Document:

Unassociated Document

Exhibit 10.1

AGREEMENT AND PLAN OF EXCHANGE

 

AGREEMENT AND PLAN OF EXCHANGE dated as of August 4, 2009 (this “Agreement") by and among Crown Partners, Inc., Inc., (“CPI”), a Nevada corporation, having its principal place of business at 9663 St. Claude Avenue, Las Vegas, Nevada 89148,
and TaxMasters, Inc. (“TaxMasters”), a Nevada corporation, having its principal place of business at 900 Town and Country Lane, Suite 400, Houston, Texas 77024  and the sole stockholder of TaxMasters listed on Schedule A hereto (the “TaxMasters Stockholder”) and as to Article IV of this Agreement only, Zaman Family Trust, an irrevocable trust created under the laws of Nevada (the “Zaman Trust”), Tisa
Capital Corp., a Colorado corporation (“Tisa Capital”), and Phoenix Consulting Services Inc., a Colorado corporation (“Phoenix Consulting”).

 

RECITALS:

 

1. CPI currently has fifty-four million two hundred fifty seven thousand nine hundred eighty three (54,257,983) shares of its common stock, par value $.001 per share (“Common Stock”), issued and outstanding.  The issued and outstanding shares of CPI will, just prior to the closing of the exchange
transaction, consist of approximately two million seven hundred twelve thousand eight hundred ninety nine (2,712,899) shares of CPI Common Stock (the "CPI Common Stock"), as a result of the one for twenty (1 for 20) reverse stock split (the “Reverse Stock Split”).

 

2.  TaxMasters currently has issued and outstanding 100,000 shares of its common stock (the “TaxMasters Shares”). All of the issued and outstanding TaxMasters Shares are owned beneficially and of record by the TaxMasters Stockholder.

3.  The Board of Directors of CPI and the majority shareholders of CPI have authorized the filing of, and CPI has filed with the Secretary of State of Nevada, the Amended and Restated CPI Articles of Incorporation, pursuant to which CPI’s name was changed from Crown Partners, Inc. to TaxMasters,
Inc. (the “Name Change”) in anticipation of the closing of this Agreement.

 

4.  CPI desires to issue and deliver to the TaxMasters Stockholder:

(i) a total of three hundred one million (301,000,000) post Reverse Stock Split shares of its common stock (the “TaxMasters CPI Shares”),

(ii) one thousand shares of CPI preferred stock, par value $.001 per share, having certain voting rights described below (the “Control Series of Preferred Shares”), and

(iii) the right to receive, during the period ending June 30, 2014, additional shares of CPI Common Stock (the “Earnout Shares”) based on an earnout formula (the “Earnout”) described below, in exchange for all of the  TaxMasters Shares (the “Exchange Transaction”), such
that at the conclusion of the Exchange Transaction, TaxMasters will be a wholly owned subsidiary of CPI.

 

 

 

 

 

5.  Simultaneously with the closing of the Exchange Transaction: (i) CPI will file withdrawal notices with the Securities and Exchange Commission for three registration statements on Form S-8 filed with the Securities and Exchange Commission (the “SEC”) on February 14, 1997 (SEC File No. 333-21789),
March 10, 2004  (SEC File No. 333-113468) and August 17, 2005  (SEC File No. 333-127625) (the “S-8 Withdrawals”); (ii) CPI will terminate all outstanding option plans and all options issued thereunder; and (iii) CPI will eliminate, or take action acceptable to TaxMasters and the TaxMasters Stockholder to eliminate all outstanding obligations on its  June 30, 2009 unaudited interim balance sheet (the “June 30 Balance Sheet”).

 

6.  At the conclusion of the above referenced transactions (including, but not limited to, the Reverse Stock Split) and issuances, CPI shall have a total of approximately three hundred three million seven hundred twelve thousand eight hundred eighty nine (303,712,899) shares of Common Stock issued and
outstanding, consisting of (i) 301,000,000 shares owned by the TaxMasters Stockholder, and (ii) approximately 2,712,899 shares owned by current shareholders of CPI.

 

7.  CPI, TaxMasters and the TaxMasters Stockholder shall cooperate with each other in making all filings and furnishing all information as may be required to conform to all applicable federal and state laws, rules and regulations including without limitation their respective securities laws.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

 

ARTICLE I

 

THE EXCHANGE TRANSACTION

 

Section 1.1 The Closing of the Exchange Transaction.  Subject to the provisions of this Agreement, the Exchange Transaction will occur within five (5) business days after the satisfaction
or waiver of the last to be fulfilled of the conditions set forth in this Article I and in Article IV of this Agreement that by their terms are to occur prior to the closing of the Exchange Transaction, but in all events within thirty (30) days from the execution and delivery of this Agreement (the “Closing Date”), at the offices of TaxMasters, Inc., 900 Town and Country Lane – Suite 400 – Houston, Texas 77024, unless another time, date or place is agreed to in writing by CPI and TaxMasters
(the “Closing”).  Any party to this Agreement, including such party’s representative, may participate in the Closing by telephone.

 

Section 1.2 The Events at the Closing.  At the Closing, all events shall be deemed to occur simultaneously and no event shall be deemed completed until all the events described below have been completed.  All parties to this Agreement acknowledge
that certain numbers of shares and amounts may differ incrementally from the numbers and amounts described below.  Any numerical discrepancies will be adjusted by the parties between the execution date of this Agreement and the Closing; provided, however, that all parties agree that at the conclusion of the events described below at the Closing and subsequent to the Closing: (1) the TaxMasters Stockholder shall own (i) 301,000,000 shares of CPI
Common Stock and (ii) 1,000 shares of Control Series of Preferred Stock, and (iii) have the right to receive the Earnout Shares (as defined in Section 5.1 of this Agreement); (2) the current stockholders of CPI shall own approximately 2,712,899 shares of CPI Common Stock; (3) there shall be no options, warrants or equity or other rights of any kind to purchase shares of CPI Common Stock other than the warrants held by Marshall Curtis & Co., LLC and Velvet International, Ltd.; and (4) CPI shall own 100% of
all of the issued and outstanding shares of common stock of TaxMasters.

 

 

2

 

 

(a) Prior to the Closing:

 

Each of the designated parties shall have performed the actions described below prior to the Closing:

 

(i) CPI shall have furnished TaxMasters with a list of the names and addresses of all stockholders, the number of shares owned by each and whether said shares are restricted or free-trading, all certified by the CPI transfer agent, Olde Monmouth Stock Transfer Co., Inc.

 

(ii) CPI shall be in good standing in the State of Nevada.

 

(iii) CPI shall be current in its reporting obligations under the Securities Exchange Act of 1934 as amended (the “Exchange Act”) and the CPI Common Stock shall be eligible for quoting on the Over the Counter Bulletin Board (“OTCBB”).

 

(iv) CPI shall have satisfied the due diligence requests of TaxMasters, provided, however, that all costs and expenses of said due diligence (other than current financial statement information) shall be the responsibility of TaxMasters.

 

(v) The current directors of CPI and the holders of a majority of the issued and outstanding shares of common stock of CPI shall have approved the transactions described in this Agreement and contemplated by the Exchange Transaction, including the Name Change, the Reverse Stock Split, the increase in the number of authorized
shares of common stock and preferred stock of CPI, the creation of the Control Series of Preferred Stock and the Earnout, in accordance with the requirements of the Nevada Private Corporations Law (“NPCL”).

 

(vi) CPI shall have effected the Name Change and the Reverse Stock Split, received a new CUSIP Number, received the approval of Financial Industry Regulatory Authority (“FINRA”) to the Name Change and the Reverse Stock Split, and, where required, other regulatory approvals, and delivered documentation reasonably
acceptable to TaxMasters demonstrating that these events have occurred.

 

(vii)  CPI shall have filed the S-8 Withdrawals with the SEC and shall not have received any comment letter from the SEC with respect to such withdrawals, terminated all existing stock option plans or similar plans of any kind of CPI, and terminated all outstanding option agreements between CPI and any person
without the issuance of any shares of CPI Common Stock.

 

 (viii)  CPI shall have filed the Certificate of Designation and the Amended and Restated Articles of Incorporation of CPI (in substantially the form annexed to CPI’s Information Statement on Schedule 14C filed with the SEC on June 16, 2009), with the Nevada Secretary of State and delivered a certified
copy thereof to TaxMasters.

 

(ix)   CPI shall have eliminated, or made arrangements acceptable to TaxMasters and the TaxMasters Stockholder  to eliminate, all liabilities and obligations of any kind shown on the June 2009 Balance Sheet.

 

(x)  If the Closing is more than four (4) business days after the date of this Agreement, CPI shall have filed with the SEC a Form 8-K with respect to its execution and delivery of this Agreement.

 

 

3

 

 

(b) At the Closing:

 

All the conditions to Closing enumerated above shall have been satisfied or waived by the party or parties entitled to the benefit thereof.

 

CPI Common Stock shall be eligible for quoting on the OTCBB, shall not be the subject of, or threatened by, any regulatory or other disciplinary proceeding by FINRA, the SEC or any other regulatory body, and shall be current in its reporting obligations as a reporting company under the Exchange Act.

 

(1)  TaxMasters and the TaxMasters Stockholder shall deliver to CPI or its representatives:

 

(i) The TaxMasters Stockholder shall deliver stock certificates for 100,000 shares of TaxMasters Common Stock, representing all of the TaxMasters Shares, duly endorsed for transfer, to CPI.  At the time of assignment, the TaxMasters Stockholder shall own his TaxMasters Shares of record and beneficially, free
and clear of all claims, liens, litigations, encumbrances, taxes, pledges, judgments or other clouds on title of any kind (together “Claims”).  The TaxMasters Stockholder shall deliver a certificate to that effect.

 

(ii)  Certified copies of resolutions of TaxMasters’s Board of Directors and of the TaxMasters Stockholder authorizing and approving the transactions described in this Agreement.

 

(iii)  Certificate of good standing for TaxMasters from the States of Nevada and Texas.

 

(iv)  Audited financial statements of TaxMasters for the years ended December 31, 2008 and December 31, 2007 together with a pro forma for the six months ended June 30, 2009 giving effect to the results of this Agreement.

 

(v)  TaxMasters officer’s certificate attesting to the truth and accuracy of the representations and warranties of TaxMasters and the TaxMasters Stockholder in this Agreement.

 

(2) CPI shall deliver to TaxMasters and/or the TaxMasters Stockholder:

 

(i) Certificate for 301,000,000 shares of CPI Common Stock representing the shares to be issued to the TaxMasters Stockholder.  All of the CPI TaxMasters Shares shall be restricted and bear a legend restricting transfer except in conformity with the United States and state securities laws.

 

(ii)  Certificate for 1,000 shares of Control Series of Preferred Shares having the characteristics described in section 3.2 of this Agreement. All of the CPI Control of Preferred  Shares shall be restricted and bear a legend restricting transfer except in conformity with the United States and state
securities laws.

 

(iii)  Certified copies of resolutions of CPI’s Board of Directors and the consent of the holders of a majority of the issued and outstanding shares of CPI Common Stock authorizing and approving the transactions described in this Agreement.

 

(iv)  Certificate of good standing for CPI from the State of Nevada.

 

 

4

 

 

(v)  The letters of resignation of the current directors of CPI to be effective after they appoint Patrick R. Cox as a director of CPI.

 

(vi) The letters of resignation of the current officers of CPI.

 

(vii)  CPI officer’s certificate attesting to the truth and accuracy of the representations and warranties of CPI in this Agreement.

 

(viii)  The corporate minute books and records of CPI and its predecessors which shall have been delivered to the Texas headquarters of TaxMasters.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF CPI AND ITS CHIEF EXECUTIVE OFFICER  AND ITS CHIEF FINANCIAL OFFICER

CPI, and its Chief Executive Officer and its Chief Financial Officer, jointly and severally, represent and warrant to TaxMasters and the TaxMasters Stockholder that, except as set forth in the disclosure schedule delivered by CPI to TaxMasters on the date hereof and initialed by the Parties (the "Disclosure Schedule"),
the statements contained in this Article II are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article II). The Disclosure Schedule will be arranged in paragraphs corresponding to the numbered and lettered sections contained in this Article II. The representations and warranties in the Disclosure Schedule are also modified by the incorporation
or exclusion of the “Knowledge” of CPI, the CEO and the CFO where so indicated.

 

“Knowledge” means, with respect to an individual, that such individual is actually aware of the relevant fact or such individual would reasonably be expected to know such fact in the ordinary course of the performance of the individual’s employee or professional responsibility. Any person that
is an entity shall have Knowledge if any officer or director of such person as of the date such knowledge is imputed has Knowledge of such fact or other matter.

 

Section 2.1.  Organization, Standing and Power. CPI is a corporation duly organized and validly existing and in good standing under the laws of the State of Nevada, has all requisite power and authority to own, lease and operate its properties and to carry
on its businesses as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify would have a material adverse effect on the business of CPI. CPI has delivered or made available to TaxMasters complete and correct copies of its articles of incorporation together with all amendments thereto, bylaws, and/or other primary charter and organizational documents ("Charter Documents") of CPI, in each case, as amended to the date hereof. The minute
books and stock records of CPI will have been provided, or copies made available to, TaxMasters (at TaxMasters’s cost and expense) in their entirety and contain correct and complete records of all material proceedings and actions taken at all meetings of, or effected by written consent of, the stockholders of CPI and its Board of Directors, and all original issuances, subsequent transfers, repurchases, and cancellations of CPI Common Stock and all other forms of CPI equity or debt securities.

 

Section 2.1A  Subsidiaries; Investments. CPI
does not currently own capital stock or any other form of equity in any corporation or other entity regardless of its form except for its ownership of a majority interest in Crown Equity Holdings, Inc. (“Crown Equity” or the “CPI Subsidiary”). Crown Equity is a corporation duly organized and validly existing and in good standing under the laws of the State of Nevada, has all requisite power and authority to own, lease and operate its properties and to carry on its businesses as now being
conducted, and is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify would have a material adverse effect on the business of Crown Equity. All of the issued and outstanding Crown Equity held by CPI are validly issued, fully paid and non-assessable and such shares have been sold to CPI in full compliance with all applicable federal and state securities laws.

 

 

5

 

 

Section 2.2   Capital Structure of CPI; CPI Shares to be Issued at Closing.

 

(a) The authorized capital stock of CPI currently consists of (i) 1,000,000,000 shares of CPI Common Stock, $.001 par value per share, of which 54,257,983 shares of CPI Common Stock are issued and outstanding, and after the Reverse Stock Split there will be 2,712,899 shares of CPI Common Stock issued and outstanding
before any of the issuances contemplated in this Agreement; (ii) 500,000,000 shares of preferred stock, $.001 par value per share, of which 1,000 shares  have been designated “Control Series” Preferred Stock and of which no shares of preferred stock (including the “Control Series” Preferred Stock) are issued and outstanding, and (iii) 9,000,000 options to purchase shares of CPI common stock, all of which will be cancelled prior to or at the Closing under this Agreement.

 

(b) All outstanding CPI Shares are validly issued, fully paid, nonassessable and not subject to any preemptive rights, or to any agreement to which CPI is a party or by which CPI may be bound.  There are no options, warrants, calls, conversion rights, commitments, agreements, contracts, understandings,
restrictions, arrangements or rights of any character to which CPI is a party or by which CPI may be bound (i) obligating CPI to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the capital stock of CPI except for 9,000,000 options shares of CPI’s common stock issued to certain directors, key employees and/or consultants of CPI, all of which will be cancelled prior to or at the Closing, or (ii) obligating CPI to grant, extend or enter into any such option, warrant,
call, conversion right, conversion payment, commitment, agreement, contract, understanding, restriction, arrangement or right, or (iii) obligating CPI to issue any other form of debt or equity security.  CPI does not have outstanding any bonds, debentures, notes or other indebtedness the holders of which (i) have the right to vote (or convertible or exercisable into securities having the right to vote) with holders of CPI Shares on any matter ("CPI Voting Debt") or (ii) are or will become entitled to
receive any payment as a result of the execution of this Agreement or the completion of the transactions contemplated hereby.

 

(c) (1) The TaxMasters CPI Shares and the Control Series of Preferred Shares, when issued and paid for as provided in this Agreement, shall be duly authorized and validly issued, fully paid and nonassessable, and shall be free of any liens, encumbrances, or restrictions on transfer (other than those created by this
Agreement and applicable federal and state securities laws). The maximum number of Earnout Shares of common stock issuable upon the Earnout have been duly and validly reserved for issuance and upon issuance in accordance with the terms of the Earnout shall be duly authorized and validly issued, fully paid, and nonassessable, and shall be free of any liens, encumbrances, or restrictions on transfer (other than those created by this Agreement and applicable federal and state securities laws).

 

(c) (2)   The Control Series of Preferred Shares shall have the following characteristics when the Certificate of Designation is filed in the State of Nevada and when issued to the TaxMaster Stockholder:  Until December 31, 2014, the holders of the Control Series of Preferred Shares (i)
voting as a separate class from the CPI Common Stock and all other series of preferred stock, shall have the right to elect a majority of the Board of Directors, and (ii) voting on all other matters to come before the stockholders with the holders of the common stock as a single class, each share shall have one hundred (100) votes per share, and (iii) shall not have preemptive rights. The Control Series of Preferred Stock shall lose all voting rights on December 31, 2014. The Control Series of Preferred
Stock shall not have any conversion rights and shall not be entitled to receive any dividends.  In the event of a liquidation, dissolution, or winding up of the corporation, whether voluntary or involuntary, the holders of the shares of the Control Series shall be entitled to receive out of the assets of the Company, whether such assets are capital or surplus in nature, the sum of one tenth of one cent per share, after payment to the holders of any senior Series.

 

 

6

 

 

(d) (1) All of the issued and outstanding CPI shares of common stock have been sold or granted in full compliance with all applicable federal and state securities laws, and CPI has made all applicable federal and state securities laws filings required in connection with all such sales in a timely and complete manner.

 

(d) (2) All of the TaxMasters CPI Shares, the Control Series of Preferred Stock and the Earnout Shares to be issued under this Agreement  will be issued and sold or granted in full compliance with all applicable federal and state securities laws, and CPI will have made all applicable federal and state
securities laws filings required in connection with all such sales and issuances in a timely and complete manner.

 

Section 2.3  Authority. The execution, delivery, and performance of this Agreement by CPI and the transactions contemplated hereby have been duly authorized by all necessary action of the Board of Directors and of the holders of a majority of the issued
and outstanding shares of common stock of CPI. This Agreement is, and the other documents and instruments required hereby shall be, when executed and delivered by CPI, the valid and binding obligations of CPI, enforceable against CPI in accordance with their respective terms, subject only to bankruptcy, insolvency, reorganization, moratorium or similar laws at the time in effect affecting the enforceability or rights of creditors generally and by general equitable principles which may limit the right to obtain
equitable remedies.

 

Section 2.4  Compliance with Laws and Other Instruments. CPI holds, and at all times has held, all licenses, permits, and authorizations from all Governmental Bodies, (as defined below) necessary for the lawful conduct of its business pursuant to all applicable
statutes, laws, ordinances, rules, and regulations of all such authorities having jurisdiction over it or any part of its operations. There are no violations or claimed violations known by CPI of any such license, permit, or authorization or any such statute, law, ordinance, rule or regulation. Neither the execution and delivery of this Agreement by CPI nor the performance by CPI of its obligations under this Agreement will, in any material respect, violate any provision of laws or will conflict with, result
in the material breach of any of the terms or conditions of, constitute a material default under, permit any party to accelerate any right under, renegotiate, or terminate, require consent, approval, or waiver by any party under, or result in the creation of any lien, charge, encumbrance, or restriction upon any of the properties or assets of CPI pursuant to, any of the Charter Documents or any agreement (including, without limitation, government contracts), promissory notes, indenture, mortgage, franchise, license,
permit, lease or other instrument of any kind to which CPI is a party or by which CPI or any of its assets is bound or affected. No consent, approval, order or authorization of or registration, declaration or filing with or exemption by or notice to (collectively "Consents"), any court, administrative agency, commission or other governmental authority or instrumentality, whether domestic or foreign (each a "Governmental Body") or other third-party is required by or with respect to CPI in connection with the execution
and delivery of this Agreement by CPI or the consummation by CPI of the transactions contemplated hereby, except for (i) the approval of the Board of Directors and the consent of a majority of the holders of common stock of CPI which has already been obtained, (ii) the filing of the appropriate documents with the Secretary of State of the State of Nevada, FINRA, and other regulatory authorities which has already occurred, and  (ii)  except
for such other Consents, which if not obtained or made would not affect CPI’s  ability to close the Exchange Transaction.

 

 

7

 

 

Section 2.5  Financial Statements; Controls and Procedures; SEC Filings; No Undisclosed Liabilities. (a)   Part 2.5(a) of the Disclosure Schedule includes true and complete copies of CPI’s' audited consolidated balance sheet at
December 31, 2008 and December 31, 2007, and CPI’s audited statements of income, cash flow and shareholders' equity for the years ended December 31, 2008 and December 31, 2007, and the unaudited financial statements filed as part of CPI’s 10-Q for the period ended March 31, 2009 consisting of a consolidated balance sheet as of March 31, 2009 and December 31 2008, the consolidated statements of operations for the three months ended March 31, 2009 and 2008, and the consolidated statements
of cash flows for the three months ended March 31, 2009 and 2008  (collectively, the "CPI Financial Statements”). The CPI Financial Statements  (i) were prepared in accordance with United States general accepted accounting principles ("GAAP") (except as may be indicated in the footnotes to such CPI Financial Statements and that unaudited financial statements may not have notes thereto and other presentation items that may be required by GAAP and are subject to normal and recurring
year-end adjustments that are not reasonably expected to be material in amount) applied on a consistent basis unless otherwise noted therein throughout the periods indicated and (ii) fairly present the financial condition and operating results of CPI as of the dates and for the periods indicated therein.

 

(b)   Each of CPI and the CPI Subsidiary maintains, within the meaning of Rule 13a-15 (e) of the Securities and Exchange Act of 1934, as amended (the “1934 Act”), a system of disclosure controls and procedures designed to insure that information required to be disclosed by CPI is recorded,
processed, summarized and reported within the time periods specified in the SEC’s rules and forms of reporting.  Each of CPI and the CPI Subsidiary maintains, within the meaning of Rule 13a-15(f) of the 1934 Act,  internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes principles and policies that:  (1) pertain
to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of CPI; (2)  provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GGAP, and that receipts and expenditures of CPI are being made only in accordance with authorization of management and the directors of CPI;  and (3)  provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of CPI’s assets; provided, however, that CPI’s internal control over financial reporting is subject to the weakness identified in its Annual Report on Form 10-K for the year ended December 31, 2008.

 

(c)   Part 2.4(c) of the Disclosure Schedule lists, and CPI has delivered to TaxMasters,  accurate and complete copies of the documentation creating or governing, all securitization transactions and "off-balance sheet arrangements" (as defined in Item 303(c) of Regulation S-K under
the 1934 Act) effected by CPI since January 1, 2006.

 

(d)   Since January 1, 2002, there have been no formal or informal internal investigations regarding financial reporting or accounting policies and practices discussed with, reviewed by or initiated at the direction of the board of directors or any committee thereof, the chief executive officer,
the chief financial officer or general counsel of CPI, or by the staff of the SEC or any other Governmental Body.

 

 

8

 

 

(e)   As of the date of this Agreement, neither CPI nor the CPI Subsidiary has any liability, indebtedness, obligation, expense, claim, deficiency, guaranty or endorsement of any kind, whether accrued, absolute, contingent, matured, unmatured or other (whether or not required to be reflected in the
CPI Financial Statements in accordance with GAAP) (each a "Liability"), individually or in the aggregate, except for: (a) liabilities identified as such in the "liabilities" column of the CPI June 2009 Balance Sheet; (b) normal and recurring current liabilities that have been incurred by CPI or its Subsidiary since the date of the CPI June 2009 Balance Sheet, in the ordinary course of business and which are not in excess of Five Thousand Dollars ($5,000) in the aggregate; (c) liabilities for performance
of obligations of CPI or the CPI Subsidiary under CPI contracts, all of which will be assigned by CPI at the Closing or terminated by CPI without any liability for the termination.

 

Section 2.6 Taxes.  (a)   CPI and the CPI Subsidiary have timely filed all Tax Returns that they were required to file under applicable Legal Requirements. All such Tax Returns were correct and complete in all material respects and have
been prepared in material compliance with all applicable Legal Requirements. Neither CPI nor the CPI Subsidiary is currently the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where CPI or the CPI Subsidiary does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

 

(b)   All Taxes due and owing by CPI or the CPI Subsidiary on or before the date hereof (whether or not shown on any Tax Return) have been paid. The unpaid Taxes of CPI and the CPI Subsidiary (A) did not, as of the date of the CPI June 2009 Balance Sheet, exceed the reserve for Tax Liability
(rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the CPI June 2009 Balance Sheet (rather than any notes thereto), and (B) will not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice of CPI in filing its Tax Returns. Since the date of the CPI June 2009 Balance Sheet, neither CPI nor the CPI Subsidiary has incurred any Liability for Taxes outside
the ordinary course of business or otherwise inconsistent with past custom and practice.

 

(c)   CPI and the CPI Subsidiary have withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party.

 

(d)   There are no encumbrances for Taxes (other than Taxes not yet due and payable) upon any of the assets of CPI or the CPI Subsidiary.

 

(e)   Neither CPI nor the CPI Subsidiary has received from any Governmental Body any (i) notice indicating an intent to open an audit or other review, (ii) request for information related to Tax matters, or (iii) notice of deficiency or proposed adjustment of or any amount of Tax proposed,
asserted, or assessed by any Governmental Body against CPI or the CPI Subsidiary. No proceedings are pending or being conducted with respect to any Tax matter and no power of attorney (other than powers of attorney authorizing employees of CPI to act on behalf of CPI) with respect to any Taxes of CPI or the CPI Subsidiary has been filed or executed with any Governmental Body. There are no matters under discussion with any Governmental Body, or known to CPI or the CPI Subsidiary with respect to Taxes that are
likely to result in an additional liability for Taxes with respect to CPI or the CPI Subsidiary. Neither CPI nor the CPI Subsidiary has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency nor has any request been made in writing for any such extension or waiver.

 

 

9

 

 

(f)    All material elections with respect to Taxes affecting CPI or the CPI Subsidiary as of the date hereof, are set forth on section 2.6 (f) of the Disclosure Schedule.

 

(g)   Neither CPI nor the CPI Subsidiary is a party to any Tax allocation, Tax sharing or similar agreement (including indemnity agreements other than employee tax equalization agreements).

 

(h)    Neither CPI nor the CPI Subsidiary has ever been a member of an affiliated group filing a consolidated, combined or unitary Tax Return (other than a group the common parent of which is CPI) for federal, state, local or foreign Tax purposes. Neither CPI nor the CPI Subsidiary have any liability
for the Taxes of any Person (other than CPI and any CPI Subsidiary) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

 

(i)  Neither CPI nor the CPI Subsidiary (i) is a partner for Tax purposes with respect to any joint venture, partnership, or other arrangement or contract which is treated as a partnership for Tax purposes, (ii) owns a single member limited liability company which is treated as a disregarded entity,
(iii) is a shareholder of a "controlled foreign corporation" as defined in Section 957 of the Code (or any similar provision of state, local or foreign law), (iv) is a "personal holding company" as defined in Section 542 of the Code (or any similar provision of state, local or foreign law), or (v) is a "passive foreign investment company" within the meaning of Section 1297 of the Code.

 

(j)  Neither CPI nor the CPI Subsidiary has entered into any transaction identified as a "listed transaction" for purposes of Treasury Regulations Sections 1.6011-4(b)(2) or 301.6111-2(b)(2). Neither CPI nor the CPI Subsidiary has entered into any transaction (i) that would result in a substantial understatement
of federal income tax within the meaning of Section 6662 of the Code if the treatment claimed by CPI were disallowed and (ii) for which there is no substantial authority for CPI' tax treatment of such transaction or for which CPI has not disclosed on its Tax Return the relevant facts affecting the tax treatment of such transaction.

 

(k)  Neither CPI nor the CPI Subsidiary has taken any action, or has any knowledge of any fact or circumstance, that could reasonably be expected to prevent the transactions contemplated hereby, including the Exchange Transaction, from qualifying as a tax-free reorganization within the meaning of Section 368(b)
of the Code.

 

(l) For the purposes of this Agreement, the following terms shall have the meanings set forth below:

 

"Code" shall mean the Internal Revenue Code of 1986, as amended.

 

“Legal Requirement” shall mean any federal, state, foreign, material local or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Body.

 

“Tax” shall mean any federal, state, local, foreign or other tax, including any income tax, franchise tax, capital gains tax, gross receipts tax, value-added tax, surtax, estimated tax, unemployment tax, national health insurance tax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use
tax, property tax, business tax, withholding tax, payroll tax, customs duty, alternative or add-on minimum or other tax of any kind whatsoever, and including any fine, penalty, addition to tax or interest, whether disputed or not.

 

 

10

 

 

“Tax Return” shall mean any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information, and any amendment or supplement to any of the foregoing, filed with or submitted to, or required
to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax.

 

Section 2.7  Leases in Effect; Real Property. CPI does not own any real property and is not a party to any commercial or other form of space lease.

 

Section 2.8 Personal Property. CPI owns its personal property free and clear of all liens, taxes, charges, encumbrances and claims of any kind.

 

Section 2.9   Litigation and Other Proceedings.  (a)  There is no pending Legal Proceeding (as defined below in Section 2.9(c)), and (to the Knowledge of CPI) no Person has threatened to commence any Legal Proceeding: (i) that
involves CPI or the CPI Subsidiary, any CPI director or officer (in his or her capacity as such) or any of the material assets owned or used by CPI or the CPI Subsidiary; or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, this Agreement and the Exchange Transaction. To the Knowledge of CPI, no event has occurred, and no claim, dispute or other condition or circumstance exists, that will, or that would reasonably be expected to, give
rise to or serve as a basis for the commencement of any such Legal Proceeding.

 

(b)  There is no order, writ, injunction, judgment or decree to which CPI or the CPI Subsidiary, or any of the assets owned or used by CPI or the CPI Subsidiary, is subject. To the Knowledge of CPI, no officer or director of CPI or the CPI Subsidiary is subject to any order, writ, injunction, judgment or decree
that prohibits such officer or director from engaging in or continuing any conduct, activity or practice relating to the business of CPI or any CPI Subsidiary or to any material assets owned or used by CPI or the CPI Subsidiary.

 

(c)  For purposes of this Agreement, “Legal Proceeding” shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or
heard by or before, or otherwise involving, any court or other Governmental Body or any arbitrator or arbitration panel.

Section 2.10 No Defaults. Each of CPI and Crown Equity is not, nor has CPI or Crown Equity (i) received notice that it would be with the passage of time or (ii) has any knowledge of any event that with the passage of time and/or written notice thereof would
cause CPI or Crown Equity to be, in default or violation of any term, condition or provision of (i) the Charter Documents of CPI or Crown Equity (as the case may be); (ii) any judgment, decree or order applicable to CPI or Crown Equity (as the case may be); or (iii) any loan or credit agreement, note, bond, mortgage, indenture, contract, agreement, lease, license or other instrument to which CPI or Crown Equity (as the case may be) is now a party or by which either of them or any of their respective properties
or assets may be bound.

 

Section 2.11   Major Contracts. Except as set forth on section 2.11 of the Disclosure Schedule, CPI is not a party to or subject to any contract or arrangement that will not be satisfied in its entirety or terminated prior to or at the Closing
of the Exchange Transaction without any remaining liability by CPI to any other party.

 

Section 2.12  Insurance.  CPI has such insurance coverage as it deems reasonably necessary in connection with the business it currently operates.

 

 

11

 

 

Section 2.13  Employees/ Consultants. CPI does not have any written or oral contract of employment or consulting with anyone. CPI does not have any employees, and has not had any employees for the period beginning
January 1, 1999 to the date of this Agreement. Except as set forth on section 2.13 of the Disclosure Schedule, there are no claims pending, or threatened to be brought, in any court or administrative agency by any former CPI employee or consultant. Except as set forth on section 2.13 of the Disclosure Schedule, CPI has paid in full all salaries, benefits, bonuses, commissions or other forms of compensation for all employees, consultants or agents of
CPI.

 

Section 2.14  Employee Benefit Plans. CPI has not sponsored, maintained or supported, or otherwise been a party to, any employee benefit plans, including, without limitation, any "employee pension benefit plan" or "employee welfare benefit plan", as such
terms are defined in Section 3 of the Employee Retirement Income Security Act of 1974, as amended.        

 

Section  2.15  Environmental Matters.  CPI and the CPI Subsidiary are in compliance
in all material respects with all applicable environmental laws, which compliance includes the possession by CPI of all permits and other Governmental Authorizations required under applicable Environmental Laws and compliance with the terms and conditions thereof. Neither CPI nor the CPI Subsidiary has received since January 1, 2006 any written notice or other communication (in writing or otherwise), whether from a Governmental Body, citizens group, employee or otherwise, that alleges that CPI or the CPI
Subsidiary is not in compliance with any environmental law, and, to the Knowledge of CPI, there are no circumstances that may prevent or interfere with CPI's compliance with any environmental law in the future.

 

Section 2.16  Intellectual Property.  (a) CPI does not own any “Intellectual Property” which for purposes of this section 2.16 is
defined as (a) United States, foreign and international patents, patent applications, including provisional applications, statutory invention registrations, invention disclosures and inventions, (b) trademarks, service marks, trade names, domain names, URLs, trade dress, logos and other source identifiers, including registrations and applications for registration thereof, (c) copyrights, including registrations and applications for registration thereof, and (d) software, formulae, customer lists, trade secrets,
know-how, confidential information and other proprietary rights and intellectual property, whether patentable or not.

 

(b)  CPI and its directors, officers and employees are not bound by any contract to indemnify, defend, hold harmless, or reimburse any other person with respect to any Intellectual Property infringement, misappropriation, or similar claim. CPI has never assumed, or agreed to discharge or otherwise take
responsibility for, any existing or potential liability of another person for infringement, misappropriation, or violation of any Intellectual Property right. To the Knowledge of CPI, CPI has never infringed on the Intellectual Property rights of any other Person, and has never receive notice of any such Claim.

 

Section 2.17 Brokers and Finders.  CPI has not retained any broker, finder, or investment banker in connection with this Agreement or any of the transactions contemplated by this Agreement, nor (ii) does or will CPI owe any fee or other amount to
any broker, finder, or investment banker in connection with this Agreement or the transactions contemplated by this Agreement.

 

 

12

 

 

Section 2.18   Disclosure. Neither the representations or warranties made by CPI, or any other certificate executed and delivered by CPI pursuant to this Agreement, contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements or facts contained herein or therein not misleading in light of the circumstances under which they were furnished.

 

Section 2.19 OTCBB/Exchange Act Reporting; Compliance.  (a)  CPI Common Stock is currently eligible for quotation on the OTCBB and has not received notice of any kind, written or oral,
that its ability to remain on the OTCBB is the subject of any regulatory or other proceeding or investigation of any kind by anyone including without limitation, the SEC and FINRA.  CPI is a “reporting company” within the meaning of the Rules and Regulations of the Exchange Act, and, except as set forth on the Disclosure Schedule, is current in all its reporting obligations under the Exchange Act.

 

(b)  CPI has delivered to TaxMasters accurate and complete copies of all registration statements, proxy statements, Certifications (as defined below) and other statements, reports, schedules, forms and other documents filed by CPI with the SEC since January 1, 2003 (the "CPI SEC Documents"), other
than such documents that can be obtained on the SEC's website at www.sec.gov. Except as set forth on section 2.19 of the Disclosure Schedule, all statements, reports, schedules, forms and other documents required to have been filed by CPI or its officers with the SEC have been so filed on a timely basis. As of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of the Exchnage Agreement, then on the date of such filing), each of the CPI SEC Documents complied in all
material respects with the applicable requirements of the Securities Act of 1933 , as amended (the “1933 Act”) or the 1934 Act (as the case may be) and, as of the time they were filed, none of the CPI SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The certifications and statements required
by (A) Rule 13a-14 under the 1934 Act and (B) 18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley Act) relating to the CPI SEC Documents (collectively, the "Certifications") are accurate and complete and comply as to form and content with all applicable Legal Requirements. As used in this Section 3, the term "file" and variations thereof shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.

 

ARTICLE III

 

Representations and Warranties of TaxMasters.

 

TaxMasters represents and warrants to CPI that, except as set forth in the disclosure schedule delivered by TaxMasters to CPI to on the date hereof and initialed by the Parties (the "Disclosure Schedule"), the statements contained in this Article III are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of the Exchange  Agreement throughout this Article III).   The Disclosure Schedule will be arranged in paragraphs corresponding to the numbered and lettered sections contained in this Article III. The representations and warranties in the Disclosure Schedule are also modified by the incorporation or exclusion of the “Knowledge” of TaxMasters where so
indicated.

 

“Knowledge” means, with respect to an individual, that such individual is actually aware of the relevant fact or such individual would reasonably be expected to know such fact in the ordinary course of the performance of the individual’s employee or professional responsibility. Any Person that
is an Entity shall have Knowledge if any officer or director of such Person as of the date such knowledge is imputed has Knowledge of such fact or other matter.

 

 

13

 

 

TaxMasters represents and warrants to CPI as follows; provided, however, that the TaxMasters Stockholder makes the representations and warranties set forth only in sections 3.2 and 3.2A:

Section 3.1 Organization, Standing and Power. TaxMasters is a corporation duly organized and validly existing under the laws of the State of Nevada, and has all requisite power and authority to own, lease and operate its properties and to carry on its businesses
as now being conducted, and is duly qualified and in good standing to do business in each jurisdiction in which a failure to so qualify would have a material adverse effect on the business of TaxMasters.  TaxMasters has delivered or made available to CPI complete and correct copies of the certificate of incorporation, bylaws, and/or other primary charter and organizational documents ("Charter Documents") of TaxMasters, in each case, as amended to the date hereof.

 

Section 3.1A Subsidiaries; Investments. TaxMasters has not made any investments in and does not own any capital stock or any other form of equity in any corporation or other entity regardless of its organizational form, except as shown on the financial statements
of TaxMasters.

 

Section 3.2   Authority.  Each of TaxMasters and the TaxMasters Stockholder has duly and validly executed and delivered this Agreement, and this Agreement constitutes the valid, binding, and enforceable obligation of each of TaxMasters
and the TaxMasters Stockholder in accordance with its terms.  The TaxMasters Stockholder has full power and authority to execute and deliver this Agreement and to perform his obligations hereunder.  TaxMasters and the TaxMasters Stockholder need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. The TaxMasters Stockholder holds of record
and owns beneficially all of the TaxMasters Shares shown opposite his name on Schedule A hereto, free and clear of any restrictions on transfer under the laws of the United States or any other jurisdiction in which said Stockholder is domiciled, including any taxes, security interests, pledges, encumbrances, options, warrants, purchase rights, contracts, commitments, equities, claims, and demands of any kind (together “Claims”).  The
TaxMasters Stockholder is not a party to any option, warrant, and purchase right, or other contract or commitment that could require the TaxMasters Stockholder to sell, transfer, or otherwise dispose of any of the TaxMasters Shares.

 

Section 3.2A Investment; Restrictions on Transfer; Legends.  (a) The TaxMasters Stockholder: (i) understands that none of the TaxMasters CPI Shares, the Control Series of Preferred Shares and
the Earnout Shares have been, and none of them will be, registered under the 1933 Act, or under any United States state securities laws, and are being offered and sold in reliance upon United States federal and state exemptions for transactions not involving any public offering, (ii) is acquiring the TaxMasters CPI Shares,  the Control Series of Preferred Shares and the Earnout Shares solely for his own account for investment purposes, and not with a view to the distribution thereof, (iii) is a sophisticated
investor with knowledge and experience in business and financial matters, (iv) has received certain information concerning CPI and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the TaxMasters CPI  Shares, the Control Series of Preferred Shares and the Earnout Shares, and (v) is able to bear the economic risk and lack of liquidity inherent in holding the TaxMasters CPI Shares, the Control Series of Preferred Shares
and the Earnout Shares.

 

(b) Without in any way limiting the representations set forth above, the TaxMasters Stockholder further agrees not to make any disposition of all or any portion of the TaxMasters CPI Shares, the Control Series of Preferred Shares and the Earnout Shares unless and until: 

 

 

14

 

 

(i) there is then in effect a registration statement under the 1933 Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(ii) the TaxMasters Stockholder shall have notified CPI of the proposed disposition and shall have furnished CPI with a statement of the circumstances surrounding the proposed disposition, and, if reasonably requested by CPI, the TaxMasters Stockholder shall, at his expense, furnish CPI with an opinion of counsel,
reasonably satisfactory to CPI, that such disposition shall not require registration of such securities under the Securities Act.

 

(c) It is understood that the certificates evidencing the TaxMasters CPI Shares, the Control Series of Preferred Shares and the Earnout Shares, shall bear legends substantially similar to the legends set forth below (in addition to any legend required under applicable state securities laws):

 

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER UNITED STATES FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THIS SECURITY BE TRANSFERRED ON THE BOOKS OF THE COMPANY, WITHOUT REGISTRATION OF SUCH SECURITY UNDER
ALL APPLICABLE UNITED STATES FEDERAL OR STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE, AT THE OPTION OF THE COMPANY, TO BE EVIDENCED BY AN OPINION OF THE SECURITY HOLDER’S COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT NO VIOLATION OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR ASSIGNMENT.”

 

Any other legends required by state securities laws applicable to any individual Investor.

 

The legend set forth above shall be removed by CPI upon delivery to CPI of an opinion by counsel, reasonably satisfactory to CPI, that a registration statement under the 1933 Act is at that time in effect with respect to the legended security or that such security can be freely transferred in a public sale without such
a registration statement being in effect and that such transfer shall not jeopardize the exemption or exemptions from registration pursuant to which CPI issued the TaxMasters CPI Shares, the Control Series of Preferred Shares and the Earnout Shares.

 

Section 3.3 Compliance with Laws and Other Instruments. The execution and delivery of this Agreement by TaxMasters and the TaxMasters Stockholder and the performance by TaxMasters and the TaxMasters Stockholder of their obligations under this Agreement will
not violate any provision of law or conflict with, result in the breach of any of the terms and conditions of, constitute a default under, permit any party to accelerate any right under, renegotiate or terminate, require consent, approval, or waiver by any party under, or result in the creation of any lien, charge, or encumbrance upon, any of the properties, assets, or shares of capital stock of TaxMasters or the TaxMasters  Stockholder pursuant to any charter document of TaxMasters or any agreement,
indenture, mortgage, franchise, license, permit, lease, or other instrument of any kind to which TaxMasters or the TaxMasters Stockholder  is a party or by which TaxMasters, the TaxMasters Shares or any of its assets are  bound or affected. No Consent is required from or with respect to TaxMasters or the TaxMasters Stockholder in connection with the execution and delivery of this Agreement by TaxMasters and the TaxMasters Stockholder or the consummation by TaxMasters and the TaxMasters Stockholder
of the transactions contemplated hereby, except for authorization of the Board of Directors of TaxMasters and the consent of the TaxMaster Stockholder, both of which have already been obtained.

 

 

15

 

 

Section 3.4 Financial Statements. TaxMasters has delivered to CPI its audited financial statements for the fiscal years ended December 31, 2008 and December 31, 2007 (the “TaxMasters Financial Statements”).  TaxMasters represents and warrants
that the TaxMasters Financial Statements are true, complete and correct and accurately reflect the financial condition of TaxMasters for the periods indicated.  TaxMasters represents and warrants that, except as set forth on the TaxMasters Financial Statements, there are no off-balance sheet liabilities, claims or obligations of any nature, whether accrued, absolute, contingent, anticipated, or otherwise, whether due or to become due, of TaxMasters.

 

Section 3.5  Capital Structure. The authorized capital stock of TaxMasters consists of one hundred ten thousand (110,000)  shares of TaxMasters Common Stock, par value $.001 per share ("TaxMasters Common Shares"), of which 100,000 Common
Shares are issued and outstanding. At the date of Closing of the  Exchange Agreement, all TaxMasters Common Shares issued and outstanding, are owned of record and beneficially by the TaxMasters Stockholder. The TaxMasters Common Shares that are owned by the TaxMasters Stockholder have been duly and validly issued, are fully paid, nonassessable and are not subject to any preemptive rights. There are no options, warrants, calls, conversion rights, commitments, agreements, contracts, understandings, restrictions,
arrangements or rights of any character to which TaxMasters is a party or by which TaxMasters may be bound obligating TaxMasters to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the capital stock of TaxMasters, or obligating TaxMasters to grant, extend or enter into any such option, warrant, call, conversion right, conversion payment, commitment, agreement, contract, understanding, restriction, arrangement or right. TaxMasters does not have outstanding any bonds, debentures,
notes or other indebtedness the holders of which (i) have the right to vote (or convertible or exercisable into securities having the right to vote) with holders of TaxMasters Common Shares on any matter. 

 

Section 3.6 Intellectual Property Rights. TaxMasters owns or possesses adequate rights to use all Intellectual Property which are necessary to conduct its business as currently conducted, (b) TaxMasters does not expect the expiration of any Intellectual Property
would result in a material adverse effect on TaxMasters, (c) TaxMasters has not received any notice of, and has no knowledge of, any infringement of or conflict with asserted rights of TaxMasters by others with respect to any Intellectual Property which would result in a material adverse effect on TaxMasters, and (d) TaxMasters  has not received any notice of, and has no knowledge of, any infringement of or conflict with asserted rights of others with respect to any Intellectual Property which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to have a material adverse effect on TaxMasters. Except as otherwise disclosed in TaxMasters's Disclosure Schedule, to the knowledge of TaxMasters there is no claim being made against TaxMasters regarding the Intellectual Property of any other person. As used in this Section only, references to the "knowledge" of TaxMasters shall mean only the actual knowledge of the officers of TaxMasters.

 

Section 3.7 Litigation and Other Proceedings.   (a)   Except as set forth on section 3.7 of the Disclosure Schedule, there is no pending Legal Proceeding, and (to the Knowledge of TaxMasters) no Person has threatened to commence
any Legal Proceeding: (i) that involves TaxMasters, any TaxMasters director or officer (in his or her capacity as such) or any of the material assets owned or used by TaxMasters; or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, this Agreement and the Exchange Transaction. To the Knowledge of TaxMasters, no event has occurred, and no claim, dispute or other condition or circumstance exists, that will, or that would reasonably
be expected to, give rise to or serve as a basis for the commencement of any such Legal Proceeding.

 

(b)  There is no order, writ, injunction, judgment or decree to which TaxMasters, or any of the assets owned or used by TaxMasters, is subject. To the Knowledge of TaxMasters, no officer or director of TaxMasters is subject to any order, writ, injunction, judgment or decree that prohibits such officer or director
from engaging in or continuing any conduct, activity or practice relating to the business of TaxMasters or to any material assets owned or used by TaxMasters.

 

 

16

 

Section 3.8  No Defaults. TaxMasters is not, and has not received notice that it would be with the passage of time, in default or violation of any term, condition or provision of (i) the Charter Documents of TaxMasters; (ii) any judgment, decree or order
applicable to TaxMasters; or (iii) any loan or credit agreement, note, bond, mortgage, indenture, contract, agreement, lease, license or other instrument to which TaxMasters is now a party or by which it or any of its properties or assets may be bound, except for defaults and violations which, individually or in the aggregate, would not have a material adverse effect on the business of TaxMasters.

 

Section  3.9  Title to Properties: Leasehold Interests. Except as set forth on section 3.9 of the Disclosure Schedule, TaxMasters
has good and valid title to all properties and assets, real and personal, as may be required to operate its business.

 

Section 3.10  Condition of Tangible Assets. All material items of TaxMasters’s tangible personal property are in good condition
and repair, subject to normal wear and tear, and are usable in the regular and ordinary course of business of TaxMasters.        

 

Section 3.11  Contracts and Commitments.  Except as set forth on section 3.11 of the Disclosure Schedule, TaxMasters is not in material default in the performance, observance or fulfillment
of any obligations, covenants or conditions of any agreement, contract or other commitment to which it is a party, either singly or in the aggregate.

 

Section 3.12  No Broker or Finder.  TaxMasters has not dealt with or retained any finder or broker whose fees or expenses have been paid
by TaxMasters or for whose fees or expenses they would be responsible in connection with this Agreement or the Exchange Transactions.        

 

Section 3.13  Employee Benefit Plans and Arrangements. TaxMasters is not in material violation of any employee benefit plan it sponsors
or supervises.

 

Section 3.14  Tax Matters.TaxMasters has filed or will file on a timely basis (including all extensions) all Tax Returns which were required to have been
filed prior to the Closing Date and such returns are complete and accurate in all respects.  TaxMasters has paid or provided for all Taxes which have been incurred or are due and payable pursuant to such Tax Returns or pursuant to any assessments received in connection with such Returns. No taxing authority has provided TaxMasters with any notice of any questions relating to or claims asserted for Taxes against TaxMasters for which it may be liable. All Taxes which TaxMasters is required by law to withhold
or collect have been duly withheld or collected and, to the extent required, have been paid over to the proper governmental authorities. 

 

Section 3.15  Disclosure.  The representations or warranties made by TaxMasters in this Agreement, and in the Disclosure Schedule or any other certificate executed and delivered by TaxMasters pursuant
to this Agreement, do not contain any untrue statement of a material fact, or omit to state a material fact necessary to make the statements or facts contained herein or therein not misleading in light of the circumstances under which they were furnished.

 

ARTICLE IV

 

CONDITIONS PRECEDENT

 

Section 4.1 Conditions to Each Party's Obligation to Effect the Exchange Transaction. The respective obligation of each party to close the Exchange Transaction shall be subject to the satisfaction prior to the Closing Date of the following conditions:

 

 

17

 

 

Section 4.1.1 Governmental Filings and Approvals. All Consents legally required for the consummation of the Exchange Transaction and the transactions contemplated by this Agreement, including the filing of the Name Change with FINRA, the receipt of a new trading
symbol from FINRA, the receipt of a new CUSIP Number from the CUSIP Bureau, and including all filings, consents and approvals under the Exchange Act, if any, shall have been filed, occurred, or been obtained, other than such Consents, for which the failure to obtain would have no material adverse effect on the consummation of the Exchange Transaction or the other transactions contemplated hereby or on the business of CPI or TaxMasters.

 

Section 4.1.2 No Restraints. No statute, rule, regulation, executive order, decree or injunction shall have been enacted, entered, promulgated or enforced by any United States, court or other Governmental Body of competent jurisdiction which enjoins or prohibits
the consummation of the Exchange Transaction.

 

Section 4.1.3  No Legal Action. There shall not be overtly threatened or pending any action, proceeding or other application before any court or Governmental Body brought by any person or Governmental Body: (i) challenging or seeking to restrain or
prohibit the consummation of the transactions contemplated by this Agreement, or seeking to obtain any damages caused by such transactions which if successful would have a material adverse effect on the viability of such transactions; or (ii) seeking to prohibit or impose any limitations on the ownership of the TaxMasters CPI Shares, the Control Series of Preferred Shares or the Earnout Shares by the TaxMasters Stockholder, or the operation and control of CPI, or to compel TaxMasters to dispose of or hold separate
all or any portion of its business or assets as a result of the transactions contemplated by this Agreement which if successful would have a material adverse effect on the viability of such transactions.

 

Section 4.2 Conditions to Obligations of TaxMasters and the TaxMasters Stockholder. The obligations of TaxMasters and the TaxMasters Stockholder to close the Transaction are subject to the satisfaction of the following conditions unless waived by TaxMasters:

 

Section 4.2.1  Representations and Warranties of CPI. The representations and warranties of CPI set forth in or required by this Agreement and the CPI Disclosure Schedule shall be true and correct in all respects as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date, except as otherwise contemplated by this Agreement. TaxMasters shall have received a certificate signed by an officer of CPI, to such effect on the Closing Date.

 

Section 4.2.2  CPI Agreements. TaxMasters and the TaxMasters Stockholder  shall have received documentary evidence satisfactory to both of them and their counsel that CPI has complied with all of the conditions listed in section 1.2(a) and
(b)(2) of this Agreement.

 

Section 4.2.3  Resignation of CPI Directors and Officers.  As of the Closing, all of the CPI directors, officers, and employees (if any) shall have been terminated or resigned.

 

Section 4.2.4  Consents. TaxMasters and the TaxMasters Stockholder shall have received duly executed copies of all third-party consents, approvals, assignments, waivers, authorizations or other certificates contemplated by this Agreement or the Disclosure
Schedule or reasonably deemed necessary by TaxMasters's and the TaxMasters Stockholder’s legal counsel to consummate the transactions contemplated hereby in form and substance satisfactory to TaxMasters and said counsel.

 

 

18

 

 

Section 4.2.5   OTCBB and Exchange Act. CPI shall continue to be eligible for quotation on the OTCBB, and shall be current in all its reporting obligations under the Exchange Act except for the post-Closing filings required under this Agreement.

 

Section 4.3  Conditions of Obligation of CPI. The obligation of CPI to effect the Exchange Transaction is subject to the satisfaction of the following conditions unless waived by CPI:

 

Section 4.3.1 Representations and Warranties of TaxMasters and the TaxMasters Stockholder.  The representations and warranties of TaxMasters and the TaxMasters Stockholder set forth in this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, except as otherwise contemplated by this Agreement, and CPI shall have received a certificate signed on behalf of TaxMasters by an officer of TaxMasters, and a certificate signed by the TaxMasters Stockholder to such effect.

 

Section 4.3.2 Performance of Obligations of TaxMasters and the TaxMasters Stockholder. TaxMasters and the TaxMasters Stockholder shall have performed in all material respects all agreements and covenants required to be performed by them under this Agreement
prior to the Closing Date, and CPI shall have received a certificate signed on behalf of TaxMasters by an officer of TaxMasters to such effect.

 

Section 4.3.3 Agreements of TaxMasters and TaxMasters Stockholders.   CPI shall have received documentary evidence satisfactory to CPI and its counsel that TaxMasters and the TaxMasters Stockholder have complied with all of the conditions listed in
section 1.2(a) and (b)(1) of this Agreement.

 

ARTICLE V

 

POST-CLOSING COVENANTS

Section 5.1   The  Earnout Shares.  (a)  As part of the Exchange Transaction CPI covenants and agrees to issue additional shares of its common stock to the TaxMasters Stockholder in accordance with the following
conditions:

(i)  The maximum number of such additional shares of CPI Common Stock that CPI shall be required to issue shall not exceed two hundred ninety nine million (299,000,000) shares of common stock (the “Earnout Shares”).

(ii)  The Earnout Shares shall be issued pursuant to the following calculation:

(1)  CPI shall calculate its “Net Income” in the manner provided by GAAP, which for the purposes of the Earnout Shares shall be the “net income” as reported by CPI in its periodic report covering the applicable Earn Out Period (as defined below) as re-calculated by CPI by excluding
(A) any employee compensation expense required to be recognized by CPI for such Earn Out Period pursuant to SFAS 123(R) (Share-Based Payment) and (B) any expense, loss or charge recognized by CPI from any discontinued operations (including, but not limited to, any such expense, loss or charge from the sale of Crown Equity pursuant to Section 5.2 hereof);

 

 

19

 

 

(2)  The Net Income amount shall be multiplied by twenty (20);

(3)  The total figure in (2) represents the number of Earnout Shares to be issued for the period covered by the calculation;

(4)  The combined total of the number of Earnout Shares and the TaxMasters CPI Shares shall be subtracted from six hundred million (600,000,000)(the “Ceiling”), and the Earnout Shares shall be issued to the
TaxMasters Stockholder.

(5)  The  steps in (1) – (3) shall be repeated for each period of the calculation; however, the number to be subtracted from the Ceiling as provided in step (4) shall
be the TaxMasters CPI Shares and the cumulative total of the Earnout Shares previously issued and to be issued to the date of the calculation.

(6)  If for any period of calculation the total of (i) the TaxMasters CPI Shares,

(ii)  the Earnout Shares issued to date and (iii)  the proposed Earnout Shares to be issued will exceed the Ceiling,  then CPI will issue only such number of additional Earnout Shares as will equal the
Ceiling.

(7)  When the Ceiling has been reached the TaxMaster Stockholder’s right to receive Earnout Shares will terminate.

(iii)   The periods of calculation for the Earnout Shares shall be the following:

Fiscal years ending ed December 31, 2009, December 31, 2010, December 31, 2011, December 31, 2012, December 31, 2013, December 31, 2014 and the fiscal quarters ending March 31, 2014 and June 30, 2014 (each an “Earn Out Period”).

(iv)  The calculation shall be made within ninety (90) days after end of each period of calculation for a fiscal year and forty five (45) days after the end of each period of calculation for a fiscal quarter.

(v)   CPI shall issue the Earnout Shares  within  ten (10) days after receipt of the calculation.

(vi)  All of the Earnout Shares shall be restricted shares of CPI and shall bear a legend comparable to the legend described in section 3.2A of the Exchange Agreement.

(vii)  None of the Earn Out Shares shall have registration rights.

 

(b) CPI represents and warrants to the TaxMasters Stockholder that (i) all of the Earnout Shares which may be issued will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, with no personal liability attaching to the ownership
thereof, and free from all taxes, liens and charges with respect to the issuance thereof.   CPI covenants to the TaxMasters Stockholder that it will (i) not amend or modify any provision of its Articles of Incorporation or by-laws in any manner that would adversely affect in any way the Earnout Shares.  CPI further covenants and agrees that it will take all such action as may be required to assure that CPI shall at all times have authorized and reserved, free from preemptive rights, a
sufficient number of shares of its Common Stock to provide for the issuance of the Earnout Shares  in full.

 

Section 5.2   Sale of Crown Equity.  Each of CPI and TaxMasters hereby covenants that within thirty (30) days after the Closing Date but effective as of the Closing, CPI shall sell all of the issued and outstanding shares of Crown Equity
Holdings, Inc. (“Crown Equity”) CPI owns to Crown Marketing Corp., a Nevada corporation, upon the terms and conditions to which CPI and Crown Management have previously agreed.  Prior to the completion of the sale, both CPI and TaxMasters agree that neither CPI nor TaxMasters shall issue, authorize the issuance of, or cause the issuance of any shares of Crown Equity to anyone.  Additionally, both CPI and TaxMasters agree that Crown Equity's present management shall continue operating
Crown Equity as it is presently being operated until said sale is completed.  Neither CPI nor TaxMasters shall assert or attempt to assert any dominion or control over Crown Equity after the execution of this Agreement.

 

Section 5.3   Further Assurances.  Each party hereby covenants to and with all other parties  that, from time to time after the Closing of the Exchange Transaction, at any party’s reasonable request, any other party
will do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered such further acts, conveyances, transfers, assignments, powers of attorney and assurances as the requesting party may require to effectuate the intentions of the parties under this Agreement and the Exchange Transaction.

 

 

20

 

 

ARTICLE VI

 

INDEMNIFICATION

 

(a)  Survival of Representations and Warranties; Survival of Covenants.  All of the representations and warranties of CPI, TaxMasters and the TaxMasters Stockholder contained in this Agreement, the Schedules and
the Exhibits shall survive and not merge at the Closing hereunder and continue in full force and effect for a period of ninety (90) days after the Closing Date. The respective covenants and agreements of the parties contained in this Agreement shall survive the execution and delivery of this Agreement until fully performed.

 

(b)  Scope of Indemnification by the CPI Indemnitors.  Beginning on and after the Closing Date and for a period of ninety (90) days thereafter (the “Indemnification Period”), and subject to the other provisions of this Section 6,
each of Zaman Trust, Tisa Capital and Phoenix Consulting (collectively the “CPI Indemnitors” and individually a “CPI Indemnitor”)   shall, severally and not jointly, indemnify, defend and hold harmless TaxMasters, the TaxMasters Stockholder and their respective officers, directors, agents,  employees, successors and assigns (collectively the “TaxMaster Indemnitees” and individually a “TaxMasters Indemnitee”) from and against any and all
losses, damages, penalties, costs, charges, fees, judgments, expenses, Taxes, Liabilities, obligations and Actions of any kind (including reasonable fees and disbursements of counsel) damage, loss, expense, cost or other deficiency sustained by any TaxMasters Indemnitee as a result of any (i) assessment of Taxes, (ii) entry of judgments or (iii) the assertion  of any other liabilities of, or claims, actions, suits, demands, assessments or Proceedings ((i), (ii) and (iii) are referred to hereinafter
together as a “Claim”) made against a TaxMasters Indemnitee of any nature with respect to CPI, this Agreement or the Exchange Transaction, whether accrued, absolute, contingent or otherwise, known or unknown, which (i) existed at, or arises out of transactions entered into or events occurring prior to, the Closing Date, to the extent that such  Claim is attributable, in whole or in part, to the period prior to the Closing Date (but only in respect of such portion of the claim as is attributable
to the pre-Closing Date period), (ii) arises out of or the existence of which is a breach of any representation or warranty or the non-fulfillment or breach of any covenant or undertaking of CPI and the CPI Indemnitees contained in this Agreement; provided, however, there is specifically excluded from the covenants CPI’s obligation to issue the Earnout Shares except insofar as
such Claim is asserted against CPI and not any of the remaining CPI Indemnitors,  or (iii) relate to any CPI liability and obligation or agreement retained by CPI and not assumed by TaxMasters hereunder.

 

(c)  Scope of Indemnification of TaxMasters.  During the Indemnification Period and subject to the other provisions of this Section 6,, TaxMasters shall indemnify, defend and hold harmless CPI, its officers, directors, agents and employees, and
their respective successors and assigns (collectively the “CPI Indemnitees” and individually a “CPI Indemnitee”) against and from any damage, loss, cost,  expense or other deficiency sustained by any CPI Indemnitee as a result of any Claim made against any CPI Indemnitee of any nature, whether accrued, absolute, contingent or otherwise, known or unknown, which (i) arise out of or the existence of which is a breach of any representation or warranty or the non-fulfillment or breach
of any covenant or undertaking of Taxasters contained in this Agreement; or (ii) arise or result from a transaction entered into, events occurring or liabilities incurred after, or attributable, in whole or in part,  to the period following the Closing Date (but only in respect of such portion of the claim as is attributable to the post-Closing Date period).

 

(d)  Making of Claims.  A claim for indemnity pursuant to this Article VI may only be made by an indemnified party by written notice to the indemnifying party which notice shall be given within sixty (60) days after the indemnified party becomes
aware of the Claim or matter giving rise to an indemnification right.  Such written notice shall set forth in reasonable detail the basis upon which such Claim for indemnity or right to indemnification is made. Notwithstanding the indemnification in Subsections (b) and (c) of this Section 6.1, no party shall assert any claim for indemnification against any other party under this Agreement unless the amount of the claim is at least $5,000 provided, however, there is specifically excluded from the operation
of this requirement the following obligations of the parties none of which shall be subject to any minimum threshold: (1) the respective obligations of the parties to pay their own Exchange Transaction taxes, costs and expenses including legal and accounting fees; (2) CPI’s obligation to eliminate all liabilities and obligations of CPI at or prior to the Closing; and (3) the respective obligations of the parties to deliver to each other the TaxMasters CPI Shares, the Control Series of Preferred Shares,
the Earnout Shares, and the TaxMasters Shares.

 

 

21

 

 

(e)  Claims and Litigation.  If any person or entity not a party to this Agreement shall make any demand or claim or pursue or file or threaten to file any lawsuit or other proceeding, which demand, claim, lawsuit or proceeding may result in
any liability, damage, deficiency or loss to an indemnified party, then the indemnified party shall give notice of such demand, claim, lawsuit or other proceeding to an indemnifying party, and the indemnifying party shall have the option, at the cost and expense of the indemnifying party, to retain counsel to defend any such demand, claim, lawsuit or other proceeding.  Thereafter, the indemnified party shall be permitted to participate in such defense at its or their own expense.  If the indemnifying
party shall fail to respond within thirty (30) days after receipt of such notice of any such demand, claim, lawsuit or proceeding, or shall notify the indemnified party that it does not intend to defend such demand, claim, lawsuit or proceeding, the indemnified party shall conduct the defense of such demand, claim, lawsuit or proceeding as it or they may in their discretion deem proper, at the cost and expense of the indemnifying party.  If the indemnifying party elects to assume the defense of a third
party claim, the indemnified party will cooperate in all reasonable respects with the indemnifying party in connection with such defense including retaining and delivering to the indemnifying party records and information which are reasonably relevant to such third party claim.  Whether or not the indemnifying party shall have assumed the defense of a third party claim, no party shall admit any liability with respect to, or settle, compromise or discharge, such third party claim without prior written
consent of the other parties, which consent shall not be withheld if the proposed settlement is in fact reasonable under the prevailing facts and circumstances.  Nothing in this Subsection (e) shall prevent an indemnified party from taking such action as may be necessary prior to the end of the thirty (30) day period provided for above to prevent a default judgment from being entered.

 

(f)  Attorneys' Fees and Expenses.  The rights of an indemnified party shall extend, to recovery of all interest, penalties, costs and expenses, including, without limitation, reasonable attorneys' fees, expert witness fees and accountants incident
to any of the matters covered by this Article VI.

 

(g)  Cap on Indemnification.   The maximum liability for indemnification under this Article VI by any CPI Indemnitor or TaxMasters shall be $150,000.

 

ARTICLE VII

 

MISCELLANEOUS  

 

Section 7.1  Expenses.  Each party shall pay its own expenses incidental to the preparation of this Agreement and the consummation
of the Exchange Transaction and other transactions contemplated by this Agreement.

 

Section 7.2  Contents of Agreement; Amendment; Parties in Interest; etc. This Agreement, the attached exhibits, including the Disclosure
Schedules of the respective parties hereto, attached hereto or subsequently delivered to the other parties sets forth the entire understanding of the parties with respect to the transactions contemplated by this Agreement. Any and all previous agreements and understandings between or among the parties regarding the subject matter hereof, whether written or oral, are terminated, null and void, and are superseded by this Agreement. This Agreement shall not be amended or modified except by written instrument duly
executed by CPI, TaxMasters and the TaxMasters Stockholder.

 

Section 7.3  Assignments and Binding Effect. This Agreement may not be assigned prior to the Closing by any party without the prior written consent of all of the other parties hereto. Any such assignment or purported assignment shall be null
and void and shall result in the termination of this Agreement.

 

 

22

 

 

Section 7.4  Waiver. Any term or provision of this Agreement may be waived at any time by the party entitled to the benefit thereof by a written instrument duly executed by such party.

 

Section 7.5  Notices. Any notice, request, demand, waiver, consent, approval or other communication which is required or permitted
hereunder shall be in writing and shall be deemed given only if delivered personally or sent by overnight courier, delivery charges prepaid, or by registered or certified mail, postage prepaid, or by facsimile transmission, confirmation received, as follows:

If to TaxMasters or the TaxMasters Stockholder: c/o Mr. Patrick R. Cox, President and CEO, TaxMasters, Inc., 900 Town and Country Lane, Suite 400, Houston, Texas 77024, e-mail patrick.cox@txmstr.com,
Facsimile: (713) 463-2936, with a copy by facsimile to Michael L. Wallace, Esq., General Counsel and Secretary, TaxMasters, Inc., 900 Town and Country Lane, Suite 400, Houston, Texas 77024, e-mail michael.wallace@txmstr.com, Facsimile: (713) 463-2936 and to  Richard C. Fox, Esq, 131 Court Street – Unit 11, Exeter, New Hampshire
03833, Facsimile: (603) 778-9911, e-mail rickfoxesq@gmail.com.

If to CPI c/o Kenneth Bosket, CEO and President, 9663 St. Claude Avenue, Las Vegas, Nevada 89148with a copy to Claudia McDowell, Esq., 27430 Riverside Lane, Valencia, California 91354,, e-mail Claudia@mcdowell-law.net,
Facsimile:  (818) 475-1819.

If to Zaman Family Trust, Tisa Capital or Phoenix Consulting, to the address set forth under such party’s name on Schedule B to this Agreement.

 

or to such other address as the addressee may have specified in a notice duly given to the sender as provided herein. Such notice, request, demand, waiver, consent, approval or other communications will be deemed to have been given as of the date personally delivered or sent by facsimile, the next business day if
sent by overnight courier, and the third business day if mailed, excluding the day of mailing.

 

Section 7.6  Governing Law; Jurisdiction; Venue; Waiver of Jury Trial.  (a) Governing
Law.  This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of Nevada without giving effect to any applicable principles of conflicts of law.

 

(b) Jurisdiction and Venue. Each party to the Agreement irrevocably agrees that any legal action or proceeding with respect to the Agreement may be brought
by any other party hereto or its successors in the courts of the State of Nevada, and each party hereby irrevocably submits with regard to any such action or proceeding for itself and in respect to its property, generally and unconditionally, to the non-exclusive jurisdiction of the aforesaid courts.  Each party hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to the Agreement, (i) any claim that
it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to serve process in accordance with this Section 7.6, and (ii) to the fullest extent permitted by applicable law, that (1) the suit, action or proceeding in any such court is brought in an inconvenient forum, (2) the venue of such suit, action or proceeding is improper and (3) the Agreement, may not be enforced in or by such courts.

 

 

23

 

 

(c) Waiver of Jury Trial.  Each party waives any right to a trial by jury in any action to enforce or defend any right, obligation or claim under this Agreement and agrees that any action shall be tried
before a court and not before a jury, whether such right, obligation or claim arises by way of claim, counterclaim, third party claim or in any other form of pleading or procedure.

 

Section 7.7  No Third Party Beneficiary Rights. The representations, warranties, covenants and agreements contained in this Agreement
are for the sole benefit of the parties hereto, and all parties expressly disclaim any and all third party benefits or the intention to create any third party benefits under this Agreement.

 

Section 7.8  Section Headings. All section headings contained in this Agreement are for convenience of reference only, do not form a
part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement.

 

Section 7.9  Schedules and Exhibits. All Exhibits and Schedules referred to herein are intended to be and hereby are specifically
made a part of this Agreement and are incorporated herein by reference.

 

Section 7.10  Severability. Any provision of this Agreement that is invalid or unenforceable in any jurisdiction shall be ineffective
to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions.

 

Section 7.11  Multiple Counterparts; Facsimile. This Agreement may be executed
in any number of counterparts and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Agreement shall become binding when one or more counterparts taken together shall have been executed and delivered by all of the parties hereto. This Agreement may be signed in any number of counterparts or by facsimile signature, each of which shall be
an original, with the same effect as if all signatures were on the same instrument and were original signatures.

 

Section 7.12  Construction; Interpretation.    

 

(a)   For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine
and neuter genders; and the neuter gender shall include masculine and feminine genders.

 

(b)   The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not be applied in the construction or interpretation of this Agreement.

 

(c)   As used in this Agreement, the words "include" and "including," and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words "without limitation."

 

 

24

 

 

(d)   Except as otherwise indicated, all references in this Agreement to "Sections," "Exhibits" and "Schedules" are intended to refer to Sections of this Agreement and Exhibits and Schedules to this Agreement.

 

(e)   The bold-faced headings contained in the Exchnage Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of
this Agreement.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 

 

 

25

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement to be effective as of the date first above written.

 

	 	
CROWN PARTNERS, INC.

a Nevada corporation
	 
	 	 	 	 
	
 
	
By: 
	/s/ Kenneth Bosket 	 
	 	 	Mr. Kenneth Bosket, President and CEO	 
	 	 	 	 
	 	 	 	 
	 	
TAXMASTERS, INC., 

a Nevada corporation
	 
	 	 	 	 
	 	By: 	/s/ Patrick R. Cox  	 
	 	 	Mr. Patrick R. Cox, President and CEO 	 
	 	 	 	 
	 	 	 	 
	 	THE TAXMASTERS STOCKHOLDER: 	 
	 	 	 
	 	/s/ Patrick R. Cox 	 
	 	Patrick R. Cox 	 

 

AS TO ARTICLE VI ONLY:

 

	ZAMAN FAMILY TRUST 	 	 	 	 
	 	 	 	 	 	 
	By: 	
/s/ Montse Zaman  

	 	 	 	 
	 	Montse Zaman, Trustee 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

 

	TISA CAPITAL CORP.   	 	PHOENIX CONSULTING SERVICES INC.	 
	a Colorado corporation  	 	a Colorado, corporation 	 
	 	 	 	 	 	 
	By: 	
/s/ Montse Zaman  
	 	 	
/s/ Montse Zaman  
	 
	 	
Name: Montse Zaman  
	 	 	
Name: Montse Zaman 
	 
	 	
Title: President 
	 	 	

Title: President 

	 

SIGNATURE PAGE FOR AGREEMENT AND PLAN OF EXCHANGE AMONG CROWN PARTNERS, INC., TAXMASTERS, INC., THE TAXMASTERS STOCKHOLDER LISTED ON SCHEDULE A HERETO, AND AS TO ARTICLE VI ONLY ZAMAN FAMILY TRUST, TISA CAPITAL CORP. AND PHOENIX CONSULTING SERVICES INC.

 

 

26tax_ex1002.htm

Exhibit 10.2

 

LEASE

 

THIS LEASE ("Lease") is entered into as of the 21st day of December 2006, by and between JIM R. SMITH INTEREST ("Landlord") and TMIRS Enterprises, Ltd db/a TaxMasters ("Tenant").

 

WITNESSETH:

 

ARTICLE 1

1.01. INTRODUCTORY PROVISIONS AND DEFINITIONS.

The Lease provisions set forth in this Section 1.01 in summary form are solely to facilitate convenient reference by the parties. If there is any conflict between this Section and any other provisions of this Lease, the latter shall control. For purposes of this lease the following terms shall have the meanings set forth
opposite the term.

 

	 	
(a)
	
Project Name and Address:
	
900 Town & Country Houston, Texas 77024

	 	  	  	  
	 	
(b)
	
Premises
	
Approximately 14,469 square feet of Rentable Area 13,126 on the fourth (obi) floor and 1,3,43 square feet of rentable area on the third (31 floor collectively referred to as Suite 400.

	 	  	  	  
	 	
(c)
	
Primary Term:
	
Eighty four (84) months

	 	  	  	  
	 	
(d)
	
Commencement Date:
	
March 1, 2007

	 	  	  	  
	 	
(e)
	
Expiration Date:
	
February 28, 2014

	 	  	  	  
	 	
(f)
	
Base Rent
	
See Exhibit "G" Special Provisions

	 	  	  	  
	 	
(g)
	
Base Operating Expense For the Building
	
Base Year 2007

	 	  	  	  
	 	
(h)
	
Tenant’s Initial Pro Rata Share:
	
28,19%

	 	  	  	  
	 	
(i)
	
Security Deposit:
	
$17,000.00

	 	  	  	  
	 	
(j)
	
Supplements:
	
Exhibits "A" - "G"

	 	  	  	  
	 	
(k)
	
Permitted Use:
	
General Office Use

	 	  	  	  
	 	
(l)
	
Guarantor:
	
TMIRS Enterprises, Ltd, d/b/a TaxMasters

	 	  	  	  
	 	
(m)
	
Broker representative
	
Ryland Enterprise, Inc. dba Concordis Ryland as Tenant's Moody Rambin Interests as Landlord's representative

	 	  	  	  
	 	
(n)
	
Addresses for Notices:
	
TO: Tenant 

TMIRS Enterprises, Ltd db/a TaxMasters 

900 Town & Country, Suite 400 

Houston, Texas 77024

	 	  	  	  
	 	  	  	
TO: Landlord 

MRJO, Inc. (Building Manager) 

1455 West Loop South, Suite 700 

Houston, Texas 77027

 

1

 

ARTICLE 2

 

2.01.  PREMISES.

Landlord hereby does lease, let and demise unto Tenant, and Tenant hereby does lease and rent from Landlord, upon and subject to the provisions of this Lease, the Rentable Area of the Premises Building located in the Building located on the tract of land ("Land') situated in Harris County, Texas and more particularly
described on EXHIBIT "A" attached hereto and incorporated herein for all purposes (the Building, the Land, the parking areas and garages, and any present or future associated underground or elevated pedestrian tunnels or walkways being hereinafter collectively referred to as the "Project"), TO HAVE AND TO HOLD said Premises for the Term, subject to the provisions of this Lease. Such space so leased to Tenant is herein called the
"Premises" and is reflected on the floor plans ("Floor Plans") of the Building attached hereto as EXHIBIT "B". The term "Rentable Area" shall have the meaning set forth in EXHIBIT "C" attached hereto and incorporated herein for all purposes.

 

2.02.  IMPROVEMENTS BY LANDLORD.

Before the Commencement Date and subject to delays caused by Tenant, Landlord shall substantially complete any leasehold improvements ("Leasehold Improvements") to be constructed or installed by Landlord pursuant to EXHIBIT "D" attached hereto and incorporated
herein for all purposes. All installations now or hereafter placed on the Premises in excess of Building Standard items as determined by Landlord and as set forth in EXHIBIT "D" shall be for Tenant's account and at Tenant's cost (and Tenant shall pay ad valorem taxes and increased insurance thereon), which costs shall be payable by Tenant to Landlord as additional rent hereunder promptly upon being invoiced therefore, and failure by Tenant to pay same in full within thirty (30) days shall constitute an event
of default by Tenant hereunder giving rise to all remedies available to Landlord under this Lease and at law for non-payment of rent.

 

ARTICLE 3

 

3.01. TERM.

Subject to the other provisions hereof, this Lease shall be and continue in full- force and effect for a primary term commencing on the Commencement Date, and expiring on the Expiration Date. Such term, as it may be modified, is herein called the "Term".

 

3.02. COMMENCEMENT.

Subject to Section 3.04 hereof, if on the Commencement Date any of the work described in EXHIBIT "D" hereto that is required to be performed by Landlord at Landlord's expense has not been substantially completed, or if Landlord is unable to tender possession of the Premises to Tenant on the Commencement Date due to
any other reason beyond the reasonable control of Landlord, then the Commencement Date shall be postponed until such work is substantially completed, the Expiration Date shall be extended so that the Term shall continue for the full number of years set forth in Section 3.01 and Landlord shall not be liable for any claims or damages in connection with such failure to complete construction or tender possession.

 

3.03. LATE POSSESSION,

No delay in the completion of the Premises resulting from delay or failure on the part of Tenant in furnishing information, work or other matters required in EXHIBIT "ID" shall delay the Commencement Date, the Expiration Date or the commencement of installments of Rent.

 

3.04. EARLY POSSESSION.

If prior to the Commencement Date, Tenant shall enter into possession of all or any part of the Premises, such possession shall be subject to all of the provisions of this Lease, and the Term of the Lease and the payment of all Rent shall commence, with respect to all or such part of the Premises as are so occupied
by Tenant, on the date of such entry, and the total amount of all Rent due hereunder shall not be increased accordingly, on a per diem basis, provided that no such early entry shall be permitted without Landlord's prior written consent or operate to change the Expiration Date provided for herein.

 

3.05. CERTIFICATE OF COMMENCEMENT DATE AND EXPIRATION DATE.

If the Commencement Date or Expiration Date is other than as set forth in Section 3.01 hereof, then upon request by either Landlord or Tenant, both parties shall execute and deliver a certificate setting forth the actual Commencement Date and Expiration Date,

 

3.06. ACCEPTANCE LETTER.

Before the entry into possession of the Premises by Tenant, Tenant shall furnish to Landlord a letter accepting the condition of the Premises or specifying any area that is not acceptable. If Tenant enters and accepts possession, Tenant shall be deemed to have accepted the condition of the Premises without Landlord
having any obligation to do further work.

 

ARTICLE 4

 

4.01. BASE RENT.

Tenant, in consideration for this Lease and the leasing of the Premises for the Term, agrees to pay to Landlord without deduction or set-off as rent, the Base Rent, in equal monthly installments for each calendar month during the Term. Base Rent is payable in advance and without demand, on the first day of each calendar
month during the Term. If the Commencement Date is other than the first day of a month, Tenant shall be required to pay only a pro rata portion of the monthly installment of Base Rent for the first partial month of the Term for which Base Rent is payable hereunder on the Commencement Date.

 

 

 

2

 

 

4.02. PAYMENT OF RENT.

As used in this Lease, "Rent" shall mean the Base Rent, the Operating Expense reimbursements pursuant to Section 5.01, the parking rent, and all other amounts provided for in this Lease to be paid by Tenant, all of which shall constitute
rental in consideration for this Lease and the leasing of the Premises. The Rent shall be paid at the times and in the amounts provided for herein in legal tender of the United States of America to Landlord at the address specified above or to such other person or at such other address as Landlord may from time to time designate in writing. The Rent shall be paid without notice, demand, abatement, deduction, or offset except as may be expressly set forth in this Lease. Landlord shall, at its option, have the
right to collect from Tenant, five cents ($.05) for each dollar ($1.00) of each installment of Rent which is not received within five (5) days after its due date for any reason whatsoever (notwithstanding any notice requirement hereunder, if any) and Tenant agrees to pay such amount immediately on demand as liquidated damages to cover the additional costs of collecting and processing such late payments. Any payment which is fess than the amount of Rent then due shall constitute a payment made on account thereof,
the parties hereto agreeing that the Landlord's acceptance of that payment shall not alter or impair the Landlord's rights under this Lease to be paid all of such amounts then due, or in other respect. Tenant acknowledges that the late payment by Tenant to Landlord of Rent due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and such late
charges represent a fair and reasonable estimate of the cost that Landlord will incur by reason of the late payment by Tenant,

 

ARTICLE 5

 

5.01. OPERATING EXPENSE REIMBURSEMENT.

In the event that Operating Expenses (defined in Section 5.02 hereof) of the Building during any calendar year of the Term shall exceed the Base Operating Expense for the Building, Tenant shall pay to Landlord its proportionate share of the increase in such Operating Expenses over the Base Operating Expense. Tenant's
proportionate share of such increase is agreed to be Tenant's Pro Rata Share. On or before the Commencement Date Landlord shall provide to Tenant the Estimated Operating Expense Increase (hereinafter defined) for the calendar year during which the Commencement Date falls. Thereafter, from time to time, Landlord shall provide to Tenant the Estimated Operating Expense Increase (or an amendment thereto) for any year. In addition to the Base Rent, Tenant shall pay in advance on the first day of each calendar month
during the Term, installments equal to 1/12th of Tenants Pro Rata Share of the Estimated Operating Expense Increase, except that the first such monthly installment is due upon the Commencement Date. As soon as possible after the comparison year, Landlord shall furnish to Tenant a statement certified by Landlord of the Actual Operating Expense Increase (hereinafter defined) for the immediately preceding calendar year, which statement shall specify the various types of Operating Expenses and set forth Landlord's
calculations of Tenants Pro Rata Share of the Actual Operating Expense Increase. If Tenant's Pro Rata Share of the Estimated Operating Expense Increase paid to Landlord during the previous calendar year exceeds Tenant's Pro Rata Share of the Actual Operating Expense Increase, then Landlord shall, at its option, either refund the difference to Tenant at the time Landlord furnishes the statement of the Actual Operating Expense Increase or credit the amount overpaid by Tenant to Tenants Pro Rata Share of the Estimated
Operating Expense Increase for the next calendar year. Otherwise, within fifteen (15) days after Landlord furnishes such statement to Tenant, Tenant shall make a lump sum payment to Landlord equal to Tenants Pro Rata Share of the positive difference between the Actual Operating Expense Increase and the Estimated Operating Expense Increase theretofore paid by Tenant.

 

The "Estimated Operating Expense Increase' shall equal Landlord's estimate of Operating Expenses for the applicable calendar year, less the Base Operating Expense. Landlord's statement of the Estimated Operating Expense Increase shall control for the year specified in such statement and for each succeeding year during
the Term until Landlord provides a new statement of the Estimated Operating Expense Increase. The "Actual Operating Expense Increase" shall equal the actual Operating Expenses for the applicable calendar year, less the Base Operating Expense.

 

5.02. OPERATING EXPENSES.

The term "Operating Expenses" shall mean and include those amounts, expenses, and costs of whatsoever nature that Landlord incurs because of or in connection with the ownership, operation, management, repair, or maintenance of the Project and Landlord's personal property used in connection therewith. Operating Expenses
shall be determined on an accrual basis in accordance with generally accepted accounting principles consistently applied and shall include, without limitation, the following:

 

(a)  Wages, salaries, fees, related taxes, insurance, benefits, and reimbursable expenses of all personnel engaged in operating, repairing, and maintaining the Project and providing traffic control about the Project; provided,
however, that if during the Term such personnel are also working on other projects being operated by Landlord, their wages, salaries, fees and related expenses shall be allocated by Landlord in good faith among all of such projects and only that portion of such expenses allocable to the Project shall be included as an "Operating Expense.'

 

(b)  Cost of all supplies and materials used in operating, repairing, and maintaining the Project.

 

(c)  Cost of all utilities for the Project, including, without limitation, water, electricity, gas, fuel oil, healing, lighting, air conditioning, and ventilating.

 

 

 

3

 

 

 

Building during the entire calendar year.

 

ARTICLE 6

 

6.01.  USE.

Tenant and its affiliates and subsidiaries shall use and occupy the Premises only for the purpose set forth in Article 1.01 (k), and for no other purposes. Tenant shall not use or permit the Premises to be used for any unlawful purpose or in any unlawful manner, and shall comply with all federal, state, and local governmental
laws, ordinances, orders, rules and regulations applicable to the Premises, the Project, and the occupancy thereof and Tenant shall give prompt written notice to Landlord of any notification to Tenant of any claimed violation thereof. Tenant shall not do or permit anything to be done in or about the Premises, nor bring or keep anything therein which will in any way increase the existing rate of or affect any fire or other insurance upon the Project or any of its contents, or cause cancellation of any insurance
policy covering the Project or any part thereof or any of its contents. Tenant shall not do or permit anything to be done in or about the Premises and/or Project which will in any way obstruct or interfere with the rights of other tenants or occupants of the Project or injure or annoy them. Tenant shall not permit any nuisance in, on or about the Premises. Tenant shall not commit or suffer to be committed any waste in or upon the Premises.

 

ARTICLE 7

 

7.01.  LANDLORD'S SERVICES.

Provided Tenant is not in default hereunder, Landlord shall, at Landlord's expense except as provided to the contrary in this Lease, furnish to Tenant the following services:

 

(a)      Air conditioning and central heat at such temperatures and in such amounts as are reasonably considered by Landlord to be standard for the Building, during normal business hours for the Building
as set forth in the Rules and Regulations as hereinafter defined. Tenant shall have thermostats within the Leased Premises.

 

(b)      Janitorial services in the Premises and public and exterior portions of the Building for all days, except Saturdays, Sundays and holidays; provided, however, if Tenant's floor covering or other
improvements is other than Building Standard, as hereinafter defined, Tenant shall pay the additional cleaning cost attributable thereto as additional rent upon presentation of a statement therefore by Landlord. Janitorial shall include cleaning of kitchen area, but not dishes, and keeping paper towels in towel holders nightly in employee break areas.

 

(c)      Hot and cold water at those points of supply provided for general use of other tenants in the Building.

 

(d)      Normal and customary routine maintenance for all public, structural, and exterior portions of the Project according to Landlord's standards.

 

(e)      Electric lighting service for all public portions of the Project

 

(f)      Automatic passenger elevator service at all times for access to and egress from the Premises. Freight elevator service, in common with other tenants, shall be provided during reasonable business
hours as prescribed by Landlord, exclusive of Saturdays, Sundays, and holidays.

 

(g)      All Building Standard fluorescent bulb replacement in all areas and all incandescent bulb replacement in public areas, toilet and rest room areas and stairwells,

 

(h)      Electrical facilities to furnish sufficient power for typewriters, calculating machines and other machines of similar low electrical consumption (total electrical power requirement not to exceed
one watt per square foot of Rentable Area); but not including electricity required for electronic data processing equipment, special lighting in excess of Building Standard, and any other item of electrical equipment, the electrical power equipment of which (singly) is more than 0.5 kilowatts per hour at rated capacity or requires a voltage other than 120 volts single phase; and provided that if the installation of said electrical equipment requires additional air conditioning capacity above that provided by
the Building Standard system, then the additional air conditioning installation and operating costs will be the obligation of Tenant. Landlord, at its option, may cause a water meter, electric current meter or such similar device to be installed on the Premises so as to measure the amount of water and electric current consumed by Tenant. The cost of any such meters and of the installation, maintenance and repair thereof shall be paid for by Tenant and Tenant agrees to pay to Landlord, promptly upon demand by
Landlord, for all such excess water and electric expense incurred. If a separate meter is not installed or Landlord is prevented from installing a separate meter by operation of law or other cause beyond Landlord's control, such excess costs for such water and electric current will be established by an estimate made by the utility company, electrical engineer, or an independent consultant, which estimate shall be binding on Tenant.

 

 

4

 

 

7.02.  ADDITIONAL SERVICE COST.

Tenant shall pay Landlord, upon demand, such additional amounts as are necessary to recover additional costs

 

(d)  Cost of all maintenance, security, window cleaning, elevator maintenance, landscaping, repair, janitorial, and other similar service agreements for the Project and the equipment and other personal property of Landlord
therein and thereon used in connection with the operation, management, repair or maintenance of the Project.

 

(e)   Cost of all insurance relating to the Project and its occupancy or operations, including but not limited to (i) the cost of rent loss and casualty and liability insurance applicable to the Project or Landlord's
personal property used in connection with the operation of the Project, (ii) The cost of business interruption insurance in such amounts as will reimburse Landlord for all losses of earnings and other income attributable to the ownership and operation of the Project, and (iii) the cost of insurance against such perils and occurrences as are commonly insured against by prudent landlords.

 

(f)All taxes, assessments, and governmental charges and fees of whatsoever nature, whether now existing or subsequently created, attributable to the Project or its occupancy or operation, excluding only federal, state and
local income taxes or the state or local equivalent of the federal income tax by whatever name it may be known except the current Texas Franchise Tax of Landlord, and including all such taxes whether assessed to or paid by Landlord or third parties, but excluding such taxes to the extent, if any, that Tenant, any other tenant of the Project, or any other party specifically reimburses Landlord therefore (other than through the payment of Operating Expense reimbursements). Without limiting the generality of the
foregoing, if at any time during the term of this Lease, there shall be levied, assessed or imposed on Landlord a capital levy or other tax directly on the rents received therefrom and/or a franchise tax, assessment, levy or charge measured by or based, in whole or in part, upon such rents from the Project and/or the land and improvements of which the Project is a part, then all such taxes, assessments, levies or charges, or the part thereof so measured or based, shall be deemed to be included within the term
"Operating Expenses" for the purposes hereof.

 

(g)  Costs of repairs to and maintenance of the Project, excluding any such costs as are paid by the proceeds of insurance, by Tenant, or by other third parties.

 

(h)  A management fee for management services rendered in connection with the Project.

 

(i) Amortization of the cost of capital investment items which are installed primarily to reduce Operating Expenses for the benefit of all of the Project's tenants or which may be required by any governmental authority. All such
costs, including interest costs, shall be amortized over the reasonable life of the capital investment items, with the reasonable life and amortization schedule being determined by Landlord according to generally accepted accounting principles, but in no event to extend beyond the reasonable life of the Building.

 

(j) Landlord's central accounting costs, and legal, appraisal, and other such third party fees relating to the operation of the Project.

 

(k) The fair market rental value of Landlord's and the property manager's offices, if any, in the Building provided the rental area is not in excess of 250 square feet of rental area per person on the property management staff.

 

Notwithstanding the foregoing provisions of this Section 5.02, "Operating Expenses" shall not include any of the following:

 

(1)  Costs incurred by Landlord for alterations, additions and replacements which are considered capital expenditures under generally accepted accounting principles, consistently applied, except to the extent provided in Section
5.02(i).

 

(2)  Any costs or expenditures for which (and to the extent) Landlord is entitled to reimbursement by Tenant (other than pursuant to this Article 5), any other tenant of the Project (other than through the payment of Operating
Expense reimbursements), insurance, or condemnation proceeds.

 

(3)  The cost of preparing, renovating, painting, decorating, or otherwise modifying any part of the Building other than Building Common Areas and Floor Common Areas.

 

(4)  Leasing commissions, ground rentals (except to the extent the same may be made to pay insurance or taxes), non-cash items (including, without limitation, depreciation, except to the extent provided in Section 5.02(i),
and obsolescence), debt service (principal and interest) and other debt costs, and advertising and promotional expenditures.

 

 

5

 

 

5.03. PRORATION AND ADJUSTMENT OF OPERATING EXPENSES.

If this Lease commences on other than the first day of a calendar year, or if this Lease expires on other than the last day of a calendar year, then the Operating Expenses for all of such calendar year shall be prorated according to the portion of the Term that occurs during such calendar year. If at any time the Building
is not fully occupied or Landlord is not supplying all services to all portions of the Building during an entire calendar year, then Operating Expenses shall be adjusted as though the Building had been fully occupied and Landlord were supplying all services to all portions of the incurred by Landlord in performing or providing non-standard janitorial maintenance, security, or other services or requirements of Tenant or in performing
any services (and in paying additional taxes) as to any Non-Building Standard installations in the Premises. Tenant shall pay Landlord, upon demand, reasonable charges for providing off-hour and non-standard air conditioning, heating and electricity; provided, however, that Tenants excessive use or consumption of heating, air conditioning and/or electrical services in violation of Section 7.01 above, without Landlords prior written consent, shall constitute a default under this Lease.

 

7.03. INTERRUPTION OF SERVICES.

Any failure or defect in Landlord's hereinabove described services shall not be construed as an eviction of Tenant, nor entitle Tenant to any reduction, abatement, offset, or refund of Rent or to any damages from Landlord. Landlord shall not be in breach or default under this Lease, provided Landlord uses reasonable diligence
to restore any such failure or defect after Landlord receives written notice thereof.

 

7.04. KEYS AND LOCKS.

Landlord shall furnish to Tenant fifty (50) keys for each corridor door entering the Premises. Additional keys, after the initial keys, will be furnished at a charge by Landlord on an order signed by Tenant or Tenant's authorized representative. All such keys shall remain the property of Landlord. No additional locks
shall be allowed on any door of the Premises without Landlord's permission, and Tenant shall not make, or permit to be made any duplicate keys, except those furnished by Landlord. Upon termination of this Lease, Tenant shall surrender to Landlord all keys to the Premises, and give to Landlord an explanation of the combination of all locks for safes, safe cabinets and vault doors, if any, in the Premises.

 

7.05.  SIGNS.

Landlord shall provide and install all letters and numerals on entrance doors in or at the Premises, entrance to Tenant suite, the building directory for Tenant and designated affiliates and subsidiaries. All such letters and numerals are to be Building Standard graphics, and no other letters, numbers, or signage shall
be used or permitted on the Premises without the prior written consent of Landlord. The Landlord intends to erect a multi-tenant monument sign. Tenant and Tenants subsidiaries and affiliates may place their names on the sign. Tenant agrees to pay for its prorate share of the cost of the sign. In the event a portion of the Tenant Improvement Allowance is unused Tenant may apply the excess Allowance toward Tenants share of the cost of the sign.

 

ARTICLE 8

 

8.01. ALTERATIONS.

Tenant shall make no alterations, installations, additions, or improvements in or to the Premises or place signs on the Premises which are visible from outside the Premises, without Landlord's prior written consent. All alterations, installations, additions or improvements, other than moveable furniture and moveable
trade fixtures, made by Tenant to the Premises shall remain upon and be surrendered with the Premises and become the property of Landlord at the expiration or termination of this Lease or the termination of Tenant's right to possession of the Premises; provided, however, that Landlord may require Tenant, at Tenants cost, to remove any or all of such items that are not Building Standee upon the expiration or termination of this Lease or the termination of
Tenant's right to possession of the Premises. All work performed by Tenant with respect to the Premises shall (a) be performed so as not to alter the exterior appearance of the Building, (b) be preformed by a contractor approved in writing by Landlord, (c) be performed so as not to adversely affect the structure or safety of the Building, (d) comply with all building, safety, fire, and other codes and governmental and insurance requirements, (e) be performed so as not to result in any usage in excess of Building
Standard of water, electricity, gas, heating, ventilating, or air conditioning (either during or after such work) unless prior written arrangements reasonably satisfactory to Landlord are made with respect thereto, (f) be completed promptly and in a good and workmanlike manner, and (g) be performed in such a manner that no valid mechanic's, materialman's, or other similar liens attached to Tenant's leasehold estate and in no event shall Tenant permit, or be authorized to permit, any such liens (valid or alleged)
or other claims to be asserted against Landlord or Landlord's rights, estates, and interests with respect to the Project or this Lease. In all events, Tenant shall not be entitled to perform any work unless and until Tenant has obtained and furnished to Landlord an appropriate workman's compensation policy covering all workmen and a general liability policy naming Landlord as a co-insured with policy limits not less than $1,000,000. Landlord may require, at Tenant's sole cost and expense, a lien and completion
bond in an amount equal to the estimated cost of any improvements, additions or alterations in the Premises which have been approved by Landlord.

 

8.02.  REMOVAL OF TRADE FIXTURES AND PERSONAL PROPERTY.

Tenant agrees to remove all of its trade fixtures, personal property and, at Landlord's request pursuant to Section 8.01, Non-Building Standard items, on or before the date of expiration or termination of the Term, and shall promptly reimburse Landlord for the cost of repairing all damage done to the Premises or the
Project by such removal and the cost of restoring the Premises to their original condition, reasonable wear and tear excepted, after such removal.

 

 

6

 

 

8.03. REPAIRS BY LANDLORD.

Landlord shall repair and maintain the structural portions of the Project, including the Building Standard plumbing (exclusive of tenant kitchens and coffee bars), air conditioning, heating and electrical systems installed or furnished by
Landlord, and all areas of the Project for the common non-exclusive use of all tenants in the Project, unless such maintenance and repairs are caused in part or in whole by the act, neglect, or omission of any duty by the Tenant, its agents, servants, employees or invitees, or unless such maintenance or repairs are otherwise herein provided to be made by Tenant. Landlord shall not be liable for any failure to make such repairs or to perform any maintenance unless such failure shall persist for an unreasonable
time after written notice of the need of such repairs or maintenance is given to Landlord by Tenant and then, only if, after ten (10) days have elapsed, Landlord has failed to commence to make such repairs or maintenance. Landlord shall not be liable for any damages, compensation or claim for loss of the use of the whole or any part of the Premises or Tenant's personal property, or any inconvenience, loss of business, or annoyance arising from any such repair and/or maintenance performed by Landlord hereunder,
except for damage resulting from Landlord's gross negligence or willful misconduct. Landlord reserves the right to make such repairs, changes, alterations, additions, or improvements in or to any portion of the Project and the fixtures and equipment thereof as it may deem necessary or desirable.

 

8.04. REPAIRS BY TENANT.

By taking possession of the Premises, Tenant shall be deemed to have accepted the Premises as being in good, sanitary order, condition and repair. Tenant hereby waives any and all warranties, express or implied, as to the Premises, including, without limitation, the implied warranty of suitability of the Premises
for Tenant's intended use. Tenant shall, at Tenant's sole cost and expense, keep the Premises in gOod condition and repair, damage thereto from causes beyond the reasonable control of Tenant and ordinary wear and tear excepted. Tenant shall, upon the expiration or sooner termination of this Lease, surrender the Premises to the Landlord in good condition, ordinary wear and tear and damage from causes beyond the reasonable control of Tenant excepted. Any injury or damage to the Premises or Project, or the appurtenances
or fixtures thereof, caused by or resulting from the act, omission or neglect of Tenant or Tenant's employees, servants, agents, invitees, assignees, or subtenants shall be repaired or replaced by Tenant, or at Landlord's option by Landlord, at the expense of Tenant. If Tenant fails to maintain the Premises or fails to repair or replace any damage to the Premises or Project resulting from the negligence or intentional act of Tenant, its employees, servants, agents, invitees, assignees or subtenants, Landlord
may, but shall not be obligated to cause such maintenance, repair or replacement to be done, as Landlord deems necessary, and Tenant shall immediately pay to Landlord all costs related thereto, plus a charge for Landlord's overhead of five (5%) of such cost.

 

ARTICLE 9

 

9.01. LANDLORD'S INSURANCE.

Landlord shall insure the Project and shall maintain liability and other insurance in such amounts as may be required by Landlord's mortgagee for the Project or in such greater amounts as Landlord, in its discretion, may deem appropriate. Such insurance shall be for the sole benefit of Landlord and, if required,
Landlord's mortgagee.

 

9.02. TENANTS INSURANCE.

Tenant shall, at Tenant's expense, fully insure its property located in the Premises against fire and other casualty and shall maintain public liability insurance with combined limits of at least $1,000,000. The limits or amounts of said insurance coverage shall not, however, limit the liability of the Tenant hereunder.
Tenant shall cause Landlord to be named as an additional insured under such public liability insurance policy and the fire and casualty insurance policy which Tenant is required to maintain with respect to Tenant's property located in the Premises. If Tenant shall fail to procure and maintain said insurance, Landlord may, but shall not be required to, procure and maintain same, and in such event, premiums and costs thereof shall be reimbursed and paid by Tenant to Landlord on demand by Landlord. Insurance required
hereunder shall be with companies rated AAA or better in "Best's Insurance Guide." Tenant shall deliver to Landlord prior to occupancy of the Premises copies of policies of liability insurance required herein or certificates evidencing the existence and amounts of such insurance. No policy shall be cancelable or subject to reduction of coverage except after thirty (30) days prior written notice to Landlord.

 

9.03. WAIVER OF SUBROGATION.

Whenever (a) any loss, cost, damage or expense resulting from fire, explosion or any other casualty or occurrence is incurred by either of the parties to this Lease in connection with the Premises or the Project, and (b) such party is then covered (or is required to be covered under the foregoing provisions of this
Article 9) in whole or in part by insurance with respect to such loss, cost, damage or expense, then the party so insured (or required to be insured) hereby releases the other party from any liability it may have on account of such loss, cost, damage or expense to the extent of such insurance coverage in place or required to be in place, and waives any right of subrogation which might otherwise exist in or accrue to any person on account thereof; provided, however, that such release of liability shall not be
operative in any case where the effect thereof is to invalidate such insurance coverage or increase the cost thereof; provided that in the case of increased cost, the other party shall have the right, within thirty (30) days following written notice, to pay such increased cost, thereupon keeping such release and waiver in full force and effect. Landlord and Tenant shall use their respective best efforts to obtain such a release and waiver of subrogation
from their respective insurance carriers and shall immediately notify the other of any failure to obtain or maintain the same. 

 

 

 

7

 

 

9.04. WAIVER OF LIABILITY AND INDEMNITY.

Landlord, its agents and employees, shall not be liable for any injury to or death of persons or for any loss of or damage to property of Tenant or of others, regardless of whether such property is entrusted to employees of the Project, or such loss or damage is occasioned by casualty, theft, or any other cause of
whatsoever nature, unless caused solely by the willful misconduct or gross negligence of Landlord. In no event shall Landlord be liable as the result of the acts or omissions of Tenant or any other tenant of the Project. All personal property upon the Premises shall be at the risk of Tenant only and Landlord shall not be liable for any damage thereto or theft thereof. Tenant hereby indemnifies and holds Landlord harmless from and against any and all claims arising from Tenant's use of the Premises for the conduct
of its business or from any activity, work or other thing done, permitted or suffered by Tenant on or about the Project and shall further indemnify and hold harmless Landlord from and against any and all claims arising from any breach or default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease, or arising from any act or omission of, or due to the negligence of, the Tenant, or any officer, agent, employee, guest or invitee of Tenant and from and against all costs,
attorneys' fees, expenses and liabilities incurred in or related to any such claim or any action or proceeding brought thereon.

 

ARTICLE 10

 

10.01. CASUALTY.

If the Premises or Project, or any portion of either, shall be damaged by fire or other casualty covered by the insurance carried by Landlord hereunder, and the cost of repairing such damage shall not be greater than ten percent (10%) of the then full replacement cost thereof, then, subject to the following provisions
of this Article, Landlord shall repair the Premises and/or Project. If the Premises or Project shall be damaged (a) by fire or other casualty not covered by insurance carried by Landlord hereunder, (b) by fire or other casualty covered by insurance carried by Landlord hereunder and Landlord's mortgagee requires that such insurance proceeds be used to retire the mortgage debt, or (c) to an extent greater than ten percent (10%) of the then full replacement
cost thereof, then Landlord shall have the option to either (i) repair or reconstruct the same to substantially the same condition as immediately prior to such fire or other casualty, or (ii) terminate this Lease by so notifying Tenant within one hundred twenty (120) days after the date of such fire or other casualty, such termination to be effective as of the date of such notice. The Rent required to be paid hereunder shall be abated in proportion to the portions of the Premises, if any, which are rendered untenantable
by fire or other casualty hereunder until repairs of the Premises are completed, or if the Premises are not repaired, until the termination date hereunder. Other than such Rent abatement, no damages, compensation or claim shall be payable by Landlord for loss of the use of the whole or any part of the Premises, Tenants personal property, or any inconvenience, loss of business, or annoyance arising from any such repair and reconstruction. If the damage results from default or negligence of Tenant, its agents,
employees, licensees or invitees, then Tenant shall not be entitled to any abatement or reduction of any Rent or other sums due hereunder and, if the cost to repair such damage is not fully covered by Landlord's insurance, such damage shall be repaired by Tenant, or at Landlord's option by Landlord, at Tenant's expense (to the extent Landlord is not reimbursed by insurance). If this Lease is terminated as provided in (c)(ii) above, all Rent shall be apportioned and paid up to the termination date. Landlord shall
not be required to repair or replace any furniture, furnishings or other personal property which Tenant may be entitled to remove from the Premises or any property constructed and in­stalled by or for Tenant pursuant to Section 8.01 hereof or any installations in excess of Building Standard.

 

10.02. END OF TERM CASUALTY.

Notwithstanding anything to the contrary in this Article, Landlord shall not have any obligation whatsoever to repair, reconstruct or restore the Premises or the Project when the damage resulting from any casualty covered under this Article occurs during the last twelve (12) months of the Term or any extension thereof.

 

ARTICLE 11

 

11.01. CONDEMNATION.

If all or substantially all of the Premises be taken by virtue of eminent domain or for any public or quasi-public use or purpose, this Lease and the estate hereby granted shall terminate on the date the condemning authority takes pos­session. If only a part of the Premises is so taken, or if a portion of the Project
not including the Premises is taken, this Lease and the estate hereby granted shall, at the election of Landlord, either (i) terminate on the date the condemning authority takes possession by giving notice thereof to Tenant within thirty (30) days after the date of such taking of possession, or (ii) continue in full force and effect as to that part of the Premises not so taken and the Base Rent shall be reduced (from and after the date of such taking of possession) in the proportion that the number of square
feet of the Premises so taken, if any, bears to the total number of square feet contained in the Premises.

 

11.02. CONDEMNATION AWARD.

Landlord shall be entitled to the whole of any and all awards which may be paid or made in connection with any such taking, except that Tenant shall be entitled to make a separate claim with the condemning authority for (a) any moving expenses incurred by Tenant as a result of such condemnation, and (b) any relocation
costs incurred by Tenant.

 

 

 

8

 

 

ARTICLE 12

 

12.01. ENTRY.

Landlord, its agents, employees, and representatives, shall have the right to enter the Premises at any time upon reasonable notice to Tenant under the circumstances (such notice may be oral and not in compliance with Section 17.05 hereof, but no notice shall be required in the case of routine maintenance or any
emergency) for any purpose which Landlord may reasonably deem necessary for the operation and maintenance of the Project, including, without limitation, the exhibiting of the Premises to prospective purchasers, mortgagees, or tenants.

 

ARTICLE 13

 

13.01. SUBORDINATION.

This Lease is and shall be subject and subordinate to any and all ground or similar leases affecting the Project, all mortgages which may now or hereafter encumber or affect the Project and to all renewals, modifications, consolida­tions, replacements and extensions of any such leases and/or mortgages; provided,
however, that at the option of any Underlying Party (hereinafter defined), this Lease shall be superior to the lease or mortgage of such Underlying Party. The provisions of this Section 13.01 shall be self-operative and shall require no further consent or agreement requested by any such lessor or mortgagee in connection with this Section 13.01. Tenant shall, however, execute promptly any appropriate certificate or instrument that Landlord may request. Tenant hereby irrevocably appoints Landlord as Tenant's attorney-in-fact
to execute the same. As used in this Lease, the term "Underlying Party' shall mean the holder of the lessors interest under any ground or similar lease of all or part of the Building and/or the mortgagee or purchaser at foreclosure with respect to any mortgage of all or part of the Building, Tenant agrees that any Underlying Party may unilaterally subordinate its mortgage or lease to this Lease at any time by filing a notice of such subordination in the Official Public Records of Real Property of the county where
the Building is located.

 

13.02. ATTORNMENT.

In the event of the termination of any ground or similar lease affecting the Project or the enforcement by the trustee or the beneficiary under any mortgage or deed of trust of remedies provided by law or by such mortgage or deed of trust, Tenant will, upon request of any person or party succeeding to the interest
of Landlord as the result of such termination or enforcement, automatically become the Tenant of such successor in interest without change in the terms or other provisions of this Lease; provided, however, that such successor in interest shall not be bound by (a) any payment of Rent for more than one month in advance, or (b) any amendment or modification of this Lease made without the written consent of such trustee or such beneficiary or such successor in interest. Upon request by any such successor in interest,
Tenant shall execute and deliver an instrument or instruments confirming the attornment provided for herein.

 

13.03. QUIET ENJOYMENT.

Tenant, on paying the Rent and keeping and performing the conditions and covenants herein contained, shall and may peaceably and quietly enjoy the Premises for the Term, subject to all applicable laws and ordinances, applicable insurance requirements and regulations, and the provisions of this Lease.

 

ARTICLE 14

 

14.01. ASSIGNMENT.

Tenant shall not assign or in any manner transfer this Lease or any estate or interest herein, or sublet the Premises or any part thereof, or grant any license, concession or other right of occupancy of any portion of the Premises without the prior written consent of Landlord. Landlord shall have the option, upon
receipt from Tenant of a written request for Landlord's consent to a subletting or assignment, to cancel this Lease as of the date which is thirty (30) days following the receipt by Landlord of the request from Tenant to sublet or assign. The option of Landlord to cancel this Lease, as provided for above, shall be exercised, if at all, within fifteen (15) days following Landlord's receipt of such written notice, by delivering to Tenant written notice of Landlord's intention to exercise the option to so cancel
this Lease. if Tenant desires at any time to enter into an assignment of this Lease or a sublease of the Premises or any portion thereof, Tenant shall give written notice to Landlord of its desire to do so, which notice shall contain (a) the name of the proposed assignee or subtenant, (b) the nature of the proposed assignee's or subtenant's business to be carried on in the Premises, (c) the terms and provisions of the proposed assignment or sublease, and (d) resumes, business plans, references, financial information,
and other information as Landlord may reasonably request concerning the proposed assignee or subtenant. If Tenant is a corporation, partnership or other entity, and if at any time during the term of this Lease or any renewal or extension hereof, the person or persons who own a majority of either the outstanding voting interest or all outstanding ownership interests of Tenant at the time of execution of this Lease cease to own a majority of such interest (except as a result of transfers by devise or descent),
the loss of a majority of such interest shall be deemed an assignment of this Lease by Tenant and therefore subject in all respects to the provisions of this Section 14.01. The previous sentence shall not apply, however, if Tenant is a corporation and at the time of the execution of this Lease the outstanding voting shares of capital stock of Tenant are listed on a recognized security exchange or over the counter market. The use of the Leased Premises by current or future created or acquired affiliates and/or
subsidiaries of Tenant shall not be deemed an assignment or sublease, or other form of transfer. Such entities shall not become a party to the agreement unless by written agreement between Landlord and the affiliate or subsidiary.

 

 

9

 

 

 

 

14.02. CONTINUED LIABILITY.

Tenant shall, despite any permitted assignment or sublease, remain directly and primarily liable for the performance of all of the covenants, duties, and obligations of Tenant hereunder and Landlord shall be permitted to enforce the provisions of this Lease against Tenant or any assignee or sublessee without demand
upon or proceeding in any way against any other person. Moreover, in the event that the rental due and payable by a sublessee (or a combination of the rental payable under such sublease, plus any bonus or other consideration thereof incident thereto) exceeds the Rent 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 Rent payable under
this Lease, then Tenant shall be bound and obligated to pay Landlord all such excess rental and other excess consideration within ten (10) days following receipt thereof by Tenant from such sublessee, assignee, licensee or other transferee, as the case may be.

 

14.03. CONSENT.

Consent by Landlord to a particular assignment or sublease shall not be deemed a consent to any other or subsequent transaction. If this Lease is assigned or if the Premises are subleased without the permission of Landlord, then Landlord may nevertheless collect rent from the assignee or sublessee and apply the net
amount collected to the Rent payable hereunder, but no such transaction or collection of rent or application thereof by Landlord shall be deemed a waiver of any provision hereof or a release of Tenant from the performance by Tenant of its obligations hereunder.

 

14.04. TRANSFER BY LANDLORD.

In the event of the transfer and assignment by Landlord of its interest in this Lease and in the Project to a person expressly assuming Landlord's obligations under this Lease, Landlord shall thereby be released from any further obligations hereunder, 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 15

 

15.01. DEFAULT BY TENANT.

Each of the following shall constitute a "Default" by Tenant:

 

(a)  The failure of Tenant to pay the Base Rent, any other installment of Rent, or any part thereof when due; or

 

(b)  Tenant shall fail to fulfill or perform, in whole or in part, any of its obligations under this Lease (other than the payment of Rent) and such failure or non-performance shall continue for a period of fifteen (15)
days after written notice thereof has been given by Landlord to Tenant; or

 

(c)  The entry of a decree or order by a court having jurisdiction adjudging Tenant to be bankrupt or insolvent or approving as properly filed a petition seeking reorganization of Tenant under the National Bankruptcy Act,
or any other similar applicable Federal or State law, or a decree or order of a court having jurisdiction for the appointment of a receiver or liquidator or a trustee or assignee in bankruptcy or insolvency of Tenant or its property or for the winding up or liquidation of its affairs; or Tenant shall institute proceedings to be adjudicated a voluntary bankrupt or shall consent to the filing of any bankruptcy, reorganization, receivership or other proceeding against Tenant, or any such proceedings shall be instituted
against Tenant and the same shall not be vacated within ninety (90) days after the same are commenced; or Tenant shall make an assignment for the benefit of Tenant's creditors or admit in writing Tenant's inability to pay the debts of Tenant generally as they may become due; or

 

(d)  Tenant shall desert or vacate or shall commence to desert or vacate the Premises or any substantial portion of the Premises or shall remove or attempt to remove, without the prior written consent of Landlord, all or
a substantial value of Tenant's personal property from the Premises; or

 

(e)  Tenant shall do or permit to be done anything which creates a lien upon the Premises or any portion of the Project; or

 

(f)   Tenant shall fail to take possession of the Premises within thirty (30) days after Landlord noti­fies Tenant that the same are ready for occupancy.

 

 

 

10

 

 

15.02. RIGHTS UPON DEFAULT BY TENANT.

(a) This Lease and the term and estate hereby granted and the demise hereby made are subject to the limitation that if and whenever there shall occur any event of Default, as enumerated above, Landlord may, at Landlord's option, without any notice or demand whatsoever (any such notice and demand being expressly
waived by Tenant) in addition to any other remedy or right given hereunder or by law or equity do any one or more of the following:

 

(1)  Terminate this Lease by written notice to Tenant, in which event Tenant shall immediately surrender possession of the Premises to
Landlord;

 

(2)  Terminate Tenant's right to possession of the Premises under this Lease without terminating the Lease itself, by written notice to
Tenant, in which event Tenant shall immediately surrender possession of the Premises to Landlord;

 

(3)  Enter upon and take possession of the Premises and expel or remove Tenant and any other occupant therefrom, with or without having terminated this Lease;

 

(4) Alter locks and other security devices at the Premises with or without having terminated this Lease or Tenant's right to possession under the Lease;

 

(5) In the event of any default described in subsection (b) of Section 15.01, Landlord shall have the right to enter upon the Premises without being liable for prosecution or any claim for damages therefore, and do whatever Tenant
is obligated to do under the terms of this Lease; and Tenant agrees to reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting compliance with Tenant's obligations under this Lease, and Tenant further agrees that Landlord shall not be liable for any damages resulting to Tenant from such action.

 

(b)  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 Premises by Tenant, 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. No such alteration of locks or other security devices and no removal or other exercise of dominion by Landlord over the property of Tenant or others at the Premises shall be deemed unauthorized or constitute a conversion, Tenant hereby consenting, after any event of Default, to the aforesaid exercise of dominion over Tenant's property within the Premises. All claims for damages by reason of such re-entry
and/or repossession and/or alteration of locks or other security devices are hereby waived, as are all claims for damages by reason of any distress warrant, forcible detainer proceedings, sequestration proceedings or other legal process. Tenant agrees that any re-entry by Landlord may be pursuant to a judgment obtained in forcible detainer proceedings or other legal proceedings or without the necessity for any legal proceedings, as Landlord may elect, and Landlord shall not be liable in trespass or otherwise.

 

(c)  (i) In the event Landlord elects to terminate this Lease by reason of an event of Default, then notwithstanding such termination, the Tenant shall be liable for and shall pay to the Landlord, at the address specified
in Section 1.01(a) above, the sum of all Rent accrued to the date of such termination, plus, as damages, (i) the cost of recovering, re-renting and remodeling the Premises and (ii) an amount equal to the total of the Rent provided in this Lease for the remaining portion of the Term of the Lease (had such Term not been terminated by Landlord prior to the Expiration Date stated in Section 3.01), less the reasonable rental value of the Premises for such period, such of count to be discounted to present value at
the rate of six percent (6%) per annum (the undersigned parties here stipulating that such reasonable rental shall in no event be deemed to exceed 60% of the present value of the Rent for such period).

 

(ii) In the event Landlord elects to terminate this Lease by reason of an event of Default, in lieu of exercising the right of Landlord under the preceding subparagraph (I), Landlord may instead hold Tenant liable for all Rent accrued to the date of such termination, plus such Rent as would otherwise have been required
to be paid by Tenant to Landlord during the period following termination of the Term measured from the date of such termina­tion by Landlord until the Expiration Date stated in Section 3.01 (had Landlord not elected to terminate the Lease on account of such event of Default) diminished by any net sums thereafter received by Landlord through reletting the Premises during said period (after deducting expenses incurred by Landlord as provided in Section 15.03 hereof). Actions to collect amounts due by Tenant
as provided for in this paragraph may be brought from time to time by Landlord during the aforesaid period, on one or more occasions, without the necessity of Landlord's waiting until expiration of such period; and in no event shall Tenant be entitled to any excess of rent obtained by reletting over and above the rent provided for in this Lease. If Landlord elects to exercise the remedy prescribed in this subparagraph (ii), this election shall in no way prejudice Landlord's right at any time thereafter to cancel
said election in favor of the remedy prescribed in the foregoing subparagraph (i).

 

(d) In the event that Landlord elects to repossess the Premises without terminating the Lease, then Tenant shall be liable for and shall pay to Landlord at the address specified in Section 1.01(a) above, all Rent accrued to the date of such repossession, plus Rent required to be paid by Tenant to Landlord during
the remainder of the Term until the Expiration Date of the Term as stated in Section 3.01, diminished by any net sums thereafter received by Landlord through reletting the Premises during said period (after deducting expenses incurred by Land­lord as provided in Section 15.03). Actions to collect amounts due by Tenant as provided in this paragraph may be brought from time to time by Landlord during the aforesaid period, on one or more occasions, without the necessity of Landlord's waiting until expiration
of the Term and in no event shall Tenant be entitled to any excess of any rent obtained by reletting over and above the Rent provided for in this Lease.

 

 

 

11

 

 

(e)  In the event of termination of the Lease or repossession of the Premises for an event of Default, Landlord shall not have any obligation to relet or attempt to relet the Premises, or any portion thereof, or to collect
rental after reletting; and in the event of reletting Landlord may relet the whole or any portion of the Premises for any period, to any tenant and for any use and purpose.

 

(f)  In the event of a Default, Tenant shall in addition to all other sums owed to Landlord, pay to Landlord an amount equal to the dollar amount of all "concessions" provided to Tenant in connection with this Lease, including,
but not limited to, rental concessions, above standard tenant improvements, relocation allowances, cash payments, any other unamortized tenant improvements, and the like. The foregoing shall not, however, act to limit in any manner the damages or remedies to which Landlord may be entitled under this Lease or by law, but shall act only as a reimbursement of such concessions as may have been provided to Tenant as an incentive to enter into this Lease.

 

15.03.  EXPENSE OF REPOSSESSION.

It is further agreed that, in addition to payments required pursuant to Section 15.02 above, Tenant shall compensate Landlord for all expenses incurred by Landlord in repossession (including among other expenses, the total amount of any increase in insurance premiums caused by the vacancy of the Premises), all expenses
incurred by Landlord in reletting (including among other expenses, repairs, remodeling, replacements, advertisements and brokerage fees), and all losses incurred by Landlord as a direct or indirect result of Tenant's default

 

15.04.  CUMULATIVE REMEDIES.

Landlord may restrain or enjoin any breach or threatened breach of any covenant, duty or obligation of Tenant herein contained without the necessity of proving the inadequacy of any legal remedy or irreparable harm. The remedies of Landlord hereunder shall be deemed cumulative and not exclusive of each other.

 

15.05.  ATTORNEY'S FEES.

If on account of any breach or default by Tenant in its obligations hereunder, Landlord shall employ an attorney to present, enforce or defend any of Landlord's rights or remedies hereunder, Tenant agrees to pay any reasonable attorney's fees incurred by Landlord in such connection.

 

15.06.  INTEREST.

All late payments of Rent, costs or other amounts due from Tenant under this Lease shall bear interest from the date due until paid at the maximum non-usurious rate of interest at which Tenant may legally contract
in Texas.

 

15.07.  SECURITY DEPOSIT.

Tenant shall deposit with Landlord on the date Tenant receives a fully executed Lease, the Security Deposit to be held by Landlord without interest as security for the performance by Tenant of Tenant's covenants and obligations under this Lease, it being expressly understood that such deposit may be commingled with
Landlord's other funds and is not an advance payment of rental or a measure of Landlord's damages in case of Default by Tenant. If the Premises are conveyed by Landlord, the security deposit or any balance thereof may be turned over to Landlord's grantee or assignee, and if the same is turned over, Tenant hereby releases Landlord from any and all liability with respect to the security deposit and its application and Tenant agrees to look solely to such grantee or assignee for such application or return. Upon
the occurrence of any event of Default by Tenant, Landlord may, from time to time, without prejudice to any other remedy provided herein or provided by law, use such fund to the extent necessary to make good any arrears of Rents and any other damage, injury, expense or liability caused to Landlord by such event of Default, and Tenant shall pay to Landlord on demand the amount so applied in order to restore the security deposit to its original amount If Tenant is not then in Default hereunder, any remaining balance
of such deposit shall be returned by Landlord to Tenant within thirty (30) days following expiration of this Lease (subject to the provi­sions of Section 14.04 above).

 

15.08.  LANDLORD'S CONTRACTUAL SECURITY INTEREST.

In addition to the statutory landlord's lien, Tenant hereby grants to Landlord and Landlord shall have at all times, a valid security interest to secure payment of all Rents and other sums of money becoming due hereunder from Tenant, and to secure payment of any damages or loss which Landlord may suffer by reason
of the breach by Tenant of any covenant, agreement or condition contained herein, upon all goods, wares, equipment, fixtures, furniture, improvements and other personal property of Tenant presently, or which may hereafter be, situated on the Premises, and all proceeds therefrom, and such property shall not be removed without the written consent of Landlord. Landlord shall have the rights and remedies of a secured party as set forth in the Texas Uniform Commercial Code. Upon the occurrence of an event of Default
by Tenant, Landlord may, in addition to any other remedies provided herein, enter upon the Premises and take possession of any and all goods, wares, equipment, fixtures, furniture, improvements and other personal property of Tenant situated on the Premises, without liability for trespass or conversion, and sell the same at public or private sale, with or without having such property at the sale, after giving Tenant reasonable notice of the time and place of any public sale or of the time after which any private
sale is to be made, at which sale the Landlord or its assigns may purchase unless otherwise prohibited by law.

 

 

 

12

 

 

Unless otherwise provided by law, and without intending to exclude any other manner of giving Tenant reasonable notice, the requirement of reasonable notice shall be met if such notice is given in the manner prescribed in this Lease at least seven (7) days before the time of sale. Any sale made pursuant to the provision
of the paragraph shall be deemed to have been a public sale conducted in commercially reasonable manner if held on the Premises or where the property is located after the time, place and method of sale and a general description of the types of property to be sold have been advertised in a daily newspaper published in the county in which the property is located for five (5) consecutive days before the date of the sale. The proceeds from any such disposition, less any and all expenses connected with the taking
of possession, holding and selling of the property (including reasonable attorney's fees and legal expenses), shall be applied as a credit against the indebtedness secured by the security interest granted in this paragraph. Any surplus shall be paid to Tenant or as otherwise required by law; the Tenant shall pay any deficiencies forthwith. Upon request by Landlord, Tenant agrees to execute and deliver to Landlord a financing statement in form sufficient to perfect the security interest of Landlord in the aforementioned
property and proceeds thereof under the provision of the Uniform Commercial Code (or corresponding state statute or statutes) in force in the State in which the property is located, as well as any other state laws of which Landlord may at any time consider to be applicable. Landlord and Tenant agree that a carbon, photographic or other reproduction of this Lease is sufficient as, and may be filed as, a financing statement.

 

15.09.  USE AND STORAGE OF PERSONAL PROPERTY.

In the event that Landlord shall have taken possession of the Premises pursuant to the authority herein granted, then Landlord shall have the right to keep in place and use all of the furniture, fixtures and equipment at the Premises, 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 lessor thereof or third party having a lien thereon. Landlord shall also have the right to remove from the Premises (without the necessity of obtaining a distress warrant, writ of sequestration or other legal process) all or any portion of such furniture, fixtures, equipment and other property located thereon and place same in storage at any premises within the county where the Building is located, including premises owned by Landlord or an affiliate of Landlord;
and in such event, Tenant shall be liable to Landlord for costs incurred by Landlord in connection with such removal and storage and shall indemnify and hold Landlord harmless from all loss, damage, cost, expense and liability in connection with such removal and storage. Landlord shall also have the right to relinquish possession of all or any portion of such furniture, fixtures, equipment and other property to any person ("Claimant") claiming to be entitled to possession thereof who presents to Landlord a copy
of any instrument represented to Landlord 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 of said instrument copy or Tenant's (or Tenant's predecessor's) signature thereon and without the necessity of Landlord's making any nature of investigation or inquiry as to the validity
of the factual or legal basis upon which Claimant purports to act; and Tenant agrees to indemnify and hold Landlord harmless from all cost, expense, loss, damage and liability incident to Landlord's relinquishment of possession of all or any portion of such furniture, fixtures, equipment or other property to Claimant. The rights of Landlord herein stated shall be in addition to any and all other rights which 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.

 

15.10.  DEFAULT BY LANDLORD.

In the event of a default or breach by Landlord under this Lease, then Tenant shall be entitled to such rights and remedies as may be available to Tenant at law or in equity.

 

ARTICLE 16

 

16.01.  HAZARDOUS WASTE.

Tenant hereby represents and warrants to Landlord the following:

 

(a) Tenant shall not cause or permit any Hazardous Substances to be used, stored, generated, or disposed of on, in or about the Premises by Tenant, Tenant's agents, employees, contractors, or invitees without first obtaining Landlord's written consent. If Hazardous Substances are used, stored, generated, or disposed
of on, in or about the Premises, or if the Premises become contaminated in any manner, Tenant shall indemnify and hold harmless the Landlord (and its agents and employees) for any and all claims, damages, fines, judgments, penalties, costs, liabilities, or losses (including, without limitation, a decrease in value of the premises or the land or building of which they are a part, damages caused by loss or restriction of rentable or usable space, damages caused by adverse impact on marketing of the space, and any
and all sums paid for settlement of claims, attorneys' fees, consultant, and expert fees) arising during or after the Lease Term and arising as a result of any use, storage, generation or disposal of any Hazardous Substance or any contamination by Tenant. This indemnification includes, without limitation, any and all costs incurred because of any investigation of the site or any cleanup, removal, or restoration mandated by a federal, state, or local agency or political subdivision. If the Tenant causes or permits
the presence of any Hazardous Substance on the Premises that results in contamination, Tenant shall promptly, at its sole expense, take any and all necessary actions to return the Premises to the condition existing prior to the presence of any such Hazardous Substance on the Premises. Tenant shall first obtain Landlord's approval for any such remedial action.

 

 

 

13

 

 

 

(b) As used herein, "Hazardous Substance" means any substance that is toxic, ignitable, reactive, or corrosive regardless whether same is regulated by any local government, the State of Texas, or the United States Government, "Hazardous Substance" includes, but is not limited to any toxic or hazardous substance
and any and all material or substances that are defined as "hazardous waste," "extremely hazardous waste," or a "hazardous substance' pursuant to state, federal or local governmental law. "Hazardous Substance" includes but is not restricted to asbestos, polychlorobiphenyls ("PCBs"), petroleum and petroleum products.

 

16.02.  ASBESTOS DISCLOSURE: The Building was constructed prior to January 1, 1981. Under the Occupational Exposure to Asbestos Rule ("Rule") [59 Fed.Reg. 40963 (Aug. 10, 1994)] promulgated by the U.S. Occupational Health and Safety Administration ("OSHA"),
every building constructed prior to 1981 is presumed to have asbestos-containing materials ("ACM") in the building. In addition to the presumption set out in the Rule, Landlord has obtained an environmental site assessment ("Report") with respect to the Building that notes the existence and location of ACM in the Building.

 

The Report indicates certain activities that reasonably would be expected to cause a release of asbestos fibers and should be avoided. Those activities include, but are not limited to, (i) cutting or drilling into the ACM; (ii) attaching anything to the ACM with nails or pins; (iii) sanding or moving the ACM; or
(iv) bumping into or rubbing against ACM.

 

ARTICLE 17

 

17.01.  SUBSTITUTE PREMISES.

INTENTIONALLY DELETED

 

17.02.  ESTOPPEL LETTERS.

Tenant will, at such time or times as Landlord may request, execute and acknowledge a certificate stating whether this Lease is in full force and effect, whether any amendments or modifications exist, whether there are any defaults hereunder, and containing such other related information as may be reasonably requested.

 

17.03.  HOLDOVER.

if Tenant shall remain in possession of the Premises after the expiration or earlier termination of this Lease, Tenant shall pay as rent an amount equal to two hundred percent (200%) of the daily rental rate prevailing on the date of such termination or expiration (computed on the basis of a thirty (30) day month).
The remaining in possession by Tenant or the acceptance by Landlord of the payment of said rent shall not be construed as an extension or renewal of this Lease. The rental payable to Landlord under this Section shall not be deemed to be in lieu of any damages or other remedy to which Landlord may be entitled by virtue of Tenant's holding over.

 

17.04.  SURRENDER.

Upon the expiration or earlier termination of the Lease, Tenant shall peacefully quit and surrender the Premises in broom clean condition and in good order and condition, excepting ordinary wear and tear, but subject to Sections 8.01 and 8.02 hereof. Tenant shall also cause all exposed electrical wires, plumbing,
and utilities to be capped.

 

17.05.  NOTICE.

Except as otherwise herein provided, any statement, notice, or other communication which Landlord or Tenant may desire or be required to give to the other shall be in writing and shall be deemed properly given if mailed by first class United States mail, postage prepaid, registered or certified with return receipt
requested, or by delivering same in person or by courier to the intended addressee. Notice so mailed shall be effective upon the expiration of three (3) business days after its deposit. Notice given in any other manner shall be effective only if and when received by the addressee.  For purposes of notice, the addresses of the parties shall be as set forth in the opening provisions of this Lease and/or Section 1.01 hereof. Either party shall have the
right to change its address for notice hereunder to any other location within the United States by the giving of thirty (30) days' notice to the other party in the manner set forth hereinabove.

 

17.06.  RULES AND REGULATIONS.

Tenant, as well as any assignee or sublessee approved by Landlord, will comply with the rules of the Project adopted by Landlord, which are set forth in EXHIBIT"F" attached hereto and made a part hereof for all purposes. Landlord shall have the right to change
such Rules and Regulations or to amend them in any reasonable manner for the safety, care and cleanliness of the Project, and the Premises, and for preservation of good order therein, all of which changes and amendments will be sent by Landlord to Tenant in writing and shall be thereafter binding upon, carried out and observed by Tenant Tenant shall further be responsible for the compliance with such Rules and Regulations by the employees, servants, agents and invitees of Tenant

 

 

 

14

 

 

17.07.  LANDLORD'S LIABILITY.

Tenant specifically agrees to look solely to Landlord's interest in the Project for the recovery of any judgment from Landlord, it being agreed that Landlord shall never be personally liable for any such judgment. The provision contained
in the foregoing sentence is not intended to, and shall not, limit any right that Tenant might otherwise have to obtain injunctive relief against Landlord or Landlord's successors in interest, or any other action not involving the personal liability of Landlord to respond in monetary damages from assets other than Landlord's interest in the Project or any suit or action in connection with enforcement or collection of amounts which may become owing or payable under or on account of insurance maintained by Landlord.

 

17.08.  INABILITY TO PERFORM.

If, by reason of inability reasonably to obtain and utilize labor, materials, equipment, or supplies, or by reason of circumstances directly or indirectly the result of any state of war or national or local emergency, or by reason of any laws, rules, orders, regulations, action, non-action, or requirements of any
governmental authority now or hereafter in force, or by reason of strikes or riots, or by reason of accidents in, damage to, or the making of repairs, replacements, or improvements to the Project or the Premises, or any of the equipment of either, or by the reason of any other cause beyond the reasonable control of Landlord, Landlord shall be unable to perform or shall be delayed in the performance of any obligation hereunder, then this Lease and the obligation of Tenant to pay the Base Rent or additional items
of Rent and to perform and comply with all of the other covenants and agreements hereunder shall in no way be affected or impaired except as otherwise expressly provided for in this Lease, and such non­performance or delay in performance by Landlord shall not give rise to any claim against Landlord for damages or constitute a total or partial eviction, constructive or otherwise. Landlord shall exercise due diligence in undertaking to remedy such inability to perform or delay in performance with all reasonable
dispatch, but shall not be required to adjust a labor dispute against its will.

 

17.09.  TENANT AUTHORIZATION.

If Tenant signs as a corporation, each of the persons executing this Lease on behalf of Tenant represents and warrants that Tenant is a duly organized and existing corporation, that Tenant has and is qualified to do business in Texas, that the corporation has full right and authority to enter into this Lease, and
that all persons signing on behalf of the corporation were authorized to do so by appropriate corporate actions. If Tenant is a general partnership, limited partnership, trust, or other legal entity, each individual executing this Lease on behalf of said entity represents and warrants that he or she is duly authorized to execute this Lease on behalf of such entity and in accordance with such entity's governing instruments, and that this Lease is binding upon such entity. Upon the Landlord's request, Tenant shall
furnish Landlord with proper proof of due authorization for Tenant's execution of this Lease as Landlord shall require.

 

17.10.  BROKER.

Tenant and Landlord each represents and warrants to the other that Tenant and Landlord, respectively, have dealt with, and only with, Brokers stated in 1.01.m as real estate broker in connection with this Lease, and that, insofar as Tenant and Landlord, respectively, knows, no other broker negotiated this Lease or
is entitled to any commission in connection herewith and Tenant and Landlord, respectively, shall indemnify and hold harmless the other from and against all claims (and costs of defending against and such claims) of any broker or similar parties claiming by, through, or under Tenant and Landlord, respectively, in connection with this Lease.

 

17.11.  MEMORANDUM OF LEASE.

Without the prior written consent of Landlord (which may be granted or withheld in Landlord's sole discretion), Tenant shall not record this Lease or a memorandum or other instrument with respect to this Lease.

 

17.12.  PARKING.

Tenant shall be permitted to use, on a non-exclusive basis certain parking spaces during the Term as more fully provided for in EXHIBIT "E hereto. Use of the parking spaces is subject to such rules and regulations governing the use as Landlord may from time to time prescribe, including the designation of specific
areas in which automobiles owned by Tenant, its employees, agents and invitees shall be part. Tenant shall furnish to Landlord upon request a complete list of license numbers and physical description of all automobiles operated by Tenant, its employees and agents.

 

17.13.  TAXES ON TENANT'S PROPERTY.

Tenant shall be liable for all taxes levied or assessed against personal property, furniture or fixtures placed by Tenant on the Premises if such taxes for which Tenant is liable are levied or assessed against Landlord or Landlord's property and if Landlord elects to pay the same, or if the assessed value of the
Project is increased by the inclusion of personal property, furniture or fixtures, placed by Tenant on the Premises, and Landlord elects to pay the taxes based on such increase, Tenant shall pay to Landlord upon demand, that part of such taxes for which Tenant is primarily liable hereunder, together with interest thereon until paid at the rate set forth in Section 15.06 hereof.

 

 

15

 

 

 

17.14.  LANDLORD'S RIGHTS IN EVENT OF NON.RENEWAL.

During the last ninety days of the original term or of any renewal term, should Tenant not elect to renew the term as provided herein, Landlord or any person authorized by Landlord may during normal business hours, exhibit the same to prospective tenants, and place in or about the Premises at such places as may be
determined by Landlord and Tenant, "For Rent' signs or notices. Such entry or actions permitted herein shall not constitute eviction of Tenant.

 

Landlord shall ensure the quiet enjoyment of the premises is maintained for Tenant during the exhibition of the premises. Landlord will assure that prospective tenants are properly escorted to ensure adequate protection and security of the property of Tenant during any exhibition of the premises. Due to the sensitive
nature of Tenants business involving the legal and tax records of clients of Tenant, Landlord agrees that Tenant may refuse to allow exhibition of certain areas containing sensitive client data unless Tenant is provided with two (2) business days notice of time and date of desired exhibition.

 

17.15.  JOINT AND SEVERAL LIABILITY.

If there is more than one tenant, the obligations hereunder imposed upon Tenant shall be joint and several. If there is a guarantor of the obligations hereunder imposed upon Tenant, there shall be a joint and several obligation of Tenant and such guarantor, and Landlord may not first proceed against Tenant before
proceeding against such guarantor, nor shall any such guarantor be released from its guaranty for any reason whatsoever.

 

17.16.  ACCEPTANCE BY LANDLORD.

The acceptance by Landlord as evidenced by the execution of this Lease by its duly authorized representative is subject to the condition precedent of obtaining written approval of the terms and provisions of this Lease by any financial institution possessing the right to approve the form and content of each lease
at the Building. In the event Landlord is unable to obtain the required written approval from any financial institution, this Lease shall become null and void ab initio and shall have no further legal force and effect.

 

17.17.  TIME OF ESSENCE.

Time is of the essence of this Lease and all of its provisions in which performance is a factor.

 

17.18.  ENTIRE AGREEMENT.

This Lease, including EXHIBITS "A" through "F" and Supplements, if any, attached hereto (which Exhibits are hereby incorporated herein and shall constitute a portion hereof), contains the entire agreement between Landlord and Tenant with respect to the subject matter hereof.

 

17.19.  AMENDMENT.

Any agreement hereafter made between Landlord and Tenant shall be ineffective to modify, release or otherwise affect this Lease, in whole or in part, unless such agreement is in writing and signed by the party to be bound thereby.

 

17.20.  SEVERABILITY.

If any term or provision of this Lease shall, to any extent, be held invalid or unenforceable by a final judgment of a court of competent jurisdiction, the remainder of this Lease shall not be affected thereby.

 

17.21.  SUCCESSORS.

Subject to the limitations and conditions set forth elsewhere herein, this Lease shall bind and inure to the benefit of the respective heirs, legal representatives, successors, and assigns of the parties hereto. All rights, powers, privileges, immunities, and dutieecif 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.

 

17.22. CAPTIONS.

The captions in this Lease are inserted only as a matter of convenience and for reference only and they in no way define, limit, or describe the scope of this Lease or the intent of any provisions hereof,

 

17.23. NUMBER AND GENDER.

All genders used in this Lease shall include the other genders, the singular shall include the plural, and the plural shall include the singular, whenever and as often as may be appropriate.

 

17.24. GOVERNING LAW.

This Lease shall be governed by and construed in accordance with the laws of the State of Texas.

 

17.25.

Although Landlord and Tenant acknowledge that certain terms of this Lease may be disclosed to certain persons such as the parties' attorneys, architects, designers, space planners, contractors, brokers and other necessary persons as contemplated in this Lease (collectively, the "Necessary Parties"), Landlord and
Tenant agree to keep the terms hereof confidential and to restrict, to the maximum extent reasonably possible, access to and knowledge of such terms. Specifically, and not by way of limitation of the foregoing, Landlord and Tenant each agree not to disclose the terms hereof to any other tenants in the Building, any real estate brokers or agents, or any competitors of Landlord or Tenant Landlord and Tenant each agree to obtain a written agreement to abide by the terms of this Section from each necessary Party
to whom the terms of this Lease are disclosed, prior to such disclosure.

 

 

 

16

 

 

 

IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this Lease as of the day and year first above written.

 

 

	
LANDLORD
	
TENANT

	
JIM R. SMITH INTEREST
	
TM1RS Enterprises, Ltd db/a TaxMasters

	

	

	
Signature Patrick Cox

President

 

 

17

 

 

 

GUARANTY OF LEASE

 

FOR VALUE RECEIVED, and in consideration for, and as an inducement for JIM R. SMITH INTEREST enter into a lease (the lease") as landlord' with TMIRS Enterprises, Ltd db/a TaxMasters as "Tenant," the undersigned unconditionally guarantees to Landlord the full
and timely performance and observance of all the covenants, conditions and agreements therein provided to be performed and observed by Tenant and expressly agrees that the validity of this Guaranty of Lease and the obligations of the undersigned hereunder shall in no wise be terminated, affected or impaired by reason of any forbearance, settlements or compromises between Landlord and Tenant or the invalidity of the Lease for any reason whatsoever or by the relief of Tenant from any of Tenants obligations under
the Lease by operation of law or otherwise, including, without limitation of the generality of the foregoing, the rejection of or assignment of the Lease in connection with proceedings under any bankruptcy laws now in effect or hereafter enacted.

 

The undersigned further covenants and agrees that this Guaranty of Lease shall be and remain in full force and effect as to any renewal, modification or extension, whether or not known to or approved by the undersigned and that no subletting, assignment or other transfer of the Lease, or any interest therein, shall
operate to extinguish or diminish the liability of the undersigned hereunder. In the event of any termination of the Lease by Landlord, the undersigned's liability hereunder shall not be terminated, but the undersigned shall be and remain liable for all damages, costs, expenses and other claims which may arise under the Lease. If the undersigned shall, directly or indirectly, advance any sums to the Tenant, such sums and indebtedness shall be subordinate in all respects to the amounts then and thereafter due
and owing by the Tenant under the Lease.

 

Wherever reference is made to the liability of Tenant in the Lease, such reference shall be deemed likewise to refer to the undersigned, jointly and severally, with Tenant. The liability of the undersigned for the obligations of the Lease shall be primary. In any right of action which shall accrue to Landlord under
the Lease, Landlord may, at Landlord's option, proceed against the undersigned and/or Tenant, jointly and severally, and may proceed against the undersigned without having demanded performance of, commenced any action against or having obtained any judgment against Tenant. The undersigned hereby waives any obligation on the part of Landlord to enforce the terms of the Lease against Tenant as a condition to Landlord's right to proceed against (i) notice of acceptance of this Guaranty of Lease and of presentment,
demand and protest; (ii) notice of any default hereunder or under the Lease and of all indulgences; (iii) demand for observance or performance of, or enforcement of, any terms or provisions of this Guaranty of Lease or the Lease; and (iv) all other notices and demands otherwise required by law which the undersigned may lawfully waive. The undersigned agrees that in the event this Guaranty of Lease shall be enforced by suit or otherwise, the undersigned will reimburse the Landlord, upon demand, for all expenses
incurred in connection therewith, including, without limitation, reasonable attorney's fees.

 

Failure of Landlord to insist upon performance or observance of any of the terms, provisions or covenants of the foregoing Lease or to the exercise of any right therein contained shall not be construed as a waiver or relinquishment for the future of any such term, provision, covenant or right, but the same shall
continue and remain in full force and effect. Receipt by Landlord of rent with knowledge of the breach of any provision of the foregoing Lease shall not be deemed a waiver of such breach.

 

The undersigned hereby waives, to the maximum extent permitted by law, all defenses available to a surety, whether the waiver is specifically herein enumerated or not

 

It is further agreed that all of the terms and provisions hereof shall inure to the benefit of the respective heirs, executors, administrators, successors and assigns of the Landlord, and shall be binding upon the successors and assigns of the undersigned.

 

In the event more than one person or entity execute this Guaranty of Lease, the liability of such signatories hereby shall be joint and several.

 

This Guaranty of Lease shall be governed by the laws of the State of Texas, and shall be performed in all respects in Harris County, Texas.

 

EXECUTED as of the 21st day of December, 2006

By: TMIRS Enterprises, Ltd db/a TaxMasters

by: /s/ Patrick Cox      

Signature

by: Patrick Cox      

Printed Name

its: President      

Title

 

 

18

 

LIST OF EXHIBITS

 

Exhibit "A" - Land

Exhibit "B" - Floor Plans

Exhibit "C" - Definition of Rentable Area

Exhibit "D" - Leasehold Improvements

Exhibit "E" - Parking

Exhibit "F" - Rules and Regulations

Exhibit "G" - Special Provisions

 

 

 

 

19

 

 

 

EXHIBIT "A"

 

LAND

 

METES AND BOUNDS DESCRIPTION

 

2.1104 ACRES OF LAND OUT OF THE

 

GEORGE BELLOWS SURVEY, ABSTRACT 3

 

HOUSTON, TEXAS

 

2.1104 acres (91.927 square feet) of land, being all that certain tract described in a deed from Town & Country Financial Corporation to Town & Country Bank, Dated December 11, 1974, recorded in Clerks File (C.F.) G365463, (C.F.) Official records of Harris County, Texas (H.C.O.P.R.R.P.), and a deed from Town
& Country Office Park Joint Venture to Town and Country Bank. dated December 6, 1979, recorded in Clerks File 0350693, H.C.O.P.R.R.P, out of the George Bellows Survey, Abstract 3. Houston, Harris County, Texas. and being more particularly described by metes and bounds as follows;

BEGINNING at a chiseled "X" in concrete set at the intersection of the west line of Town and Country Boulevard (60 feet wide), as described in a deed from Town & County Office Park Joint Venture to the City of Houston, dated September 2, 1971, recorded in C.F.1)416796, H.C.O.P.R,R.P., with the north line of Town
and Country Lane (60 feet wide), as dedicated by the subdivision plat of Town & Country Extension, recorded in Volume 166, Page 35, Harris County Map Records (H.C.M.R.) and the southeast corner hereof;

 

THENCE, N 00° 23' 00"W, a distance of 295.86 feet, along the west line of Town and Country Boulevard, to a 5/8 inch iron rod found, as called, for the northwest corner hereof and the southwest cornet of a called 2.1678 acre tract described in a deed from Creole Stewart & Stevenson Realty Corporation, dared
September 12, 1995, recorded in C.F. R 741676, H.C.O.P.R.R.P

 

THENCE, N 89° 37' 00" E, a distance of 310.24 feet, leaving the west line of Town & Country Boulevard to a 5/8 inch iron rod set for the northeast corner hereof and the southeast corner of said Stewart & Stevenson tract in the west line of Unrestricted
reserve "A", called 3.8581 acres, as decried in the plat of BED, Bath & Beyond, as recorded in Volume'364, page 98, 1- 1.

 

THENCE, S 00° 34' 00" E, a distance of 295.86 feet, to a 1 — V: inch iron pipe found in the north line of Town & Country Lane for the southeast corner hereof and the southwest corner of said reserve "A";

 

Thence, S 89° 37' 00" W, a distance of 311.19 feet, along the north line of Town and Country Lane to the POINT OF BEGINNING, delineating and encompassing within the metes recited 2.1104 acres (91,927 square feet) of land, more or less, based on the Land Title Survey and plat made by Thompson Surveying Company,
Houston, Texas on April 16, 1998.

 

 

 

20

 

 

 

EXHIBIT "B"

 

FLOOR PLANS

 

 

 

 

 

21

 

 

 

EXHIBIT "C"

 

RENTABLE AREA

 

The term "Rentable Area shall mean the area or areas determined, in square feet, as follows: (i) the Rentable Area on a single-tenant floor shall be (a)the entire area bounded by the inside face of glass panes that are part of the exterior walls of the Building, excluding only the area contained within the same (measured
from the mid-point of dividing walls) used for the Building Common Areas (hereinafter defined) located on such floor, Building stairs, fire towers, vertical ducts, elevator shafts, flues, vents, stacks, and pipe shafts, but including all other areas on such floor, plus (b) a pro-rata part of Building Common Areas, and (ii) the Rentable Area for a multi-tenant floor shall be (a) the entire area bounded by the inside face of glass panes that are part of exterior walls of the Building, the exterior face of any partitions
that separate the Premises from Floor Common Areas (hereinafter defined) and the mid-point of partitions that separate the Premises from adjoining tenant spaces, plus (b) a pro-rata share of Floor Common Areas and Building Common Areas. The term "Common Areas" as used herein shall mean all Building corridors, lobbies, rest rooms, jani­tor closets, vending rooms, telephone rooms, mechanical rooms, electrical rooms, and other areas not for the exclusive use of any particular tenant, The term "Floor Common Areas"
shall mean all Common Areas on a floor except those Common Areas, if any, that are primarily for the benefit of more than one floor, such as elevator mechanical rooms and Building lobbies. The term "Building Common Areas" shall mean all Common Areas that are not Floor Common Areas. No deductions from Rentable Area shall be made for columns or other structural portions or projections necessary to the Building. Notwithstanding the foregoing, for purposes of this lease the term Rentable Area shall be deemed to be 14,469 square
feet.

 

 

 

 

 

22

 

 

EXHIBIT "D"

LEASEHOLD IMPROVEMENTS

 

ARTICLE 1 

DEFINITIONS

 

These terms defined in Article 1 of this Exhibit "ID", for all purposes of this Exhibit "D", shall have the meaning herein specified, and, in addition to the terms defined herein, the definitions otherwise in the Lease to which this Exhibit "D" is attached shall also apply to this Exhibit "D".

 

1.01 "Building Standard" means the quantity or quality of materials, finishes, and workmanship from time to time specified by Landlord as being standard for office space in the Building.

 

1.02 'Landlord's Work' means the Building Standard items which are supplied, installed and finished by Landlord, according to the Building Standard specifications, and which shall be paid for by Landlord as provided for below.

 

1.03 "Tenants Work" means the items which are supplied, installed, and fumished by Landlord on behalf of Tenant, as provided for hereinbelow, which exceed Building Standard specifications in terms of quality as described in Landlord's Work, which shall be paid for by Tenant as provided for below.

 

1.04 "Landlord's Contractor" means the person or firm from time to time selected by Landlord to construct and install the Leasehold Improvements (as defined below) in the Premises.

 

1.05 "Non-Building Standard' means all materials, finishes, and workmanship used in connection with the construction and installation of the Leasehold Improvements which exceed or deviate from Building Standard in terms of quantity or quality (or both).

 

1.06 "Leasehold Improvements" shall mean the aggregate of the Landlord's Work and Tenant's Work.

 

1.07 "Landlord's Designer" shall mean the architect or space planner engaged by Landlord to prepare the plans and specifications for the Leasehold Improvements as contemplated by Article 2 hereof.

 

1.08 "Tenants Designer shall mean an architect or space planner selected by Tenant and reasonably approved by Landlord.

 

1.09 "Landlord's Engineer shall mean the person or firm hired by Landlord to provide the mechanical, electrical and plumbing drawings and services.

 

1.10 "Construction Documents" shall mean the final architectural, mechanical and electrical construction plans, detailed specifications and finish schedules.

 

ARTICLE 2

 

COMPLETION OF PREMISES

 

2.01 Within ten (10) working days after the execution of this Lease, Tenant, at Tenants expense, shall provide Landlord with sufficient instructions and information to enable Landlord's Designer to prepare and complete the plans and specifications for the Leasehold Improvements. Such plans and specifications shall be
prepared by Landlord's Designer and submitted to Tenant, for Tenants approval. Within ten (10) working days after Tenants receipt of such plans, specifications and cost estimate, Tenant shall notify Landlord in writing as to whether Tenant approves or disapproves same. Tenant will be allowed three (3) revisions of such plans and specifications. Any additional revisions will be at the sole expense of Tenant. Upon Tenant's approval, Landlord's Designer and Engineer will prepare all Construction Documents necessary
for construction of the Leasehold Improvements. If Tenant fails to expressly disapprove such plans, specifications and cost estimate within this ten (10) working day period, then Landlord shall be authorized to proceed thereon. The cost of all plans, specifications and Construction Documents for Building Standard Leasehold Improvements shall be borne and paid by Landlord. All plans, specifications and Construction Documents for Non-Building Standard Leasehold Improvements shalt be borne and paid for by Tenant,
unless specified to the contrary in the Lease.

 

2.02 Unless otherwise agreed to in writing by Landlord and Tenant, all work involved in the construction and installation of the Leasehold Improvements shall be carried out by Landlord's Contractor under the sole direction of Landlord. Tenant shall cooperate with Landlord's Contractor under the sole direction of Landlord's
Designer to promote the efficient and expeditious completion of such work. Tenant agrees to pay Landlord, promptly upon being billed therefore, the cost (labor and material) of all Tenants Work, together with a fee to Landlord of fifteen percent (15%) of such cost as compensation for Landlord's supervision of the construction and installation of Tenants Work. Landlord at its option may require Tenant to make an advance payment of fifty percent (50%) of the estimated cost of Tenants

 

 

23

 

 

 

Work prior to commencement of such work, and shall have the right to submit interim statements of cost incurred in connection with Tenants Work which shall be paid by Tenant to Landlord within ten (10) working days after receipt thereof. Tenant agrees that if Tenant fails to make any such payment when due, Landlord
shall (in addition to all other remedies) have the same rights as in the event of default of payment of Rent under this Lease.

 

2.03 If there are any changes in the Leasehold Improvements caused by Tenant from the work as reflected in the Construction Documents, each such change must receive the prior written approval of Landlord, and, in the event of any such approved change in the Construction Documents, Tenant shall, at Tenant's expense, upon
completion of Tenants Work, furnish Landlord with accurate "as built" reproducible mylar plans of Tenants Work as constructed, which plans shall be incorporated into this Exhibit "D" by this reference for all intents and purposes.

 

2.04 Under no circumstances whatsoever will Tenant, or Tenants authorized representative, ever alter or modify or in any manner disturb any central system or installation of the Building, including, but not limited to, exterior building, central plumbing system, central fire protection and fire alert systems, central
building maintenance systems, central structural systems, elevators, and anything located within the central core of the Building. Only with Landlord's express written permission and under direct supervision of Landlord or Landlord's authorized representative shall Tenant or Tenants authorized representative alter or modify or in any manner disturb any branch of any system or installation of the Building which is located within the Premises, including, but not limited to, branch electrical, heating, ventilating
and air conditioning systems, and branch fire protection and alert systems. For the purposes of this Section 2.04, "central" shall be defined as that portion of any Building system or component which is within the core and/or common to and/or serves or exists for the benefit of other tenants in the Building; and "branch" shall be defined as that portion of any Building System or component which serves to connect or extend central systems into the Premises.

 

2.05 Landlord shall have no obligation to commence installation of any of the Leasehold Improvements in the Premises until (a) Tenant shall have approved the plans and specifications for such work as required by Section 2.01 hereof and (b) Landlord shall have received any advance payment required by Landlord under Section
2.02 of this Exhibit "D".

 

ARTICLE 3

LANDLORD'S WORK

 

Landlord agrees to provide, at Landlord's sole cost and expense, the following items. No credit shall be allowed for Building Standard items not used. Remodel restrooms on fourth (4th) floor and to meet ADA requirements. Replace ceiling tiles throughout the fourth (4W) floor. Landlord shall replace 2x4 light fixtures
on the fourth (4th) floor as needed to meet current fire codes.

 

ARTICLE 4

TENANTS WORK

 

4.01 Any Non-Building Standard Leasehold Improvements to be constructed in the Premises shall be constructed by Landlolt at Tenant's cost, provided, however, all such improvements shall be expressly subject to review and approval by Landlord. Prior to the commencement of construction of such additional improvements,
Landlord shall submit to Tenant Landlord's written estimate of the cost of constructing such Non-Building Standard Leasehold Improvements, including the cost of preparing detailed plans and specifications for the Premises. Tenant covenants and agrees to promptly furnish to Landlord all information necessary for Landlord's written estimate of the cost of such work described above.

 

ARTICLE 5

TENANT DELAY

 

The following shall be considered delays caused by Tenant:

 

A.        Tenant's failure to submit and approve all information, plans and specifications as required by Section
2.01 of this Exhibit "D".

B.         Tenant's changes in any plans and specifications involving long lead time items;

C.         Tenant's request for materials, finishes, or installations other than Building Standard after the submission of
construction drawings; or

D.         Tenants disapproval, or failure to approve, Landlord's cost estimate of Tenants Work as required by Section
2.01 of this Exhibit "V within the time periods set forth therein.

 

 

24

 

 

 

 

  EXHIBIT "E" 

PARKING

 

1.        At the beginning of the original Term of this Lease, Landlord shall make available to Tenant forty nine (49)
unreserved parking spaces six (6) of which shall be reserved in the area designated for parking on the Land.

 

2.        Tenant shall pay Landlord (or agent designed by Landlord) as monthly rent $0.00. The Parking Rent shall
be payable in accordance with the policies established by Landlord (or its agent) from time to time for payment of Parking Rent. Tenant shall indemnify and hold harmless Landlord from and against all claims, losses, liabilities, damages, costs and expenses (including, but not limited to, attorneys' fees and court costs) arising or alleged to arise out of Tenants use of any such parking spaces. Tenant shall have no further rights to (a) any parking permit not taken at the beginning of the original Term or (b)
any parking permit taken at the beginning of the original Term and thereafter released by Tenant or terminated by Landlord for failure to pay parking rent or to comply with the other terms and conditions for the leasing of such parking permit imposed by Landlord. Upon the termination of this Lease, Tenant's rights to the parking permit then being leased to Tenant hereunder shall terminate. In the event any of the above parking spaces are or become unavailable at any time or from time to time throughout the Term,
whether due to casualty or any other cause, the Lease shall continue in full force and effect, and Tenants sole remedy shall be an abatement of Parking Rent for those parking spaces rendered unavailable, which abatement shall continue until such time as said parking spaces, or substitutes therefore, again become available, it being expressly agreed and understood that Landlord shall have no duty to provide substitute parking spaces for those spaces rendered unavailable,

 

3. Tenant agrees to comply with all reasonable rules and regulations now or hereafter established by Landlord relating to the use of the parking facilities by contract parking patrons. A condition of any parking shall be compliance
by the parking patron with the rules and regulations, including any sticker or other identification system established by Landlord. The following rules and regulations are in effect until notice is given to Tenant of any change. Landlord reserves the right to modify and/or adopt such other reasonable and non-discriminatory rules and regulations as it deems necessary for the operation of the parking facilities. Landlord may refuse to permit any person who violates the rules to park in the designated parking area,
and any violation of the rules shall subject the car to removal.

 

RULES AND REGULATIONS

 

1.      Cars must be parked entirely within the stall lines painted on the floor.

2.      All directional signs and arrows must be observed.

3.      The speed limit shall be 5 miles per hour.

4.      Parking is prohibited:

(a)       in areas not striped for parking

(b)       in aisles

(c)       where no parking" signs are posted

(d)       in cross hatched areas

(e)       in such other areas as may be designated by Landlord or Landlord's agent(s).

5.     Parting stickers or any other device or form of identification supplied by Landlord shall remain the property of the Landlord and shall not
be transferable. There will be a replacement charge payable by Tenant equal to the amount posted from time to time by Landlord for loss of any magnetic parking card or parking sticker.

6.     Garage managers or attendants are not authorized to make or allow any
exceptions to these Rules and Regulations.

7.     Every parker is required to park and lock his own car. All responsibility for damage to cars or persons is assumed by the parker.

8.     No intermediate or full size cars shall be parked in parking spaces limited to compact cars. 

9.     All motorcycles/motorized bicycles are to be parked in the designated motorcycle area, and will be removed from the property if not in the designated area.

 

Failure to promptly pay the rent required hereunder or persistent failure on the part of Tenant or Tenants designated packers to observe the rules and regulations above shall give Landlord the right to terminate Lessee's right to use the parking structure. No such termination shall create any liability on Landlord or
be deemed to interfere with Tenants right to quiet possession of the Premises.

 

 

 

25

 

 

 

EXHIBIT "F"

RULES AND REGULATIONS

 

1.        The sidewalks, walks, plaza entries, conidors, concourses, ramps, staircases, escalators and elevators of the
Project shall not be obstructed or used by Tenant, or the employees, agents, servants, visitors or licensees of Tenant for any purpose other than ingress and egress to and from the Premises. No bicycle or motorcycle shall be brought into the Building or kept on the Premises without the prior written consent of Landlord.

 

2.        No freight, furniture or bulky matter of any description will be received into the Project or carried into the elevators
except in such a manner, during such hours and using such elevators and passageways as may be approved by Landlord, and then only upon having been scheduled in advance. Any hand trucks, carryalls, or similar equipment used for the delivery or receipt of merchandise or equipment shall be equipped with rubber tires, side guards and such other safeguards as Landlord shall require.

 

3.        Landlord shall have the right to prescribe the weight, position and manner of installation of safes or other heavy
equipment which shall, if considered necessary by Landlord, be installed in a manner which shall insure satisfactory weight distribution. All damage done to the Project by reason of a safe or any other article of Tenant's office equipment being on the Premises shall be repaired at the expense of Tenant. The time, routing and manner of moving safes or other heavy equipment shall be subject to prior approval by Landlord.

 

4.        Only persons authorized by Landlord will be permitted to furnish newspapers, ice, drinking water, towels, barbering,
shoe shining, janitorial services, floor polishing and other similar services and concessions to Tenant, and only at hours and under regulations fixed by Landlord. Tenant shall use no other method of heating or cooling than that supplied by Landlord.

 

5.        Tenant, or the employees, agents, servants, visitors or licensees of Tenant shall not at any time place, leave
or discard any rubbish, paper, articles or objects of any kind whatsoever outside the doors of the Premises or in the corridors or passageways of the Project. No animals or birds shall be brought or kept in or about the Project.

 

6.        Landlord shall have the right to prohibit any advertising on or in the premises by Tenant which, in Landlord's
opinion, tends to impair the reputation of the Project or its desirability for offices and, upon written notice from Landlord, Tenant will refrain from or discontinue such advertising.

 

7.        Tenant shall not place, or cause or allow to be placed, any sign, placard, picture, advertisement, notice or lettering
whatsoever, in, about or on the exterior of the Premises, Building or Project except in and at such places as may be designated by Landlord and consented to by Landlord in writing. Any such sign, placard, advertisement, picture, notice or lettering so placed may be removed by Landlord without notice to and at the expense of Tenant. All lettering and graphics on corridor doors shall conform to the Building Standard prescribed by Landlord. No trademark except those belonging to Tenant shall be displayed in any
event

 

8.        Canvasging, soliciting or peddling in the Building and/or Project is prohibited and Tenant shall cooperate to
prevent same.

 

9.        Landlord shall have the right to exclude any person from the Project other than during customary business
hours as set forth in the Lease, and any person in the Project will be subject to identification by employees and agents of Landlord. All persons in or entering the Project shall be required to comply with the security policies of the Project If Tenant desires any additional security service for the Premises, Tenant shall have the right (with the advance written consent of Landlord) to obtain such additional service at Tenant's sole cost and expense. Tenant shall keep doors to unattended areas locked and shall
otherwise exercise reasonable precautions to protect property from theft, loss or damage. Landlord shall not be responsible for the theft, loss or damage of any property or for any error with regard to the exclusion from or admission to the Project of any person. In case of invasion, mob, riot or public excitement, the Landlord reserves the right to prevent access to the Project during the continuance of same by closing the doors or taking other measures for the safety of the tenants and protection of the Project
and property or persons therein.

 

10.         Only workmen employed, designated or approved by Landlord may be employed for repairs, installations, alterations,
painting, material moving and other similar work that may be done in or on the Premises.

 

11.       Tenant shall not do any cooking or conduct any restaurant, luncheonette, automat or cafeteria for the sale or
service of food or beverages to its employees or to others, or permit the delivery of any food or beverage to the Premises, except by such persons delivering the same as shall be approved by Landlord and only under regulations fixed by Landlord. Tenant may, however, operate a coffee bar by and for its employees.

 

12.       Tenant shall not bring or permit to be brought or kept in or on the Premises or Project any inflammable, combustible,
corrosive, caustic, poisonous, or explosive substance, or cause or permit any odors to permeate in or emanate from the Premises, or permit or suffer the Premises to be occupied or used in a manner offensive or

 

 

 

26

 

 

 

objectionable to Landlord or other occupants of the Project by reason of light, radiation, magnetism, noise, odors and/or vibrations, or interfere in any way with other tenants or those having business in the Project.

 

13.        Tenant shall not mark, paint, drill into, or in any way deface any part of the Project or the Premises. No boring,
driving of nails or screws, cutting or stringing of wires shall be permitted, except with the prior written consent of Landlord, and as Landlord may direct. Tenant shall not install any resilient tile or similar floor covering in the Premises except with the prior approval of Landlord. The use of cement or other similar adhesive material is expressly prohibited.

 

14.        No additional locks or bolts of any kind shall be placed an any door in the Project or the Premises and no lock
on any door therein shall be changed or altered in any respect. Landlord shall furnish keys in the number determined in section 7.04 for each lock on exterior doors to the Premises and shall, on Tenants request and at Tenants expense, provide additional duplicate keys. Tenant shall not make duplicate keys. All keys shall be returned to Landlord upon the termination of this Lease and Tenant shall give to Landlord the explanations of the combinations of all safes, vaults and combination locks remaining with the
Premises. Landlord may at all times keep a pass key to the Premises. All entrance doors to the Premises shall be left closed at all times and left locked when the Premises are not in use.

 

15.        Tenant shall give immediate notice to Landlord in case of theft, unauthorized solicitation or accident in the Premises
or in the Project or of defects therein or in any fixtures or equipment, or of any known emergency in the Project.

 

16.        Tenant shall not use the Premises or permit the Premises to be used for photographic, multilith or multigraph
reproductions, except in connection with its own business and not as a service for others without Landlord's prior permission.

 

17.        Tenant shall not use or permit any portion of the Premises to be used as an office for a public stenographer
or typist, offset printing, the sale of liquor or tobacco, a barber or manicure shop, an employment bureau, a labor union office, a doctor's or dentists office, a dance or music studio, any type of school, or for any use other than those specifically granted in this Lease.

 

18.        Tenant shall not advertise for laborers giving the Premises as an address, nor pay such laborers at a location
in the Premises.

 

19.        The requirements of Tenant will be attended to only upon application at the office of Landlord in the Building
or at such other address as maybe designated by Landlord in the Lease. Employees of Landlord shall not perform any work or do anything outside of their regular duties, unless under special instructions from the office of Landlord.

 

20.        Tenant shall not place a load upon any floor of the Premises which exceeds the load per square foot which
such floor was designed to carry and which is allowed by law. Business machines and mechanical and electrical equipment belonging t&Tenant which cause noise, vibration, electrical or magnetic interference, or any other nuisance that may be transmitted to the structure or other portions of the Project or to the Premises to such a degree as to be objectionable to Landlord or which interfere with the use or enjoyment by other tenants of their premises or the public portions of the Project shall be placed and
maintained by Tenant, at Tenant's expense in settings of cork, rubber, spring type, or other vibration eliminators sufficient to eliminate noise or vibration.

 

21.        No awnings, draperies, shutters or other interior or exterior window coverings that are visible from the exterior
of the Building or from the exterior of the Premises within the Building may be installed by Tenant.

 

22.        Tenant shall not place, install or operate within the Premises or any other part of the Project any engine, stove,
or machinery, or conduct mechanical operations therein, without the written consent of Landlord.

 

23.        No portion of the Premises or any other part of the Project shall at any time be used or occupied as sleeping
or lodging quarters.

 

24.        Tenant shall at all times keep the Premises neat and orderly.

 

25.        The toilet rooms, urinals, wash bowls and other apparatus shall not be used for any purpose other than that
for which they were constructed and no foreign substance of any kind whatsoever shall be thrown therein and the expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the Tenant who or whose employees or invitees shall have caused it.

 

26.        Landlord reserves the right to exclude or expel from the Project any person who, in the judgment of Landlord,
is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of the Rules and Regulations of the Project.

 

27.        Normal business hours shall be deemed to be 7:00 am. through 7:00 p.m. on weekdays and 7:00 am. through
1:00 p.m. on Saturdays, exclusive of holidays. Holidays shall, for purposes of this Lease, be deemed to be New Years Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.

 

28.        Landlord reserves the right, without the approval of Tenant, to rescind, add to and amend any rules or regulations,
to add new rules or regulations, and to waive any rules or regulations with respect to any tenant or tenants.

 

 

 

27

 

 

 

EXHIBIT "G"

SPECIAL PROVISIONS

 

Notwithstanding anything contained elsewhere herein: 

 

1.  BASE RENT SCHEDULE:

 

Pursuant to the terms outlined in 1.01. INTRODUCTORY PROVISIONS AND DEFINITIONS Item (f) Base Rent of the Lease, the Base Rent shall be paid as follows:

 

	  Time Period	
# Months
	
Rate/RSF
	
Rent/Month
	
Total Rent

	03/01/07 - 06/30/07	
4
	
$0.00
	
$0.00
	
$0.00

	07/01/07 - 08/31/08	
14
	
$10.00
	
$12,057.50
	
$168,805.00

	09/01/08 - 02/28/11	
30
	
$15.00
	
$18,086.25
	
$542,587.50

	03/01/11 - 02/28/12	
12
	
$15.75
	
$18,990.56
	
$227,886.74

	03/01/12 - 02/28/14	
24
	
$16.25
	
$19,593.44
	
$470,242.48

 

2. TENANT ALLOWANCE:

 

Landlord shall grant Tenant an allowance not to exceed $16.00 per square foot of NRA (14,469) totaling $231,504.00 for building standard leasehold improvements.

 

3.  RIGHT OF FIRST REFUSAL

 

As long as Tenant is not in default and Tenant has not been in monetary default two (2) times during the term then Tenant shall have an ongoing of first refusal ("ROFR") to lease available space in the building; provided, however, that Landlord shall be obligated and entitled to comply with any rights of existing tenants.
Tenant's right of first refusal may be exercised only upon Landlord's presentation to Tenant of a third party's offer (Offer") to lease ROFR space containing the relevant terms satisfactory to Landlord, Upon receipt of such Offer, Tenant shall have three (3) days in which to accept or reject said Offer (a failure to respond within said period shall be deemed a rejection).

 

Should Tenant reject said Offer, Landlord shall be relieved of any further rights of first offer; should Tenant accept said Offer, Landlord will within five (5) business days, prepare an amendment to the Lease (the "Amendment') reflecting the third party's terms and Tenant will execute the Amendment within ten (10) days
following the receipt of such Amendment. The commencement date of the ROFR space shall be the earlier of (i) the third party's commencement date or (ii) thirty (30) days after the execution of the Amendment.

 

This ROFR shall (a) A subject to the Landlord's approval of Tenant's current financial conditions of Tenant being that of the same or better quality as of the date of the signing of the Lease and (b) shall not be valid if Tenant has subleased or assigned any portion of the Leased Premises,

 

The rental rate on ROFR space shall be as follows:

 

$15.50 / ref / year if the Tenant leases any ROFR space within the first two (2) years of the Lease Term. 

 

$16.25 rsf / year if Tenant lease any ROFR space after the end of the second year of the Lease Term.

 

In the event the Tenant leases any ROFR space after the 3rd year of the Lease Term, Tenant must extend the Term of the Lease on all of the Leased Premises, effective on the commencement date of the FOFR space, for four (4) additional years.

 

4.   RENEWAL OPTIONS:

As long as Tenant is not in default and Tenant has not been in monetary default two (2) or more times during the term then Tenant shall have one (1) renewal option and shall be for five (5) years. Tenant shall exercise said renewal option no earlier than nine (9) months prior to the then current expiration date and the
renewal rent shall be the prevailing Fair Market Value Rental Rate.

 

FAIR MARKET VALUE RENTAL RATE: For the purposes of definition in this Lease document, Fair Market Value Rental Rate shall have the following meaning:

 

With respect to the Renewal Option contained herein, the applicable "Fair Market Value Rental Rate" shall be that rate charged for space of comparable size and condition in comparable office buildings in the area in which the Building is located, taking into consideration the location, quality and age of the building,
floor level, extent of leasehold improvements (existing or to be provided), term of lease, extent of services to be provided, distinction

 

 

 

28

 

 

 

between "gross" and net lease, base year or other amount allowed by Landlord for payment of building operating expenses (expense stop), the time the particular rental under consideration became or is to become effective, or any other relevant term or condition.

 

5.       After Hours Cost of HVAC

 

The cost to Tenant of after hours HVAC is currently $25.00 per hour. If actual cost exceeds $25.00 the Landlord may increase the cost per hour to landlords actual cost as long as the Landlord notifies Tenant at lease two
(2) weeks prior to changing the electricity rate for after hours use by Tenant.

 

6.       Storage

 

Landlord shall provide the storage space underneath the up ramp in the lower level of the parking garage to Tenant at no additional cost.

 

 

 

29

 

 

 

FIRST AMENDMENT TO OFFICE LEASE

 

This First Amendment to Office Lease ("First Amendment") is made and entered into on this 22nd day of January, 2008, by and between Jim R. Smith Interest ("Landlord") and TMIRS Enterprises, Ltd dbla TaxMasters ("Tenant").

 

RECITALS:

 

Landlord and Tenant entered into that certain Office Lease effective as of the 21st day of December, 2006, "Original Lease Agreement" covering approximately 14,469 square feet of space located on the 3rd and 4th floor of the building known as Suite 400 located at 900 Town & Country Street ("Building"), Houston, Texas
("Original Leased Premises").

 

Now, therefore, for and in this Consideration of mutual covenants set out in this First Amendment, Landlord and Tenant agree to extend and modify this Lease as follows:

 

1.  Premises: Tenant shall expand the Original Leased Premises by approximately 5,086 rentable square
feet on the 3rd floor of the Building as shown on Exhibit A attached hereto ("Expansion Premises").

 

2.  Term: The Term for the Expansion Space shall commence on May 1, 2008. The expiration date for
the Expansion Space shall be May 31, 2014 ("Expiration Date").

 

3.  Rental Rate:The Rental Rate for the Expansion Space shall be paid in monthly installments as
set forth below:

 

	
Time Period
	
Rate/RSF
	
Rent/Month

	
05/01/08-05/31/2014
	
$15.50
	
$6,569.42

 

4.  Operating Expense Reimbursements. Tenant's Proportionate Share shall be increased to 17.903%
to reflect the increase in square footage, Tenant's reimbursement of Operating Expenses for the Expansion Space shall be based on the calendar year 2007.

 

5.  Leasehold Improvements: Landlord shall tender and Tenant shall accept the Expansion Space in
"AS-IS" CONDITION, with all FAULTS, and without any warranty, express, implied, or statutory (including implied warranties of habitability, suitability, condition, and fitness for a particular purpose, all of which are hereby disclaimed).

 

Landlord shall provide a tenant improvement allowance equal to $13.71 I rsf ("Allowance"). Any cost incurred that exceeds the Allowance shall be paid for by Tenant within thirty (30) days after receipt of an invoice from the Landlord. It
is mutually agreed that the Landlord will not charge a construction management fee to manage the construction of the Tenant Improvements.

 

6.  Parking:Tenant shall be granted an additional nineteen (19) parking spaces.

 

Except as expressly modified by this Amendment, the Leases continues in full force and effect as originally executed and delivered.

 

This Amendment is binding upon and insures to the benefit of Landlord and Tenant and their respective successors and assigns.

 

 

 

 

30

 

 

Executed as of the dates set out below:

 

	
TENANT:
	
LANDLORD:

	
TMIRS Enterprises, Ltd
	
JIM R. SMITH INTEREST

	
db/a TaxMasters
	  
	  	  
	
BY: /s/ Patrick Cox      
	
By: /s/ Jim R. Smith      

	
Patrick Cox, President
	
NAME: Jim R. Smith

	  	
TITLE: Owner

	  	
DATE: 1/22/08

 

 

31

 

 

 

 

 

 

 

 

32

 

TENANT ACCEPTANCE LETTER

 

TMIRS Enterprises, Ltd. dba Tax Masters 

900 Town & Country, Suite 400

Houston, Texas 77024

 

Re:   Building Lease (the "Lease") dated as of December 21, 2006 between Jim R. Smith Interest ("Landlord") and TMIRS Enterprises, Ltd. dba Tax Masters ("Tenant")

 

Premises:    Suite 400 & portion of 3"1 floor totaling 14,469 square feet

900 Town & Country

Houston, Texas 77024

 

Dear Mr. Cox:

 

This letter shall serve as certification and notification of commencement and expiration of the above referenced Lease Agreement.

 

Landlord will have substantially completed the leasehold improvements, alterations or modifications to the premises on the fourth floor in accordance with the Lease Agreement by May 15, 2007. Work is in process for the third floor. An additional acceptance letter will be drafted when that space is complete.

 

Tenant will take possession of the Premises on May 18, 2007.

 

The Commencement Date and Expiration Date, is defined as follows:

 

Commencement Date: May 18, 2007 

Expiration Date: May 17, 2014

 

The obligation to commence the payment of rent commenced or will commence on 

October 1, 2007

 

There are no offsets or credits against Base Rent or Additional Rent, nor has any Base Rent or Additional Rent been prepaid except as provided pursuant to the terms of the Lease.

 

Please acknowledge your agfeement with the reaffirmed commencement and expiration dates by signing below and returning this letter to our office.

 

Sincerely,

 

Tonna Maloy, Property Manager

Accepted:

 

TMIRS Ente Ltd. dba Tax Masters

By: /s/ Patrick Cox

Title: President

 

 

 

 

33

 

 

SECOND AMENDMENT TO LEASE AGREEMENT

 

This Second Amendment to Lease Agreement ("Second Amendment") is made and entered into thi3 31st day of March 2008 ("Effective Date"), by and between Jim R. Smith Interest ("Landlord") and
T IRS Enterprises, Ltd. d/b/a TaxMasters ("Tenant").

 

RECITALS:

 

A. Landlord and Tenant entered into that certain Lease Agreement effective as of the 21st day of December, 2006, covering approximately 14,469 square feet of space (the "original premises") located on the 3rd and 4th floor of the building known as Suite 400, located at 900 Town & Country Street ("Building"),
Houston, Texas 77024 and entered into the First Amendment to Office lease effective as of the 22nd day of January, 2008, covering approximately 5,086 square feet of space (the "first expansion premises") located on the 3rd floor of the building.

 

NOW, THEREFORE, for and in this consideration of the mutual covenants set out in this Amendment, Landlord and Tenant agree as follows:

 

	
  
	
1.
	
Area: Approximately 392 rentable square feet (RSF) of area (the "second expansion premises") located on level 3 as shown on Exhibit A attached hereto shall be added to the leased premises making the total net RSF 19,947 (including the original premises, the first expansion premises and the second expansion premises). Fourth floor square footage of 13,126 shall
be referred to as Suite 400, third floor square footage of 1,343 shall be referred to as Suite 335, third floor Square footage of 4,957 shall be referred to as Suite 330, third floor square footage of 129 shall be referred to as Suite 305, and the third floor square footage of 392 shall be referred to as Suite 301.

 

	
  
	
2.
	
Term: The term for the Lease of the second expansion premises shall commence on May 1, 2008 and expire on May 31, 2014.

 

	
  
	
3.
	
Rental Rate: The rental rate for the second expansion premises shall be paid in monthly installments as set forth below:

 

	
Period
	
Annual Rate / RSF
	
Rent / Month

	  	  	  
	
May 1, 2008 - May 31, 2014
	
$15.50
	
$506.33

 

	
  
	
4.
	
Operating Expense Reimbursements: Tenant's Proportionate Share shall be increased to 37% to reflect the increase in square footage (including the original premises, the first expansion premises and the second expansion premises). Tenant's reimbursement of Operating Expenses for the second expansion premises shall be based on the Calendar Year 2007.

 

	 	
5.
	
Leasehold Improvements:Landlord shall tender and Tenant shall accept the second expansion premises in "As-Is" condition, with all FAULTS, and without any warranty, express, implied, or statutory (including implied warranties of habitability, suitability, condition, and fitness for
a particular purpose, all of which are hereby disclaimed).

 

Landlord shall provide tenant improvement allowance equal to $13.71 / rsf of area contained in the second expansion premises ("Allowance"). Any cost incurred that exceeds the Allowance shall be paid for by Tenant within thirty (30) days after receipt of an invoice
from the Landlord.

 

 

 

34

 

 

It is mutually agreed that the Landlord will not charge a construction management fee to manage the construction of the Tenant Improvements.

 

	
  
	
6.
	
Parking: Tenant shall be granted one (I) additional parking unreserved space and two (2) additional reserved parking spaces for a total of 69 unreserved parking spaces and 8 reserved parking spaces.

 

	
  
	
7.
	
Ratification of Lease: Except as and to the extent amended by this First Amendment, the Lease and all of the terms, conditions and provisions thereof are hereby ratified and shall in all respects remain unmodified, unchanged and in full force and effect.

 

	
  
	
8.
	
Entire Agreement. This First Amendment, in conjunction with the Lease, constitutes the entire agreement of Landlord and Tenant with respect to the subject matter hereof and supersedes all oral and written agreements and understandings made and entered into by the parties prior to the date hereof.

 

	
  
	
9.
	
Multiple Counterparts. This Second Amendment may be executed in multiple counterparts, all of which, when taken together, shall constitute one and the same instrument.

 

IN TESTIMONY WHEREOF, the parties hereto have executed this Second Amendment as of the date first above written.

 

 

	
TENANT:
	
LANDLORD:

	 	 
	
TMIRS Enterprises, Ltd d/b/a TaxMasters
	
JIM R. SMITH INTEREST

	  	  
	
BY: /s/ Patrick Cox      
	
By: /s/ Jim R. Smith      

	
Patrick Cox
	
Jim R. Smith

	 	 
	TITLE: President	
TITLE: Landlord

	 	 
	DATE: 4/2/08	
DATE: 4/2/08

 

 

 

 

35

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}]]