Exhibit
10.34


 


LEASE
AGREEMENT


 


This
Lease Agreement, made this 7th day of
October, 2003, by and between Gwen Reed (hereinafter referred to as the
“Lessor”) and Paragon Systems, Inc. (hereafter referred to as the “Lessee”).


 


WITNESSETH:


 


That
said Lessor does hereby lease, demise, and let unto the said Lessee, premises
known as 3317 Triana Boulevard, Huntsville, Alabama, containing approximately
5600 square feet on two floors.


 


TO HAVE AND TO HOLD the same for a term of one
(1) year, commencing the 1st day of November, 2000, and ending the
31st day of October, 2001 for a total annual rent as detailed below,
payable in advance in equal monthly installments on or before the first day of
every month during the said term, according to the following terms and conditions:


 


November 1, 2003 -
October 31, 2004, S46,200 per annum $3,850 per
month.


 


SECURITY DEPOSIT: A security deposit in the
amount of $3,500 is required, and receipt is hereby acknowledged. The deposit
is to be returned to Lessee upon satisfactory, completion of this lease or to
be retained by Lessor as partial damages in the event Lessee does not comply
with all obligations of this lease. Any refund due will be returned within 30
days after compliance with the terms of this lease and/or of expiration of this
lease.


 


1.               USE OF PREMISES:  Said premises shall be used and occupied by
Lessee for the purpose of general office, sales office, engineering
and for any other related activity or for any other lawful purpose which may be
required in the conduct of the Lessee’s business.


 


2.               HOLDING OVER: 
In the event that Lessee shall hold over after the expiration of the
term of this Lease Agreement, such hold over shall be considered as tenancy on
a month-to-month basis. Rent during the hold over period shall be a rent of One
Hundred Fifty Percent (150%) of the rent in effect immediately prior to such
hold over period.


 


3.               MAINTENANCE AND REPAIRS:  Lessor covenants and agrees to maintain in
good order and repair, and replace when necessary, (i) the foundations, exterior
walls, roof, gutters, downspouts, all exterior lighting, and the structural
integrity of the building, (ii) all utility and service lines running to the
building(s), and all unexposed utility and service lines within the
building(s).


 


Lessee agrees to maintain in good
order and repair the grounds and landscaped areas of the Leased Premises and
keep the Leased Premises clean and free of trash and debris, including
providing janitorial services and trash removal for the interior of the Leased
Premises. Lessee shall be responsible for minor maintenance inside the suite up
to $200 per incident, including but not limited to light bulbs, ballast, HVAC
filters, faucet and toilet repair.


 


Lessor shall have the right to
enter the Leased Premises at all reasonable times for the purpose of (i)
inspecting said Leased Premises and (ii) conducting said maintenance and
repairs; provided, however, that Lessor shall take reasonable steps not to
interfere with the ability of Lessee to conduct its business.


 
















 


4.               TAXES: 
Except as provided herein, Lessor covenants and agrees to pay all real
estate taxes, charges, and assessments on the Leased Premises. Lessee shall pay
for all telephone service required during the term of this lease.


 


5.               UTILITIES: 
Lessee shall pay for all necessary water, gas and electrical service,
and other utilities required during the term of this lease. Lessee shall pay
for all telephone service required during the term of this lease.


 


6.               LAWS AND REGULATIONS:  Lessor hereby stipulates that the Leased
Premises are in full and complete compliance with all Federal, State, County,
and local laws, charters, ordinances, and regulations, and Lessor covenants and
agrees to keep the Leased Premises at Lessor’s own cost and expense in
compliance with all Federal, State, County, and local laws, charters,
ordinances, and regulations unless such compliance is required because of the
peculiar use by the Lessee of the Leased Premises, in which event such
compliance shall be by Lessee at Lessee’s own cost and expense without limiting
in any way the obligations of Lessor as set forth above. Lessee agrees to
comply with all Federal, State, County, and local laws, relating to the use of
the Leased Premises or the business to be conducted thereon: provided, however,
should the conduct of the aforementioned business on said Leased Premises not
be permitted for any reason, other than a reason caused by the act or omission
to act of the Lessee, this Lease Agreement shall terminate forthwith, and
Lessee shall have no further liability hereunder, except for rent due and
payable through the month in which the Lease Agreement is so terminated.


 


7.               TRADE FIXTURE, ALTERATIONS AND IMPROVEMENTS:  All trade fixtures, alterations and tenant
improvements, and equipment installed by Lessee, shall be considered personal
property and shall remain in the property of the Lessee, and may be removed by  the Lessee at any time; provided,
however, that Lessee at its own cost and expense shall restore the Leased
Premises to substantially the same condition as before the installation
thereof, reasonable wear and tear excepted, and shall otherwise repair any
damage caused by such removal.  Lessee
shall not effect any alterations or improvements to the Leased Premises without
the written consent of the Lessor, which consent shall not be unreasonably
withheld. Such alterations and improvements shall be made in a good and
workman-like manner and in compliance with all laws and regulations of any
governmental agency having jurisdiction over the Leased Premises. Lessee shall
hold the Lessor and the Leased Premises harmless against all claims and demands
of every kind and character which may result from or arise out of making such
alterations and improvements, except those caused by Lessor or Lessor’s agents.
Lessor may enter the Leased Premises at any reasonable hour to inspect such
alterations and improvements and verify compliance with the terms and
conditions of its consent. Lessee will not cause or permit to stand any
mechanic’s, laborer’s, materialman’s, or other liens against Leased Premises or
improvements thereon in connection with work of any character performed or
material furnished to said premises by or at the direction or sufferance of
Lessee.


 


8.               RIGHT TO CONTEST LIENS AND TAXES:  Lessee shall have the right to contest in
good faith the validity or amount of any lien, tax, imposition, charge, or
assessment imposed upon the Leased Premises. Lessor hereby agrees to cooperate
in the institution, defense, and maintenance of any such action or proceeding
at the expense of the Lessee, and Lessor may, at its own expense, without
Lessee’s request, institute, defend, and maintain any action or proceeding to
contest the validity or amount of any such lien tax, imposition, charge, or
assessment provided that any such action or proceeding instituted by Lessee or
Lessor may be instituted and maintained only if, and so long as, the
enforcement of any such lien, tax.


 
















 


imposition,
charge, or assessment by sale or otherwise shall be stayed, by reason of such
action or proceeding, or of a bond filed, or of a deposit made in connection
therewith. Promptly after the determination of any such contest adverse to the
Lessee or the Lessor and prior to the enforcement of any lien, tax, imposition,
charge or assessment, Lessee shall (i) pay and discharge the amount of any such
lien and related expenses with respect to all Lessee-initiated contests or (ii)
reimburse Lessor for the amount of any such tax or assessment to the extent it
has not already made its proportionate share payment to the Lessor on account
thereof.


 


9.               QUIET ENJOYMENT:  Lessor covenants and agrees that if the
Lessee pays the rent and all other charges herein provided and shall perform
all of the covenants and agreements herein stipulated to be performed on the
Lessee’s part, Lessee shall at all times during the term of this Lease
Agreement have the peaceable and quiet enjoyment and possession of the Leased
Premises.


 


10.         DAMAGE OR DESTRUCTION:  Damages which render fifty percent (50%) or
more of the square-foot area of the building(s) of the Leased Premises unfit
for the purpose of Lessee’s business shall be considered Substantial
Destruction, Damages which render less than fifty percent (50%) but more than
thirty percent (30%) of the square-foot area of the building(s) of the Leased
Premises unfit for the purpose of Lessee’s business shall be considered a
Substantial Destruction subject to special treatment. Damages, which render
thirty percent (30%), or less of the square-foot area of the
building(s) of the Leased Premises unfit for the purpose of Lessee’s
business shall be considered a Partial Destruction.


 


If, during the term of this Lease
Agreement, or any extension thereof, the Leased Premises shall be substantially
destroyed (“Substantial Destruction”) by fire, the elements, or any other
cause, this Lease Agreement, at the option of Lessor or Lessee and upon written
notice delivered by the terminating party to the other party within ten (10)
business days after the date of said destruction, shall thereupon cease and
terminate, and each party shall be released from further obligation thereunder,
and Lessor shall refund to Lessee any portion of the rent paid in advance and
not earned at the time of said destruction; provided however, that should
Lessor elect to terminate this Lease Agreement and/or not repair damages to
Leased Premises, caused by a Substantial Destruction of less than fifty percent
(50%) but more than thirty percent (30%) as defined above, Lessee shall have
the option of making such repairs and paying the cost thereof, if any, in
excess of the insurance proceeds, and such action by Lessee shall negate the
option otherwise available to Lessor to terminate this Lease Agreement and
Lessee shall be entitled to a rent deduction during the period of restoration
pursuant to Partial Destruction provisions described below; and in addition,
Lessee shall be entitled to a credit against future rent beginning with the
first month following said restoration in an amount equal to Lessee’s cost of
repairs plus ten percent (10%) of the cost of such repairs. If neither party
elects to terminate this Lease Agreement pursuant to the foregoing, Lessor
shall be deemed to have elected to restore the Leased Premises substantially to
their condition before such Substantial Destruction, Lessor shall commence the
restoration within thirty (30) calendar days and complete said restoration
within one hundred twenty (120) calendar days from the date of such Substantial
Destruction.


 


If however, during the term of this
Lease Agreement, or any extension thereof, the premises shall be partially
destroyed (“Partial Destruction”) by fire, the elements, or any other cause,
then the Lessor shall repair the Leased Premises at Lessor’s expense as rapidly
as possible, but the elapsed time shall not exceed one hundred twenty (120)
calendar days from the date of such Partial Destruction, and Lessee shall be
entitled to a reduction of rent, in proportion’s


 
















 


to
the area of the Leased Premises rendered unfit for occupancy, until the Leased
Premises are restored to their condition before said destruction.


 


11.         INSURANCE: 
Lessor shall not be liable for any damage or destruction by fire, the
elements, or any other cause, however the same may occur, to the trade
fixtures, equipment, and other items located on the Leased Premises and not
owned by Lessor, and Lessee hereby waives and releases Lessor from any claim
for such damage which Lessee may suffer, and further waives and releases Lessor
from any right of subrogation against Lessor for such damages, Lessor covenants
and agrees to procure and continue in full force and effect during the term of
this lease fire and extended-coverage insurance upon the Leased Premises, and
Lessor hereby waives and releases Lessee from any claim for such damages which
Lessor may suffer and further waives and releases any right of subrogation
against Lessee for any loss or damage due to fire, the elements, or any other
cause, however the same may occur. Each party shall cause each insurance policy
obtained by it, in connection with this Lease Agreement, to provide that the
insurance company shall waive all right of recovery by way of subrogation
against the other party in connection with any damage covered by any policy.


 


Lessee covenants and agrees to
protect and save Lessor harmless from any and all claims for injuries to
persons and property occurring on the Leased Property and arising from acts or
omissions to act by the Lessee, other than those caused by Lessor or Lessor’s
agents; and Lessee further agrees that it shall, at its own cost and expense,
procure and continue in full force and effect during the term of this Lease
Agreement General Liability Insurance with limits of not less than One Million
Dollars ($1,000,000.00).


 


Liability, fire, and causality insurance
policies covering the Leased Premises and applicable personal property,
obtained by Lessor and Lessee, shall include endorsements thereto (i) waiving
any and all rights of subrogation by the insurers and (ii) naming the
nonprocuring party(s) as additional insured, as their interest may appear.


 


Lessor and Lessee shall provide the
non-procuring party(s) with copies of all insurance policies, or other evidence
of insurance, obtained pursuant of this paragraph 11.


 


12.         DEFAULT: 
Lessor and Lessee agree that if default be made in the fulfillment or
performance of any of the material covenants or agreements herein specified to
be fulfilled by the Lessor or the Lessee, as the case may be, and such default
is not cured within thirty (30) days from the receipt by Lessor or Lessee or
written notice thereof from the non-breaching party of any such default, other
than a default in payment of the rent which must be cured within thirty (30)
days after such notice, then, if Lessor be in default, Lessee may (i) declare
this Lease Agreement terminated without further liability other than that which
has accrued, or (ii) cure said default(s) at Lessor’s cost, with the further
right to deduct from its rent any amounts which it reasonably expends in
connection with effecting such cure; and, if Lessee be in default, Lessor may
(i) collect by suit or otherwise each installment of rent as it becomes due
hereunder, or enforce any other term or provision hereof required to be kept or
performed by the Lessee; or (ii) reenter the Leased Premises and terminate this
Lease Agreement, in which event Lessor shall be entitled to recover from Lessee
the amount of rent reserved hereunder for the balance of the unexpired term.
The non-defaulting party shall be entitled to receive court costs and other
expenses, including reasonable attorney’s fees incurred in effecting the
collection of rent, retaking possession of the Leased Premises, curing any
defaults, or exercising any other rights or remedies that may be available to
the non-defaulting party in connection with such default.


 
















 


13.         ASSIGNMENT: 
Lessee shall not assign this Lease Agreement or sublet all or any
portion of the Leased Premises without first obtaining the written consent of
Lessor, which consent shall not be reasonable withheld; provided, however, that
Lessee shall be free to assign or sublet all or any portion of the Leased
Premises to any company which owns or is owned by Lessee.


 


14.         SURRENDER AT END OF TERM:  Lessee covenants to peaceably and quietly
surrender and yield up to the Lessor the entire Leased Premises upon the
termination of this lease and in good order and condition, reasonable wear and
tear, and damage by fire, the elements, or any other cause, excepted.


 


15.         NOTICES: 
All notices required or permitted hereunder shall be deemed to have been
given and properly serviced if mailed in any United States Post Office by
certified or registered mail, postage prepaid, addressed to Lessor at:


 


Gwen Reed

1833 University Drive, NW

Huntsville, AL 35801


 


Or
to Leases at:


 


Paragon Systems, Inc.

3317 Triana Boulevard

Huntsville, AL 35805


 


16.         APPLICABLE LAW:  This Least Agreement is made and the
relationship of the parties shall be construed, interpreted, and applied in
accordance with the laws of the State of Alabama.


 


17.         SUBORDINATION:  Lessee agrees to execute such instruments as
may be necessary to subordinate this Lease Agreement to any bonafide mortgage
or deed or trust encumbrance now or at any time hereafter upon the Leased
Premises, whether or not the aggregate amount thereof shall exceed the
aggregate amount of the encumbrance now upon the Leased Premises, and lessee
hereby appoints Lessor its attorney in fact to execute such instruments in its
behalf; provided, however, that no such subordination shall affect Lessee’s
right to quiet enjoyment of the Leased Premises while Lessee is in performance
of its obligations hereunder.


 


18.         SIGNS: 
Lessee understand and agrees that all exterior
signs at the Leased Premises shall be subject to the written approval of the
Lessor, which approval shall not be unreasonably withheld.


 


19.         SUCCESSORS AND ASSIGNS:  This Lease Agreement shall be binding upon
and insure to the benefit of the parties and their respective heirs,
administrator, executors, successors, and assigns.


 


20.         EMINENT DOMAIN:  If the whole or any part of the Leased
Premises is taken for any public purpose so as to render the premises
untenantable for the purpose and utilization by Lessee in performance of its
business, this Lease Agreement shall thereupon cease and terminate, and each
party shall be released from further obligation thereunder and Lessor shall
refund to Lessee any portion of the rent paid in advance and not earned at the
date of said possession. All damages awarded for such taking will belong to the
Lessor and Lessee, as their interests may appear.


 
















 


21.         RECORDATION: 
This Lease Agreement shall not be recorded, except that if either party
requests the other party to do so, the parties shall execute for recording a
memorandum of lease which is reasonable acceptable to the party requesting
recordation.


 


22.         CONSTRUCTION IMPROVEMENTS:  Lessee agrees to take the premises on an
as-is basis.


 


IN WITNESS WHEREOF, the parties hereto have
caused this Lease Agreement to be executed by there duly authorized representatives
all on the day and year first written above.


 


WTTNESSETH:


 


 


	
   

  	
   

  	
  LESSEE: Paragon Systems, Inc.

  
	
   

  	
   

  
	
   

  	
  BY: 

  	
  /s/ Charles Keathley

  
	
  DATE

  	
  10/7/03

  	
   

  	
   

  
	
   

  	
  TITLE: 

  	
  PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  LESSOR:

  	
  /s/ Gwen Reed

  
	
   

  	
   

  	
  Gwen Reed

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATE

  	
  10-7-03