**Exhibit10.10**

 

SECOND AMENDMENTTO LEASE AGREEMENT

 

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

 

WITNESSETH

 

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

 

WHEREAS, Landlord and Tenantnow desire to further amend the Lease pursuant to the terms and provisions setforth herein.

 

NOW, THEREFORE, for andin consideration of Ten and No/100 Dollars ($10.00), the premises and mutualagreements contained herein, and the exchange of other good and valuableconsideration between the parties hereto, the receipt and sufficiency of whichis hereby acknowledged, Landlord and Tenant agree that the Lease is amended asfollows:

 

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

 

2.               Term. The Term of the Lease is hereby extended forsixty (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 (“ExpansionSpace Commencement Date”), the Premises shall be expanded to include anadditional 2,910 square feet of Rentable Area (the ‘Expansion Space’ ) locatedon the seventh floor of the Building as shown on Exhibit A 1 attached heretoand incorporated herein by this reference for all purposes. In the eventLandlord is unable to deliver Expansion Space by the Expansion SpaceCommencement 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 thenumber of full lease months plus the number of days remaining in the month inwhich the Term commences.

 

4.               Premises as of Expansion Space Commencement Date.  Effective as of the Expansion Space CommencementDate, the Expansion Space shall be included in the Premises and shall hesubject to all of the terms, conditions and provisions of the Lease (as amendedhereby). As of the Expansion Space Commencement Date, the Rentable Area of thePremises 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 BaseRental (exclusive of the Base Rental Adjustment) for the entire Premises (includingthe 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 squarefoot of Rentable Area per annum.

 

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6.               Tenant Improvements.  Except as otherwiseprovided below and subject to the Tenant Allowance (as defined below), Landlordagrees to cause the construction of alterations, improvements and finish-out tothe Premises for Tenant’s use (the “Tenant Improvements”) in accordance withFinal Working Drawings and Specifications approved by Landlord and Tenant inthe following manner. Landlord hereby acknowledges receipt and approval ofTenant’s preliminary plans and specifications for the Tenant Improvements whichare annexed hereto as Exhibit “B- 1” (the “Preliminary Plans”). Withinfifteen days from the Effective Date of this Amendment, Landlord will cause tobe prepared by Landlord’s architect (the “Architect”) and delivered to Tenant workingdrawings and specifications for the Tenant Improvements (the “Proposed Working Drawings”)which shall substantially conform to the Preliminary Plans and shall include reasonablydetailed plans and specifications for the Tenant Improvements in form andcontent and containing sufficient information and detail to allow forcompetitive bidding or negotiated pricing by contractor(s) selected andengaged by Landlord. Within five (5) days following Tenant’s receipt ofsuch Proposed Working Drawings from Landlord, Tenant will advise Landlord ofany required revisions to the Proposed Working Drawings, provided however such requiredrevisions shall not increase the Construction Costs, delay the SubstantialCompletion of the Tenant Improvements, or materially deviate from thePreliminary Plans (the “Requested Changes”). Within fifteen (15) days followingreceipt of the Requested Changes, Landlord shall deliver Tenant revisedProposed Working Drawings incorporating the Requested Changes. The ProposedWorking Drawings as revised by the Requested Changes will constitute the “FinalWorking Drawings and Specifications.”

 

Landlord will promptlybegin construction of the Tenant Improvements described in the Final WorkingDrawings and Specifications and will pursue construction with reasonablediligence to completion.

 

Tenant ImprovementAllowance.  Landlord agrees to provide up to, but not in excess ofseventy eight thousand four hundred one and 00/100 Dollars 78,401 .00) (calculatedat $14.45 per square foot of the Rentable Area of the Premises) for costs ofconstructing the Tenant Improvements (the “Tenant Allowance”). Any excess costsmust be paid by Tenant. The cost of constructing Tenant Improvements willinclude (a) costs of labor and materials, (b) fees and other chargespayable to contractors, (c) fees to governmental authorities for permits,inspections, and certificates of occupancy, and (d) other third partyout-of-pocket costs and expenses incurred by Landlord that are directly relatedto the preparation of the Final Working Drawings and Specifications or the constructionof the Tenant Improvements. The Tenant Allowance shall not be utilized towardany of Tenant’s furniture, fixtures or equipment including cabling. Tenant mustpay Landlord the estimated cost of constructing the Tenant Improvements inexcess of the Tenant Allowance in full within ten (10) days of receipt ofsuch estimate in writing. Any underpayment based on such estimate must be paidby Tenant to Landlord within fifteen (15) days alter delivery of Landlord’s invoiceto Tenant reflecting the final accounting of the Construction Costs of theTenant Improvements.

 

Changes to TenantImprovements. If Tenant requests any changes in the Final Working Drawings andSpecifications, Tenant must submit revised drawings and specifications forLandlord’s approval. If Landlord approves the changes, Landlord willincorporate the changes in the Tenant Improvements following Landlord’s receiptof 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 increasedcost of constructing the Tenant Improvements attributable to the change whichexceeds the Tenant Allowance.

 

Substantial CompletionDate. The “Substantial Completion Date” will be the date on which the TenantImprovements are completed in all material respects in substantial compliancewith the Final Working Drawings and Specifications (including any changesapproved by a change order executed by Landlord and Tenant). The SubstantialCompletion Date will be reasonably determined by the Architect, whose goodfaith determination will bind Landlord and Tenant. After the SubstantialCompletion Date, Landlord will promptly complete any work required to

 

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complete the LeaseholdImprovements, and Landlord may enter the Premises for that purpose at any timewithout prior notice to Tenant.

 

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

 

8.               Renewal Option. Provided that Tenant is not in defaultof its Lease beyond any notice and cure period, and gives written notice toLandlord not more than nine (9) months and not less than six (6) monthsprior to it’s Lease expiration of its intent to renew, Tenant shall have oneoption to renew this Lease for one additional period of five (5) yearsunder the same terms and conditions except that Base Rental for such renewalterm shall be reestablished at the then current market rate for buildings ofsimilar class and location as mutually agreed upon by Landlord and Tenant. AtTenant’s election, the Expansion Space may be excluded from this renewaloption. If on or before thirty (30) days after the delivery of the renewalnotice Landlord and Tenant cannot agree in writing to the “current market rate”to be applicable during the renewal term, either Landlord or Tenant mayterminate the Renewal Option (notwithstanding its earlier exercise) bydelivering written notice of such termination to the other party not later thanthe original termination date of this Lease. In the event of termination of theRenewal Option, the Renewal Option shall therefore be null and void and of nofurther force and effect, and the Lease shall expire at the expiration of itsTerm. 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’sAssignee(s) or Sublessee(s).

 

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

 

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

 

Executed in multiplecopies 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 PLANSEXPANSION SPACE

 

Exhibit is a floorplan and could not be included in this document as is not convertible to HTMLformat for submission to the SEC. Copy of plans may be requested from investorrelations 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 notfor construction. Contractor to visit site and verify existing conditions.

 

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

 

3.               Provide all safety systems and items required, such asexit signs, emergency lights, fire extinguishers, smoke detectors, sprinklerheads and fire alarms, to meet all applicable codes. All systems to be tied intobuilding system as required.

 

4.               All Interior partitions to match building standardunless noted otherwise.

 

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

 

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

 

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

 

ALLOW FOR:

 

New dedicated duplex walloutlets.

New duplex wall outlets

Voice/data wall outlets

New dual wall switches

Existing 2x4 lightfixtures 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 withnew, relocate existing base & wail cabs from demo.

 

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

 

4.               Add in-wail 2 1⁄2’ sound batt insulation (Remove GWB asrequired). 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 & drainlines

 

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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 WorkRoom, 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 coatsof Interior latex enamel, egg shell finish.(existing suite &expansion)

 

Exhibit includes afloor plan and could not be included in this document as is not convertible toHTML format for submission to the SEC. Copy of plans may be requested frominvestor relations if so required.

 

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