Document:

Exhibit
10.64

 

COMMERCIAL LEASE

 

                This Commercial Lease (“lease
agreement”) is made and entered into as of this 1st day of January 2008 (“Effective
Date”) by and between WILLIAM L. CAVIN  (“Landlord”) and MCFSA, LTD. (“Tenant”).

 

1.             GRANT OF LEASED PREMISES.     In consideration of the obligation of
Tenant to pay basic rentals and in consideration of the other terms and
provisions of this lease agreement, Landlord hereby leases to Tenant during the
Term, subject to the terms and provisions of this lease agreement, that certain
real property with commercial building and other improvements known as 7823
Fortune Drive, Bexar County, Texas (“leased premises”).

 

2.             TERM.   The primary term of this lease agreement shall be three (3) months
commencing on the Effective Date above, and ending at 11:59 p.m. local
time on the day preceding the 3-month anniversary of the Effective Date.  (See paragraph 7 “Holding Over” below).

 

3.             OPTIONS TO EXTEND TERM.         Not applicable.

 

4.             UTILITIES/WASTE REMOVAL.      Electricity, water and sewer utilities,
waste removal services and dumpster services are currently in Landlord’s name
and shall be paid by Landlord during the Term, but Tenant shall reimburse
Landlord for all such utility, waste removal and dumpster charges provided to
the leased premises within ten (10) days of Landlord’s invoice for same
accompanied by a copy of the actual billing from the service provider.

 

5.             RENTAL.               Tenant agrees to pay and shall pay Landlord at
Landlord’s offices in San Antonio, Bexar County, Texas, (see paragraph 32
below) or at such other place Landlord shall designate from time to time in
writing, as basic rental for the leased premises, the sum of $2,000.00 per
month, payable without demand in advance on or before the first day of the
primary term and each additional month of the primary term.  Rent received after the fifth day of the
month shall be deemed delinquent.  If
rent is not received by Landlord by the fifth of each month, Tenant shall pay a
late charge of $50.00.

 

6.             TAXES.                 Landlord shall pay all real property taxes assessed
against the leased premises. Tenant shall pay all personal property taxes
assessed against Tenant’s equipment stored or placed on the leased premises.

 

7.             HOLDING OVER.                 Failure of Tenant to surrender the
leased premises at the expiration of the 3-month primary term of this lease
agreement constitutes a holding over which shall be construed as a tenancy from
month-to-month at a rental equal to $3,000 per month during the holdover
period, payable to Landlord in advance on the first day of each such month of
the holdover period.

 

8.             USE OF LEASED PREMISES.            Tenant shall use the leased premises
for operation of its FireQuest alarm business purchased from FireQuest, Inc.,
the former occupant of the leased premises.

 

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9.             SECURITY DEPOSIT.         Not applicable.

 

10.           CONDITION OF PREMISES.             Tenant has examined and accepts the
leased premises in an “as is” condition as complete and suitable for the
purposes for which the same are leased. 
Tenant hereby releases Landlord from all liability or responsibility for
defects, latent or otherwise, contained in the leased premises.

 

11.           MAINTENANCE AND REPAIRS.    Tenant shall, at its sole cost and expense,
keep and maintain the leased premises in clean and sanitary order and
condition.  At the termination of this
Lease, Tenant shall deliver the leased premises in good order and condition,
reasonable wear and tear excepted.

 

12.           ALTERATIONS.  Alterations, additions, and improvements may
only be made with the prior written consent of Landlord, which consent shall
not be unreasonably withheld.  Any damage
caused by the installation or removal of trade fixtures shall be repaired at
Tenant’s expense prior to the expiration of the lease term.  All alterations, improvements, additions, and
repairs made by Tenant shall be made in good and workmanlike manner.

 

13.           SECURITY FOR LEASED PREMISES.             Landlord shall have no liability
whatsoever to Tenant, its employees, patrons, visitors, agents or contractors
for personal injury, property damage or property loss occasioned by criminal
acts or entry by any person or persons into the leased premises.  Landlord and Tenant acknowledge that sole
responsibility and liability for the security, safety and/or well-being of
Tenant’s employees, patrons, visitors, agents or contractors, or their personal
property, shall lie with Tenant.   Tenant
agrees to defend, indemnify and hold Landlord and its employees, agents and
contractors harmless from any claims or damages incurred as a result of Tenant’s
failure to strictly comply with the provisions of this paragraph.

 

14.           TENANT INSURANCE.     During the entire Term of this lease
agreement, the Tenant shall, at the Tenant’s sole cost and expense, but for the
mutual benefit of Landlord and Tenant, maintain general public liability
insurance with personal injury endorsement against claims for personal injury,
death or property damage occurring in, upon or about the leased premises.  All of such policies of insurance shall be
issued in the name of Tenant and Landlord and for the mutual and joint benefit
and protection of the parties, and such policies of insurance or copies thereof
shall be delivered to the Landlord prior to occupancy by Tenant and shall
provide that cancellation shall not be effective until thirty (30) days after
notice to Landlord.

 

15.           TENANT’S WAIVER OF SUBROGATION.    Tenant waives its claims as to and releases
Landlord, its agents, officers and employees, for any loss or damage that may
occur which is covered by the insurance described herein, including extended
coverages and endorsements, and further agrees to notify its insurance carriers
of this waiver so as to cause the respective policies of insurance to be
properly endorsed, if necessary, to prevent invalidation of the insurance coverage
by reason of this waiver of subrogation. 
Upon execution of this lease agreement and at any time upon reasonable
request hereafter, Tenant shall provide Landlord with a certificate evidencing
the foregoing insurance coverage.

 

16.           COMPLIANCE WITH LAWS, REGULATIONS AND
LANDLORD RULES.            Tenant shall,
at its own expense, fully comply with all laws, orders, and requirements of all
governmental

 

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entities
(federal, state, county or city) with reference to the use and occupancy of the
leased premises.

 

17.           ASSIGNMENT AND SUBLETTING.                Tenant shall not voluntarily or
by operation of law assign this lease nor sublet the leased premises or any
interest therein without first obtaining the written consent of Landlord, which
consent may be arbitrarily withheld.

 

18.           DEFAULT BY TENANT.    The following shall be deemed to be events
of default by Tenant under this lease agreement:  (1) Tenant shall fail to pay when due
any installment of rental or any other payment required pursuant to this lease
agreement; (2) Tenant shall file a petition or be adjudged bankrupt or
insolvent under any applicable federal or state bankruptcy or insolvency law or
admit that it cannot meet its financial obligations as they become due, or a
receiver or trustee shall be appointed for all or substantially all of the
assets of Tenant;  (3) Tenant shall
make a transfer in fraud of creditors or shall make an assignment for the
benefit of creditors; (4) Tenant shall do or permit to be done any act which
results in a lien being filed against the leased premises and Tenant shall fail
to bond around such lien within 20 days thereafter; (5) the liquidation,
termination, dissolution or (if the Tenant is a natural person) the death of
Tenant; or (6) Tenant shall be in default of any other term, provision or
covenant of this lease agreement, other than those specified in subparts (1) through
(5), above, and such default is not cured within ten (10) days after
written notice thereof is received by Tenant.

 

19.           REMEDIES FOR TENANT’S DEFAULT.        Upon the occurrence of any event of
default set forth in this lease agreement. 
Landlord may terminate this lease agreement, in which event Tenant shall
immediately surrender the leased premises to Landlord, and if Tenant fails to
surrender the leased premises, Landlord may, without prejudice to any other
remedy which it may have for possession or arrearages in rent, enter upon and
take possession of the leased premises, by picking or changing locks if
necessary, and lock out, expel or remove Tenant and any other person who may be
occupying all or any part of the leased premises without being liable for any
claim for damages.  Tenant agrees to pay
on demand the amount of all loss and damage which Landlord may suffer for any
reason due to the termination of this lease agreement under this Section,
including (without limitation) loss and damage due to the failure of Tenant to
maintain and/or repair the leased premises as required hereunder and/or due to
the inability of Landlord to relet the leased premises on satisfactory terms or
otherwise.

 

20.           DEFAULT BY LANDLORD.              If Landlord defaults in the
performance of any term, covenant or condition required to be performed by
Landlord under this lease agreement, Landlord shall have thirty (30) days
following the receipt of written notice from Tenant specifying such default to
commence to cure such default, provided that if Landlord has commenced actions
to cure such default within said thirty (30) day period, Landlord shall have
all reasonable and necessary time to complete such cure.  If any utility services provided by Landlord
are interrupted for any reason, Landlord shall not be liable in any respect for
damages to the person or property of Tenant or Tenant’s employees, agents,
contractors, patrons and invitees.

 

21.           INDEMNIFICATION OF LANDLORD.           Landlord and its employees and agents
shall have no liability whatsoever to Tenant or to Tenant’s employees, agents,
contractors, patrons, visitors, invitees or any other persons and Tenant hereby
waives all claims against Landlord for any injury to any of such persons or for
any damage to their goods, wares, merchandise or other

 

3

 

personal
property on or about the leased premises from any cause or reason and at any
time.  Tenant agrees to defend, indemnify
and hold Landlord and its employees, agents and contractors harmless from any
and all claims or damages incurred by Landlord or any other person for personal
injury or damage to the goods, wares, merchandise or personal property of
Landlord or such other person arising directly or indirectly from the use of
the leased premises by Tenant or Tenant’s agents, employees, agents,
contractors, patrons, visitors or invitees, from the failure of Tenant to keep
the leased premises in a clean, good condition and repair, or from the failure
of Tenant to strictly comply with the covenants contained in this lease
agreement.  Tenant further agrees to
defend, indemnify and hold Landlord and its employees, agents, contractors and
invitees harmless from any and all damages or expenses of whatever kind arising
out of or caused by a burglary, theft, vandalism, malicious mischief or other
illegal acts performed in, at or from the leased premises.

 

22.           BROKER’S FEE.   Tenant warrants that it has had no dealings
with any real estate broker or agents in connection with the negotiation of
this lease and it knows of no other real estate broker or agent who is entitled
to a commission in connection with this Lease.

 

23.           RIGHT OF ENTRY.              Landlord shall have the right
during normal business hours to enter the demised premises: a) to inspect the
general condition and state of repair thereof; b) to make repairs required or
permitted under this lease; c) to retrieve tools and other personal property of
Landlord stored at the lease premises; d) to retrieve records of FireQuest, Inc.
stored at the lease premises; or e) for any other reasonable purpose.

 

24.           TIME OF ESSENCE.            Time is expressly declared to be of
the essence in this lease.

 

25.           BINDING ON HEIRS AND ASSIGNS.              Subject to the provisions of this
lease pertaining to assignment of the Tenant’s interest, all provisions of this
lease shall extend to and bind, or inure to the benefit not only of the parties
to this lease but to each and every one of the heirs, executors,
representatives, successors and assigns of Landlord or Tenant.

 

26.           RIGHTS AND REMEDIES CUMULATIVE.    The rights and remedies by this lease
agreement are cumulative and the use of any one right or remedy by either party
shall not preclude or waive its right to use any or all other remedies.  Said rights and remedies are given in
addition to any other rights the parties may have by law, statute, ordinance or
otherwise.

 

27.           TEXAS LAW TO APPLY.  This agreement shall be construed under and in
accordance with the laws of the State of Texas, excluding conflict of laws
provisions.

 

28.           SEVERABILITY.  In case any one or more of the provisions
contained in this agreement 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 provision hereof and this agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.

 

29.           PRIOR AGREEMENTS SUPERSEDED.            This agreement constitutes the sole
and only agreement of the parties to this lease and supersedes any prior
understandings or written or oral agreements between the parties respecting the
subject matter of this lease.

 

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30.           AMENDMENT.              No amendment, modification or
alteration of the terms hereof shall be binding unless it is in writing, dated
subsequent to the date hereof, and duly executed by the parties.

 

31.           ATTORNEY’S FEES.  Any signatory to this lease agreement who is
the prevailing party in any legal proceeding against any other signatory
brought under or with relation to this lease agreement or this transaction
shall be additionally entitled to recover court costs, reasonable attorney
fees, and all other out-of-pocket costs of the litigation, including
deposition, travel and witness costs, from the nonprevailing party.

 

32.           NOTICES.              Any demand, notice or request provided for by this
lease agreement shall be in writing, addressed to the party to whom notice is
to be given, and shall be considered as having been made (i) if by hand
delivery or facsimile upon receipt, or (ii) if my mail, three (3) days
from the date of the placing of said notice in the United States Mail Service,
certified mail, return receipt requested, addressed and postage prepaid, to the
addresses shown herein below:

 

5

 

	
  To
  the Landlord:

  	
   

  	
  Fire
  Quest, Inc.

  
	
   

  	
   

  	
  7823
  Fortune Drive

  
	
   

  	
   

  	
  San
  Antonio, TX 78520

  
	
   

  	
   

  	
  Attn:
  William L. Cavin

  
	
   

  	
   

  	
   

  
	
  To
  the Tenant:

  	
   

  	
  MCFSA,
  LTD.

  
	
   

  	
   

  	
  12903
  Delivery Drive

  
	
   

  	
   

  	
  San
  Antonio, TX 78247

  
	
   

  	
   

  	
  Attn:
  Sam Youngblood

  
	
   

  	
   

  	
  Facsimile:
  210-495-5613

  
	
   

  	
   

  	
  E-mail:
  syoungblood@isidet.com

  
	
   

  	
   

  	
   

  
	
  EXECUTED
  as of the Effective Date.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  “Landlord”

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WILLIAM L. CAVIN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  “Tenant”

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MCFSA, LTD.

  
	
   

  	
   

  	
  By: 
  Metroplex Commercial Fire and Security

  Alarms, Inc.

  
	
   

  	
   

  	
  Its: Sole
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  Sam Youngblood

  
	
   

  	
   

  	
  Title:
  CEO

  
							

 

6

 

[Signature Page to
Commercial Lease]

 

7Exhibit 10.65

 

Commercial-Industrial
Lease Agreement

 

ARTICLE ONE: BASIC TERMS

 

1.01         DATE OF LEASE: February 1, 2008.

 

1.02         LANDLORD: Investment Properties,
Ltd., a Texas limited partnership.

 

1.03         TENANT:         ISI Security Group, Inc., formerly known as ISI Detention Contracting
Group, Inc., a Delaware corporation.

 

1.04         PROPERTY:   A building (the “Building”) consisting of
approximately 14,175 rentable square feet located at 12915 Delivery Drive, San
Antonio, Texas 78247 together with the parcel of land (the “Land”) described on Exhibit “A”
attached hereto (the Building and the Land are also sometimes collectively
referred to herein as the “Premises” or
the “Property”).

 

1.05         LEASE TERM:  The Lease Term shall be for a period of
eighty four (84) months beginning on February 1, 2008 (“Commencement Date”) and ending January 31, 2015 (“Expiration Date”), unless extended pursuant to the
provisions in Article 14.01.

 

1.06         RENT:  The “Base Rent”
shall be the rent paid by Tenant to Landlord during the Lease Term according to
the following terms: The Base Rent amounts shall be due and payable on the
first day of each calendar month during the term hereof and continuing through
and including the last month of the Lease Term at the following rates:

 

	
  Months 1-3

  	
   

  	
  $5,400.00 per month

  
	
  Months 4-36

  	
   

  	
  $8,965.00 per month

  
	
  Months 37-60

  	
   

  	
  $9,500.00 per month

  
	
  Months 61-72

  	
   

  	
  $7,100.00 per month

  
	
  Months 73-84

  	
   

  	
  $7,100.00 per month
  plus CPI adjustment as described in Article 3.04.

  

 

Tenant shall deposit the
Base Rent for the first month upon execution of this Lease Agreement

 

1.07         SECURITY DEPOSIT:  Tenant shall deposit with Landlord an
amount equivalent to the last two months rent ($14,200.00) less the amount
currently held by Landlord ($5,400.00) under the terms of the existing Lease
Agreement between the parties, for a total deposit obligation of $8,800.00.

 

1.08         PERMITTED USE:  The Property may be used only for the
purpose of general office and warehouse, including sales, storage,
distribution, technical support and for such other lawful purposes as may be
incidental thereto.

 

1.09         INSURANCE, AD VALOREM TAXES, AND MAINTENANCE
ASSESSMENTS: Tenant shall pay insurance premiums as specified in Article 6
and ad valorem taxes for the

 

 

Property as specified in Article 11.
In addition, the Tenant shall reimburse Landlord for any maintenance
assessments levied by the Wetmore Business Park Association, Inc. during
the term of this Lease. The parties agree that the estimated amount of such
fees is $1,901.08 per month.

 

	
  1.10         RENT TO BE PAID TO:

  	
  Investment Properties,
  Ltd.

  
	
   

  	
  Address: P.O. Box
  7608

  
	
   

  	
  San Antonio, Texas
  78207

  

 

1.11         DAILY LATE CHARGE (See Article 3.02): Ten Dollars
($10.00) per day.

 

1.12         REALTORS COMMISSIONS: To be paid by the party
incurring such by separate agreement.

 

1.13         WETMORE BUSINESS PARK DECLARATION:  The Property is subject to a Declaration of Covenants for Office, Commercial, Warehouse, and
Industrial Section of Wetmore Business Park, San Antonio, Texas (“the
Declaration”), which is recorded in Volume 3423, Page 262-271 of the Real
Property Records of Bexar County, Texas. A copy of the Declaration is attached
at Exhibit “C”. Tenant shall be
subject to these covenants, including, but not limited to, signage restrictions
and maintenance assessments.

 

ARTICLE TWO:   LEASE
AND LEASE TERM

 

2.01         LEASE OF PROPERTY.  Landlord hereby leases
the Property to Tenant and Tenant hereby leases the Property from Landlord for
the Lease Term stated in Article 1.05.

 

2.02         HOLDING OVER.   Tenant shall vacate the
Property upon the Expiration Date or earlier termination of this Lease. Tenant
shall reimburse Landlord for and indemnify Landlord against any reasonable
damages incurred by Landlord from any delay by Tenant in vacating the Property.
If Tenant does not vacate the Property upon the expiration or earlier
termination of this Lease, Tenant’s occupancy of the Property shall be a “month-to-month”
tenancy, subject to all the terms and provisions applicable to a month-to-month
tenancy, except that the rent then in effect shall be increased by fifty
percent (50%).

 

2.03         QUIET ENJOYMENT.   Landlord covenants
that it has good title to the Property, free and clear of all liens and
encumbrances, excepting only the lien for current taxes not yet due, such
mortgage or mortgages as are permitted by the terms of this Lease, zoning
ordinances and other building and fire ordinances and governmental regulations
relating to the use of such property, and easements, restrictions and other
conditions of record. Landlord represents that it has the authority to enter
into this Lease and that so long as Tenant pays all amounts due hereunder and
performs all other covenants and agreements herein set forth, Tenant shall
peaceably and quietly have, hold and enjoy the Property for the term hereof
without hindrance or molestation from Landlord, subject to the terms and
provisions of this Lease.

 

 

ARTICLE THREE:  RENT

 

3.01         RENT.  Tenant agrees to pay
rent for the Property at the rate specified in Article 1.06. One monthly rental
installment shall be due and payable on the first (1st)
day of the first calendar month of the Lease Term, and a like monthly
installment shall be due and payable on the first day of each succeeding
calendar month during the Lease Term. All rent shall be paid to the party
designated in Article 1.10 at the address stated herein for such party. Unless
otherwise provided herein, Tenant shall pay Base Rent and all other charges
specified in this Lease for the period of occupancy.

 

3.02         LATE CHARGE.  If any rent due hereunder is
not paid within five (5) days after written notice from Landlord that the
same was not paid when due, Tenant shall pay the party named in Article 1.10
above a late charge equal to the sum stated in Article 1.11 above for each
day from its due date until such delinquent sum is paid. The parties agree that
such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of such late payment.

 

3.03         NET NATURE OF LEASE.  With the exception of
Landlord’s obligations under Article 5.02, it is the intent of both
Landlord and Tenant that the Base Rent to be paid hereunder shall be absolutely
net to Landlord, so that this lease shall yield, net to Landlord, the rental
specified in this Article in each month of the Lease Term, free of any
charges, assessments or impositions of any kind charged, assessed or imposed on
or against the Property, and without abatement, deduction or set-off by Tenant,
except as expressly provided otherwise herein, and Landlord shall not be
expected or required to pay any such charge, assessment or imposition, or be
under any obligation or liability hereunder, except as expressly set forth.

 

3.04         CONSUMER PRICE INDEX (“CPI”) INCREASES TO BASE
RENT.  The Base Rent shall be adjusted during the last full year of
the Lease Term, beginning in on February 1, 2014. The Base Rent shall be
the Base Rent for the last month of the immediately preceding Lease Year, as
adjusted by any increase in the index known as the United States Bureau of
Labor Statistics, Consumer Price Index for Urban Wage Earners and Clerical
Workers, United States City Average, index Base Period (1982-84=l00) (“CPI-W”)
from February 1, 2013, provided, however, that the Base Rent shall never
be less than the Base Rent in last month of the immediately preceding Lease
Year. If the CPI-W shall be revised or cease to be compiled during the term of
the Lease, or in some other way fail to be a reliable index for the purposes of
the Lease, the parties shall agree in good faith on some other index serving
the same purpose to adjust the Base Rent.

 

ARTICLE FOUR:  USE OF
PROPERTY

 

4.01         PERMITTED USE.  Tenant may use the Property
only for the Permitted Use stated in Article 1.08. Tenant shall, at its
own cost and expense, obtain any and all licenses and permits necessary for
such use (including, but not limited to, a Certificate of Occupancy, or the
equivalent thereof), shall at all times maintain the Property in good condition
(except with respect to

 

 

obligations of Landlord
under this Lease) and comply with all governmental laws, codes, ordinances,
regulations or any other applicable authorities with regard to the use,
condition or occupancy of the Property (except as the same relates to Landlord’s
obligations under this Lease). Tenant shall not permit any objectionable or
unpleasant odors, smoke, dust, gas, noise, vibrations, or pest infestations to
emanate from the Property, nor take any other action that would constitute a
nuisance or would disturb, unreasonably interfere with, or endanger Landlord.
Tenant’s use of the Property shall at all times comply with the insurance
provisions in Article 6.01 hereof. Tenant agrees that the point pressure
resulting from Tenant’s inventory, forklifts and equipment pertaining to Tenant’s
use of the Property shall not exceed allowable design floor loading for floor
slabs on grade. Tenant shall hold harmless Landlord from any loss, liability,
and expenses arising out of any damage or repair caused by Tenant’s negligence
or failure to comply with this paragraph.

 

4.02         COMPLIANCE WITH THE LAW.   Tenant shall
comply with all governmental laws, ordinances and regulations applicable to the
use of the Property during the Lease Term, and shall promptly comply with all
governmental orders and directives for the correction, prevention and abatement
of nuisances on or upon, or connected with the Property, all at Tenant’s sole
expense.

 

4.03         HAZARDOUS MATERIALS. The term “Substances,” as used in
this Lease shall mean pollutants, contaminants, toxic or hazardous wastes, or
any other substances, the use, storage, handling, disposal, transportation or
removal of which is regulated, restricted, prohibited or penalized by any “Environmental
Law,” which term shall mean any federal, state or local law, ordinance or other
statute of a governmental or quasi-governmental authority relating to pollution
or protection of health or the environment and shall specifically include, but
not be limited to, any “hazardous substance” as that term is defined under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
and any amendments or successors in function thereto. Tenant hereby agrees that
(i) no activity will be conducted on the Property that will produce any
Substance, except for such activities that are part of the ordinary course for
Tenant’s business activities (the “Permitted Activities”) provided said
Permitted Activities are conducted in accordance with all Environmental Laws
and have been approved in advance in writing by Landlord (which approval
Landlord may grant or withhold in its reasonable discretion); Tenant shall be
responsible for obtaining any required permits and paying any fees and
providing any testing required by any governmental agency; (ii) the
Property will not be used in any manner for the storage of any Substances
except for the temporary storage of such materials that are used in the
ordinary course of Tenant’s business provided such substances are properly
stored in a manner and location meeting all Environmental Laws and approved in
advance in writing by Landlord (which approval Landlord may grant or withhold
in its sole discretion); Tenant shall be responsible for obtaining any required
permits and paying any fees and providing any testing required by any
governmental agency; (iii) no portion of the Property will be used as a
landfill or a dump; (iv) Tenant will not install any underground or
aboveground tank of any type; (v) Tenant will not allow any surface or
subsurface conditions to exist or come into existence that constitute, or with
the passage of time, may constitute a public or private nuisance; (vi) Tenant
will not permit any Substances to be brought onto the Property, except in
accordance with the terms and

 

 

conditions hereof, and if
so brought or found located thereon, the same shall be immediately removed, and
properly disposed, and all required cleanup procedures shall be diligently
undertaken pursuant to all Environmental Laws; and (vii) Tenant shall in
all regards comply with Environmental Laws including, without limitation,
meeting any necessary financial responsibility requirements. Prior to any
Substance being brought upon or into the Property, whether Landlord’s written
permission is required or not, Tenant will provide to Landlord any applicable
material safety data sheets regarding said Substance as well as a written
description of the amount of such Substance to be brought upon or into the
Property and the common and recognized chemical name of such Substance. Tenant
shall bear responsibility for insuring that all record keeping, reporting and
remediation responsibilities of Tenant under Environmental Laws are met and
Tenant assumes all such responsibility and liability for such legal compliance.
Landlord or Landlord’s representative shall have the right, but not the
obligation, to enter the Property for, among other purposes, the purposes of
inspecting the storage, use and disposal of any Substances and to review
compliance with all Environmental Laws. Should it be determined, in Landlord’s
sole opinion, that any Substances are being improperly stored, used, or
disposed of, then Tenant shall immediately take such corrective action as
required by applicable Environmental Laws. Tenant will provide Landlord written
notification of the release or disposal of any Substance either within the
Property or outside of Tenant’s Property and will also provide Landlord written
notice of any pending or threatened litigation concerning the breach or
purported breach of any Environmental Laws. If at any time during or after the
term of the Lease, the Property is found to be contaminated by Substances or
subject to said conditions, arising from or as a result of Tenant’s negligence
(whether in whole or in part) or the use of the Property or any Substances by
Tenant or any of Tenant’s agents, employees, assigns or subtenants, Tenant
shall diligently institute proper and thorough cleanup procedures in accordance
with Environmental Laws at Tenant’s sole cost, and Tenant agrees to indemnify
and hold Landlord harmless from all claims, demands, actions, liabilities,
costs, expenses, damages, fines, reimbursement, restitution, response costs,
cleanup costs, and obligations (including investigative responses and attorney’s
fees) of any nature. The foregoing indemnification and the responsibilities of
Tenant shall apply to Tenant regardless of whether they arise from any
Permitted Activity, Substances or Permitted Materials (as may be listed below),
and shall survive the termination or expiration of this Lease. Landlord shall
be under no obligation to expend any sums or to seek reimbursement to enforce
the indemnification obligations of Tenant hereunder. In no event shall Tenant
be liable for any environmental conditions not caused by Tenant, its agents or
contractors.

 

Permitted Materials: [“None”]

 

Tenant acknowledges and
agrees that it shall not be unreasonable for Landlord to withhold its consent
to any proposed assignment, subletting, or transfer of Tenant’s interest in
this Lease if (i) the anticipated use of the Property by the proposed
assignee, subtenant, or transferee (collectively, a “Transferee”) involves the
generation, storage, use, treatment, or disposal of Substances other than as a
non-material part of the business; (ii) the proposed Transferee has been
required by any prior Landlord, lender, or governmental authority to make
remedial action in connection with Substances contaminating a property, if the
contamination resulted from such

 

 

Transferee’s actions or
use of the property in question; or (iii) the proposed Transferee is
subject to an enforcement order issued by any governmental authority in
connection with the use, disposal, or storage of a Substance.

 

4.04         SIGNS.  Without the prior written consent of
Landlord, Tenant shall not place or affix any signs or other objects upon or to
the Property, including but not limited to the roof or exterior walls of the
building or other improvements thereon, or paint or otherwise deface said
exterior walls, which consent shall not be unreasonably withheld, conditioned
or delayed. Any signs installed by Tenant shall conform with applicable laws
and deed and other restrictions, including the Declaration. Tenant shall remove
all signs at the termination of this Lease and shall repair any damage and
close any holes caused or revealed by such removal.

 

4.05         UTILITIES.  Tenant shall pay the cost of all
utility services used by Tenant at the Property. Tenant’s costs shall include
but not be limited to initial connection charges, all charges for gas, water
and electricity used on the Property, and for all electric lights, lamps and
tubes.

 

4.06         LANDLORD’S ACCESS.  Landlord and its
authorized agents shall have the right to enter upon the Property at all
reasonable hours for the purpose of inspecting them, making repairs to them,
exhibiting the Property to existing or prospective lenders or purchasers, or
curing any “Tenant Default,” as defined herein that Landlord elects to cure.
Landlord shall not be liable to Tenant for any expense, loss or damage from any
such entry upon the Property. Tenant shall permit Landlord, at any time during
the last six months of the term of the Lease (as the same may be extended) to
place upon the Property any usual or ordinary “For Lease” signs and Landlord or
its agent may enter upon the Property during normal business hours to exhibit
same to prospective tenants.

 

4.07         INTERRUPTION OF SERVICE.  Interruption or
curtailment of services furnished to the Property by or through Landlord shall
not entitle Tenant to any claim against Landlord or to any abatement in rent,
nor shall the same constitute constructive or partial eviction, unless Landlord
fails to take such measures as may be reasonable in the circumstances to
restore the service without undue delay.

 

4.08         EXEMPTIONS FROM LIABILITY.  Except as
specifically provided herein, Landlord shall not be liable for any damage or
injury to the person, business (or any loss of income therefrom), goods, wares,
merchandise or other property of Tenant, Tenant’s employees, invitees,
customers or any other person in or about the Property, whether such damage or
injury is caused by or results from: (a) fire, steam, electricity, water,
gas, or rain; (b) the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures or any other cause; (c) conditions arising on or about the
Property or upon other portions of any building of which the Property is a
part, or from other sources or places; or (d) any act or omission of any
other tenant of any building of which the Property is a part. Landlord shall
not be liable for any such damage or injury even though such damage or injury
is not attributable to Tenant. Subject to Article 6.04, the provisions of
this Article 4.08 shall not,

 

 

however, exempt Landlord
from liability for Landlord’s gross negligence or willful misconduct or Landlord’s
breach of this Lease.

 

ARTICLE FIVE: MAINTENANCE,
REPAIRS AND ALTERATIONS

 

5.01         ACCEPTANCE OF PROPERTY.  Tenant acknowledges
that 1) it has inspected and accepts the Premises in an “AS IS, WHERE IS”
CONDITION; 2) the Building and Improvements are suitable for the purpose for
which the Premises are leased and for Tenant’s intended commercial purpose, and
Landlord has made no warranty, representation, covenant, or agreement with
respect to the merchantability or fitness for any particular purpose of the
Premises; 3) the Premises are in good and satisfactory condition; 4) no
representations as to repair of the Premises, nor promises to alter, remodel,
or improve the Premises have been made by Landlord (unless and except as may be
set forth in the Exhibit attached to the Lease and Landlord’s maintenance
and repair obligations under Article 5.02; 5) there are no representations
or warranties, express, implied, or statutory, that extend beyond the
description of the Premises.

 

5.02         MAINTENANCE AND REPAIRS BY LANDLORD.  Landlord
shall at its expense maintain, repair, and if necessary replace, only the roof,
foundation, and structure of the improvements on the Property, except for
reasonable wear and tear and any non-casualty damage caused by the negligent
act or omission of Tenant, or Tenant’s invitees, employees or customers. Tenant
shall give prompt written notice to Landlord of the need for such maintenance,
repairs or replacement and Landlord shall proceed promptly to perform such
maintenance, repairs or replacement. Landlord shall not be liable to Tenant for
any damages or inconvenience, and Tenant shall not be entitled to any damages,
nor to any abatement or reduction of rent, by reason of any repairs,
alterations, or additions made by Landlord under the Lease. Landlord’s
liability for any defects, repairs, replacement, or maintenance for which
Landlord is responsible under the Lease shall be limited to the cost of
performing such work. Nothing in this provision shall entitle Tenant to terminate
the Lease based on the physical condition of the Premises.  If Landlord fails, refuses or neglects to
maintain the Premises as required in this Lease, after notice shall have been
given Landlord in accordance with the terms of this Lease, Tenant may make such
repairs without liability to Landlord for any loss or damage that may accrue to
the Premises and Landlord shall promptly reimburse Tenant for its reasonable
third party costs; provided, however, that no notice shall be required in the
event of any hazardous or emergency condition. Landlord shall have a reasonable
time within which to perform such repairs or maintenance.

 

5.03         MAINTENANCE AND REPAIRS BY TENANT.  Tenant,
at its own cost and expense, shall (i) maintain all parts of the Property
(except for those items for which Landlord is responsible) in good condition,
except for reasonable wear and tear and damage by casualty, (ii) promptly
make all necessary repairs and replacements, including, but not limited to,
windows, glass and plate glass, exterior doors, any special office entry,
interior walls and finish work, interior doors and floor covering, utility
connections, downspouts, gutters, heating and air conditioning systems, light
bulbs and ballasts, dock boards, truck doors, dock bumpers, paving, plumbing
work and fixtures, termite and pest extermination, regular removal of trash and
debris,

 

 

dedicated sewer lines and
any damage due to vandalism or malicious mischief (iii) keep the parking
areas, driveways, truck aprons, and grounds surrounding the Property in a clean
and sanitary condition, (iv) repair all wind damage to glass except with
respect to tornado or hurricane damage. In the event Tenant should neglect
reasonably to maintain the Property, Landlord shall have the right (but not the
obligation, unless such repairs are not caused by Tenant’s neglect, in which
event Landlord shall make the necessary repairs at its cost) to cause repairs
or corrections to be made upon notice to Tenant and any reasonable costs
therefore shall be payable by Tenant to Landlord as additional rental on the
next rental payment due date following written notice of such costs delivered
by Landlord. Upon termination of this Lease, Tenant shall deliver up the
Property in good repair and condition, reasonable wear and tear, defects for
which Landlord is responsible and damage by fire, wind storm or other casualty
excepted. Tenant shall repair any damage caused by Tenant’s act or omission, or
the act or omission of Tenant’s invitees, employees or customers.

 

5.04         ALTERATIONS.  Tenant shall not create any
openings in the roof or exterior wall, or make any alterations, additions or
improvements to the structure, interior or exterior of the Property, without
the prior written consent of Landlord, not to be unreasonably withheld,
conditioned or delayed. All approved construction shall be done in a good and
workmanlike manner using first class materials. Tenant shall have the right,
without Landlord’s consent, to erect or install shelves, bins, machinery, and
trade fixtures, provided that Tenant complies with all applicable governmental
laws, ordinances and regulations. At the expiration or termination of this
Lease, Tenant shall, subject to the restrictions of Article 5.06 below,
have the right to remove such items so installed by it, provided that Tenant
shall, at the time of removal of such items, repair in a good and workmanlike
manner any damage caused by installation or removal thereof and restore the
Property to the condition that existed prior to the installation of such items,
reasonable wear and tear excepted. Tenant shall pay for all costs incurred or
arising out of alterations, additions or improvements in or to the Property and
shall not permit a mechanic’s or materialman’s lien to be asserted against the
Property.

 

5.05         SECURITY.  Any and all security of any kind
for Tenant, Tenant’s agents, employees or invitees, the Property, or any
personal property thereon (including, without limitation, any personal property
of any sublessee) shall be the sole responsibility and obligation of Tenant,
and shall be provided by Tenant at Tenant’s sole cost and expense. Tenant
acknowledges and agrees that Landlord shall have no obligation or liability
whatsoever with respect to the same. Tenant shall indemnify and hold Landlord
harmless from and against any and all loss, cost, damage or other liability
arising directly or indirectly from security measures or the absence thereof
with respect to the Property and the building or the project of which the
Property is a part. There is currently an alarm system installed on the
Property, however, Tenant may, at Tenant’s sole cost and expense, install alarm
systems in the Property provided such installation complies with the provisions
of Article 5.04 hereof. Removal of any Tenant installed alarm systems
shall be Tenant’s sole responsibility and, at Tenant’s sole cost and expense,
shall be completed prior to lease termination and all affected areas of the
Property shall be repaired and/or restored in a good and workmanlike manner to
the condition that existed prior to such installation.

 

 

5.06         CONDITION UPON TERMINATION. Upon termination of this
Lease, Tenant shall surrender the Property to Landlord, broom clean and in the
same condition as received except for ordinary wear and tear or any condition
which Tenant was not otherwise obligated to remedy under any provision of this
Lease. Tenant shall not be obligated to repair any damage which Landlord is
required to repair hereunder. In addition, if Landlord so notified Tenant prior
to commencement of work, Landlord may require Tenant to remove any
extraordinary alterations, additions or improvements made during the term of
this Lease, without Landlord’s consent. In no event, however, shall Tenant
remove any of the following materials or equipment without Landlord’s prior
written consent: any power wiring or power panels; lighting or lighting
fixtures; wall coverings; drapes, blinds or other window coverings; carpets or
other floor coverings; heaters; air conditioners or any other heating and air
conditioning equipment; fencing or security gates; or other similar building
operation equipment and decorations.

 

All obligations of Tenant
hereunder not fully performed as of the expiration or earlier termination of
the term of this Lease shall survive the expiration or earlier termination of
the term hereof, including without limitation, all payment obligations with
respect to Base Rent and additional rental and all obligations concerning the
condition and repair of the Property. Upon the expiration or earlier
termination of the term hereof, and prior to Tenant vacating the Property,
Tenant shall restore the Property to good condition and repair, reasonable wear
and tear excluded. Prior to Tenant vacating the Property, Tenant shall make all
repairs as specified in this Article 5 hereof, including but not limited
to any repairs necessary so that the heating and air conditioning systems are
in good working order, subject to commercially reasonable obsolescence. If any
and all repairs or restoration required of Tenant hereunder are not completed
by the expiration or earlier termination hereof, Landlord may cause the same to
be completed and the costs shall be paid by Tenant promptly upon demand
(including a fifteen percent (15%) service charge for arranging for and
coordinating such work).

 

ARTICLE SIX: INSURANCE AND
INDEMNITY

 

6.01         LANDLORD INSURANCE. Landlord shall maintain
insurance covering the buildings situated on the Property, except for those
items the repair and maintenance of which are Tenant’s responsibility, in an
amount not less than eighty percent (80%) of the “replacement cost” thereof
insuring against the perils of Fire, Lightning, Extended Coverage, Vandalism,
and Malicious Mischief. Tenant shall reimburse Landlord for the cost and
expense of all such insurance within fifteen (15) days of written receipt of a
statement showing the amount and computation of such premiums due. Tenant shall
not keep anything upon the Property, or do anything in or about the Property
except the Permitted Use specified herein, which Landlord represents will not
increase the rates for the fire and standard extended coverage insurance upon
the building which is part of the Property. Tenant agrees to pay on written
demand any increase in insurance premiums that may be charged to Landlord
during the term of this Lease resulting from a deviation from the Permitted Use
specified herein within Tenant’s reasonable control. Tenant shall also be
responsible for maintaining insurance on Tenant’s equipment and other personal
property located

 

 

on the Property. Tenant
agrees to pay to Landlord as additional rental during the Lease Term any
amounts for commercially reasonable insurance paid by Landlord.

 

6.02         LIABILITY INSURANCE.  Tenant, at its own
expense, shall maintain during the term of this Lease a policy or policies of
worker’s compensation and comprehensive general liability insurance, including
personal injury and property damage, with contractual liability endorsement, in
the amount of One Million Dollars ($1,000,000.00) for property damage and One
Million Dollars ($1,000,000.00) per occurrence for personal injuries or deaths
of persons occurring in or about the Property. Tenant, at its own expense, also
shall maintain during the term of this Lease, fire and extended coverage
insurance covering (i) the replacement cost of all alterations, additions,
partitions and improvements installed or placed on the Property by Tenant or by
Landlord on behalf of Tenant and (ii) the replacement cost of all of
Tenant’s personal property contained within the Property and (iii) business
interruption of Tenant. Said policies shall (i) name Landlord as an
additional insured and insure Landlord’s contingent liability under this Lease
(except for the worker’s compensation policy and Tenant’s insurance on Tenant’s
personal property, which instead shall include waiver of subrogation
endorsement in favor of Landlord), (ii) be issued by an insurance company
which is acceptable to Landlord, (iii) provide that said insurance shall
not be canceled unless thirty (30) days prior written notice shall have been
given to Landlord, and (iv) provide primary coverage to Landlord when any
policy issued to Landlord provides duplicate or similar coverage, and in such
circumstance Landlord’s coverage under Landlord’s policy shall be deemed excess
over and above the coverage provided by Tenant’s policy. Said policy or
policies or certificates thereof shall be delivered to Landlord by Tenant upon
commencement of the term of the Lease and upon each renewal of said insurance.

 

6.03         LIABILITY AND INDEMNITY. Except for any claims,
rights of recovery and causes of action that Tenant has released, Landlord
shall hold Tenant harmless and defend Tenant against any and all claims or
liability for any injury or damage to any person in, on or about the Property
or any part thereof and/or the building of which the Property are a part, when
such injury or damage shall be caused by the act, neglect, fault of, or
omission of any duty with respect to the same by Landlord, its agents, servants
and employees. Notwithstanding the foregoing or anything to the contrary in
this Lease, Tenant hereby agrees that in no event shall Landlord be liable for
any incidental or consequential damages whatsoever, including, without
limitation, any damages as a result of any interruption of Tenant’s business or
any loss of income therefrom. Except for any claims, rights of recovery and
causes of action that Landlord has released, Tenant shall hold Landlord
harmless from and defend Landlord against any and all claims or liability for
any injury or damage (i) to any person or property whatsoever occurring
in, on or about the Property or any part thereof and/or of the building of
which the Property are a part, including without limitation elevators, stairways,
passageways or hallways, the use of which Tenant may have in accordance with
this Lease, when such injury or damage shall be caused by the act, neglect,
fault of, or omission of any duty with respect to the same by Tenant, its
agents, servants, employees, or invitees, (ii) arising from the conduct of
management of any work done by the Tenant in or about the Property, (iii) arising
from transactions of the Tenant, and (iv) all costs, reasonable counsel
fees, expenses and liabilities incurred in connection with any such claim or
action or proceeding

 

 

brought thereon. The
provisions of this Article 6.03 shall survive the expiration or
termination of this Lease with respect to any claims or liability occurring
prior to such expiration or termination.

 

6.04         WAIVER OF SUBROGATION.  NOTWITHSTANDING ANY
PROVISION TO THE CONTRARY IN THIS LEASE, LANDLORD AND TENANT EACH HEREBY WAIVE,
AND AGREE TO CAUSE THEIR INSURERS TO WAIVE, ANY AND ALL RIGHTS OF RECOVERY
AGAINST THE OTHER OR AGAINST THE OFFICERS, EMPLOYEES, AGENTS OR REPRESENTATIVES
OF THE OTHER (COLLECTIVELY, “RELEASED PARTIES”), FOR LOSS OR DAMAGE TO ITS
PROPERTY, OR THE PROPERTY OF OTHERS UNDER ITS CONTROL, IF SUCH LOSS OR DAMAGE
IS COVERED BY ANY INSURANCE POLICY REQUIRED TO BE CARRIED BY IT UNDER THIS LEASE,
OR COULD BE COVERED BY STANDARD COMMERCIAL PROPERTY INSURANCE, EVEN IF SUCH
LOSS OR DAMAGE IS CAUSED, IN WHOLE OR IN PART, BY THE NEGLIGENCE OF ANY OF THE
RELEASED PARTIES. FOR THE PURPOSES HEREIN, ALL DEDUCTIBLES UNDER ANY INSURANCE
POLICY SHALL BE FOR THE SOLE BENEFIT AND ACCOUNT OF THE INSURED PARTY UNDER THE
APPLICABLE POLICY.

 

ARTICLE
SEVEN:    TRANSFER OF INTEREST

 

7.01         ASSIGNMENT AND SUBLETTING.  Tenant shall not
assign or in any manner transfer this Lease or any estate or interest therein,
by operation of law or otherwise, or sublet the Property or any part thereof,
or grant any license, concession or other right of occupancy of any portion of
the Property without the prior express written consent of Landlord, which shall
not be unreasonably withheld, conditioned, or delayed.  Consent by Landlord to one or more
assignments or sublettings shall not operate as a waiver of Landlord’s rights
as to any subsequent assignments and sublettings. In no event shall any
assignment or sublease of the Property relieve or release Tenant from any
obligations under this Lease, except as herein otherwise expressly provided.
Landlord shall be permitted to enforce the provisions of this instrument
against the undersigned Tenant and/or any assignee without demand upon or
proceeding in any way against any other person. Landlord does agree, however,
that Tenant shall be permitted to assign this Lease to any related entity,
subsidiary or affiliate of Tenant (in which Tenant has a controlling interest)
without having the obligation of securing the prior consent or approval of
Landlord. In addition, the acquisition of all the stock of Tenant by any
corporation, the stock of which is registered pursuant to the Securities
Exchange Act of 1934, or the merger of Tenant into such a corporation the stock
of which is so registered, shall not be considered to be a violation of this
Article. Any unauthorized assignment or subleasing of the Property by Tenant
shall cancel the right of any Renewal Option in Article 14.01.

 

7.02.        ASSIGNEE COVENANTS.  Notwithstanding that
the prior express written consent of Landlord to any of the aforesaid
transactions may have been obtained, the following shall apply:

 

(a)           In the event of an assignment,
contemporaneously with the granting of Landlord’s consent, Tenant shall (i) cause
the assignee to expressly assume in writing and agree to perform all of the
obligations of Tenant hereunder, and such assignee shall be jointly and
severally liable therefor along with Tenant; and (ii) cause such assignee
to grant to Landlord an express first and

 

 

prior Landlord’s lien and
security interest (and execute one or more Uniform Commercial Code Financing
Statements) in assignee’s goods, wares, equipment, fixtures, furniture,
merchandise, improvements and other personal property in the manner set forth
in Article 9.03 hereof.

 

(b)           A signed counterpart of all instruments
relative thereto (executed by all parties to such transaction with the
exception of Landlord) shall be submitted by Tenant to Landlord prior to or contemporaneously
with the request for Landlord’s consent thereto (it being understood that no
such instrument shall be effective without the written consent of Landlord).

 

(c)           Tenant shall subordinate to Landlord’s
statutory lien and Landlord’s aforesaid contractual lien and security interest,
any liens or other rights which Tenant may claim with respect to any fixtures,
equipment, goods, wares, merchandise, furniture, improvements, or other
personal property owned by the proposed assignee, subTenant, or other party
intending to occupy the Property.

 

(d)           Tenant agrees to reimburse Landlord for
all attorneys’ fees and administrative expenses incurred in connection with the
review, processing or preparation of any documentation associated with the
assignment, subletting or other transfer of this lease or Tenant’s interest in
the Property, whether or not Landlord’s consent to such transfer is required or
obtained.

 

7.03         CONTINUING OBLIGATIONS.  Notwithstanding any
assignment or subletting, Tenant shall at all times remain fully responsible
and liable for the payment of the rent herein specified and for compliance with
all of its other obligations under this Lease (even if future assignments and
sublettings occur subsequent to the assignment or subletting by Tenant, and
regardless of whether or not Landlord’s approval has been obtained for such
future assignments and sublettings). Moreover, in the event that the rental due
and payable by a sublessee exceeds the rental payable under this Lease, or if
with respect to a permitted assignment, permitted license or other transfer by
Tenant permitted by Landlord, the consideration payable to Tenant by the
assignee, licensee or other transferee exceeds the rental payable under this
Lease, then Tenant shall be bound and obligated to pay Landlord 50% of such
excess rental (after Tenant first recovers all of its third party expenses
relating to such transfer e.g. brokerage commissions) within ten (10) days
following receipt thereof by Tenant from such sublessee, assignee, licensee or
other transferee, as the case may be. In the event of any assignment or
subletting, it is understood and agreed that all rentals paid to Tenant by an
assignee or sublessee shall be received by Tenant in trust for Landlord, to be
forwarded immediately to Landlord without offset or reduction of any kind; and
upon election by Landlord such rentals shall be paid directly to Landlord as
specified in Article 1.10 of this Lease (to be applied as a credit and
offset to Tenant’s rental obligations).

 

7.04         TRANSFERS IN BANKRUPTCY.  In the event this
Lease is assigned to any person or entity pursuant to the provisions of the
Bankruptcy Code, 11 U.S.C. § 101 et  seq. (the “Bankruptcy Code”),
any and all monies or other considerations payable or otherwise to be delivered
in connection with such assignment shall be paid or delivered to Landlord,
shall be and remain the

 

 

exclusive property of
Landlord and shall not constitute property of Tenant or of the estate of Tenant
within the meaning of the Bankruptcy Code. Any and all monies or other
considerations constituting Landlord’s property under the preceding sentence
not paid or delivered to Landlord shall be held in trust for the benefit of
Landlord and be promptly paid or delivered to Landlord. Any person or entity to
which this Lease is assigned pursuant to the Bankruptcy Code shall be deemed
without further act or deed to have assumed all of the obligations arising
under this Lease on and after the date of such assignment. Any such assignee
shall upon demand execute and deliver to Landlord an instrument confirming such
assumption.

 

7.05         ENCUMBRANCE.  Tenant shall not mortgage,
pledge or otherwise encumber its interest in this Lease or in the Property
without the prior written consent of Landlord. Upon any violation of this
provision, this Lease shall terminate at Landlord’s option.

 

7.06         ASSIGNMENT BY LANDLORD.  In the event of the
transfer and assignment by Landlord of its interest in this Lease and in the
building containing the Property to a person expressly assuming Landlord’s
obligations under this Lease, Landlord shall thereby be released from any
further obligations hereunder (but Landlord shall not be released from any
obligations accruing prior to any such transfer or assignment), and Tenant
agrees to look solely to such successor in interest of the Landlord for
performance of such obligations. Any security given by Tenant to secure
performance of Tenant’s obligations hereunder may be assigned and transferred
by Landlord to such successor in interest, and Landlord shall thereby be
discharged of any further obligation relating thereto.

 

ARTICLE EIGHT:  DAMAGE
OR DESTRUCTION

 

8.01         PARTIAL DAMAGE.  In the event the
improvements situated on the Property are partially damaged, or rendered
partially unfit for occupancy, by fire or other casualty, Tenant shall give
immediate written notice thereof to Landlord. If the repairs can reasonably be
made within ninety (90) days after Landlord receives such written notice from
Tenant so that the damaged portion of the Property is completely restored to
its condition prior to such casualty, Landlord shall forthwith cause such
repairs to be made within such ninety (90) days and this Lease shall not
terminate. “Partial Damage” shall mean damage or destruction to the Property
other than Tenant owned alterations, the repair cost of which damage or
destruction is less than fifty percent (50%) of the then replacement cost
immediately prior to said damage or destruction. If damage is the result of
Landlord’s gross negligence or willful misconduct, Landlord shall allow Tenant
a fair reduction in rent in proportion to the extent the improvements are
partially unfit for occupancy. If the repairs or restoration cannot reasonably
be made within ninety (90) days after Landlord receives such written notice
from Tenant, this Lease shall terminate and the rent shall be paid to the date
of such casualty.

 

8.02         UNINSURED PARTIAL DAMAGE OR TOTAL OR SUBSTANTIAL
DESTRUCTION.  In the event of total or substantial destruction of the
improvements situated on the Property by fire or other casualty, Tenant shall
give immediate written notice thereof to Landlord. “Total or

 

 

Substantial Destruction”
shall mean damage or destruction to the Property other than Tenant owned
alterations, the repair cost of which damage or destruction is fifty percent
(50%) or more of the then Replacement Cost of the Property, excluding Tenant
owned alterations immediately prior to such damage or destruction. If Landlord’s
insurance proceeds are sufficient to pay for the necessary repairs, and if the
repairs can reasonably be made within one hundred eighty (180) days after
Landlord receives such written notice from Tenant so that the damaged portion
of the Property is completely restored to its condition prior to such casualty,
Landlord shall forthwith cause such repairs to be made within such one hundred
eighty (180) days and this Lease shall not terminate. While such repairs are
being made, Landlord shall allow Tenant a fair reduction in rent in proportion
to the extent the improvements are wholly or partially unfit for occupancy. If
Landlord’s insurance proceeds are insufficient to pay for the necessary repairs
or restoration, or the repairs or restoration cannot reasonably be made within
one hundred eighty (180) days after Landlord receives such written notice from
Tenant, this Lease shall terminate and the rent shall be paid to the date of
such casually.

 

ARTICLE NINE:  DEFAULT
AND REMEDIES

 

9.01         EVENTS OF DEFAULT. The following events (herein
individually referred to as “event of default”) each shall be deemed to be
events of nonperformance by Tenant under this Lease:

 

A. Tenant shall fail to
pay any installment of Base Rent or any additional rental herein reserved when
due, or any other payment or reimbursement to Landlord required herein when
due, and such failure shall continue for a period of five (5) days after
written notice to Tenant from the date such payment was due.

 

B. Tenant hereunder shall
(i) become insolvent; (ii) admit in writing its inability to pay its
debts: (iii) make a general assignment for the benefit of creditors; (iv) commence
any case, proceeding or other action seeking to have an order for relief
entered on its behalf as a debtor or to adjudicate it as bankrupt or insolvent,
or seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors or seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or of
any substantial part of its property; or (v) take any action to authorize
or in contemplation of any of the actions set forth above in this Paragraph.

 

C. Any case, proceeding
or other action against the Tenant hereunder shall be commenced seeking (i) to
have an order for relief entered against it as a debtor or to adjudicate it as
bankrupt or insolvent; (ii) reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors (iii) appointment
of a receiver, trustee, custodian or other similar official for it or for all
or any substantial part of its property, and such case, proceeding or other
action (a) results in the entry of an order for relief against it which it
is not fully stayed within seven (7) business days after the entry thereof
or (b) shall remain undismissed for a period of forty-five (45) days.

 

 

D. Tenant shall (i) abandon
all or a substantial portion of the Property or (ii) fail to continuously
operate its business at the Property for the permitted use set forth herein,
whether or not Tenant is in default of the rental payments due under this
Lease.

 

E. Tenant shall fail to
discharge any lien placed upon the Property within twenty (20) days after any
such lien or encumbrance is filed against the Property.

 

F. Tenant shall fail to
comply with any term, provision or covenant of this Lease (other than those
listed in this Article), and shall not cure such failure within twenty (20)
days after written notice thereof to Tenant.

 

9.02         REMEDIES.

 

A. Upon each occurrence
of an event of default, Landlord shall have the option to pursue any one or
more of the following remedies without any notice or demand:

 

(1) Terminate this
Lease; and/or

(2) Enter upon and
take possession of the Property with or without terminating this Lease; and/or

(3) Alter all locks
and other security devices at the Property with or without terminating this
Lease, and pursue, at Landlord’s option, one or more remedies pursuant to this
Lease, Tenant hereby specifically waiving any state or federal law to the
contrary; and in any such event Tenant immediately shall surrender the Property
to Landlord, and if Tenant fails to do so, Landlord, without waiving any other
remedy it may have, may enter upon and take possession of the Property and
expel or remove Tenant and any other person who may be occupying such Property
or any part thereof, without being liable for prosecution or any claim of
damages therefore.

 

B. If Landlord terminates
this Lease, at Landlord’s option, Tenant shall be liable for and shall pay to
Landlord, the sum of all rental and other payments owed to Landlord hereunder
accrued to the date of such termination, plus, as liquidated damages, an amount
equal to the present value (using the current “prime” interest rate of Frost
National Bank of San Antonio, or should such financial institution no longer
exist, a comparable financial institution) of (1) the total rental and
other payments owed hereunder for the remaining portion of the Lease term, less
(2) the then fair market rental of the Property.

 

C. If Landlord
repossesses the Property without terminating the Lease, Tenant, at Landlord’s
option, shall be liable for and shall pay Landlord on demand all rental and
other payments owed to Landlord hereunder, accrued to the date of such
repossession, plus all amounts required to be paid by Tenant to Landlord until
the date of expiration of the term as stated in Article 1.05, diminished
by all amounts received by Landlord through reletting of the Property during
such remaining term (but only to the extent of the rent herein reserved).
Actions to collect amounts due

 

 

by Tenant to Landlord
under this subparagraph may be brought from time to time, on one or more
occasions, without the necessity of Landlord’s waiting until expiration of the
Lease term.

 

D. Upon an event of
default, in addition to any sum provided to be paid herein, Tenant also shall
be liable for and shall pay to Landlord (i) brokers’ fees incurred by
Landlord in connection with reletting the whole or any part of the Property; (ii) the
costs of removing and storing Tenant’s or other occupant’s property; (iii) the
costs of repairing, altering, remodeling or otherwise putting the Property into
as good condition as that in which it was originally delivered to Tenant; and (iv) all
reasonable expenses incurred by Landlord in enforcing or defending Landlord’s
rights and/or remedies. If either party hereto institutes any action or proceeding
to enforce any provision hereof by reason of any alleged breach of any
provision of this Lease, the prevailing party shall be entitled to receive from
the losing party all reasonable attorneys’ fees and all court costs in
connection with such proceeding.

 

E. In the event Tenant
fails to make any payment due hereunder when payment is due, to help defray the
additional cost to Landlord for collecting and/or processing such late
payments, Tenant shall pay to Landlord on demand a late charge as specified in Article 1.11
herein; and the failure to pay such late charge within ten (10) days after
demand therefore shall be an additional event of default hereunder. The
provision for such late charge shall be in addition to all of Landlord’s other
rights and remedies hereunder or at law and shall not be construed as
liquidated damages or as limiting Landlord’s remedies in any manner.

 

F. Exercise by Landlord
of any one or more remedies hereunder granted or otherwise available shall not
be deemed to be an acceptance of surrender of the Property by Landlord, whether
by agreement or by operation of law, it being understood that such surrender
can be effected only by the written agreement of Landlord and Tenant. Tenant
and Landlord further agree that forbearance by Landlord to enforce its rights
pursuant to the Lease at law or in equity, shall not be a waiver of Landlord’s
right to enforce one or more of its rights in connection with any subsequent
default.

 

G. If Landlord fails to
perform any of its obligations hereunder within thirty (30) days after written
notice from Tenant specifying such failure, Tenant’s exclusive remedy shall be
an action for damages. Unless and until Landlord fails to so cure any default
after such notice, Tenant shall not have any remedy or cause of action by
reason thereof. All obligations of Landlord hereunder will be construed as
covenants, not conditions; and all such obligations will be binding upon
Landlord only during the period of its possession of the Property and not
thereafter. The term “Landlord” shall mean only the owner, for the time being
of the Property, and in the event of the transfer by such owner of its interest
in the Property, such owner shall thereupon be released and discharged from all
covenants and obligations of the Landlord thereafter accruing, but such
covenants and obligations shall be binding during the Lease term upon each new
owner for the duration of such owner’s ownership. Notwithstanding any other
provision hereof, Landlord shall not have any personal liability hereunder. In
the event of any breach or default by Landlord in any term or provision of this
Lease, Tenant agrees to look solely to the equity or interest then owned

 

 

by Landlord in the
Property or of the building of which the Property are a part; however, in no
event, shall any deficiency judgment or any money judgment of any kind be
sought or obtained against any Landlord.

 

H. If Landlord
repossesses the Property pursuant to the authority herein granted, then
Landlord shall have the right to (i) keep in place and use or (ii) remove
and store all of the furniture, fixtures and equipment at the Property,
including that which is owned by or leased to Tenant at all times prior to any
foreclosure thereon by Landlord or repossession thereof by any Landlord thereof
or third party having a lien thereon. Landlord also shall have the right to
relinquish possession of all or any portion of such furniture, fixtures,
equipment and other property to any person (“Claimant”) who presents to
Landlord a copy of any instrument represented by Claimant to have been executed
by Tenant (or any predecessor of Tenant) granting Claimant the right under
various circumstances to take possession of such furniture, fixtures, equipment
or other property, without the necessity on the part of Landlord to inquire
into the authenticity or legality of said instrument. The rights of Landlord
herein stated shall be in addition to any and all other rights that Landlord
has or may hereafter have at law or in equity; and Tenant stipulates and agrees
that the rights herein granted Landlord are commercially reasonable.

 

I. Notwithstanding
anything in this Lease to the contrary, all amounts payable by Tenant to or on
behalf of Landlord under this Lease, whether or not expressly denominated as
rent, shall constitute rent.

 

J. This is a contract
under which applicable law excuses Landlord from accepting performance from (or
rendering performance to) any person or entity other than Tenant.

 

9.03         LANDLORD’S LIEN. Landlord agrees to subordinate its
security interest, whether statutory or otherwise, upon any goods, inventory,
furniture, fixtures, equipment or any other personal property of Tenant (“Tenant’s
Property”) situated in or upon the Property, to any lien of Tenant’s lender,
and shall sign any document to this effect reasonably requested by Tenant’s
lender.

 

ARTICLE TEN:  CONDEMNATION

 

Landlord shall notify
Tenant if Landlord receives notice of any potential condemnation of the
Property or portion thereof. If all or any portion of the Property is taken
under the power of eminent domain or sold under the threat of that power (all
of which are called “Condemnation”), this Lease shall terminate as to the part
taken or sold on the date the condemning authority takes title or possession,
by delivering written notice to the other within ten (10) days after
receipt of written notice of such taking (or in the absence of such notice,
within ten [10] days after the condemning authority takes possession). If
neither Landlord nor Tenant terminates this Lease, this Lease, shall remain in
effect as to the portion of the Property not taken, except that the rent shall
be reduced in proportion to the reduction in floor area of the Property. Any
Condemnation award or payment shall be distributed in the following order: (a) first,
to any ground Landlord,

 

 

mortgagee or beneficiary
under a deed of trust encumbering the Property, the amount of its interest in
the Property; (b) second, to Tenant, only the amount of any award
specifically designated for loss of or damage to Tenant’s trade fixtures or
removable personal property; and (c) third, to Landlord, the remainder of
such award, whether as compensation for reduction in the value of the
leasehold, the taking of the fee, or otherwise. If this Lease is not
terminated, Landlord shall promptly repair any damage to the Property caused by
the Condemnation, except that Landlord shall not be obligated to repair any
damage for which Tenant has been reimbursed by the condemning authority. If the
severance damages received by Landlord are not sufficient to pay for such
repair, Landlord shall have the right to either terminate this Lease or
promptly make such repair at Landlord’s expense.

 

ARTICLE
ELEVEN: TAXES

 

Tenant shall pay the
party named in Article 1.10 above, as additional rental, the real estate
taxes on the Property for any year during the Lease Term. Tenant shall make
such payment within twenty (20) days after receipt of a statement showing the
amount and computation of such taxes. Tenant shall be responsible for the
pro-rata portion of such additional rental for the portion of the first
calendar year of the Lease Term beginning on the Commencement Date, payable as
specified in this Article 11, and for any fractional part of a year
preceding the end of the Lease Term, which prorated sum shall be due and
payable upon the termination of this Lease. If the termination of this Lease
occurs before the tax rate is fixed for the particular year, the proration
shall be upon the basis of the tax rate for the preceding year applied to the
latest assessed valuation, and notwithstanding the termination of this Lease,
any difference in the actual real estate taxes for such year shall be adjusted
between the parties upon receipt of written evidence of the payment thereof.
Tenant agrees to pay all personal property taxes levied against the Property
and Tenant during the term hereof by reason of Tenant’s improvements,
inventory, equipment and business conducted at the Property. The Landlord shall
have the right to employ a tax consulting firm to attempt to assure a fair tax
burden on the building and grounds within the applicable taxing jurisdiction.
Tenant agrees to pay its proportionate share of the reasonable cost of such
consultant. At its own cost and expense, Tenant shall have an independent right
to protest or appeal the value of the Property pursuant to the Texas Property
Code. Landlord will reasonably cooperate with Tenant in such efforts, however
Landlord shall have no obligation to provide notice to Tenant of any protest or
appeal or any appraisal or reappraisal of the value of the Property, but
Landlord or Landlord’s agent will deliver any statement of appraised value to
Tenant not later than twenty five (25) days after receipt.

 

ARTICLE
TWELVE: SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE

 

12.01  SUBORDINATION. Subject to Tenant’s receipt of
a Subordination Non-Disturbance and Attornment Agreement (“SDNA”) in a form
reasonably acceptable to Tenant and its lender. Landlord shall have the right
to subordinate this Lease to any ground lease, deed of trust or mortgage encumbering
the Property, and advances made on the security thereof and any renewals,
modifications, consolidations, replacements or extensions thereof, whenever
made or recorded.

 

 

However, Tenant’s right
to quiet possession of the Property during the Lease Term shall not be
disturbed if Tenant pays the rent and performs all of Tenant’s obligations
under this Lease and is not otherwise in default (beyond any applicable notice
and cure periods). If any ground Landlord, beneficiary or mortgagee elects to
have this Lease prior to the lien of its ground lease, deed of trust or
mortgage and gives written notice thereof to Tenant, this Lease shall be deemed
prior to such ground lease, deed of trust or mortgage whether this Lease is
dated prior or subsequent to the date of said ground lease, deed of trust or
mortgage or the date of recording thereof. Landlord shall use its best efforts
to obtain an SNDA (in the form attached as Exhibit “D” attached hereto)
from its existing lender within twenty one days of the execution of this Lease,
however, the SNDA shall be provided not later than ninety days after execution
of this Lease.

 

12.02  ATTORNMENT. If Landlord’s interest in the
Property is acquired by any ground Landlord, beneficiary under a deed of trust,
mortgagee or purchaser at a foreclosure sale, Tenant shall attorn to the
transferee of or successor to Landlord’s interest in the Property and recognize
such transferee or successor as Landlord under this Lease, provided such
successor Landlord executes a SNDA in form reasonably satisfactory to Tenant.
Tenant waives the protection of any statute or rule of law which gives or
purports to give Tenant any right to terminate this Lease or surrender
possession of the Property upon the transfer of Landlord’s interest so long as
the transferee performs Landlord’s obligations under this Lease.

 

12.03  SIGNING OF DOCUMENTS. Upon reasonable written
request by the other party, Landlord or Tenant shall sign and deliver any
instruments or documents necessary or appropriate to evidence any such
attornment or subordination or agreement to do so.

 

12.04  ESTOPPEL CERTIFICATES.

 

a.             Upon Landlord’s or Tenant’s
reasonable written request, Landlord or Tenant shall execute, acknowledge and
deliver to the other party a written statement certifying (i) that none of
the terms or provisions of this Lease have been changed (or if they have been
changed, stating how they have been changed); (ii) that this Lease has not
been cancelled or terminated; (iii) the last due date of payment of the
rent and other charges and the time period covered by such payment; and (iv) that
Landlord or Tenant, as the case may be, is not in default under this Lease (or,
if Landlord or Tenant is claimed to be in default, stating why). Landlord or
Tenant shall deliver such statement to the other party within twenty (20)
business days after request. Any such statement by Tenant may be given by
Landlord to any prospective purchaser or

 

 

encumbrancer of the
Property. Such purchaser or encumbrancer may rely conclusively upon such
statement as true and correct.

 

b.             If Landlord or Tenant does not
deliver such statement to the other party within such twenty (20) business days
period, Landlord or Tenant, as the case may be, may conclusively presume and
rely upon the following facts: (i) that the terms and provisions of this
Lease have not been changed except as otherwise represented by Landlord or
Tenant; (ii) that this Lease has not been cancelled or terminated except
as otherwise represented by the Landlord or Tenant; (iii) that not more
than one month’s rent or other charges have been paid in advance; and (iv) that
Landlord or Tenant is not in default under the Lease. In such event, Landlord
or Tenant, as the case may be, shall be estopped from denying the truth of such
facts.

 

ARTICLE
THIRTEEN: MISCELLANEOUS

 

13.01  EXHIBITS. 
All exhibits, attachments, annexed instruments and addenda referred to
herein shall be considered a part hereof for all purposes with the same force
and effect as if copied at full length herein.

 

13.02  INTERPRETATION. Words of any gender used in
this Lease shall be held and construed to include any other gender, and words
in the singular shall be held to include the plural, unless the context
otherwise requires.  In any provision
relating to the conduct, acts or omissions of Tenant, the term “Tenant” shall
include Tenant’s agents, employees, contractors, invitees, successors,
permitted assigns or others using the Property with Tenant’s expressed or
implied permission.

 

13.03  CAPTIONS. 
The captions or headings of paragraphs in the Lease are inserted for
convenience only, and shall not be considered in construing the provisions
hereof if any question of intent should arise.

 

13.04  WAIVERS, All waivers must be in writing and
signed by the waiving party. Landlord’s failure to enforce any provision of
this Lease or its acceptance of rent shall not be a waiver and shall not
prevent Landlord from enforcing that provision or any other provision of this
Lease in the future. No statement on a check from Tenant or in a letter
accompanying a payment check shall be binding on Landlord.  Landlord may, with or without notice to
Tenant, negotiate such check without being bound to the conditions of such
statement.

 

 

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

 

13.06  JOINT
AND SEVERAL LIABILITY. All parties signing this Lease as Tenants shall be
jointly and severally liable for the obligations of Tenant.

 

13.07  INCORPORATION
OF PRIOR AGREEMENTS; MODIFICATIONS. This Lease is the only agreement between
the parties pertaining to the lease of the Property and no other agreements are
in effect.  All amendments to this Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.

 

13.08  BINDING EFFECT.  The terms,
conditions and covenants contained in the Lease, shall apply to, inure to the
benefit of, and be binding upon the parties hereto and their respective heirs,
representatives, successors and permitted assigns, except as otherwise herein
expressly provided. Landlord agrees to cause any purchaser, assignee or other
transferee acquiring title to the Property to assume in writing all of Landlord’s
obligations, duties and covenants under this Lease.  All rights, powers, privileges, immunities
and duties of Landlord under this Lease, including but not limited to any
notices required or permitted to be delivered by Landlord to Tenant hereunder,
may, at Landlord’s option, be exercised or performed by Landlord’s agent or
attorney.

 

13.09  NOTICES.  Any notice, payment or
document required or permitted to be delivered hereunder shall be in writing
and shall be deemed to be delivered whether actually received or not, (i) two
business days after being deposited in the United States Mail, postage prepaid,
certified mail, return receipt requested, or (ii) the next business day
after being sent by nationally recognized courier service for next business day
delivery, addressed to parties hereto at the respective addresses stated
herein, or at such other address as they have theretofore specified by written
notice delivered in accordance herewith. 
Notices to Landlord and Tenant shall be delivered to the addresses
specified on the signature page hereof.

 

13.10  FORCE MAJEURE.  In the event
performance by Landlord of any term, condition or covenant in this Lease is
delayed or prevented by any Act of God, strike, lockout, shortage of

 

 

material or labor,
restriction by any governmental authority, civil riot, flood or any other cause
not within the control of Landlord, the period of performance of such term,
condition or covenant shall be extended for a period equal to the period
Landlord is so delayed or hindered.

 

13,11  ATTORNEYS’ FEES. If on account of any breach
or default of any party hereto in its obligations to any other party hereto, it
shall become necessary for the non-defaulting party to employ an attorney to
enforce or defend any of its rights or remedies hereunder, the defaulting party
agrees to pay the non-defaulting party its reasonable attorneys’ fees, whether
or not suit is instituted in connection therewith.

 

13.12  TIME OF ESSENCE. Time is of the essence in
this Lease.

 

13.13  APPLICABLE LAW.  This Lease Agreement shall be construed under
the laws of the State of Texas. Venue for any action under this Lease shall be
the county in which the Property is located.

 

13.14  WARRANTIES DISCLAIMED. Landlord and Tenant
expressly agree that there are and shall be no implied warranties of
merchantability, habitability, fitness for a particular purpose or any other
kind arising out of this Lease Agreement and that all express or implied
warranties in connection therewith are expressly disclaimed.  Notwithstanding this express disclaimer of
warranties, Landlord does represent and warrant, that to the best of Landlord’s
actual knowledge, the Property has been maintained in compliance with
environmental laws, rules and regulations and is free of all hazardous
materials as of the date of execution of this Lease Agreement.

 

ARTICLE
FOURTEEN: SPECIAL PROVISIONS

 

14.01  RENEWAL OPTIONS.  So long as Tenant is not in default hereunder
beyond any applicable notice and cure period, and in consideration of Tenant
fulfilling all other terms, covenants, conditions, and obligations of this
Lease, Tenant shall have the option to renew this Lease for one additional term
of thirty six (36) months (“First Renewal Term”) and one additional term of
twenty four (24) months (“Second Renewal Term”). Such renewals shall be on the
same terms, covenants or conditions as provided for in the original term,
except that the Base Rent during the First Renewal Term shall be adjusted by
the Consumer Price Index as set forth in Article 14.02.  The Base Rent during the Second Renewal Term
of twenty four (24) months shall be at the fair market rental then in effect on
equivalent properties, of equivalent size, in equivalent areas with the length
of the lease, and the length of the renewal term, and other relevant factors,
to

 

 

be taken into account.
The primary method of determining fair market rental during the Second Renewal
Term shall be an agreement between Landlord and Tenant. Should Landlord and
Tenant fail to agree upon the fair market rental, each may hire a real estate
appraiser certified by the State of Texas to determine the fair market rental,
and in the event that the appraisals so prepared (a) differ by 10% or
less, the fair market rental during the Second Renewal Term shall be deemed to
be the average of the two appraisals or (b) differ by more than 10%, then
the two appraisers shall appoint a third impartial real estate appraiser
certified by the State of Texas, whose valuation shall constitute the final,
binding fair market rental of the Property. 
Notwithstanding the foregoing sentence, in the event that the fair
market rental rate as determined pursuant to the appraisal method set forth
herein is unacceptable to the Tenant, Tenant shall have the right to rescind
its election to exercise the Second Renewal Term and the Lease shall expire at
the end of the First Renewal Term. In no event shall the Base Rent, in the
Second Renewal Term be less than the Base Rent in the last month of the First
Renewal Term. Notice of Tenant’s intention to exercise the option must be given
to Landlord in writing not less than one hundred eighty (180) days prior to the
expiration of the original term of this Lease or the expiration of the First
Renewal Term, whichever is applicable. In the renewal terms, Tenant shall also
pay as additional rent ad valorem taxes, insurance, maintenance assessments,
tenant maintenance, and all other charges and assessments that Tenant is
responsible for during the Lease Term.  In
the event the Property is sublet or assigned, in violation of Article 7 of
this Lease, this renewal option will be null and void and of no further effect.

 

14.02  CONSUMER PRICE INDEX INCREASES TO BASE
RENT.  At the beginning of the First
Renewal Term (February 1, 2015), if Tenant elects to extend the Lease Term
in accordance with Article 14.01, the Base Rent shall be the Base Rent for
the last month of the Lease Term, as adjusted by any increase in the index
known as the United States Bureau of Labor Statistics, Consumer Price Index for
Urban Wage Earners and Clerical Workers, United States City Average, index Base
Period (1982-84=100) (“CPI-W”) from February 1, 2013. Then, at the end of
each twelve (12) month period of the First Renewal Term , the Base Rent shall
again be adjusted as of that date based on the Base Rent for the last month of
the immediately preceding twelve (12) month renewal period adjusted by any
increases in the CPI-W. In no event shall the Base Rent, in either the first,
second or third year of the First Renewal Term be less than the Base Rent in
the immediately preceding annual period. If the CPI-W shall be revised or cease
to be compiled during the term of the Lease, or in some other way fail to be a
reliable index for the purposes of the Lease, the parties shall agree in good
faith on some other index serving the same purpose to adjust the Base Rent.

 

 

14.03  ACCESS TO PREMISES.  Tenant may access the Property through the
South Gate adjacent to the front loading dock in addition to other access
points.  Upon Lease Termination, Tenant shall,
at Landlord’s option, remove any gates installed by Tenant and repair the fence
to its original condition.

 

14.04 CONSTRUCTION AND
ACCEPTANCE OF PROPERTY. Tenant, at Tenant’s sole cost and expense, will perform
the following construction:

 

The
interior renovation project consists of 4,975 square feet of usable office
space.  The usable office space will
consist of (10) ten enclosed offices, two gang office area’s for work cubicles,
a conference room, copy/work area, a second work area, break room, Data closet,
and men’s and women’s toilet facilities. Also included in the project is the
demolition of all construction related to the existing usable office space and
the erection of a new rated demising wall.

 

The construction on the
Property shall be in accordance with the provisions of Exhibit “B” attached
hereto. By occupying the Property, Tenant shall be deemed to have accepted the
same and to have acknowledged that the Property fully complies with Landlord’s
covenants and obligations hereunder, except as may be otherwise expressly
provided in Exhibit “B”. The Property is leased to Tenant in an “AS IS”
“WHERE IS” condition and without warranty of any kind, except as may be
herein otherwise expressly provided.

 

14.05  PATRIOT ACT. Tenant (which for this purpose
includes without limitation, its partners, members, principal stockholders and
any other constituent entities) represents and warrants (i) that it has
not been designated as a “Specially Designated National and Blocked Person” on
the most current list published by the United States Treasury Department Office
of Foreign Assets Control at its official website,
http://www.treas.gov/ofac/tllsdn.pdf or at any replacement website or other
replacement official publication of such list or for or on behalf of any
person, group, entity, or nation designated in Presidential Executive Order
13224 as a person who commits, threatens to commit, or supports terrorism; (ii) that
it is not engaged in this Lease directly or indirectly for or on behalf of, or
facilitating this Lease directly or indirectly on behalf of, any such person,
group, entity, or nation; (iii) that it is currently in compliance with
and will at all times during the term of this Lease (including any extension
thereof) remain in compliance with the regulations of the Office of Foreign
Assets Control of the United States Treasury Department and any statute,
executive order (including without limitation the September 24, 2001,
Executive Order Blocking Property and Prohibiting Transactions with Person Who
Commit, Threaten to Commit or Support Terrorism), or other governmental action
relating thereto; and (iv) that it has not used and will not use funds
from illegal activities for any payment made under the Lease. Tenant agrees to
defend, indemnify, and hold harmless Landlord from and against any and all

 

 

claims, damages, losses,
risks, liabilities, and expenses (including reasonable attorneys’ fees and
costs) arising from or related to any breach of the foregoing representation
and warranty.

 

14.06 SUPERSEDING
AGREEMENT.  This Lease Agreement supersedes
in all respects the Lease Agreement between the same parties dated November 16,
2007 with an expiration date of May 31, 2008.

 

[signatures on next page]

 

 

EXECUTED as of the date
stated in Article 1.01 above.

 

	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
  INVESTMENT
  PROPERTIES, LTD.

  	
   

  	
  ISI SECURITY
  GROUP, INC.

  
	
  BY: PROPER
  INVESTMENTS, LLC

  	
   

  	
  f/k/a ISI
  DETENTION CONTRACTING GROUP, 

  INC.

  
	
  GENERAL PARTNER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Brian
  Weiner

  	
   

  	
  By:

  	
   /s/ Samuel
  C. Youngblood

  
	
   

  	
  Brian Weiner,
  President

  	
   

  	
  Samuel C.
  Youngblood, CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ADDRESS:

  	
   

  	
  P.O. Box
  7608

  	
   

  	
  ADDRESS:

  	
   

  	
  12903 Delivery
  Drive

  
	
   

  	
   

  	
  San Antonio,
  Texas 78207

  	
   

  	
   

  	
   

  	
  San Antonio,
  Texas 78247

  
	
   

  	
   

  	
  Telephone:
  210-226-6820

  	
   

  	
   

  	
   

  	
  Telephone: 210.495.5245

  
	
   

  	
   

  	
  Facsimile:
  210-226-5716

  	
   

  	
   

  	
   

  	
  Facsimile:
  210.798.2984

  
												

 

 

EXHIBIT “A”

 

LEGAL DESCRIPTION

 

Lots 8 &
9, Block 4, NCB 17578, Wetmore Business Park, Unit 3, City of San Antonio,
Bexar County, Texas

 

 

EXHIBIT “B”

 

CONSTRUCTION AND IMPROVEMENTS

 

This Exhibit “B” is
attached to the annexed Commercial-Industrial Lease Agreement (the “Lease”) by
and between the Landlord and the Tenant named below.

 

ARTICLE I

PARTIES

 

Section 1.01
Landlord: Investment Properties, Ltd., a Texas limited partnership

 

Section 1.02
Tenant: ISI Security Group f/k/a 1SI Detention Contracting Group, Inc.,
a Delaware corporation

 

ARTICLE II

LANDLORD’S WORK

 

Section 2.01
With the exception of the work that Landlord has agreed to do as described in Section 2.02,
it is expressly stipulated and agreed that Landlord shall not be obligated or
required to perform any work in, on or at the Property. Tenant acknowledges
that it has, prior to the execution hereof, inspected the Property and that
Tenant has accepted the Property in its “AS IS, WHERE IS”
condition, it being agreed that Landlord shall have no liability or
responsibility for defects in the Property, except as may be otherwise
expressly provided in this Lease.

 

Section 2.02
Landlord, at its sole cost and expense, shall complete the following work at
the property: NONE

 

Section 2.03
General Provisions. Landlord shall have the right to locate utility
lines, air ducts, flues, refrigerant lines, drains, sprinkler mains and valves,
and such other facilities (including access panels for same) within the
Property as deemed necessary by engineering, design and/or code requirements.
Landlord shall also have the right to locate mechanical and other equipment on
the roof over the Property.

 

ARTICLE III

TENANT’S PLANS FOR THE PROPERTY

 

Section 3.01
Submission of Plans. Tenant shall prepare and submit to Landlord, at
Tenant’s sole cost and expense, three (3) sets of plans and specifications
and working drawings for the work to be performed to finish the Property in
accordance with Tenant’s requirements set forth in Articles IV and V of this Exhibit “B”
(the “Tenant’s Plans”). Tenant’s Plans shall be subject to Landlord’s approval
in writing prior to commencement of any construction by Tenant in or on the
Property. Tenant’s Plans shall be prepared in strict accordance with the
provisions contained in this Exhibit and shall indicate in detail the design
character and finishing of the premises. Within ten (10) days after
receipt of Tenant’s Plans, Landlord

 

 

shall notify Tenant of
any matters to which Landlord objects. Within ten (10) days after receipt
of any such notice, Tenant shall cause Tenant’s Plans to be revised to the
extent necessary to obtain Landlord’s approval and to be re-submitted for
Landlord’s approval. The above process of submission of Tenant’s Plans to
Landlord shall be repeated until all of Landlord’s objections have been satisfied.
Tenant shall be responsible for obtaining any and all permits, licenses and
other governmental approvals and consents necessary or required with respect to
Tenant’s Plans. Tenant shall furnish appropriate copies of Tenant’s Plans to
any and all governmental agencies and authorities having jurisdiction
simultaneously with the submission of Tenant’s Plans to Landlord. In no event
will Tenant’s Plans be approved or deemed approved by Landlord unless and until
the same have been approved by all such governmental agencies and authorities.

 

Section 3.02
Approval of Plans. When Landlord has approved Tenant’s Plans, the same
shall become a part hereof and shall be incorporated herein by this reference
for all purposes. After Tenant’s Plans have been approved by Landlord, no
changes, substitutions or eliminations therein shall be made without the prior
written approval of Landlord, and Tenant shall pay any and all additional costs
and expenses (including, but not limited to, architectural fees and
construction costs) which may be incurred by Landlord in connection with or as
a result of any such changes, substitutions or eliminations.

 

Section 3.03
Tenant’s Failure to Submit or Resubmit Plans. Notwithstanding any other
provision contained in the Lease or this Exhibit, in the event Tenant shall
fail or refuse for any reason to submit or resubmit Tenant’s Plans as necessary
to obtain Landlord’s approval thereof within sixty (60) days after the Date of
the Lease, Landlord shall have the continuing right and option, in addition to
and without limiting or impairing any other rights available to Landlord under
the Lease, to cancel and terminate the Lease by written notice to Tenant,
whereupon this Lease shall be and become null and void and of no further force
or effect and neither party shall have any further rights or obligations
whatsoever hereunder. It is further expressly understood and agreed that, in
the event the Lease is cancelled and terminated in accordance with the
provisions of this paragraph, Landlord shall be entitled to keep and retain as
agreed liquidated damages on account of such default any and all sums
theretofore paid by Tenant to Landlord under the Lease.

 

ARTICLE IV

TENANT’S WORK

 

Section 4.01
Work by Tenant in Property. Tenant, at its sole cost and expense, shall
perform all work required to complete the Property strictly in accordance with
the approved Tenant’s Plans (“Tenant’s Work”) to a finished condition ready for
the conduct of business. Tenant’s Work shall conform to procedures, schedules
and criteria as set forth herein. Without limiting any other requirements
relating to Tenant’s Work hereunder, Tenant shall be required to provide all
additional steel framing necessary or required for bracing Tenant’s mechanical
equipment and all necessary engineering design associated therewith.

 

Section 4.02
Requirements for Tenant’s Contractor. All contractors and
sub-contractors engaged in the performance of Tenant’s Work must be licensed
and bondable. Any damage to any work caused by Tenant

 

 

or Tenant’s Contractor
shall be at the sole cost and expense of Tenant. Tenant shall submit to
Landlord at least ten (10) days prior to the commencement of construction,
the following information:

 

(a) The name and
address of Tenant’s Contractor, and the names of the plumbing, mechanical, fire
sprinkler and electrical subcontractors (if any) to be engaged in the
construction of the Property.

 

(b) The actual
commencement date of construction and estimated date of completion of the work.

 

(c) Evidence of
insurance called for in this Exhibit B.

 

(d) Copy of all
contracts and subcontracts relating to the performance of Tenant’s Work.

 

(e) A bond issued by
a bonding company approved by Landlord assuring the performance of Tenant’s Contractor
and the payment of all obligations arising under such contract.

 

Section 4.03
Performance of Tenant’s Work. All Tenant’s Work shall be governed by and
subject to the following:

 

(a) Construction
shall comply in all respects with applicable federal, state, city and county
statutes, ordinances, regulations, laws and codes, including, without
limitation, all requirements of the Americans With Disabilities Act and the
Texas Architectural Barriers Act.

 

(b) All required
building and other permits in connection with the construction and completion
of Tenant’s Work shall be obtained and paid for by Tenant.

 

(c) Tenant’s Work
shall be subject to the general inspection and approval of Landlord.

 

(d) All roof
openings shall be approved by Landlord. No equipment shall be installed on the
roof without the prior written approval of Landlord.

 

(e) Tenant shall
keep the Property free and clear of all liens and claims of liens in connection
with Tenant’s Work.

 

Section 4.05
Temporary Facilities During Construction. Tenant’s Contractor shall
provide and pay for all temporary power, water, other utility facilities, and
the collection of debris, as necessary and required in connection with the
construction of the Property. Storage of Tenant’s Contractors’ construction
materials, tools, equipment and debris shall be confined within the Property.
Tenant’s Contractor shall not run pipes or conduits over or through other
portions of the Property, except as may be directed and approved by Landlord.

 

Section 4.06
Upon completion of construction of all Tenant’s Work in the Property, Tenant
shall deliver to Landlord one (1) set of record plans and one (1) set
of sepias (not to exceed 30” X 42”) and one (1) set of specifications and
a copy of all required certificates of occupancy for the Property.

 

 

Section 4.07
Cleanup and Discipline:

 

(a) Tenant shall be
responsible for the preservation of good order and discipline among the
employees of Tenant and Tenant’s Contractor.

 

(b) Tenant shall
maintain the Property in a clean and orderly condition during construction and
merchandising. Tenant shall promptly remove all unused construction materials,
equipment, shipping containers, packaging, debris and flammable waste from the
site. Tenant shall keep all construction materials, equipment, fixtures and
merchandise shipping containers within the Property. All trash storage within
the premises shall be confined to covered metal containers.

 

Section 4.08
Insurance. Tenant shall provide or shall cause its contractors and
sub-contractors to provide insurance in responsible companies licensed to do
business in Texas in favor of Landlord and Tenant, as their respective
interests may appear, as follows:

 

(a) Liability
insurance as required by the Lease.

 

(b) Builder’s Risk
Completed Value fire and extended coverage insurance for the estimated cost of Tenant’s
Work.

 

(c) Worker’s
Compensation insurance covering all persons employed in connection with Tenant’s
Work and with respect to whom death or bodily injury claims could be asserted
against Landlord or the Property.

 

Section 4.09
Indemnity. Tenant shall and does hereby agree to indemnify and hold
Landlord, its agents and employees, harmless from and against any and all
claims, demands, suits and causes of action for injury to person or death and
for damage to property, including property of Landlord, arising out of or in
any way connected with the construction and installation by Tenant of
improvement required hereunder.

 

Section 4.10
Allowance. Upon completion of Tenant’s Work in the Property, Tenant
shall furnish Landlord:

 

(a) A Certificate of
Occupancy issued by the municipality in which the Property is located or other
evidence satisfactory to Landlord that the improvements have been approved by
such municipality;

 

(b) An Affidavit and
Lien Waiver in form satisfactory to Landlord executed by Tenant’s Contractor stating
that Tenant’s Work has been completed in accordance with the provisions hereof
and that all subcontractors, laborers and material suppliers engaged in or
supplying materials for such work have been paid in full;

 

(c) Lien Waivers in
form satisfactory to Landlord executed by all subcontractors and materialmen
who shall have furnished labor and/or materials for the work in excess of
$10,000.00;

 

 

(d) Certificates of
insurance for all policies of insurance required to be provided by Tenant.

 

As consideration for
Tenant’s Work, Landlord agrees to (1) maintain the Base Rent at $5,400.00
for the first three months of the Lease Term and (2) make a one time
payment of $150,000.00 (“Tenant Construction Allowance”) to Tenant upon
completion of the items enumerated in this Section 4.10 (a) through
(d). In the event the Landlord fails to pay to Tenant the Tenant Construction
Allowance within five (5) business days of the satisfaction by Tenant of the
conditions set forth in 4. l0(a)-(d) above, (i) the Tenant
Construction Allowance will accrue interest at the rate per annum equal to the
lesser of (A) the highest lawful rate and (B) 10% and (ii) Tenant
may deduct such unpaid amounts (plus interest thereon) from rent and other sums
due under the Lease without further notice to Landlord.

 

 

EXHIBIT “C”

 

Declaration of Covenants for Office,
Commercial, Warehouse, and Industrial Section of Wetmore Business Park, San
Antonio, Texas

 

 

DECLARATION OF
PROTECTIVE COVENANTS FOR 

OFFICE, COMMERCIAL, WAREHOUSE AND INDUSTRIAL SECTION OF 

WETMORE BUSINESS PARK

SAN ANTONIO, TEXAS

 

THIS DECLARATION made this 1st day of January, 1985 by
Quincy Lee Industrial Joint Venture No. 5, herein called “Developer”.

 

W I T N E S S E T
H:

 

WHEREAS, Developer is the owner of all the following described
real property to-wit:

 

64.154 acre (2,794,542,417
square feet) tract of land formerly described as 64,137 tract recorded in
Volume 2356, Page 184, Official Public Records of Real Property, Bexar
County, Texas and out of a 65 acre tract recorded in Volume 1233, Page 639,
Deed Records, Bexar County, Texas, and being out of the Louis Kneipp Survey No.
11, Abstract 391, County Block 5014, Bexar County, Texas and being partially
located in New City Block 15678, City of San Antonio, Bexar County, Texas.

 

WHEREAS, such property
has been designated as Wetmore Business Park by Developer with the intent to
develop the above described property as a planned, mixed use business
development in the City of San Antonio, Bexar County, Texas, and

 

WHEREAS, Developer
desires to provide for the systematic, orderly development and use of the land
in Wetmore Business Park and to provide systematic and timely construction criteria,
taking into consideration the aesthetics of a properly planned development; and

 

WHEREAS, Developer intends
for the development and the construction of buildings in Wetmore Business Park to
proceed according to a general plan which provides for the mutual benefit of all
subsequent Owners of the property located in Wetmore Business Park.

 

NOW THEREFORE, Developer
declares, publishes and encumbers the above described real property which shall
be held, transferred, sold, conveyed, occupied and used subject to the covenants,
requirements, conditions and continuing rights held by Developer as hereinafter
set forth.

 

I.

 

DEFINITIONS

 

A.            “Wetmore Business Park” (WBP) shall mean the real
estate and business development above described herein sometimes referred to as
“the business park”.

 

B.            “Developer” shall mean Quincy Lee Industrial Joint
Venture No. 5.

 

C.            “Improvements” shall mean and include, but not be
limited to, buildings, outbuildings, roads, driveways, parking areas, fences, screening
walls, retaining walls, loading areas and facilities, signs, utilities, lawns,
hedges, mass plantings, landscaping, water lines, sewers, electrical and gas
distributions facilities and all metering equipment.

 

 

D.            “Association” shall mean and refer to Wetmore Business
Park Association, Inc., a Texas nonprofit corporation, its successors and
assigns.

 

E.             “Owner” or “Property Owner” shall mean and refer to
each record owner other than the Association, whether one or more persons or
entities, of a fee simple title to any part of the properties, including
contract sellers, but excluding those having such interest merely as security for
the performance of an obligation.

 

F.             “Properties” shall mean and refer to that certain real
property described above, being one tract comprising 64.154 acres.

 

G.            “Common Area” shall mean all real property owned by
the Association for the common use and enjoyment of the Owners or property
owned by the City or by individual Owners which the Association is responsible
for maintaining.  The common areas the Association
shall maintain are as follows:

 

1.             The entranceway and directional signs and signs advertising
the subdivision as a whole.

 

2.             Medians owned by the City of San Antonio.

 

3.             Any areas within or abutting the property dedicated to
the City of San Antonio for street or easement purposes, (including areas
within medians, parks, or drainage easements).

 

4.             Any landscaped area within the view of a dedicated
street.

 

5.             Such additional portion of the Properties as Developer
may from time-to-time designate as Common Area.

 

H.            “Lot” shall mean and refer to any plot of land shown
upon the recorded subdivision map or plat of the properties with the exception of
the common area.

 

I.              “Declarant” shall mean and refer to Quincy Lee
Industrial Joint Venture No. 5.

 

J.             “Architectural Committee” shall mean the three member
Architectural Control Committee constituted as set forth in Article VII
hereof.

 

K             “CPI” shall mean the “Consumer Price Index for All
Urban Consumers” specified for “U.S. City Average - All Items” by the U.S.
Bureau of Labor Statistics, or in the event of discontinance then by any other nationally
recognized publisher of similar statistical information, with a base index of
1967=100.

 

II.

 

MEMBERSHIP AND
VOTING RIGHTS

 

A.            Every Owner shall be a member of the Association. Membership
shall be appurtenant to and may not be separated from ownership of any Lot
which is subject to assessment.

 

B.            The Association shall have one (1) class of voting
membership. The members shall be entitled to one (1) vote for each full acre
comprising a Lot or Lots or one vote if the Lot comprises less than one acre.
When more than one person holds an interest in any acre, votes for such Lot
shall be exercised as they among themselves determine, but in no event shall
there be more than one (1) vote per acre, except in respect to Lots
comprising less than one (1) acre.

 

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III.

 

USE OF PREMISES

 

The following provisions shall govern the use of
building.

 

A.            Permitted Uses:  Office, commercial,
warehouse, industrial, retail or combination thereof.

 

B.            Non-Permitted Uses:  Any use or
occupancy which:

 

1.             Is noxious or offensive to Owners of 10% or more of
Wetmore Business park by reason of the emission or discharge of noise, vibration,
smoke, glare, heat, radiation, fumes or wastes, odorous or particulate matter.

 

2.             Storage, handling or use explosive material.

 

3.             Commercial landfill, dump, junkyard or other similar
operation.

 

4.             Raising, maintenance, housing or treatment of livestock
or other animals, except as conducted entirely inside a laboratory and for
scientific purposes.

 

5.             Commercial storage, sales or repair (except new automobile
agency or dealer) of motor vehicles, mobile homes, trailers, portable buildings
or other temporary buildings.

 

6.             Outdoor storage or display of equipment, material or
merchandise except where not visible from any public street.

 

7.             Commercial amusement, entertainment or recreational
facilities such as nightclubs, taverns, massage parlors, kiddie parks, dance
halls, outdoor theatres, and race tracks, except as such use is wholly
contained within a bona fide restaurant or as is otherwise considered an amenity
by the business park clientele, such as a health club, tennis club or
racquetball club.

 

8.             Institutional establishments which by nature of operation
or character are incompatible with the business park environment, including specifically:
nursing homes, churches, mortuaries, funeral homes, and cemeteries.

 

9.             Temporary buildings, trailers and mobile homes in the
open, except as a construction office for a project being constructed within
the business park and only for the period of such construction.

 

IV.

 

CONSTRUCTION AND
DEVELOPMENT STANDARDS

 

A.            Structural:

 

1.             Exterior Walls:  Shall
be 100% brick face, face tile, painted concrete, exposed architectural sand blasted
concrete, glass, metal or combination thereof of a design and color approved by
the Architectural Committee. No corrugated metal may be used. No concrete block
or tile construction may be used unless the wall is completely covered with
stucco or a similar material.

 

2.             Roof Structure:  All
objects mounted on the roof of any building such as air-conditioning units, exhaust
fans,

 

3

 

chillers, etc. must be screened
from view from any street or adjoining building.

 

3.             Lighting:  All parking lots
and buildings shall be lighted from sun-down to sun-up to provide for night-time
security. Lighting plans shall be approved by the Architectural Committee.

 

4.             Signs:

 

a.             Permitted signs are those which;

 

1.             Identify the business park and give directions. 

 

2.             Identify a building or a particular business.

 

b.             Non-Permitted signs are:

 

1.             Portable signs of any kind.

 

2.             Pole signs, pylon signs or signs protruding above the building
roof Line or building parapet.

 

3.             Neon signs, blinking, rotating or animated signs.

 

4.             Promotional signs except for not more than one sign
of not more than thirty-two (32) square feet in area used to advertise a
property for sale or lease. This sign must be removed as soon as the property
is sold or leased.

 

c.             Approval:

 

1.             All signs must be architecturally coordinated with the
development to which they apply and be architecturally compatible with other
business park sign. All sign plans must conform to any sign criteria promulgated
by the Architectural Committee and must be approved in writing by the Architectural
Committee.

 

5.             Outdoor Storage and Screening:

 

a.             Masonry screen walls (same as exterior
walls) a minimum of 8’ in height but not less than 1’ taller than the item being
screened shall be provided to visually screen from all parking areas and
streets and shall be within an area approved by the Architectural Committee:

 

1.             Refuse containers, utility meters and transformers;

 

2.             Outdoor storage of any kind other than
normal parking.

 

b.             A chain link fence with continuous
screening of a design and material approved by the Architectural Committee or
dense landscaping may be substituted for 5.a. above.

 

6.             Fences:  No fence may
be built within view of any public street unless the fence conforms to 5.a. or
5.b. above.  Any gates opening onto Metro
Parkway must be solid metal and painted.  No fence or wall may be

 

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erected within 40’ of the right of way line of any public
street.

 

7.             Parking and Truck Loading Areas:

 

a.             Parking lots shall be paved with concrete, asphalt or
other permanent material.

 

b.             All parking lots built within 100’ of Metro Parkway or
200’ of Wetmore Road must be overlayed with asphalt or tinted coated or colored
to simulate the dark gray appearance of asphalt.

 

c.             All parking areas shall conform to the City Code of
San Antonio, Texas. 

 

d.             No inventory vehicles, equipment or other property nay
be maintained, stored, or placed outdoors without the express written consent
of the Architectural Committee except for vehicles and one television satellite
dish antenna, which shall be kept within the truck loading area to the rear of
improvements.

 

e.             With respect to buildings located on Lots which adjoin
Metro Parkway, no truck doors or dock doors shall face Metro Parkway unless
they are completely and esthetically screened by wing walls and/or Landscaping
as described in 5.a above.

 

f.              No on-street parking shall be permitted.

 

B.            Landscaping:

 

1.             The street right of way line is 12’ outside of the
curb line of Metro Parkway.  From the 12’
right of way line of Metro Parkway, the setbacks shall be:

 

a.             Parking: 13’ to form a 25’ parkway, inclusive of
right-of-way;

 

b.             Buildings, fences, walls, or screenwalls: 28’ to set
all buildings a minimum of 40’ off the curb line.

 

2.             Parking areas must be set back 10’ from the curb line
on other public streets in the business park.

 

3.             All set back areas not used for parking or approaches and
all areas of an improved Lot not covered with parking or buildings shall be
effectively landscaped.

 

4.             Landscaping shall consist of a combination of berms, grass,
trees, shrubs, flowers and ground cover and an adequate underground sprinkler
system to be installed prior to the building shell being 95% complete.  Each Owner shall be responsible for watering and
maintaining vegetation on his Lot.

 

5.             All landscape maintenance for common areas, including
but not limited to watering, fertilizing, pruning, trimming, mowing of grass, plant
replacement, spraying with herbicides and pesticides, weed removal, supervision
of crews, parking Lot sweeping, trash removal, and street cleaning shall be
provided by the Association with actual cost passed on to the land owner.  This cost shall be prorated among all
landowners on the basis outlined in Section VIII. D.  Any watering or maintenance of vegetation or landscaping
by the

 

5

 

Association within a Lot as
a result of the Lot Owner’s failure so to do shall be billed to the Lot Owner
as a special assessment against the Lot.

 

6.             All non-developed areas shall be bladed smooth, sown in
Bermuda grass and mowed regularly to maintain a neat appearance.  The Association will be responsible for
mowing and cleaning the undeveloped areas. The cost of this service will be
charged to individual Owners on a quarterly basis.

 

7.             All landscape plans shall be reviewed and approved by
the Architectural Committee prior to installation.

 

8.             Should any Owner neglect, damage, or in any way
destroy, or allow to be destroyed any vegetation or landscaping upon his Lot,
he shall be solely responsible for the repair or replacement thereof, and, in
absence of timely repair or replacement thereof by the Owner, the Association
may perform such repair or replacement on behalf of and at the expense of the
Owner.

 

V.

 

MAINTENANCE

 

A.            Construction Sites:  Each Property
Owner shall maintain construction sites in a clean condition, removing accumulation
of scrap and rubbish regularly and storing construction materials and equipment
in a neat, orderly manner.  On site
burning or disposal of trash shall be prohibited except in areas designated as
such by the Association, and in absence of designation, shall be prohibited.

 

B.            Developed Property:

 

1.             Outdoor storage of trash, materials, equipment, and vehicles
must be screened as outlined in Article IV.5. All trash must be removed on
a regular basis, and in no event less frequently than once weekly.

 

VI.

 

ENFORCEMENT

 

A.            Enforcement of Articles I and II: The Association and each Owner shall have
the right to enforce all restrictions and covenants imposed by this declaration.
 Failure to enforce any covenant or
restriction shall not be deemed a waiver of the right. The reservation of this
kind of enforcement shall not create an obligation of any kind to enforce same.
Any court action brought to enforce any obligation or restriction hereunder shall,
if successful, entitle the party initiating such action to the award of costs and
attorney’s fees.

 

B.            Enforcement of Article III:  If,
in the opinion of the Architectural Committee or the Owners of 10% of more of
the business park, any Owner has failed to maintain its property, as specified
in Article III, the Association may proceed as follows:

 

1.             Give the Owner written notice of such failure and the
Owner must within thirty (30) days perform the care and maintenance required.

 

2.             Should the Owner fail to fulfill this duty
within thirty (30) days, then the Association shall have the

 

6

 

right to perform such
care and maintenance without any liability for damages or wrongful entry or
trespassing.

 

3.             The defaulting Owner or occupants (including lessees) or
any part of the properties in which such work is performed shall jointly and
severally be liable for the cost of such work and shall promptly reimburse the
Association for such cost.

 

4.             Should the Owner or occupant fail to reimburse the
Association within thirty (30) days after receipt of its statement, then the debt
shall be a debt of all persons, jointly and severally, and shall constitute a
lien against that portion of the Lot on which the work was performed.

 

5.             The liens created shall be subordinate and inferior to
any and all mortgages and Deed of Trust filed of record prior to filing of lien
affidavit by the Association or suit to foreclose lien.

 

6.             If any Owner requires an estoppel certificate indicating
that no debt exists under the above provision and no debt does exist, then the
Association shall promptly execute such certificate.

 

7.             Failure to pay on time will result in the overdue
amount bearing interest at the highest legal rate compounded quarterly.

 

C.            Variances:

 

The Association shall have the sole authority to grant
variances to the covenants set forth in Articles I - IV of this instrument,
Variances shall be granted only upon approval of Owners of more than
thirty-five (35) acres of property located within the park.

 

VII.

 

ARCHITECTURAL
CONTROL

 

A.            Architectural Control:  No building, fence,
sign, or other structure or landscaping shall be erected, placed or altered on
any Lot until the complete plans and specifications including site plan shall
have been approved in writing by a majority of a three member Architectural Control
Committee designated by the Association. In the event the committee fails to
disapprove any plans within ten (10) working days after submission, such plans
shall be deemed approved. However, such non-action shall not constitute the approval
of any request for variance or of any plans which violate any provisions
hereof. All decisions of the committee shall be final and binding and there shall
be no legal action taken against the committee or its members except by procedure
for injunctive relief when such action is patently arbitrary and capricious. Members
of the committee shall not be liable to any persons subject to or possessing or
claiming the benefits of these covenants for any damage or loss arising out of
their acts hereunder.

 

It is understood and
agreed that the remedy of any aggrieved party shall be restricted to injunctive
relief. In any event, approval of the Architectural Committee shall not be
unreasonably withheld.

 

B.            The initial membership of the Architectural Control
Committee shall consist of Mark Schwarz, Michael Hampton and Wm. Eugene Powell,
Upon the death or resignation of any member, the remaining members shall appoint
a successor. The Association shall have the right to fill vacancies when the

 

7

 

committee members have
failed to do so for more than fifteen (15) days following creation of a
vacancy.

 

VIII.

 

COVENANT FOR
MAINTENANCE ASSESSMENTS

 

A.            Creation of the Lien and Personal Obligation of Assessments:

 

The Declarants for each Lot
owned within the Properties, hereby covenant and each Owner of any Lot by
acceptance of a deed therefor, whether or not it shall be so expressed in such deed,
is deemed to covenant and agree to pay the Association:

 

1.             annual assessments or charges, and

 

2.             special assessments for capital improvements, such
assessments to be established and collected as herein- after provided.

 

The annual and special assessments
(including any expense incurred by the Association to discharge the responsibilities
of a Lot Owner hereunder), together with interests, costs and reasonable
attorney’s fees, shall be a charge on the land and shall be a continuing lien
upon the property against which each such assessment is made, Each such assessment,
together with interests, costs and reasonable attorney’s fees, shall also be
the personal obligation of the person who was the Owner of such property at the
time when assessment fell due. The personal obligation for delinquent
assessments shall not pass to his successors in title unless expressly assumed
by them.

 

B.            Purpose of Annual Assessments: The annual assessments levied by the
Association shall be used exclusively for common area, maintenance, security, repair,
taxes, utilities, and minor improvements made thereto, including the reasonable
costs of supervising, making and collecting such assessments.  Security services as may be deemed desirable
by a majority of the Association members may be contracted for by the Association,
but shall not be required to be provided by the Association and in no event
shall the Association be liable to Owners for security or for any negligence or
misfeasance of any security service contracted for or provided.

 

C.            Special Assessments for Capital Improvements: 
In addition to the annual assessments authorized above, the Association
may levy, in any assessment year, a special assessment applicable to that year only
for the purpose of defraying, in whole or in part, the cost of any
construction, reconstruction, repair or replacement of a capital improvement
upon the common area, including fixtures and personal property related thereto,
provided  that any such assessment shall have the written consent of
the Owners of the Lots, comprising two-thirds (2/3rds) or more of the acres
situated in all the Lots. 

 

D.            Uniform Rate of Assessments:  Each
Lot, whether developed or not, shall be assessed that portion of the aforesaid
annual or special assessments bearing the same ratio to the total thereof as
the number of square feet comprising said Lot shall bear to the total number of
square feet comprising all Lots.

 

E.             Date of Commencement of Annual Assessments - Due Dates:  The
Annual assessments provided for herein shall commence October 1, 1985. The initial
annual assessment shall be computed at a rate of $0.05 per square foot per Lot,

 

8

 

prorated for the period October 1,
1985 through December 31, 1985. Thereafter, annual assessments shall be at
such rate as the Association may fix, shall be determined on a calendar year
basis, and may be billed monthly, quarterly, or annually in advance by the Association.
The Board of Directors of the Association shall, without vote of the
membership, have the power to increase the annual assessment by the greater of:
(a) five percent (5%) over the prior year’s assessment; or (b) the percentage
increase in CPI during the last full twelve month period preceding the setting
of assessment for which such statistic is available. Membership approval of sixty
percent (60%) or more in interest shall be required to increase the annual
assessment except as herein specifically authorized by the Board of Directors.

 

The annual assessment rate
set forth above shall apply to all Lots which have been sold or leased by Declarant
or which have been improved by a structure and opened for business or whichever
event first occurs. All “unoccupied Lots,” defined herein to be all Lots owned
by Declarant, which have not been leased to another or improved by a structure
and opened for business shall be assessed at a rate of one-third (1/3rd) the
annual assessment rate provided for above.

 

F.             Effect of Nonpayment of Assessments – Remedies of the
Association:  Any assessment or expense incurred by the
Association to discharge an obligation of an Owner not paid within thirty (30) days
after the due date shall bear interest from the due date at the rate of
eighteen percent (18%) per annum. The Association may bring an action at law
against the Owner personally obligated to pay the same, or foreclose the lien against
the property. Each such Owner, by his acceptance of a deed to a Lot, hereby
expressly vests in the Association, or its agents the right and power to bring all
actions against such Owner personally or the collection of such charges as a
debt and to enforce the aforesaid lien by all methods available for the
enforcement of such liens, including judicial foreclosure by an action brought
in the name of the Association in a like manner as a mortgage or deed of trust lien
on real property, and such Owner hereby expressly grants to the Association a
power of sale in connection with said lien.  The lien provided for in this section shall be
in favor of the Association and shall be for the benefit of all other Lot
Owners. No Owner may waive or otherwise escape liability for the assessments
provided for herein by non-use of the common area or abandonment of his Lot.

 

C.            Subordination of the Lien to Mortgages:  The
lien of any assessments provided for herein shall be subordinate to the lien of
any first mortgage.  Sale or transfer of
any Lot shall not affect the assessment lien. However, the sale or transfer of
any Lot pursuant to mortgage foreclosure or any proceeding in lieu thereof, shall
extinguish the lien of such assessments as to payments which became due prior
to such sale or transfer. NO sale or transfer shall relieve such Lot from
liability or any assessment thereafter becoming due or from the lien thereof.

 

H.            Exempt Property:  All
properties dedicated to, and accepted by, a local public authority and all
properties owned by a charitable or nonprofit organization exempt from taxation
by the laws of the State of Texas may, at the discretion of the Board of
Directors of the Association, be exempt from the assessments created herein
except in respect to any land used for business or proprietary functions. No land
or improvements devoted to a business use shall be exempt from said
assessments.

 

9

 

IX.

 

GENERAL PROVISIONS

 

A.            Severability:  Invalidation
of any one of these covenants or restrictions by judgment or court order shall
in no wise affect any other provisions which shall remain in full force and
effect.

 

B.            Term: The foregoing covenants are made and adopted to run
with the land, and shall be binding upon the undersigned and all parties and
persons claiming through and under it until 2235, at which time said covenants
will be automatically extended for successive periods of ten (10) years,
unless an instrument signed by a majority interest of the than record Owners of
the Lots in the subdivision has been recorded agreeing to change in said
covenants in whole or in part.

 

C.            The Association and its duly assigned committees, including
the Architectural Committee and the Developer shall perform such duties so assigned
to the Association or Developer elsewhere in these protective covenants. Neither
the Association nor the Developer shall be liable in damages or otherwise to
anyone submitting plans or specifications for approval or to any Property Owner
by reasons of mistake or judgment, negligence or non-feasance in the
performance or non-performance of any duties assigned in these covenants.

 

EXECUTED effective this 1st day of January, 1985.

 

	
   

  	
  QUINCY LEE INDUSTRIAL
  JOINT

  
	
   

  	
  VENTURE NO. 5

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wm. Eugene Powell

  
	
   

  	
   

  	
  Eugene Powell

  
	
   

  	
  Its: Managing Joint
  Venturer

  

 

(Acknowledgement)

 

	
  STATE OF TEXAS

  	
  $

  
	
  COUNTY OF BEXAR

  	
  $

  

 

This instrument was acknowledged before me on the 30th
day of May, 1985, by Eugene Powell, Managing Joint Venturer of Quincy Lee Industrial
Joint Venture No. 5, a Texas Joint Venture, on behalf of said joint venture.

 

 

	
   

  	
  /s/ Lametta D. Knight

  
	
  [SEAL]

  	
  Notary Public, State of
  Texas

  
	
   

  	
   

  
	
   

  	
  /s/ Lametta D. Knight

  
	
   

  	
  Printed Name of Notary

  
	
   

  	
   

  
	
   

  	
  My Commission Expires:

  	
  1-04-89

  

 

AFTER RECORDING RETURN TO:

James R. Cliffe

800 Milam Building 

San Antonio, Texas
7820  

 

	
   

  	
   

  	
  [ILLEGIBLE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JUN 11 1985

  
	
   

  	
   

  	
   

  
	
   

  	
  [SEAL]

  	
  [ILLEGIBLE]

  
	
   

  	
   

  	
  [ILLEGIBLE]

  

 

10

 

DECLARATION
RELATING TO A PARTY WALL

 

AND
EASEMENT FOR ENCROACHMENTS

 

	
  STATE OF TEXAS

  	
  $

  
	
   

  	
   

  
	
  COUNTY OF BEXAR

  	
  $

  

 

WHEREAS, Elmwood Properties, a Texas general partnership
(“Declarant”) is the owner of Lots 4 and 5, Block 3, N.C.B. 17577, San Antonio,
Bexar County, Texas (the “lots”) upon which the Declarant has constructed a
warehouse/office building which has a wall situated along and upon the common
boundary of the lots (the “party wall”); and

 

WHEREAS, the footings and foundation of the party wall
encroach upon the common boundary of each of the lots; and

 

WHEREAS, title to the lots along and upon which the
party wall is constructed is to become vested in separate owners, consequently it
is necessary that appropriate provision be made for the party wall to be shared
by the owner of each lot, and for encroachments which result from the
construction of the party wall;

 

NOW, THEREFORE, in consideration of the premises and
the covenants and conditions herein contained, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Declarant hereby declares that:

 

(a)  The well situated along and upon the
common boundary of the lots constitutes a party wall and to the extent not inconsistent
with this declaration, the general rules of law regarding party walls and
liability for property damage due to negligence or willful acts or omissions shall
apply thereto;

 

(b)  The cost of reasonable repairs and
maintenance of the party wall shall be shared equally by the owner of each lot
upon which the party wall is situated; 

 

(c)  If the party wall is destroyed or
damaged by fire or other casualty, the owner of either lot may restore the party
wall, to substantially the condition the party wall was

 

 

immediately prior to its
destruction or damage by fire or casualty, and the owner of the other lot shall
contribute to and share equally in the cost of restoration thereof without prejudice,
however, to the right of any such owner to call for a larger contribution from
the other lot owner under any rule of law regarding liability for negligence or
willful acts or omissions;

 

(d)  Notwithstanding any of the provisions
of this declaration, the owner of a lot who by such owner’s negligence or
willful act causes the party wall to be exposed to the elements shall bear the
whole cost of furnishing the necessary protection against such elements;

 

(e)  The right of either lot owner to contribution
from the other lot owner under this declaration shall be appurtenant to the land
and shall pass to such owner’s successor in title; and

 

(f)  In the event any footings or foundation
of the party wall should encroach upon the abutting lot, the owner of each lot
upon which such party wall is constructed, shall possess and easement to
continue such encroachment for so long as the encroachment and the party wall
are in existence.

 

This declaration including without limitation all covenants
provided for herein shall constitute covenants running with the land.

 

	
   

  	
  EXECUTED this 3rd day
  of December, 1985.

  

 

	
   

  	
  ELMWOOD PROPERTIES

  

 

 

	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
      Its
  Managing Partner

  
	
   

  	
   

  	
               Declarant

  

2

 

The undersigned lienholder hereby Joins in the
execution of this declaration for the purpose of subordinating all of the liens
   filed by it to such declaration.

 

	
   

  	
  THE FROST NATIONAL BANK
  

  
	
   

  	
  OF SAN ANTONIO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bernard Gonzales

  
	
   

  	
    Execu. Vice
  President

  
	
   

  	
        Bernard
  Gonzales

  

 

	
  ATTEST:

  
	
   

  
	
   

  	
   

  
	
  Administrative Officer 

  
	
  Betsy Glicser

  

 

	
  STATE OF TEXAS

  	
  $

  
	
   

  	
   

  
	
  COUNTY OF BEXAR

  	
  $

  

 

This instrument was acknowledged before me on the 3rd
day of December, 1985, by Michael S. Hampton, an Managing Partner of Elmwood
Properties, a Texas partnership, on behalf of said partnership.

 

[SEAL]

 

	
   

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Notary Public State of
  Texas

  
	
   

  	
  [ILLEGIBLE]

  
	
   

  	
  My Commission Expires: 7-1-89

  

 

	
  STATE OF TEXAS

  	
  $

  
	
   

  	
   

  
	
  COUNTY OF BEXAR

  	
  $

  

 

This instrument was acknowledged before me on the 3rd
day of December, 1985, by BERNARD GONZALES, an Exe. Vice President of The Frost
National Bank of San Antonio, a national banking association, on behalf of said
association.

 

 

	
   

  	
  /s/ Shunda Steveson

  
	
   

  	
  Notary Public, State of
  Texas

  
	
   

  	
      Shunda
  Steveson

  
	
   

  	
  My Commission Explores:
  10-09-89

  

 

[SEAL]

 

[ILLEGIBLE]

 

3

 

FILED [ILLEGIBLE] MY
OFFICE

ROBERT D. GREEN

COUNTY CLEAN BEXAR CO.

 

[ILLEGIBLE]

 

	
   

  	
  DEC 6 1985

  
	
   

  	
   

  
	
  [SEAL]

  	
  [ILLEGIBLE]

  
	
   

  	
  [ILLEGIBLE]

  

 

 

 

EXHIBIT “D”

 

SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE
AGREEMENT

 

THIS SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE
AGREEMENT (this “Agreement”) made this the
         day of
                      ,
2008, by and between ISI Security Group, Inc. f/k/a ISI Detention
Contracting Group, Inc., a Delaware corporation (“ISI Security Group, Inc.”)
with its principal offices at 12915 Delivery Drive, San Antonio, Texas 78247 (“Tenant”),
and                                                     (“Lender”)
with an address                                                     .

 

W I T N E S S E T H:

 

WHEREAS by Lease dated February   , 2008, Investment Properties, Ltd., by and
through its general partner, Proper Investments, LLC, (“Landlord”) leased and
rented to Tenant certain premises (“the Leased Premises”) located in Bexar
County, Texas, constituting the real property (the “Property”) a more
particular description of which Property appears in Exhibit “A”, attached
hereto and by this reference made a part hereof; and

 

WHEREAS, Landlord has obtained a loan (“Loan”) from
Lender, secured by a Deed of Trust and Security Agreement covering the Property
(the “Mortgage”) and in connection with the Loan, Lender requires that Tenant
subordinate Tenant’s interest under the Lease to the Mortgage; and

 

WHEREAS, Tenant and Lender desire hereby to establish
certain rights, safeguards, obligations and priorities with respect to their
respective interest by means of the following Subordination Attornment and
Non-Disturbance Agreement;

 

NOW, THEREFORE, for valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

1.             Tenant
subordinates all of its right, title and interest in and to the Lease and the
Leased Premises to the liens of the Mortgage and to all renewals, extensions,
modifications or replacements thereof.

 

2.             Provided
Tenant is not in default in the payment of rent or in the performance of any of
the terms, covenants and conditions of the Lease, the right of possession of
Tenant to the Leased Premises shall not be affected or disturbed by Lender in
the exercise of any of its rights under the mortgage or the note secured
thereby, and any sale of the Leased

 

 

Premises pursuant to the exercise of any rights and
remedies under the Mortgage or otherwise shall be made subject to Tenant’s
right of possession under the Lease.

 

3.             If
Lender forecloses the lien of the Mortgage or accepts a conveyance in lieu of
foreclosure, Tenant shall attorn to Mortgages or any purchaser of the Leased
Premises and the Lease shall continue in accordance with its terms between
Tenant and Mortgagee or such other purchaser.

 

4.             The
foregoing provisions shall be self operative; however, Tenant agrees to execute
and deliver to Mortgagee or to any person to whom Tenant herein agrees to
attorn, such other appropriate instrument as either shall request in order to
effectuate such provisions.

 

5.             Any
successor to the interest of Landlord under the Lease shall be bound to Tenant
under all the terms, covenants and conditions of the Lease for the period of
such successor’s ownership of the Leased Premises provided, however, such
successor owner shall not be (a) liable for any act or omission of the
landlord or any prior landlord; (b) subject to any offsets or defenses
that Tenant may have against Landlord or any prior landlord; (c) bound by
any rent that Tenant may have paid for more than the current month to Landlord
or any prior landlord, or (d) bound by any agreement between Landlord and
Tenant to which Lender had not previously consented in writing.

 

6.             Tenant
covenants that the Lease has not been modified or altered and that the Lease
shall not, without the prior written consent of Lender, be terminated,
surrendered, modified or altered hereafter.

 

7.             Tenant
agrees that it will notify Lender in writing by certified mail, of any default
by Landlord under the Lease and shall not cancel or terminate the Lease without
providing Lender thirty (30) days from the date of such notice within which to
cure said default, without any obligation to do so. If any default by Landlord
is cured within the time period described above, Tenant shall have no right to
cancel or terminate the Lease by virtue of said default.

 

8.             This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and/or assigns.

 

9.             This
Agreement may be signed in multiple counterparts, each of which shall
constitute an original, but all of which together comprise one agreement.

 

 

	
   

  	
  TENANT

  
	
   

  	
   

  
	
   

  	
  ISI Security
  Group, Inc. f/k/a

  
	
   

  	
  ISI Detention
  Contracting Group, Inc.

  
	
   

  	
  a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  LENDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						

 

	
  STATE OF TEXAS

  	
  §

  
	
   

  	
   

  
	
  COUNTY OF

  	
                                      

  	
   

  	
  §

  
				

 

This instrument was acknowledged before me on this          
day of      , 2008 by                                ,
the                                
of 1SI Security Group, Inc., a Delaware corporation.

 

	
   

  	
   

  
	
   

  	
  Notary Public,
  State of Texas

  
	
   

  	
  My commission
  expires:

  	
   

  

 

	
  STATE OF

  	
  §

  
	
   

  	
   

  
	
  COUNTY OF

  	
                                      

  	
   

  	
  §

  
				

 

This instrument was acknowledged before me on this
           day of      ,
2008 by                   ,
the                      of                    .

 

	
   

  	
   

  
	
   

  	
  Notary Public, State of

  
	
   

  	
  My commission expires:

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