Exhibit
10.8




THIS LEASE, made
this 4thday
of November, 2008, by
and between St. John Properties, Inc., as agent for owner, (herein called
“Landlord”), and Universal Security Instruments, Inc., a Maryland corporation
(herein called “Tenant”).




WITNESSETH,that in
consideration of the rental hereinafter agreed upon and the performance of all
the conditions and covenants hereinafter set forth on the part of Tenant to be
performed, Landlord does hereby lease unto said Tenant, and the latter does
lease from the former an agreed upon 12,000 square feet at the following
address: 11407 Cronhill Drive, Suites A-D, Owings Mills, Maryland 21117, (herein
called the “Premises”) for the term of ten (10) years, beginning on the first
(1st) day of
March, 2009 (the “Commencement Date”), and ending on the twenty-eight (28th) day of
February, 2019 (the “Expiration Date”, and the period between the Commencement
Date and the Expiration Date called the “Term”) for the annual rental of
$99,000.00, (herein called “Annual Rent”), subject to Annual Rent Increases (as
defined in Section 2 herein), payable in advance on the first day of each and
every month during the Term, (and renewal term(s), if any) in equal monthly
installments of $8,250.00.




Said
installments of Annual Rent shall be paid to St. John Properties, Inc., 2560
Lord Baltimore Drive, Baltimore, Maryland  21244or at such other place
or to such appointee of Landlord as Landlord may from time to time designate in
writing.




TENANT
COVENANTS AND AGREES WITH LANDLORD AS FOLLOWS:


1.                 Tenant
shall pay said rent and each installment of Annual Rent thereof and Additional
Rent (as defined in section 4 herein) as and when due without setoff or
deduction.




RENTAL
ESCALATION


2.                 Beginning
with the first anniversary of the Commencement Date and each annual anniversary
thereafter throughout the remainder of the Lease and renewal term(s), if any,
the Annual Rent shall be increased by an amount equal to three percent (3%) of
the previous year’s Annual Rent (the “Annual Rent Increases”), which sum shall
be payable in equal monthly installments in advance as hereinafter set
forth.




USE


3.                 Tenant
shall use the Premises solely for the following purposes: office and associated
warehouse uses and for no other purposes whatsoever.  Tenant will not
use or occupy or permit the Premises to be used or occupied for any purpose
or in any manner prohibited by federal, state or local laws and
ordinances.  Tenant will conduct its business in such a manner as
not to create a nuisance.  Tenant will not do anything that is currently
prohibited by Landlord's property insurance policy or that will materially
increase the existing rate of such insurance (unless Tenant is willing to
separately pay for such material increase) or that will cause a cancellation of
Landlord's insurance.




ADDITIONAL
RENT


4.                 Tenant
shall use the Premises solely for the following purposes: office and associated
warehouse uses and for no other purposes whatsoever.  Tenant will not
use or occupy or permit the Premises to be used or occupied for any purpose
or in any manner prohibited by federal, state or local laws and
ordinances.  Tenant will conduct its business in such a manner as
not to create a nuisance.  Tenant will not do anything that is currently
prohibited by Landlord's property insurance policy or that will materially
increase the existing rate of such insurance (unless Tenant is willing to
separately pay for such material increase) or that will cause a cancellation of
Landlord's insurance.




A.           UTILITIES


Tenant
shall apply for and pay all costs of electricity, gas, telephone and other
utilities used or consumed on the Premises, together with all taxes, levies or
other charges on such utilities.  Tenant agrees to pay Landlord, as
Additional Rent, Tenant’s pro rata share, (as the same is defined in this
subsection 4A of the water and sewer service charges, chargeable to the building
or group of buildings in which the Premises is located, together with all
parking and other common areas adjacent thereto (herein collectively the
“Property”).  However, if in Landlord’s reasonablejudgment the water and
sewer/water well and septic charges for the Premises are substantially higher
than normal due to Tenant’s water usage, then Tenant agrees to install a water
meter upon Landlord’s written request and thereafter pay all water charges for
the Premises based on such meter reading.  “Tenant’s Pro-Rata Share of
Water andSewer
ServiceCharges”
shall mean the same percentage that the gross square foot area of the Premises
bears to the gross square foot area of all leasable floor area within the
Property that is occupied during the calendar year billing
period.  Landlord shall notify Tenant of any change in Tenant’s Pro
Rata Share of Water andSewer Charges.





B.           TAXES


Tenant
shall pay to Landlord, as Additional Rent,Tenant’s Pro Rata Share
of Taxes (as the same is defined in this subsection 4B) in excess of those
assessed against the Property  during the fiscal year commencing July
1, 2008, and ending June 30, 2009, whether the taxes are payable to the State of
Maryland and/or Baltimore County.  If this Lease shall be in effect
for less than a full fiscal year, Tenant’s Pro Rata Share of the increased taxes
shall be pro rated based upon the number of months that this Lease is in
effect.  Said taxes shall include Metropolitan District Charges, sewer
service charges, and any and all benefits or assessments which may be levied on
the Property hereby leased but shall not include excess profit taxes, franchise
taxes or similar taxes on Landlord’s business, inheritance taxes, gift taxes,
transfer taxes, recordation taxes, capital levies, and the United States Income
Tax, or any State or other income tax upon the income or rent payable
hereunder.  “Tenant’s Pro Rata Share of Taxes” shall mean the same
percentage that the gross square foot area of the Premises bears to the gross
square footage of leasable floor area in the Property.  Tenant’s Pro
Rata Share of Taxes is equal to nine and fourteen hundredths percent (9.14%) as
of Lease execution.  Landlord shall notify Tenant of any change in
Tenant’s Pro Rata Share of Taxes.




C.           COMMON
AREA EXPENSES


Tenant
shall pay to Landlord as Additional Rent, Tenant’s pro rata share of the
following “Common Area
Expenses”(estimated at
forty cents ($0.40) per square foot for 2008 and subject to change), to the
exclusion of all other expenses for the maintenance of the Common
Areas:




·
              Snow
      Removal


·
                Grounds
      Maintenance (included but not limited to: lot cleaning, lawn care and
      maintenance, and landscaping care, maintenance and
      replacement)





·
              Semi-Annual
      Window Washing


·
              Common
      Area Electric (when
applicable)


·
              Fire
      Sprinkler Monitoring (when
applicable)


·
              Security
      Guard and Access Control Services (when Landlord, in its reasonablejudgment
      deems necessary).





“Tenant’s
Pro Rata Share of Common Area Expenses” shall mean the same percentage that the
gross square foot area of the Premises bears to the gross square foot area of
all leasable floor area within the Property.    Tenant’s Pro
Rata Share of Common Area Expenses as of Lease execution is equal to nine and
fourteen hundredths percent (9.14%).  Landlord shall notify Tenant of
any change in Tenant’s Pro Rata Share of Common Area Expenses.


“Common
Areas” shall be deemed to include loading facilities, elevators, and other
facilities as may be constructed and intended for common use, and of the common
driveways, footways, lawn, landscaping, storm water management facilities and
parking areas on the Property, subject to such rules and regulations as Landlord
may, from time to time, prescribe governing such Common Areas.




D.           TRASH
REMOVAL


In the
event Landlord provides trash removal services for tenants within the Property,
Tenant shall pay to Landlord, as Additional Rent Tenant’s pro rata share of the
cost of the trash removal services.  “Tenant’s Pro Rata Share of Trash
Removal Services” shall mean the same percentage that the gross square foot area
of the Premises bears to the gross square foot area of all leasable floor area
within the Property that is occupied during the calendar year billing
period.  Landlord shall notify Tenant of any change in Tenant’s Pro
Rata Share of Trash Removal Services.




E.
PAYMENT OF ADDITIONAL RENT & LANDLORD’S ANNUAL STATEMENT


Landlord
shall notify Tenant from time to time of the amounts which Landlord estimates
will be payable by Tenant for Tenant’s Pro Rata Share of Water and Sewer
Charges, Taxes, Common Area Expenses and Trash Removal Services (collectively,
“Tenant’s Pro Rata Share”), and Tenant shall pay such amounts in equal monthly
installments, as Additional Rent, in advance on or before the first day of each
month during the Term. Within one hundred and fifty (150) daysfollowing the end of
each calendar year, or fiscal year (with regard to taxes) Landlord shall submit
to Tenant a statement (the “Statement”)summarizing Landlord’s
costs for the Water and Sewer Charges, Taxes, Common Area Expenses and Trash
Removal Services to be paid by Tenant with respect to such year, the amount paid
by Tenant, and the amount of the resulting balance due or
overpayment.  If a balance is due to Landlord, Tenant will pay balance
to Landlord within thirty (30) days of invoice.  If Tenant overpaid
its Tenant’s Pro Rata Share, Landlord will pay or credit to Tenant’s account the
overpayment to Tenant within thirty (30) days of Landlords submission of the
Statement.Each
Statement shall be final and conclusive if no objection is raised within ninety
(90) days after submission of each such statement.  Tenant shall have
the right to audit and/or inspect Landlord’s records (not more than once in any
lease year) with respect to Tenant’s Pro Rata Share and all other Additional
Rents payable by Tenant under this Lease for the immediately prior lease
year.  Tenant shall give Landlord not less than thirty (30) days
written notice of its intention to conduct any such audit.  If such
audit discloses that the amount paid by Tenant as Additional Rent for the lease
years under consideration has been overpaid by Tenant, then Landlord shall
refund the overcharge to Tenant within thirty (30) days.


2


Notwithstanding
the forgoing provisions of the above section, Landlord shall have the right,
upon thirty (30) days written notice, to require Tenant to pay Tenant’s Pro Rata
Share of Water and Sewer Charges, Taxes, Common Area Expenses and Trash Removal
Services in quarterly or semi-annual payments rather than on a monthly basis as
provided herein.




MUNICIPAL
REGULATING


5.                 A.  Tenant
shall observe, comply with and execute at its expense, all laws, orders, rules,
requirements, and regulations of the United States, State, City or County of the
said State, in which the Premises is located, and of any and all governmental
authorities or agencies and of any board of fire underwriters or other similar
organization, respecting the Premises and the manner in which the Premises are
or should be used by Tenant.  Notwithstanding anything contained in
this Lease, Landlord warrants and represents that as of the Commencement Date,
the Premises complies with all laws, orders, rules, requirements, and
regulations of the United States, State, City or County of the said State, in
which the Premises is located, and of any and all governmental authorities or
agencies and of any board of fire underwriters or other similar
organization.


Landlord and Tenant acknowledge
that under current laws, regulations and ordinances enforced at the
time of Lease Execution the Tenant is not required to install in-rack
sprinklers so long as the racking is less than twenty feet (20') in
height.   Accordingly, so long as Tenant installs racking that is
less than twenty feet (20') in height, the Tenant shall not be
required to install in-rack sprinklers unless the laws, regulations
and ordinances are hereafter changed or amended to lower the
height at which in-rack sprinklers are required to be
installed and such height is below the then existing actual
height of the racking installed in the Premises; provided, that in such event
the Tenant shall have the right to reduce the height of the racking system to a
height that would not require the installation of in-rack sprinklers rather than
install in-rack sprinklers.




ASSIGNMENT
AND SUBLET


6.                 A.           Tenant
shall not assign this Lease, in whole or in part, or sublet the Premises, or any
part or portion thereof, or grant any license or concession for any part of the
Premises, without the prior written consent of Landlord.  If such
assignment or subletting is permitted, Tenant shall not be relieved from any
liability whatsoever under this Lease.  Landlord shall be entitled to
all additional considerations over and above those stated in this Lease, which
are obtained in or for the sublease and/or assignment.  No option
rights can be assigned or transferred by Tenant to an assignee or
subtenant.  Any sublet or assignment of this Lease will be assessed
with processing fees to be paid for by Tenant as Additional
Rent.  Such processing fees shall not exceed $500.00.




B.           Notwithstanding
the foregoing, Tenant shall be permitted, without the consent of Landlord, but
upon written notice to Landlord, to assign the Lease or sublet all or a portion
of the Premises: (a) to a direct or indirect subsidiary, parent, or a subsidiary
of a parent of Tenant; or (b) to a successor to Tenant by merger, consolidation
or acquisition of all or substantially all of the assets or stock of
Tenant.  The following shall not be deemed an assignment or sublease
under this Lease (a) the sale of shares of Tenant if the Tenant is a corporation
whose shares are traded on a recognized domestic or foreign public stock
exchange and such trading is not for the purpose of acquiring effective control
of Tenant, or (b) the transfers of such stock from private to public ownership
if Tenant is a private corporation whose stock becomes publicly
held.




INSURANCE




7.                      A.  TENANT’S
INSURANCE




Throughout
the Term of this Lease, Tenant shall obtain and maintain:





1.  Business
Personal Property insurance covering Special Causes of Loss.  Such
Business Personal Property insurance shall not be in an amount less than that
required to replace all of the Tenant’s trade fixtures, decorations,
furnishings, equipment and personal property and in an amount required to avoid
the application of any coinsurance provision.  Such Business Personal
Property insurance shall contain a Replacement Cost valuation
provision.




2.  Commercial
General Liability insurance (written on an occurrence basis) including
Contractual Liability coverage insuring the obligations assumed by Tenant under
this Lease, Premises and Operations coverage, Personal Injury Liability
coverage, Independent Contractor’s Liability coverage.  Such
Commercial General Liability insurance shall be in minimum amounts typically
carried by prudent businesses engaged in similar operations, but in no event
shall be in an amount less than Two Million Dollars ($2,000,000) combined single
limit per occurrence with a Three Million Dollar ($3,000,000) annual
aggregate.  If Tenant conducts operations at locations and/or projects
other than the Premises, such annual aggregate limit will be expressed on a “per
location” and/or “per project” basis, as may be the case.  Tenant
agrees to notify Landlord of any erosion in its Commercial General Liability
annual aggregate limit within ten (10) days of being advised of such erosion by
its insurer or insurance agent.




3


All such
insurance shall: (i) be issued by a company that has a rating equal to or
exceeding A: XI from A.M. Best Company; (ii) name Landlord and the holder of any
Mortgage if requested by mortgagee as Additional Insured, as applicable (for
General Liability insurance, this will be accomplished by use of policy form CG
2011 [November, 1985 edition date] or its equivalent); (iii) contain an
endorsement prohibiting cancellation, failure to renew, reduction of amount of
insurance or reduction in the scope of coverage without the insurer first giving
Landlord thirty (30) days’ prior written notice (by certified or registered
mail, return receipt requested) of such proposed action (no less than ten [10]
days’ notice of cancellation or failure to renew for non-payment of
premium).




No such
Commercial General Liability insurance shall contain a self-insured retention
provision except as otherwise approved in writing by Landlord, which approval
shall not be unreasonably withheld,conditioned or
delayed.  Landlord reserves the right from time to time but no more
than once a yearto
require Tenant to obtain higher minimum amounts or different types of insurance
if it becomes customary for other landlords of similar buildings as that which
contains the Premises to require similar-sized tenants in similar industries to
carry insurance of such higher minimum amounts or of different
types.  At the commencement of this Lease, Tenant shall deliver a
certificate of all required insurance and will continue throughout the term of
this Lease to do so not less than ten (10) days prior to the expiration of any
required policy of insurance.  Neither the issuance of any insurance
policy required under this Lease nor the minimum limits specified herein shall
be deemed to limit or restrict in any way Tenant’s liability arising under or
out of this Lease.




All
insurance obtainedby Tenant and
Landlordshall
provide that the insurer thereunder waives all right of recovery by way of
subrogation against the other, its partners, employees, agents, representatives
in connection with any loss or damage covered by such policy. To the fullest
extent permitted by law, Tenant shall indemnify and hold harmless Landlord, its
partners, employees, agents, representatives and any other party required to be
indemnified and/or held harmless under the terms of any written contract or
agreement with Landlord pertaining to this Lease and/or to the Premises, from
and against all claims, damages, losses, costs and/or expenses, including, but
not limited to attorneys’ fees, arising out of or resulting from Tenant’s
negligent acts or omissions, occupancy of the Premises or obligations under this
Lease.  Such indemnification and/or hold harmless shall not be
invalidated by the partial negligence of one or more of the
indemnities.  If the laws of the governing jurisdiction do not permit
such an indemnification and/or hold harmless, then Tenant’s obligations to
indemnify and hold harmless the indemnities will be to the fullest extent
permitted and all other parts of this Lease and this paragraph will
apply.




B.  LANDLORD’S
INSURANCE




Throughout
the Term of this Lease, Landlord shall obtain and maintain:





1.  Real
Property insurance against Special Causes of Loss and subject to Replacement
Cost valuation covering the Building and all of Landlord’s property therein in
an amount required by its insurance company to avoid the application of any
coinsurance provision.


2.  Commercial
General Liability insurance (written on an occurrence basis) including
Contractual Liability coverage insuring the obligations assumed by Landlord
under this Lease, Premises and Operations coverage, Personal Injury Liability
coverage, Independent Contractor’s Liability coverage.  Such
Commercial General Liability insurance shall be in amounts not less than Two
Million Dollars ($2,000,000) combined single limit per occurrence with a Four
Million Dollar ($4,000,000) annual aggregate.


3.      All
insurance obtained by Landlord shall provide that the insurer thereunder waives
all right of recovery by way of subrogation against Tenant, its partners,
employees, agents, representatives and any other party required to be the
recipient of such a waiver under the terms of any written contract or agreement
with Tenant pertaining to this Lease and/or to the Common Areas of the Property,
in connection with any loss or damage covered by such policy.  To the
fullest extent permitted by law, Landlord shall indemnify and hold harmless
Tenant, its partners, employees, agents, representatives and any other party
required to be indemnified and/or held harmless under the terms of any written
contract or agreement with Tenant pertaining to this Lease and/or to the Common
Areas, from and against all claims, damages, losses, costs and/or expenses,
including, but not limited to attorneys’ fees, arising out of or resulting from
Landlord’s acts or omissions, use and maintenance of the Common Areas or
obligations under this Lease.  Such indemnification and/or hold
harmless shall not be invalidated by the partial negligence of one or more of
the indemnities.  If the laws of the governing jurisdiction do not
permit such an indemnification and/or hold harmless, then Landlord’s obligations
to indemnify and hold harmless the indemnities will be to the fullest extent
permitted and all other parts of this Lease and this paragraph will
apply.




ALTERATIONS




8.                 A.      Tenant
shall not make structuralalterations or other alterations except decorative changes (i.e.:
painting, hanging art or installing personal property)to the Premises in
addition to original improvements existing in the Premises at the time of
occupancy without the prior written consent of Landlord, which consent will not
be unreasonably withheld, conditioned or delayed.




4


B.  In
the event Tenant shall desire to make any such alterations, plans for the same
shall first be submitted to Landlord for approval, and upon approval, the same
shall be performed by Tenant at its own expense.  Tenant agrees that
all such work shall be done in a good and workmanlike manner, that the
structural integrity of the building shall not be impaired, that no liens shall
attach to the building by reason thereof, and that all alterations shall be in
accordance with all applicable codes.  Tenant agrees to obtain at
Tenant’s expense all permits pertaining to the alterations.  Tenant
also agrees to obtain, prior to commencing to make such alterations, and to keep
in full force and effect at all time while such alterations are being made, all
at Tenant’s sole cost and expense, such policies of insurance pertaining to such
alterations and/or to the making thereof as Landlord reasonably may request or
require Tenant to obtain, including, but not limited to, public liability and
property damage insurance, and to furnish Landlord evidence satisfactory to
Landlord of the existence of such insurance prior to Tenant’s beginning to make
such alterations.  Tenant shall also provide to Landlord evidence of
lien waivers for each and every contractor Tenant hires.




C.  Any
such alterations shall become the property of Landlord as soon as they are
affixed to the Premises and all rights, title and interest therein of Tenant
shall immediately cease, unless otherwise agreed to by Landlord in
writing.  Landlord shall have the sole right to collect any insurance
for any damage of any kind caused by any alterations or improvements placed upon
the Premises by Tenant.  If the making of any such alterations, or the
obtaining of any permits therefore shall directly or indirectly result in a
franchise, minor privilege or any other tax or increase in tax, assessment or
increase in assessment, such franchise, privilege, tax or assessment shall be
paid, immediately upon its levy and subsequent levy, by Tenant.




D.  Unless
Landlord shall consent in writing that all or part of any alterations installed
by Tenant shall remain, the Premises shall be restored to their original
condition by Tenant, reasonable wear and tear, damage from casualty and
condemnation excepted,at its own expense,
before the expiration of its tenancy.




E.  Costs
of alterations or modifications (in addition to the improvements as described
herein in Section 34) Tenant requests Landlord to make on Tenant’s behalf during
the term of this Lease shall be due and payable as Additional Rent.




MAINTENANCE
AND SERVICES


9.      
     A.      TENANT’S
RESPONSIBILITY.  Tenant shall, during the Term, keep the
Premises and appurtenances (including, but not limited to, interior and exterior
windows, interior and exterior doors, interior plumbing, heating, ventilating
and air conditioning (HVAC), interior electrical in good order and condition and
will make all necessary repairs or replacement thereof.  Landlord
does, however, give a ninety (90) day warranty on all of the above mentioned
items.  This warranty does not include the required annual maintenance
contract on the HVAC unit(s) as described in Section 9(B) below.  Any
repair made by Landlord at Tenant’s request to the Premises shall be invoiced to
Tenant and shall become due and payable as Additional Rent within thirty (30)
days of invoice.  Tenant will be responsible for all exterminating
services, except termites, required in the Premises.  If Tenant does
not make necessary repairs within thirty (30) days after receiving written
notice from Landlord of the need to make a repair, Landlord may proceed to make
said repair and the cost of said repair will become part of and in addition to
the next due monthly installment of Additional Rent.  Provided Tenant
is not in default of the Lease and that Tenant maintains an annual HVAC
maintenance agreement with Landlord, Landlord shall warrant the HVAC systems
that service the Premises installed by Landlord against all repairs and
replacements over $500.00 per unit per lease year.




B.  HVAC ANNUAL MAINTENANCE
CONTRACT.  Tenant agrees to furnish to Landlord, at the expense
of Tenant, prior to occupancy, a copy of an executed and paid for annual
maintenance contract on all heating and air conditioning (HVAC) equipment with a
reputable company acceptable to Landlord and said contract will be kept in
effect during the Term of the Lease at the expense of Tenant.  Should
Tenant not provide a satisfactory HVAC Maintenance contract to Landlord prior to
occupancy, Tenant shall be provided a contract through St. John Properties,
Inc.  Billings for this contract shall become due and payable as
Additional Rent within thirty (30) days of invoice.




C.  LANDLORD’S
RESPONSIBILITY.  Landlord shall make all necessary structural
repairs to the exterior masonry walls,foundation, interior support
columns, subfloorand roof of the
Premises, after being notified in writing of the need for such repairs, provided
the necessity for such repairs was not caused by the negligence or misuse of
Tenant, its employees, agents or customers.




D.  SURRENDER.Tenant shall, at the expiration of the Term or at the sooner termination
thereof by forfeiture otherwise, deliver up the Premises in the same good order
and condition as it was at the beginning of the tenancy, reasonable wear and
tear excepted,damage by
casualty and condemnation excepted.




DEFAULT


10.  In
the event Tenant shall fail to pay said installments of Annual Rent, Additional
Rent or any other sum required by the terms of this Lease, additional written
agreements or addenda of this Lease to be paid by Tenant, and such failure shall
continue for five (5) days after Landlord has given written notice thereof to
Tenant, Landlord shall have along with any and all other legal remedies the
immediate right to make distress therefore, and upon such distress, in
Landlord’s discretion, this tenancy shall terminate. In the event Tenant shall
fail to comply with any of the provisions, covenants or conditions of this
Lease, on its part to be kept and performed, and such default shall continue for
a period of thirty (30)days after Landlord has
given written notice to Tenant, then, upon the happening of any such event, and
in addition to any and all other remedies that may thereby accrue to Landlord,
Landlord may do the following:


5


A.   Landlord’s Election to
Retake Possession Without Termination of Lease


Landlord
may retake possession of the Premises and shall have the right, but not the
obligation, without being deemed to have accepted a surrender thereof, and
without terminating this Lease, to relet the same for the remainder of the Term
upon terms and conditions satisfactory to Landlord; and if the rent received
from such reletting does not at least equal the Annual Rent and other sums
payable by Tenant hereunder, Tenant shall pay and satisfy the deficiency between
the amount of Annual Rent and other sums so provided in this Lease and the
Annual Rent received through reletting the Premises; and, in addition, Tenant
shall pay reasonable expenses in connection with any such reletting, including,
but not limited to, the cost of renovating, altering, and decorating for any
occupancy, leasing commissions paid to any real estate broker or agent, and
attorneys’ fees incurred.




B.  Landlord’s Election to
Terminate Lease




Landlord
may terminate the Lease and forthwith repossess the Premises and be entitled to
recover as damages a sum of money equal to the total of the following
amounts:




1)
            any
      unpaid rent or any other outstanding monetary obligation of Tenant to
      Landlord under the Leaseas of the
      termination date;


2)
            the
      balance of the rent and other sums payable by Tenant for the remainder of
      the Term to be determined as of the date of Landlord’s
      re-entry;


3)
            damages
      for the wrongful withholding of the Premises by
  Tenant


4)
            all
      reasonablelegal expenses,
      including attorneys’ fees, expert and witness fees, court costs and other
      costs incurred in exercising its rights under the
  Lease;


5)
            all
      reasonablecosts incurred in
      recovering the Premises, restoring the Premises to good order and
      condition, and all commissions incurred by Landlord in reletting the
      Premises; and


6)
            any
      other reasonable amount necessary to compensate Landlord for all detriment
      caused by Tenant’s default.




DAMAGE




11.  In
the case of the total destruction of the Premises by fire, other casualties, the
elements or other cause, or of such damage thereto as shall render the same
totally unfit for occupancy by Tenant for more than sixty (60) days, this Lease,
upon surrender and delivery to Landlord of the Premises, together with the
payment of the monthly installments of Annual Rent and Additional Rent to the
date of such occurrence, shall terminate and be at an end,and both parties shall be
released from all obligations under this Lease.  If the Premises are
rendered partly untenantable by any cause mentioned in the preceding sentence,
Landlord shall, at its own expense, restore the Premises with all reasonable
diligence, and the monthly installments of Annual Rent and Additional Rent shall
be abated proportionately for the period of said partial untenantability and
until the Premises shall have been fully restored by Landlord.




BANKRUPTCY




12.  In
the event of the appointment of a receiver or trustee for Tenant by any court,
Federal and State, in any legal proceedings under any provisions of the
Bankruptcy Act, if the appointment of such receiver or such trustee is not
vacated within sixty (60) days, or if said Tenant be adjudicated bankrupt or
insolvent, or shall make an assignment for the benefit of its creditors, then
and in any of said events, Landlord may, at its option, terminate this tenancy
by thirty (30) days
written notice, and re-enter upon the Premises.




POSSESSION/BENEFICIAL
OCCUPANCY




13.  Landlord
covenants and agrees that possession of the Premises shall be given to Tenant as
soon as the Premises are ready for occupancy.  If possession, cannot
be given to Tenant on or before the Commencement Date, Landlord agrees to abate
the rent proportionately until possession is given to said Tenant and Tenant
agrees to accept such prorated abatement as liquidated damages for the failure
to obtain possession.  If possession of the Premises is not given to
the Tenant by May 1, 2009, then Tenant shall have the right to terminate this
Lease by providing Landlord with ten (10) days’ written notice.




If Tenant
occupies any portion of the Premises prior to tender of possession thereof by
Landlord, such occupancy shall be deemed to be beneficial occupancy and a
proportionate share of the Annual Rent and Additional Rent shall be due and
payable as to that portion of the Premises so occupied, immediately upon
Tenant’s occupancy.  Such occupancy by Tenant and installments of
Annual Rent and Additional Rent thereby due shall not depend on official
governmental approval of such occupancy, state of completion of building,
availability or connection of utilities and services including but not limited
to water, sewer, well water, septic system, gas, oil, or electric.  No
Annual Rent credit shall be given because of lack of utilities or services
unless caused by the negligence of Landlord.


6


Notwithstanding
anything to the contrary contained in this Lease, if any utility service to the
Premises is interrupted for more than seventy-two (72) consecutive hours as a
result of an act or omission of Landlord or its employees, then commencing with
the first full business day thereafter, there shall be an equitable abatement of
Annual Rent and all Additional Rent.




SIGNS,
ETC.




14.  Tenant
covenants and agrees that:




A.  It
shall not place or permit any signs, lights, awnings or poles on or about the
exterior of the Premises without the prior permission, in writing, of
Landlord,such
permission to not be unreasonably withheld, conditioned or delayed, and in the
event such consent is given, Tenant agrees to pay any minor privileges or other
tax associated with Tenant’s signage, lights, awnings, or poles.




B.  Landlord,
at Landlord’s option, may immediately remove and dispose of any of the
unauthorized aforementioned items at the expense of Tenant and said cost shall
become part of and in addition to the next due monthly installments of Annual
Rent, as Additional Rent.  Tenant further covenants and agrees that it
will not paint or make any changes of the Premises without the written consent
of Landlord.  Tenant agrees that it will not do anything on the
outside of the Premises to change the uniform architecture, paint or appearance
of said building, without the written consent of Landlord.




C.  Landlord
shall have the right to place a “For Rent” sign on any portion of the Premises
for ninety (90) days prior to termination of this Lease and to place a “For
Sale” sign thereon at any time.




EXTERIOR
OF PREMISES




15.  Tenant
further covenants and agrees not to put any items on the sidewalk or parking lot
in the front, rear, or sides of said building or block said sidewalk, and not to
do anything that directly or indirectly takes away any of the rights of ingress
or egress from any other tenant of Landlord or do anything which will, in any
way, change the uniform and general design of the Property of which the Premises
hereby leased shall constitute a part.




WATER
DAMAGE




16.  Tenant
covenants and agrees that Landlord shall not be held responsible for and
Landlord is hereby released and relieved from any liability by reason of or
resulting from damage or injury to person or property of Tenant or of anyone
else, directly or indirectly caused by (a) dampness or water in any part of the
Premises or in any part of any other property of Landlord or of others and/or
(b) any leak or break in any part of the Premises or in any part of any other
property of Landlord or of others or in the pipes of the plumbing or heating
works thereof, unless the damage is due to Landlord’s negligent act or
omission.




LIABILITY




17.  Landlord
shall not be liable to Tenant for any loss or injury to Tenant or to any other
person or to the property of Tenant or of any other person unless such loss or
damage shall be caused by or result from a negligent act or omission solely on
the part of Landlord or any of its agents, servants, or
employees.  Tenant shall, and does hereby, indemnify and hold harmless
Landlord and any other parties in interest from and against any and all
liabilities, fines, claims, damages and actions, costs and expenses of any kind
or nature (including attorneys’ fees) and of anyone whatsoever (i) relating to
or arising from Tenant’s use and occupancy of the Premises; (ii) due to or
arising out of any mechanic’s lien filed against the building, or any part
thereof, for labor performed or for materials furnished or claimed to be
furnished to Tenant, or (iii) due to or arising out of any breach, violation or
nonperformance of any covenant, condition or agreement in this Lease set forth
beyond any applicable notice and cure periodand contained on the
part of Tenant to be fulfilled, kept, observed or performed.




In the event Landlord provides any
Security Guard or Access Control Services as described herein in Section 4c,
Landlord is hereby released from any responsibility for any damages either to
person or property sustained by Tenant incurred in connection with or arising
from acts or omissions of any Security Guard or Access Control Services provided
by Landlord.




RIGHT
OF ENTRY




18.  It
is understood and agreed that Landlord, and its agents, servants, and employees,
including any builder or contractor employed by Landlord, shall have, and Tenant
hereby gives them and each of them, the absolute, and unconditional right,
license and permissionwith reasonable notice,
at any and all reasonable times, and for any reasonable purpose whatsoever, to
enter through, across or upon the Premises or any part thereof, and, at the
option of Landlord, to make such reasonable repairs to or changes in the
Premises as Landlord may deem necessary or proper,provided that Landlord shall
use reasonable efforts to avoid material interference to the conduct of Tenant’s
business operations therein except in the event of an
emergency.  Tenant agrees thatLandlord and its agents
and assigns have the unconditional right to show the Premises for lease at any
time, with reasonablenotice once Tenant
notifies Landlord of its intention to vacate the Premises.




7


EXPIRATION




19.  It
is agreed that the term of this Lease expires on February 28, 2019, without the
necessity of any notice by or to any of the parties hereto.  If Tenant
shall occupy the Premises after such expiration, it is understood that, in the
absence of any written agreement to the contrary, said Tenant shall hold the
Premises as a “Tenant from month to month”, subject to all the other terms and
conditions of this Lease, at one hundred and fifty percent (150%) the highest
monthly installments of Annual Rent reserved in this Lease; provided that
Landlord shall, upon such expiration, be entitled to the benefit of all public
general or public local laws relating to the speedy recovery of the possession
of lands and tenements held over by Tenant that may be now in force or may
hereafter be enacted.




Prior to
Lease expiration, Tenant agrees to schedule an inspection with Landlord to
confirm that the Premises will be in proper order at expiration, including, but
not limited to, lighting, mechanical, electrical and plumbing
systems.




CONDEMNATION




20.  It
is agreed that in the event condemnation proceedings are instituted against the
Property, or thePremises and possession
taken by the condemning authority, then this Lease shall terminate at the date
possession is taken and Tenant shall not be entitled to recover any part of the
award.




SUBORDINATION




21.  It
is agreed that Landlord shall have the right to place a mortgage or deed of
trust on the Premises and this Lease shall be subordinate to any such mortgage
or deed of trust whether presently existing or hereafter placed on the Premises,
and Tenant agrees to execute any reasonable documents assisting the effectuating
of said subordination.  Furthermore, if any person or entity shall
succeed to all or part of Landlord’s interest in the Premises, whether by
purchase, foreclosure, deed in lieu of foreclosure, power of sale, termination
of lease, or otherwise, Tenant shall automatically attorn to such successor in
interest, which attornment shall be self operative and effective upon the
signing of this Lease, and Tenant shall execute such other agreement in
confirmation of such attornment as such successor in interest shall reasonably
request.  Landlord shall provide Tenant a Subordination Attornment and
Non-Disturbance (SNDA) Agreement from its lender(s) in the lender’s standard
form.




NOTICE




22.  Any
written notices required by this Lease shall be deemed sufficiently given, if
(i) hand delivered, (ii) sent via first class U.S. mail, (iii) certified mail or
(iv) overnight courier service.




Any
notice required by this Lease is to be sent to Landlord at:




2560 Lord Baltimore DriveBaltimore,
      Maryland  21244Any
      notice required by this Lease is to be sent to Tenant at:11407 Cronhill Drive, Suite
    A-DOwings Mills, Maryland
21117


With a
copy to:




Hillel
Tendler




Neuberger, Quinn, Gielen,
Rubin & Gibber P.A.




One South Street,
27thFloor




Baltimore, Maryland
21202




Emergency
Contact Information:




Address:Contact:Title:Telephone:Fax:




8


REMEDIES
NOT EXCLUSIVE




23.  No
remedy conferred upon Landlord shall be considered exclusive of any other
remedy, but shall be in addition to every other remedy available to Landlord
under this Lease or as a matter of law.  Every remedy available to
Landlord may be exercised concurrently or from time to time, as often as the
occasion may arise.  Landlord andTenant hereby waive any
and all rights which it may have to request a jury trial in any proceeding at
law or in equity in any court of competent jurisdiction.




NON-WAIVER




24.  It
is agreed that the failure of either partyto insist in any one or
more instances upon a strict performance of any covenant of this Lease or to
exercise any right herein contained shall not be construed as a waiver or
relinquishment for the future of such covenant or right, but the same shall
remain in full force and effect, unless the contrary is expressed in writing by
Landlord.  The receipt of the monthly installments of Annual Rent or
Additional Rent by Landlord, with knowledge of any breach of this Lease by
Tenant or of any default on the part of Tenant hereunder, shall not be deemed to
be a waiver of any provisions of this Lease.  Neither acceptance of
the keys nor any other act or thing done by Landlord or any agent or employee of
Landlord shall be deemed to be an acceptance of a surrender of the Premises,
excepting only an agreement in writing by Landlord accepting or agreeing to
accept such surrender.




SECURITY
DEPOSIT AND FINANCIAL STATEMENTS




25.  A
security deposit of $8,250.00 is required to accompany this Lease, when
submitted for approval by Landlord, subject to all the conditions of the
security deposit agreement attached.  If this Lease is not approved by
Landlord within thirty (30) days of its submission to Landlord, the security
deposit will be refunded in full within thirty (30) days of Landlord’s rejection
of this Lease.




FINAL
AGREEMENT




26.  This
Lease contains the final and entire agreement between the parties hereto, and
neither they nor their agents shall be bound by any terms, conditions or
representations not herein written.




LEGAL
EXPENSE




27.  In
the event, to enforce the terms of this Lease, either party files legal action
against the other, and is successful in said action, the losing party agrees to
pay all reasonable expenses to the prevailing party, including the attorneys’
fee incident to said legal actionincluding any
appeals.  In the event that Landlord is successful in any legal action
filed against Tenant, Landlord’s expenses incident to said legal action shall be
due as Additional Rent within thirty (30) days of invoice.




LAND




28.  It
is agreed that the Premises is the building area occupied by Tenant and only the
land under that area.




RELOCATION




29.  Intentionally
Deleted.




ENVIRONMENTAL
REQUIREMENTS




30.  Tenant
hereby covenants and agrees that if at any time it is determined that there are
materials placed on the Premises by Tenant which, under any environmental
requirements require special handling in collection, storage, treatment, or
disposal, Tenant shall, within thirty (30) days after written notice thereof,
take or cause to be taken, at its sole expense, such actions as may be necessary
to comply with all environmental requirements.   If Tenant shall
fail to take such action, Landlord may make advances or payments towards
performance or satisfaction of the same but shall be under no obligation to do
so; and all sums so advanced or paid, including all sums advanced or paid in
connection with any judicial or administrative investigation or proceeding
relating thereto, including, without limitation, reasonable attorneys’ fees,
fines, or other penalty payments, shall be at once repayable by Tenant as
Additional Rent and shall bear interest at the rate of four percent (4%) per
annum above the Prime Rate from time to time as published by The Wall Street
Journal, from the date the same shall become due and payable until the
date paid.  Failure of Tenant to comply with all environmental
requirements shall constitute and be a default under this Lease.




Tenant
will remain totally liable hereunder regardless of any other provisions which
may limit recourse.




9


Landlord
hereby represents and warrants that to the best of Landlord’s knowledge, as of
the Commencement Date, the Property and the Premises comply with all federal,
state and local environmental requirements.




SEVERABILITY




31.  In
the event any one or more of the provisions contained in this Lease shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Lease, but this Lease shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.




LATE
CHARGE




32.  In
the event Tenant shall fail to pay when due, the monthly installments of Annual
Rent, Additional Rent or any other sum required by the terms of this Lease to be
paid by Tenant, then, upon the happening of any such event, and in addition to
any and all other remedies that may thereby accrue to Landlord, Tenant agrees to
pay to Landlord a late charge of five percent (5%) of the monthly account
balance.  The late charge on the Annual Rent accrues after ten (10)
days of the due date, payable as Additional Rent and the late charge on other
amounts due Landlord accrue thirty (30) days from invoice, payable as Additional
Rent.




In the
event the monthly installment of Annual Rent is received fifteen (15) days after
due date, Landlord shall have option to require the rental payment be made with
a certified or cashier’s check.




QUIET
ENJOYMENT




33.  Tenant,
upon paying the monthly installments of Annual Rent, Additional Rent and other
charges herein provided and observing and keeping all of its covenants,
agreements, and conditions in this Lease, shall quietly have and enjoy the
Premises during the Term of this Lease without hindrance or molestation by
anyone claiming by or through Landlord: subject, however, to all exceptions,
reservations and conditions of this Lease.




LANDLORD’S
WORK




34.  The
Premises shall contain only the following items by Landlord at the expense of
Landlord: $41,285.00 to perform demolition of existing office space as
necessary, remove carpet glue from concrete floor, furnish and install one (1)
set of pre-cast steps, one (1) personnel door, three (3) over-head block doors
and bumpers, repair, clean and or replace mini-blinds and expand the building’s
sprinkler system to sprinkler Suites A-C.




The
Premises shall contain the followings items installedby Landlord at the sole
expense of Tenant in the amount of $117,858.00 payable as Additional Rent, all
other work to furnish and install improvements to the Premises as illustrated on
attached “Exhibit A” (floor plan) and as quantified on “Exhibit B” (estimate)
both made a part hereof.  Tenant shall pay $29,464.50 upon lease
execution, $29,464.50 on or before November 20, 2008, $29,464.50 on or before
December 14, 2008 and $29,464.50 upon Landlord’s substantial completion of work,
but prior to Tenant’s occupancy.




Tenant shall be solely responsible for
all voice, data and security wiring, equipment and installation.




WINDOW
COVERINGS




35.  Tenant
shall not install any window covering other than a one-inch horizontal
mini-blind of an off-white color unless approved in writing by
Landlord.




RULES
AND REGULATIONS




36.  Tenant
shall at all times comply with the Rules and Regulations attached hereto and
made a part hereof.  Landlord shall make a reasonable effort to
enforce the Rules and Regulations equitably against all tenants of the
Property.




ESTOPPEL
CERTIFICATE




37.  Tenant
shall, at any time during the Term or any renewal thereof, upon request of
Landlord, execute, acknowledge, and deliver to Landlord or its designee, a
statement in writing, certifying that this Lease is unmodified and in full force
and effect if such is the fact that the same is in full force and
effect.




EXCULPATION
CLAUSE




38. No
principal, partner, member, officer, director, trustee or affiliate of Landlord
(collectively, “Landlord Affiliates”) shall have any personal liability under
any provision of this Lease.




EARLY
TERMINATION




39.  Tenant
shall have the one time right to terminate this Lease on February 29, 2014; by
giving Landlord three hundred and sixty five (365) days prior written notice of
Tenant’s intent to terminate this Lease and a payment at the time of notice in
the amount of $42,000.00.  In the event Tenant does not exercise its
right to terminate as prescribed herein, the right is hereby extinguished and of
no further force and effect.




10


RIGHT
OF FIRST OFFER




40.                 Landlord
shall grant Tenant the Right of First Offer (“ROFO”) on the contiguous 6,000
square feet, Suites E and F, (“Contiguous ROFO Space”) in the building in which
the Premises is located.  Landlord shall give Tenant five (5) business
days (the “ROFO Period”) prior written notice of its intention to lease the
Contiguous ROFO Space and the price and other terms and conditions on which
Landlord is willing to lease the space.  Tenant shall have until the
end of the ROFO Period to elect to lease the Contiguous ROFO Space at the same
price, conditions and terms as specified in the written notice.  In
the event Tenant elects not to lease the contiguous ROFO space, this ROFO is
extinguished and of no further force or effect.




AS
WITNESS THE HANDS AND SEALS OF THE PARTIES HERETO THE DAY AND YEAR FIRST ABOVE
WRITTEN:




WITNESS:
                                    TENANT:Universal
      Security Instruments, Inc.(a
      Maryland corporation)___________________________________
                                    By:
                                    /s/Printed Name:Title:WITNESS:
                                    LANDLORD:St.
      John Properties, Inc.,as
      agent for owner___________________________________
                                    By:
                                    /s/Printed Name:
                                    Richard
      WilliamsonTitle:
                                    Senior
      Vice
President


11


SECURITY
DEPOSIT AGREEMENT


This is
NOTa
receipt.




Date:   November 4,
2008




Received
from Universal Security Instruments, Inc., a Maryland corporation, the amount of
$8,250.00, as security deposit for the Premises located at11407 Cronhill Drive,
Suites A-D, Owings Mills, Maryland 21117.




Landlord
agrees that, subject to the conditions listed below, this security deposit will
be returned in full within thirty (30) days of vacancy.




Tenant
agrees that this security deposit may not be applied by Tenant as rent and that
the full monthly rent will be paid on or before the first day of every month,
including the last month of occupancy.  Tenant further agrees that a
mortgagee of the property demised by the Lease to which this Security Deposit
Agreement is appended and/or a mortgagee thereof in possession of said property
and/or a purchaser of said property at a foreclosure sale shall not have any
liability to Tenant for this security deposit.




SECURITY
DEPOSIT RELEASE PREREQUISITES




·
            Full
      term of Lease has expired.


·
            No
      damage to property beyond ordinary wear and tear,casualty and
      condemnation.


·
            Entire
      Premises broom clean and in order.


·
            No
      unpaid late charges or delinquent rents, or other delinquent sums payable
      by Tenant.


·
            All
      keys returned to Landlord.


·
            All
      debris and rubbish and discards placed in proper rubbish
      containers.


·
            Forwarding
      address left with Landlord.


12




AS
WITNESS THE HANDS AND SEALS OF THE PARTIES HERETO THE DAY AND YEAR FIRST ABOVE
WRITTEN:




WITNESS:
                TENANT:Universal
      Security Instruments, Inc.(a
      Maryland corporation)__________________________________
                By:
                /s/Printed
      Name:Title:WITNESS:
                LANDLORD:St.
      John Properties, Inc.,as
      agent for owner__________________________________
                By:
                /s/Printed
      Name:
                Richard WilliamsonTitle:
                Senior Vice
  President


13


RULES
AND REGULATIONS




1)
            The
      Common Facilities, and the sidewalks, driveways, and other public portion
      of the Property shall not be obstructed or encumbered by Tenant or used
      for any purpose other than ingress or egress to and from the Premises, and
      Tenant shall not permit any of its employees, agents, licensees or
      invitees to congregate or loiter in any of the Property.  Tenant
      shall not invite to, or permit to visit the Premises, persons in such
      numbers or under such conditions as may interfere with the use and
      enjoyment by others of the Property.  Landlord reserves the
      right to control and operate, and to restrict and regulate the use of, the
      Property and the public facilities, as well as facilities furnished for
      the common use of tenants, in such manner as it deems best for the benefit
      of tenants generally.




2)
            No
      animals (except Seeing Eye dogs), fish or birds of any kind shall be
      brought into, or kept in or about the Premises within the
      building.




3)
            Tenant
      shall not make or cause to make noise, including, but not limited to,
      music, the playing of musical instruments, recordings, radio or
      television, which, in the judgment of Landlord, might disturb other
      tenants in the building or Property shall be made or permitted by any
      tenant.




4)
            Tenant
      shall not use the Premises or allow it to be used for lodging or sleeping
      or for any immoral or illegal
purpose.




5)
            Tenant
      shall not cause or permit any odors of cooking or other processes, or any
      unusual or objectionable odors, to emanate from the Premises which would
      annoy other tenants or create a public or private
      nuisance.  Smoking is not allowed in the Premises or within the
      building.




6)
            Plumbing
      facilities shall not be used for any purpose other than those for which
      they were constructed.  No sweepings, rubbish, ashes,
      newspapers, objects or other substances of any kind shall be thrown into
      the plumbing facilities.




7)
            Tenant
      agrees to keep the Premises in a neat, good and sanitary condition and to
      place garbage, trash, rubbish and all other disposables only where
      Landlord directs.




8)
            Landlord
      reserves the right to rescind, alter, waive or add, any rule or Regulation
      at any time prescribed for the building when, in the reasonable judgment
      of Landlord, Landlord deems it necessary or desirable for the reputation,
      safety, character, security, care, appearance or interests of the
      Property, or the preservation of good order therein, or the operation or
      maintenance of the Property, or the equipment thereof, or the comfort of
      tenants of others in the Property.  No rescission, alteration,
      waiver or addition of any rule or regulation in respect of one tenant
      shall operate as a rescission, alteration or waiver in respect of any
      other tenant.




9)
            Tenant
      shall have the non-exclusive right to park in parking spaces in front of
      and behind Tenant’s Premises.  This area shall be defined by two
      imaginary lines extending out from Tenant’s demising
  walls.




10)
            Tenant
      shall not place storage trailers or other storage containers of any type
      outside the Premises.




11)
            Tenant
      shall not park on a permanent or semi-permanent basis, any trailer behind
      dock doors or in any other location outside the Premises for the purpose
      of storage.




12)
            Tenant
      shall place any and all trash containers in the rear parking lot with a
      minimum of 10 feet distance from the building and within the two imaginary
      lines extending out from Tenant’s rear demising
  walls.




Non-compliance
with any of the above rules and regulations may, in Landlord’s sole judgment,
result in a monetary fine not to exceed $100 per day.  Landlord will
notify Tenant of such violations and Tenant will have five (5) days to rectify,
after which, daily fine will be applied, due and payable as Additional Rent
within thirty (30) days of invoice.




14





15