specifying the nature of such defaults, if any;

writing may be given, made or sent to either party may be

changed by written notice given by such party as above

provided.

Taylor Bedding\2012-12-3 HDI Lease

be unreasonably withheld.

No such assignment or

40.

SPRINKLER SYSTEM

subletting shall relieve Tenant or any of Tenant’s obligations

hereunder. Consent by Landlord to an assignment or

Under the building lease referenced in Section 4,

subletting by Tenant shall not relieve Tenant from obtaining

Landlord has previously paid up to $3,000.00 for the

similar consent of Landlord to any future assignment or

following repairs to the fire sprinkler system in the main

subletting.

building on the Premises: installation of an anti-tamper

device, sprinkler compressors and NOX box. Any other

44.

REMEDIES CUMULATIVE

repairs, or the cost of such repairs that exceeds $3,000.00,

shall be Tenant’s sole and exclusive responsibility. If the

All remedies herein conferred upon either party

applicable fire and safety code or the Fire Marshall with

shall be cumulative and no one exclusive of any other

jurisdiction over the Building requires such sprinkler system

remedy conferred herein or by law.

to be monitored, Tenant shall pay the monthly monitoring

fees directly to the monitor.

45.

WAIVER

41.

RIGHT TO PURCHASE PREMISES

The waiver by Landlord of any breach of any term,

At any time on or after February 28, 2016,

covenant or condition herein contained shall not be deemed

provided that Tenant is not in default under this lease,

to be a waiver of any subsequent breach of such term

Tenant shall have the right to purchase the Premises for

covenant, condition, or any subsequent breach of any other

$700,000.00, provided that closing and funding occurs on or

term, covenant or condition herein contained. Subsequent

before February 29, 2017. Each party shall be responsible

acceptance of rent hereunder by Landlord shall not be

for their respective usual and customary closing costs on

deemed a waiver of any preceding breach by Tenant other

commercial real estate sales in the Austin, Texas area.

than the failure of Tenant to pay the particular rent accepted,

regardless of Landlord’s knowledge of such preceding

In addition, provided that Tenant is not in default

breach at the time of acceptance of rent.

under this lease, Tenant shall have a right of first refusal to

purchase the Premises at any time prior to February 28,

46.

CONSTRUCTION OF LEASE

2016 by matching such terms and conditions as Landlord

elects to accept of any bona fide third party offer. In such

The word “Tenant” as used herein shall include

event, Landlord shall notify Tenant in writing prior to

the plural as well as the singular. The neuter gender

Landlord’s written acceptance of such bona fide third party

includes the masculine and feminine. In the event there is

offer of the terms and conditions of the offer and Landlord’s

more than one Tenant, the obligations to be performed shall

intent to accept. Tenant shall then have seven (7) days to

be joint and several. Paragraph headings in this Lease are

notify Landlord in writing of its election to match said terms

for convenience only and are not to be construed as part of

and conditions to purchase the Premises. Failure of Tenant

this Lease or in any way defining, limiting or amplifying the

to respond in writing within such seven (7) day period shall

provisions hereof.

be deemed a waiver of Tenant’s right of first refusal.

Landlord shall notify any bona fide third party in writing of

Tenant’s right of first refusal upon receipt of any such written

47.

SURRENDER OF LEASE

offer.

The voluntary or other surrender of this Lease by

In the event that Tenant exercises its option to

Tenant, or mutual cancellation thereof, shall not work a

purchase or right of first refusal, Landlord shall provide to

merger, and shall, at the option of Landlord, operate as an

Tenant at Landlord’s sole cost and expenses a then current

assignment to it of any or all of such subleases or

Phase I environmental report on the Premises. If Tenant

subtenancies.

does not close on the purchase of the Premises due to a

fault of Tenant, Tenant shall reimburse Landlord for its actual

48.

TIME

cost of such report within ten (10) days of written request by

Landlord.

Time is of the essence in the performance of all

obligations of Tenant hereunder for which a time of

42.

BROKER’S FEES

performance is specified.

Landlord and Tenant represent and warrant to one

49.

LIABILITY OF LANDLORD

another that they have dealt with no other real estates agent

or brokers other than Roy Beard and Vara Properties

The liability of Landlord hereunder shall be strictly

concerning the Premises and this lease or the leases

limited to the assets of the entity executing this Lease as

referenced in Section 4. Landlord shall be responsible for

Landlord and no general or limited partner, officer, director,

payment of any broker’s commission based upon this lease,

shareholder, joint venturer or trustee of Landlord shall ever

the purchase of the Premises by Tenant pursuant to Section

be personally or individually liable for the performance of any

41 and the leases in Section 4.

obligation of Landlord under this Lease and, upon the sale or

disposition of the Premises Landlord shall be fully released

43.

SUCCESSORS AND ASSIGNS

from all Landlord’s obligations under this Lease which are

not then accrued.

All of the rights, interests, obligations and

privileges of Landlord shall be assignable in whole or in part

50.

MERGER OF AGREEMENTS

and shall extend to and be binding upon its successors and

assigns. Tenant shall not assign Tenant’s rights, interests or

This instrument sets forth the entire agreement

privileges or sublet the Premises in whole or in part without

between the parties hereto, both written and oral.

the prior written consent of Landlord, which consent shall not

Taylor Bedding\2012-12-3 HDI Lease

51.

GOVERNING LAW

This Lease shall be governed by the laws of the

State of Texas and is performable in Williamson County,

Texas.

This agreement may be executed in multiple

original counterparts each of which shall be an original but

shall still constitute one and the same Agreement.

IN WITNESS WHEREOF, the parties have

executed this Lease by proper persons duly authorized

effective ______________________ ____, 2012.

“LANDLORD”

Southern Mattress Company of Texas, Inc. d/b/a

Taylor Bedding Company

By: _______________________________

Rodney Frazier

President

“TENANT”

HDI Plastics, Inc.

By: __________________________________________

Printed name: Kenneth W. Brimmer

Title: CEO

Taylor Bedding\2012-12-3 HDI Lease