Exhibit 10.10

 

SECOND AMENDMENT TO LEASE AGREEMENT

 

This Second Amendment to Lease Agreement (this “Amendment”) is made and entered
into as of the 18th day of January , 2008 by and between Frost National Bank,
Trustee for a Designated Trust (“Landlord”) and Argyle Security, Inc. as
successor in interest to Argyle Security Acquisition Corporation (“Tenant”).

 

WITNESSETH

 

WHEREAS, Landlord and Tenant entered into that certain Lease Agreement dated
April 20, 2006 (the “Lease”) pursuant to which the Landlord has leased to
Tenant, and Tenant has leased from Landlord the Premises identified as Suite 700
containing 2,547 rentable square feet in the Building known as Concord Plaza,
200 Concord Plaza, San Antonio, Texas 78216 (the “Premises”).

 

WHEREAS, Landlord and Tenant now desire to further amend the Lease pursuant to
the terms and provisions set forth herein.

 

NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars ($10.00), the
premises and mutual agreements contained herein, and the exchange of other good
and valuable consideration between the parties hereto, the receipt and
sufficiency of which is hereby acknowledged, Landlord and Tenant agree that the
Lease is amended as follows:

 

1.               All capitalized terms used in this Amendment, to the extent not
otherwise expressly defined herein, shall have the same meanings ascribed to
such terms in the Lease.

 

2.               Term. The Term of the Lease is hereby extended for sixty (60)
months commencing February 1, 2008 and ending at 6:00 p.m. on January 31, 2013
(“Extended Term”).

 

3.               Expansion Space. Effective February 1, 2008 (“Expansion Space
Commencement Date”), the Premises shall be expanded to include an additional
2,910 square feet of Rentable Area (the ‘Expansion Space’ ) located on the
seventh floor of the Building as shown on Exhibit A 1 attached hereto and
incorporated herein by this reference for all purposes. In the event Landlord is
unable to deliver Expansion Space by the Expansion Space Commencement Date,
Tenant’s Base Rental shall be reduced by the equivalent of $165.71 per day of
such delay and the term of this Lease shall be for the number of full lease
months plus the number of days remaining in the month in which the Term
commences.

 

4.               Premises as of Expansion Space Commencement Date.  Effective as
of the Expansion Space Commencement Date, the Expansion Space shall be included
in the Premises and shall he subject to all of the terms, conditions and
provisions of the Lease (as amended hereby). As of the Expansion Space
Commencement Date, the Rentable Area of the Premises shall be 5,457 square feet.

 

5.               New Base Rent for the Premises (including Expansion Space.
Effective from and after the Expansion Space Commencement Date, the new Base
Rental (exclusive of the Base Rental Adjustment) for the entire Premises
(including the Expansion Space), shall be as follows:

 

Term

 

Rate(1)

 

Annual Amount

 

Monthly Installment

 

02/01/08 - 03/31/08

 

$

21.43

 

$

116,962.56

 

$

9,746.88

 

04/01/08 - 03/31/09

 

$

22.50

 

$

122,782.50

 

$

10,231.88

 

04/01/09 - 03/31/10

 

$

23.00

 

$

125,511.00

 

$

10,459.25

 

04/01/10 - 03/31/11

 

$

23.50

 

$

128,239.50

 

$

10,686.63

 

04/01/11 - 03/31/12

 

$

24.00

 

$

130,968.00

 

$

10,914.00

 

04/01/12-01/31/13

 

$

24.50

 

$

133,696.50

 

$

11,141.38

 

 

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(1) Based on per square foot of Rentable Area per annum.

 

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6.               Tenant Improvements.  Except as otherwise provided below and
subject to the Tenant Allowance (as defined below), Landlord agrees to cause the
construction of alterations, improvements and finish-out to the Premises for
Tenant’s use (the “Tenant Improvements”) in accordance with Final Working
Drawings and Specifications approved by Landlord and Tenant in the following
manner. Landlord hereby acknowledges receipt and approval of Tenant’s
preliminary plans and specifications for the Tenant Improvements which are
annexed hereto as Exhibit “B- 1” (the “Preliminary Plans”). Within fifteen days
from the Effective Date of this Amendment, Landlord will cause to be prepared by
Landlord’s architect (the “Architect”) and delivered to Tenant working drawings
and specifications for the Tenant Improvements (the “Proposed Working Drawings”)
which shall substantially conform to the Preliminary Plans and shall include
reasonably detailed plans and specifications for the Tenant Improvements in form
and content and containing sufficient information and detail to allow for
competitive bidding or negotiated pricing by contractor(s) selected and engaged
by Landlord. Within five (5) days following Tenant’s receipt of such Proposed
Working Drawings from Landlord, Tenant will advise Landlord of any required
revisions to the Proposed Working Drawings, provided however such required
revisions shall not increase the Construction Costs, delay the Substantial
Completion of the Tenant Improvements, or materially deviate from the
Preliminary Plans (the “Requested Changes”). Within fifteen (15) days following
receipt of the Requested Changes, Landlord shall deliver Tenant revised Proposed
Working Drawings incorporating the Requested Changes. The Proposed Working
Drawings as revised by the Requested Changes will constitute the “Final Working
Drawings and Specifications.”

 

Landlord will promptly begin construction of the Tenant Improvements described
in the Final Working Drawings and Specifications and will pursue construction
with reasonable diligence to completion.

 

Tenant Improvement Allowance.  Landlord agrees to provide up to, but not in
excess of seventy eight thousand four hundred one and 00/100 Dollars 78,401 .00)
(calculated at $14.45 per square foot of the Rentable Area of the Premises) for
costs of constructing the Tenant Improvements (the “Tenant Allowance”). Any
excess costs must be paid by Tenant. The cost of constructing Tenant
Improvements will include (a) costs of labor and materials, (b) fees and other
charges payable to contractors, (c) fees to governmental authorities for
permits, inspections, and certificates of occupancy, and (d) other third party
out-of-pocket costs and expenses incurred by Landlord that are directly related
to the preparation of the Final Working Drawings and Specifications or the
construction of the Tenant Improvements. The Tenant Allowance shall not be
utilized toward any of Tenant’s furniture, fixtures or equipment including
cabling. Tenant must pay Landlord the estimated cost of constructing the Tenant
Improvements in excess of the Tenant Allowance in full within ten (10) days of
receipt of such estimate in writing. Any underpayment based on such estimate
must be paid by Tenant to Landlord within fifteen (15) days alter delivery of
Landlord’s invoice to Tenant reflecting the final accounting of the Construction
Costs of the Tenant Improvements.

 

Changes to Tenant Improvements. If Tenant requests any changes in the Final
Working Drawings and Specifications, Tenant must submit revised drawings and
specifications for Landlord’s approval. If Landlord approves the changes,
Landlord will incorporate the changes in the Tenant Improvements following
Landlord’s receipt of a change order executed by Tenant. As a condition to
Landlord’s approval, Tenant must pay Landlord in advance the estimated amount by
which the increased cost of constructing the Tenant Improvements attributable to
the change which exceeds the Tenant Allowance.

 

Substantial Completion Date. The “Substantial Completion Date” will be the date
on which the Tenant Improvements are completed in all material respects in
substantial compliance with the Final Working Drawings and Specifications
(including any changes approved by a change order executed by Landlord and
Tenant). The Substantial Completion Date will be reasonably determined by the
Architect, whose good faith determination will bind Landlord and Tenant. After
the Substantial Completion Date, Landlord will promptly complete any work
required to

 

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complete the Leasehold Improvements, and Landlord may enter the Premises for
that purpose at any time without prior notice to Tenant.

 

7.               Expense Stop.  Effective upon the Expansion Space Commencement
Date, the Base Year for Operating Expenses shall be the calendar year 2008.

 

8.               Renewal Option. Provided that Tenant is not in default of its
Lease beyond any notice and cure period, and gives written notice to Landlord
not more than nine (9) months and not less than six (6) months prior to it’s
Lease expiration of its intent to renew, Tenant shall have one option to renew
this Lease for one additional period of five (5) years under the same terms and
conditions except that Base Rental for such renewal term shall be reestablished
at the then current market rate for buildings of similar class and location as
mutually agreed upon by Landlord and Tenant. At Tenant’s election, the Expansion
Space may be excluded from this renewal option. If on or before thirty (30) days
after the delivery of the renewal notice Landlord and Tenant cannot agree in
writing to the “current market rate” to be applicable during the renewal term,
either Landlord or Tenant may terminate the Renewal Option (notwithstanding its
earlier exercise) by delivering written notice of such termination to the other
party not later than the original termination date of this Lease. In the event
of termination of the Renewal Option, the Renewal Option shall therefore be null
and void and of no further force and effect, and the Lease shall expire at the
expiration of its Term. Any termination of the Lease shall also terminate the
Renewal Option. This Renewal Option is personal to Tenant and shall not apply to
any of Tenant’s Assignee(s) or Sublessee(s).

 

9.               Conflict. Except as amended herein, the terms and conditions of
the Lease shall continue in full force and effect and are hereby ratified in
their entirety. To the extent, if any, that the terms amid conditions of this
Amendment conflict with the terms and conditions of the Lease, the Lease as
amended accordingly, the terms and conditions of this Amendment shall control.

 

10.         Counterparts.  This Amendment may be executed in one (1) or more
counterparts, each of which when taken together shall constitute but one and the
same Amendment. Counterparts bearing facsimile signatures shall be deemed to
constitute originals.

 

Executed in multiple copies as of the date first written above.

 

LANDLORD:

TENANT:

 

 

 

 

 

 

FROST NATIONAL BANK, TRUSTEE

ARGYLE SECURITY INC.

 

 

 

FOR A DESIGNATED TRUST

By:

/Bob Marbut/

By:

REOC Partners, Ltd., a Texas limited

Name:  Robert Marbut

 

 

partnership As Agent for Landlord

Title:  CEO and Chairman

 

 

 

 

 

 

 

 

 

By:

REOC General Partner, LLC., a Texas

 

 

 

limited liability company (f/k/a GWHLT, LLC)

 

 

Its:

General Partner

 

 

 

 

 

 

By:

/ Todd A. Gold/

 

 

Name:  Todd A. Gold

 

 

Title:  Manager

 

 

 

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EXHIBIT “A-1”

PRELIMINARY PLANS EXPANSION SPACE

 

Exhibit is a floor plan and could not be included in this document as is not
convertible to HTML format for submission to the SEC. Copy of plans may be
requested from investor relations if so required.

 

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EXHIBIT “B-I”

PRELIMINARY PLANS

 

ARGYLE SECURITY

Concord Plaza Level 7

11/5/07

11/6/07 Revision

 

Preliminary Pricing Notes

 

GENERAL CONDITIONS

 

1.               These notes are for preliminary pricing only and not for
construction. Contractor to visit site and verify existing conditions.

 

2.               Modify existing HVAC system as required for new wall
configurations and to meet all applicable codes

 

3.               Provide all safety systems and items required, such as exit
signs, emergency lights, fire extinguishers, smoke detectors, sprinkler heads
and fire alarms, to meet all applicable codes. All systems to be tied into
building system as required.

 

4.               All Interior partitions to match building standard unless noted
otherwise.

 

5.               All new interior doors, frames, and hardware to match existing
unless noted otherwise. All hardware is to be lever type.

 

6.               Ceiling tile and grid is existing to remain. Replace any
damaged or discolored tile.

 

7.     Reuse all building standard materials. Salvage where possible. Coordinate
the use of any stockpiled building standard materials with building
representative.

 

ALLOW FOR:

 

New dedicated duplex wall outlets.

New duplex wall outlets

Voice/data wall outlets

New dual wall switches

Existing 2x4 light fixtures to be relocated

New fluorescent downlights

 

KEYED NOTES:

 

1.               Replace existing wood door with new paired ~4” tempered glass
doors with polished stainless steel trim & push/pull.

 

2.               Remove existing plastic laminate top and replace with new,
relocate existing base & wail cabs from demo.

 

3.               Provide for exhaust fan with thermostat with 24 x 24 aluminum
floor louver.

 

4.               Add in-wail 2 ½’ sound batt insulation (Remove GWB as
required). Also add 2 Vs” sound batt above ceiling through-out room.

 

5.               Provide & Install new 24” wide dishwasher. Remove & modify base
cabinets, provide for water & drain lines

 

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EXHIBIT “B-I”

PRELIMINARY PLANS

 

GENERAL FINISH NOTES:

 

1.               Provide and Install new building standard carpet & rubber base
through-out (existing suite & expansion) except at Work Room, Coffee1 File &
Storage Rooms which are to receive VCT flooring.

 

A. Carpet allowance to be $20.00 per sq. yd. installed.

B. VCT allowance to be $2.50 per sq. ft. Installed.

 

2.               All partitions to be prepared and painted with 2 coats of
Interior latex enamel, egg shell finish.(existing suite & expansion)

 

Exhibit includes a floor plan and could not be included in this document as is
not convertible to HTML format for submission to the SEC. Copy of plans may be
requested from investor relations if so required.

 

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