Exhibit 10.24

 

SECOND AMENDMENT TO LEASE

 

THIS SECOND AMENDMENT TO LEASE (hereinafter referred to as the “Amendment”) is
made this 21st day of September, 2012, by and between CWTX CORPORATE PLACE 87,
L.P., a Delaware limited partnership (“Landlord”), and INTRUSION, INC., a
Delaware corporation (“Tenant”).

 

WITNESSETH:

 

WHEREAS, Landlord and Tenant are party to that certain Lease, with the Lease
Reference Date of January 12, 2004 (the “Original Lease”) as amended by that
certain First Amendment to Lease, dated as of September 1, 2009 (the “First
Amendment”, and together with the Original Lease, the “Lease”, as may be further
amended or modified from time to time), pursuant to which Landlord leases to
Tenant certain premises consisting of approximately 27,777 rentable square feet
with a common address of 1101 East Arapaho Road, Suite 200, Richardson, Texas,
as more particularly described in the Lease (the “Premises”). Capitalized terms
used herein but not otherwise defined shall have the meanings ascribed thereto
in the Lease.

 

WHEREAS, the Term is scheduled to expire on December 31, 2012 and Landlord and
Tenant desire to extend the existing Term for an additional fifty-two (52) full
calendar months from such expiration date and to amend the terms and conditions
of the Lease as hereinafter provided.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of ten dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, and the mutual covenants set forth herein, the
parties hereto agree as follows:

 

1.                                      Extension of Term. The Term is hereby
extended for a period of fifty-two (52) full calendar months, commencing as of
January 1, 2013 (the “Extended Term Commencement Date”) and expiring on
April 30, 2017 (the “Extended Term”). From and after the date hereof, the “Term”
shall be deemed to include the Extended Term.

 

2.                                      Monthly Installment of Rent.

 

(a)                                 Monthly Installment of Rent Schedule.
Effective as of the Extended Term Commencement Date, the Annual Rent and Monthly
Installment of Rent for the Premises payable by Tenant to Landlord during the
Extended Term is as follows:

 

ANNUAL RENT and MONTHLY INSTALLMENT OF RENT:

 

Period

 

Rentable Square

Footage

 

 

Annual Rent Per

Square Foot

 

 

Annual Rent

 

 

Monthly

Installment of Rent

 

 

 

 

 

 

 

 

 

 

From

 

 

Through

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1/01/2013

 

 

4/30/2014

 

27,777

 

 

$13.25

 

 

$368,045.25

 

 

$30,670.44

 

5/01/2014

 

 

4/30/2015

 

27,777

 

 

$13.50

 

 

$374,989.50

 

 

$31,249.13

 

5/01/2015

 

 

4/30/2017

 

27,777

 

 

$14.00

 

 

$388,878.00

 

 

$32,406.50

 

 

Except as otherwise set forth in this Amendment, all other terms and conditions
with respect to the payment of Monthly Installment of Rent, Taxes, Expenses, or
any other sums due and payable by Tenant under the Lease shall remain as set
forth thereunder.

 

(b)                                 Monthly Installment of Rent Abatement
Period. Notwithstanding the foregoing subsection (a) and the Monthly Installment
of Rent due and payable as set forth in the Original Lease and First Amendment,
Tenant’s obligation to pay the Monthly Installment of Rent shall be
conditionally abated as follows (the “Monthly Installment of Rent Abatement
Period”):

 

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From:

 

 

To:

 

Monthly Installment

 

 

Monthly Installment of

 

 

Monthly Installment

 

 

 

 

 

 

of Rent

 

 

Rent Abated

 

 

of Rent

 

 

 

 

 

 

 

 

 

 

 

 

Due and Payable

 

1/01/2013

 

 

4/30/2013

 

$30,670.44

 

 

$30,670.44

 

 

$0.00

 

 

During any Monthly Installment of Rent Abatement Period, Tenant’s obligation to
pay Expenses, Taxes, and any and all other charges pursuant to the terms of the
Lease shall continue in full force and effect without abatement of any kind. The
abatement of Monthly Installment of Rent described above is expressly
conditioned on Tenant’s performance of its obligations under the Lease
throughout the Term. If there is an Event of Default under the Lease and such
Event of Default leads to the enforcement of any remedies against Tenant
(including the termination of the Lease prior to the expiration of the Term),
then Tenant shall immediately pay to Landlord on demand, in addition to all
other amounts and damages to which Landlord is entitled, the amount of Monthly
Installment of Rent which would otherwise have been due and payable during any
portion of the Monthly Installment of Rent Abatement Period.

 

(c)                                  Base Year. As of the Extended Term
Commencement Date, the Base Year (Expenses) and Base Year (Taxes) shall both
deemed to be calendar year 2013.

 

3.                                      AS-IS Condition; Tenant’s Work.

 

(a)                                 AS-IS Condition. Tenant hereby acknowledges
and agrees that it has accepted the Premises as of the date hereof, and will
accept the Premises as of the Extended Lease Term Commencement Date, in AS-IS,
WHERE-IS condition without any representation or warranty of any kind made by
Landlord in favor of Tenant.

 

(b)                                 Tenant’s Work. Notwithstanding the foregoing
subsection (a), Tenant may, on or after the Extension Term Commencement Date
(except as set forth on Exhibit A) complete the work set forth on Exhibit A
attached hereto in accordance with the terms and conditions set forth on such
exhibit.

 

4.                                      Landlord’s Address. Landlord’s Address
set forth in the Reference Pages of the Lease is hereby deleted in its entirety
and replaced with the following:

 

LANDLORD’S ADDRESS:

c/o IndCor Properties

2 N. Riverside Plaza, Suite 2350

Chicago, IL 60606

Attention: Lease Administration

With a copy to:

 

c/o IndCor Properties

7887 E. Belleview Avenue, Suite 325

Denver, CO 80111

Attention: Charles E. Sullivan

 

5.                                      Limitation of Landlord’s Liability.
Section 40 of the Original Lease shall be amended and restated in its entirety
as follows:

 

“40.                         Limitation of Landlord’s Liability. All obligations
of Landlord under this Lease will be binding upon Landlord only during the
period of its ownership of the Premises and not thereafter. The term “Landlord”
in this Lease shall mean only the owner, for the time being of the Premises, and
in the event of the transfer by such owner of its interest in the Premises, such
owner shall thereupon be released and discharged from all obligations of
Landlord thereafter accruing, but such obligations shall be binding during the
Term upon each new owner for the duration of such owner’s ownership. Any
liability of Landlord under this Lease shall be limited solely to its interest
in the Building, and in no event shall any personal liability be asserted
against Landlord in connection with this Lease nor shall any recourse be had to
any other property or assets of Landlord. Any obligation or liability whatsoever
of Landlord which may arise at any time under this Lease or any obligation or
liability which may be incurred by it pursuant to any other instrument,
transaction, or undertaking contemplated hereby shall not be personally binding
upon, nor shall resort for the enforcement thereof be had to the property of,
its trustees, directors,

 

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shareholders, officers, employees or agents, regardless of whether such
obligation or liability is in the nature of contract, tort, or otherwise.”

 

6.             Renewal Option. For the avoidance of doubt, Exhibit E of the
Original Lease and Section 6 of the First Amendment are hereby deemed null and
void and of no further force and effect. Tenant shall have a one-time renewal
option on the terms and conditions as set forth on Exhibit B attached hereto.

 

7.             Roof. Notwithstanding anything to the contrary in the Lease,
Landlord may elect, in its sole discretion and from time to time, to install (or
permit the installation of) telecommunication equipment, solar equipment and
panels, and any other equipment for any other uses on the roof of the Premises.

 

8.             Tenant’s Broker. Tenant represents and warrants that it has dealt
with no broker, agent or other person in connection with this transaction and
that no broker, agent or other person brought about this transaction other than
NAI Robert Lynn. Tenant agrees to indemnify and hold Landlord harmless from and
against any claims by any other broker, agent or other person claiming a
commission or other form of compensation by virtue of having dealt with Tenant
with regard to this leasing transaction.

 

9.             OFAC. Tenant hereby represents and warrants that, to the best of
its knowledge, neither Tenant, nor any persons or entities holding any legal or
beneficial interest whatsoever in Tenant, are (i) the target of any sanctions
program that is established by Executive Order of the President or published by
the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”);
(ii) designated by the President or OFAC pursuant to the Trading with the Enemy
Act, 50 U.S.C. App. § 5, the International Emergency Economic Powers Act, 50
U.S.C. §§ 1701-06, the Patriot Act, Public Law 107-56, Executive Order 13224
(September 23, 2001) or any Executive Order of the President issued pursuant to
such statutes; or (iii) named on the following list that is published by OFAC:
“List of Specially Designated Nationals and Blocked Persons.” If the foregoing
representation is untrue at any time during the Term, an Event of Default will
be deemed to have occurred, without the necessity of notice to the defaulting
party.

 

10.          Authority. Tenant represents and warrants to Landlord that Tenant
has been and is qualified to do business in the state in which the Premises is
located, that the entity has the full right and authority to enter into this
Amendment, and that all persons signing on behalf of the entity were authorized
to do so by appropriate actions.

 

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

 

12.          Counterparts and Delivery. The Amendment may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of such counterparts shall constitute one Amendment. Execution copies of the
Amendment may be delivered by facsimile or email, and the parties hereto agree
to accept and be bound by facsimile signatures or scanned signatures transmitted
via email hereto, which signatures shall be considered as original signatures
with the transmitted Amendment having the binding effect as an original
signature on an original document. Notwithstanding the foregoing, Tenant shall,
upon Landlord’s request, deliver original copies of the Amendment to Landlord at
the address set forth in such request. Neither party may raise the use of a
facsimile machine or scanned document or the fact that any signature was
transmitted through the use of a facsimile machine or email as a defense to the
enforcement of the Amendment.

 

13.          Conflict; Ratification. Insofar as the specific terms and
provisions of this Amendment purport to amend or modify or are in conflict with
the specific terms, provisions and exhibits of the Lease, the terms and
provisions of this Amendment shall govern and control. Landlord and Tenant
hereby agree that (a) this Amendment is incorporated into and made a part of the
Lease, (b) any and all references to the Lease hereinafter shall include this
Amendment, and (c) the Lease, and all terms, conditions and provisions of the
Lease, are in full force and effect as of the date hereof, except as expressly
modified and amended hereinabove.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
authorized, executed and delivered as of the day and year first set forth above.

 

 

TENANT:

 

LANDLORD:

 

 

 

INTRUSION, INC., a Delaware corporation

 

CWTX CORPORATE PLACE 87, L.P., a Delaware
limited partnership

 

 

 

By:

/s/ Michael L. Paxton

 

By:

CWTX GP, L.L.C., a Delaware limited liability

Name:

Michael L. Paxton

 

 

company, its general partner

Title:

VP & CFO

 

 

 

 

 

 

 

 

 

By:

 

/s/ Charles E. Sullivan

 

 

Name:

 

Charles E. Sullivan

 

 

Title:

 

Vice President

 

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EXHIBIT A

 

TENANT’S WORK

 

(a)              Tenant’s Work. Landlord shall contribute, on the terms and
conditions of this Exhibit A, up to a maximum amount of $111,108.00 (the
“Allowance”) towards Tenant’s alterations and improvements to the Premises as
agreed to between Landlord and Tenant and provided that any such alterations or
improvements will become permanently affixed to the Property, directly benefit
the Building, and are agreed to by Landlord, such consent not to be unreasonably
withheld (collectively, the “Tenant’s Work”). Landlord’s agreement to provide
the Allowance is expressly conditioned upon Tenant’s submission of detailed
plans and specifications for the Tenant’s Work to Landlord with Tenant to
finalize such plans and specifications in response to any of Landlord’s comments
thereto within five (5) business days of Landlord’s response to such submission.

 

(b)              Landlord’s Approval; Tenant’s Obligations. The Tenant’s Work
shall be subject to the terms of Section 6 of the Lease. In addition to
obtaining Landlord’s consent as and when required pursuant to Section 6 of the
Lease, Tenant shall obtain Landlord’s prior written consent for any of the
Tenant’s Work for which Tenant will seek reimbursement from the Allowance. In
all cases, Tenant shall deliver plans and specifications for the Tenant’s Work,
and any other documentation reasonably requested by Landlord, to Landlord for
approval prior to commencing any of the Tenant’s Work. All of the Tenant’s Work
shall be constructed and undertaken in a good and workmanlike manner and in
compliance with all applicable laws, and Tenant shall perform, at its expense,
any alteration or modification required by any applicable laws as a result of
the Tenant’s Work. Landlord may monitor the construction of the Tenant’s Work,
subject to the obligation to provide prior notice to Tenant of any entry onto
the Premises (except in the case of emergency, in which case no prior notice is
required). In the event the scope of work requested by Tenant is such that
Landlord elects to engage a third-party architect, engineer, or other similar
consultant or professional to review such proposed work, Tenant shall reimburse
Landlord for its actual, reasonable out-of-pocket costs in reviewing plans and
specifications and in monitoring the construction for compliance with such
approved plans and specifications. Landlord’s right to approve the Tenant’s Work
and to monitor construction shall be solely for its own benefit, and Landlord
shall have no duty to see that the Tenant’s Work complies with any applicable
laws. In addition, Landlord may collect a construction management fee in an
amount which shall be calculated based upon the scope of the Tenant’s Work as
described herein and any additional work requested by Tenant and agreed to by
Landlord, taking into account costs generally payable for similar services
within the market area in which the Building is located, and such fee shall be
paid, in part or in whole, from the Allowance with any amount not covered by the
Allowance to be paid by Tenant directly to Landlord (or, at Landlord’s election,
to Landlord’s property manager). Landlord shall provide Tenant with a good faith
estimated cost of the expected construction management fee; provided, however,
Tenant hereby agrees and acknowledges that the estimated cost of such fee is an
estimate only and Landlord makes no guaranty or warranty that such estimate will
be accurate.

 

(c)              Allowance. The Allowance may be used only for the hard costs
and Eligible Soft Costs (as hereinafter defined) of construction of the Tenant’s
Work pursuant to the approved plans and specifications. “Eligible Soft Costs”
shall be deemed to be costs and expenses incurred by Tenant which are directly
and primarily related to the Tenant’s Work and which relate solely to the work
of any architect, space planner, engineer, or similar construction professional
or which are direct payments made to applicable authorities for permitting and
license fees; provided, however, that in no event shall the Eligible Soft Costs
exceed fifteen percent (15%) of the total Allowance or be used for services
provided in connection with the negotiation of the Lease. For the avoidance of
doubt, Eligible Soft Costs shall expressly exclude any financing, attorney, or
other costs and expenses not expressly permitted hereunder. In no event will the
Allowance be used to pay for moving or storage expenses or furniture, racking,
equipment, cabling, telephone systems or any other item of personal property
which is not intended to be permanently affixed to the Premises. Payment of the
Allowance shall be made by Landlord to Tenant within thirty (30) days following
the last to occur of: (i) completion of the Tenant’s Work, (ii) Landlord’s
receipt of Tenant’s invoice substantiating the costs related thereto,
(iii) Landlord’s receipt of final lien waivers from all contractors and
subcontractors who performed the Tenant’s Work, and (iv) Landlord’s receipt of a
copy of the final closed-out permit approved by the applicable governing
authority for any work which requires the same. Landlord shall be under no
obligation to pay for any of the Tenant’s Work in excess of the Allowance.
Further, the Allowance shall only be available for Tenant’s use for work
performed and submitted for reimbursement in accordance with the terms of this
exhibit from the Extension Term Commencement Date through December 31, 2016, at
which time

 

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Tenant hereby waives any and all rights to any unused portion of the Allowance;
provided, however, that Landlord agrees to permit Tenant, upon Tenant’s written
request, to commence any portion of the Tenant’s Work related solely to the HVAC
system servicing the existing server area located within the Premises prior to
the Extension Term Commencement Date.

 

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EXHIBIT B

 

RENEWAL OPTION

 

Notwithstanding anything to the contrary in the Lease, Tenant shall have one
(1) option to renew the Lease Term (the “Renewal Option”) on the following terms
and conditions:

 

(a)                                           Provided that as of the date of
the receipt of the Renewal Notice (as hereinafter defined) by Landlord and the
Renewal Commencement Date (as hereinafter defined), (i) Tenant is the tenant
named on the Lease as of the Extended Term Commencement Date, (ii) Tenant
actually occupies all of the Premises, and (iii) no default exists, or would
exist but for the passage of time or the giving of notice, or both, then Tenant
shall have the right to extend the Term for an additional term of sixty (60)
months (the “Renewal Term”) commencing on the day following the expiration of
the Extended Term (the “Renewal Commencement Date”). Tenant shall give Landlord
written notice (the “Renewal Notice”) of its election to renew the Term in
accordance with the terms hereof at least six (6) months, but not more than nine
(9) months, prior to the scheduled expiration date of the Extended Term.

 

(b)                                          The Annual Rent payable by Tenant
to Landlord during the Renewal Term shall be the greater of (i) the Annual Rent
applicable to the last year of the Extended Term, and (ii) the then-prevailing
market rate for comparable space in comparable buildings in the vicinity of the
Property taking into account the size of the Lease, the length of the renewal
term, market escalations, and the credit of Tenant. The Annual Rent shall not be
reduced by reason of any costs or expenses saved by Landlord by reason of
Landlord’s not having to find a new tenant for such premises (including, without
limitation, brokerage commissions, costs of improvements, rent concessions or
lost rental income during any vacancy period).

 

(c)                                           Within thirty (30) days of receipt
of the Renewal Notice, Landlord shall notify Tenant of its determination of the
Annual Rent (which shall be made in Landlord’s sole discretion) for the Renewal
Term, and Tenant shall advise Landlord in writing of any objection within ten
(10) days of receipt of Landlord’s notice. Failure to respond within the ten
(10) day period shall constitute Tenant’s rejection of such Annual Rent with
Tenant’s exercise of the Renewal Option deemed withdrawn and the Lease shall
expire or terminate in accordance with its terms. If Tenant objects in writing,
Landlord and Tenant shall commence negotiations to attempt to agree upon the
Annual Rent for a period of up to fifteen (15) days after Landlord’s receipt of
Tenant’s objection notice. If the parties cannot agree, each acting in good
faith but without any obligation to agree, on the Annual Rent on or before the
end of such fifteen (15) day period, then Tenant’s exercise of the Renewal
Option shall be deemed withdrawn and the Lease shall expire or terminate in
accordance with its terms.

 

(d)                                          The determination of the Annual
Rent does not reduce the Tenant’s obligation to pay or reimburse Landlord for
Expenses, Taxes, and any other reimbursable or chargeable items as set forth in
the Lease, and Tenant shall reimburse and pay Landlord as set forth in the Lease
with respect to such items with respect to the Premises during the Renewal Term.

 

(e)                                           Except for the Annual Rent for the
Renewal Term as determined above, Tenant’s occupancy of the Premises during the
Renewal Term shall be on the same terms and conditions as are in effect
immediately prior to the expiration of the Extended Term; provided, however,
Tenant shall have no further right to any allowances, credits or abatements or
any options to expand, contract, renew, terminate or extend the Lease.

 

(f)                                             If Tenant does not give the
Renewal Notice within the period set forth above, the Renewal Option shall
automatically terminate. Time is of the essence as to the giving of the Renewal
Notice.

 

(g)                                          Landlord shall have no obligation
to refurbish or otherwise improve the Premises for the Renewal Term. The
Premises shall be tendered on the Renewal Commencement Date in “as-is”
condition.

 

(h)                                          If the Lease is extended for the
Renewal Term, then, promptly after the determination of Annual Rent in
accordance with the terms of this exhibit, Landlord shall prepare and Tenant
shall execute an amendment to the Lease confirming the extension of the Term and
the other provisions applicable thereto.

 

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(i)                                              If Tenant exercises its right
to renew the term of the Lease for the Renewal Term pursuant to this exhibit and
the parties execute the amendment, the term “Term” as used in the Lease shall be
construed to include, when practicable, the Renewal Term except as provided in
subparagraph (e) above.

 

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