Document:

ex10-10.htm

     

     Exhibit
10.10 

    AGREEMENT

    BETWEEN

    VEMICS
INC

    AND

    EP
GLOBAL COMMUNICATIONS, INC.

    

     This
AGREEMENT, consisting of the terms and conditions set forth below and the
attached exhibits, each of which is incorporated into and made a part hereof by
this reference (“Agreement”), is entered into as of November 3, 2005, (the
“Effective Date”), by and between Vemics, Inc a Nevada corporation (“VEMICS”),
having its principal place of business at 65 East Route 4, River Edge,
New Jersey 07661 and EP Global Communications mc, a Delaware corporation having
its principal place of business at 65 East Route 4, Riveredge,
New Jersey (“EP  GLOBAL”). 

    

    Background

    

    VEMICS
and EP GLOBAL are both in the business of marketing and selling certain
complementary but different services to The Allied Health Industry, specifically
to care givers and medical services providers that address the needs of people
with disabilities and individuals with special health care needs. VEMICS
provides connectivity for distribution of information and knowledge over its
technology platform and interface connections; and EP GLOBAL provides
connectivity to its client base which is a thirty five year old database of
clinically relevant information for the chronic disability field, professional
contacts and accreditation bodies, associations, companies and other entities
that would be interested in utilizing the services offered through this
Agreement. Pursuant to this Agreement, the parties have customized certain of
their product and offerings used in combination with each other, the combined
products and services will provide a unique, electronic, internet based visual
communications system solution for delivery of educational / training content
and business meetings. The system is designed to replicate the same dynamic
found in live classrooms and live business meeting environments. The parties
intend to utilize the next generation of visual communications technology as
provided jointly by Vemics and EP GLOBAL.

    

     The
definition of the Special Needs Market, for the purposes of this Agreement, is
specifically intended to include those individuals and/or organizations,
professional societies, physicians, allied health care professionals,
caregivers, teachers, and families involved in the care and development of
people with life long chronic disabilities, physical, mental or emotional and/or
any other significantly debilitating conditions. (hereinafter referred to as
“Special Needs Market”) The Special Needs market is not intended for purposes of
this agreement to include any of the traditional bio-medical disease states such
as cancer, infectious diseases, etc. 

     

    NOW, THEREFORE, in
consideration of 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, VEMICS and EP GLOBAL agree as
follows:

    

    Terms
and Conditions

    

    1.
Appointment; Territory; Limitations; Relationship of Parties

    

     (a)
Appointment 

    

     Subject
to all of the terms and conditions in this Agreement, VEMICS hereby appointed EP
GLOBAL to act, during the term of this Agreement, as its exclusive global
representative authorized to market, resell and support VEMICS’ Products and
Services (the “VEMICS Services”) directly to customers of EP GLOBAL (“EP GLOBAL
Customers”) specifically in the Special Needs Market (as defined herein). EP
GLOBAL hereby accepts said appointment. 

    

    (b)
Territory

    

    EP GLOBAL
shall be authorized to market, resell and support VEMICS Services

    globally.

    

     (c)
No Restrictions on a Party’s Activities 

    

     Each
party acknowledges that this Agreement is non-exclusive and, except as expressly
set forth in section 1(f) of this Agreement, nothing in this Agreement shall
limit in any manner any party’s marketing, distribution or sales activities or
its rights to market, distribute or sell, directly or indirectly, or appoint any
other person or Vemics as a dealer, distributor, EP GLOBAL, licensee or agent
for its Services, within the Territory. 

    

     (d)
Freedom of Action, Certain Restrictions 

    

    Except as provided in section 1(f) of
this Agreement, each party may directly or indirectly (through EP GLOBALs or
otherwise market, sell, offer or provide any of its respective products or
services to any customer within the Territory and during or after the
Term.

    

    
      
        
        

      

      
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               (e) No Agency

    

                VEMICS
and EP GLOBAL each acknowledge and agree that the relationship established by
this Agreement is that of independent contractors, and nothing contained in this
Agreement shall be construed to: (i) give either party the power to direct or
control the day-to-day activities of the other; (ii) deem the parties to be
acting as co-owners or otherwise as participants in a joint ownership
undertaking; or (iii) permit either party or any of either party’s officers,
directors, employees, agents or representatives to create or assume any
obligation on behalf or for the account of the other party for any purpose
whatsoever. 

    

               (f) Mutual
Exclusivity

    

                Vemics
hereby grants EP Global the exclusive right to sell its products and services
globally specifically and limited to the Special Needs Market as defined herein.
EP Global hereby agrees that it will provide electronic, internet based visual
communications system solution for delivery of educational/training content in
the areas to People with Disabilities and People with Special Medical Needs, as
defined herein, exclusively utilizing the Vemics System. 

    

    2.
License Grant; Restrictions; Customer Agreements

    

    (a)
License Grant

    

                Subject
to all terms and conditions of this Agreement, VEMICS hereby grants to EP GLOBAL
during the Term of this Agreement the non-exclusive (except as stated in Section
1(f)), nontransferable right and license to enter into contracts with EP
GLOBAL’s Customers to provide VEMICS Services together with all related software
(the “Software”) and other intellectual property, and documentation (the
“Documentation”) that are necessary or appropriate to enable EP GLOBAL to
provide VEMICS Services (the VEMICS Software and such other intellectual
property and the Documentation are collectively sometimes referred to as “VEMICS
Intellectual Property”) to EP GLOBAL’s customers. Each party shall also be
authorized to utilize the other party’s Intellectual Property solely for the
purposes set forth in this Agreement. 

    

               (b) License
Restrictions

    

               EP
GLOBAL shall not appoint any other person, firm, or entity as a sub-distributor
or agent for VEMICS Services without obtaining advance written approval from
VEMICS with the exception of bona fide EP GLOBAL sales representatives whether
said representatives are employees EP GLOBAL or appointed independent
contractors of EP GLOBAL as long as a condition of their employment they agree
to be bound by the terms and conditions set forth herein. EP GLOBAL shall not,
for itself, for any affiliate of EP GLOBAL or for any third party: sell,
sublicense, assign, or transfer the Software or any Documentation, except as
permitted under this Agreement. Furthermore, EP GLOBAL agrees that is shall not
decompile, disassemble, or reverse engineer the VEMICS Software.

    

               (c) Customer Terms and Conditions;
Right of VEMICS to Restrict Content

    

                All
re-sales of VEMICS Services by EP GLOBAL will be subject to the execution and
delivery by each of EP GLOBAL Customer(s) of a written, binding agreement that
contains, at a minimum, the relevant terms and conditions set forth in this
Agreement transaction and the VEMICS Standard Terms and Conditions as well as no
terms or conditions that are inconsistent with the terms or conditions contained
in this Agreement (the “Customer Agreement”). Prior to entering into any
agreement for VEMICS Services with any proposed customer, EP GLOBAL shall notify
VEMICS of the identity of such proposed customer and shall not enter into any
Agreement with any proposed customer that VEMICS notifies EP GLOBAL it
disapproves pursuant to the provisions of this paragraph. VEMICS shall notify EP
GLOBAL of its approval of a prospective customer within five (5) business days after
receiving EP GLOBAL’s request for approval, which shall not be unreasonably
withheld and shall exercise its approval rights reasonably. If VEMICS fails to
notify EP GLOBAL of its approval or disapproval within such five (5) business day period,
VEMICS shall be deemed to have approved such customer. Notwithstanding any
approval of a prospective customer, if VEMICS subsequently becomes aware that
the content of any of EP GLOBAL’s Customers is illegal it shall notify EP GLOBAL
thereof and unless the illegal content is removed within Five (5) business days after such
notice, VEMICS may take steps to prevent such illegal content from being routed
to, passed through or stored on or utilized within VEMICS’ network. VEMICS shall
promptly notify EP GLOBAL and the applicable EP GLOBAL Customer of such removal
of any of EP GLOBAL’s Customer content pursuant to the foregoing
provisions. 

     

    
 

    
      
        
        

      

      
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               3.
Marketing Efforts; Promotional Materials

    

               (a) Efforts

    

                EP
GLOBAL shall use its commercially reasonable efforts to: (i) aggressively
market, resell and support VEMICS Services to prospective customers in the
Territory; (ii) dedicate adequate resources, financial and otherwise, and
maintain facilities and staff, to market, resell and support VEMICS Services in
accordance with EP GLOBAL’s obligations under this Agreement, in a timely,
diligent and professional manner using competent personnel; (iii) keep VEMICS
informed as to any problems encountered by EP GLOBAL’s Customers or by EP GLOBAL
with the VEMICS Services or any VEMICS Intellectual Property, and communicate to
VEMICS any resolution or proposed resolutions relating to such problems; (iv)
maintain accurate records of all EP GLOBAL’s Customers including their names,
addresses, telephone numbers and email address as well as the date VEMICS
Services were initially provided to EP GLOBAL’s Customers, and the Customer
Agreements thereto; (v) maintain accurate records of all support services
provided to EP GLOBAL’s Customers; and (vi) provide to VEMICS and maintain and
update as necessary emergency contact information for each of EP GLOBAL’s
Customer. All information concerning EP GLOBAL’s Customers shall be deemed
Confidential Information of EP GLOBAL in accordance with the provisions of
Section 10 of this Agreement. 

    

               (b) Promotional Materials;
Marketing

    

     VEMICS
will provide EP GLOBAL with a reasonable amount of sales and marketing
literature relating to the VEMICS Services. The exact form and quantity of such
literature will be determined jointly by VEMICS and EP GLOBAL and be based upon
the needs and dictates each of specific project requirements. EP GLOBAL shall
adhere to VEMICS’ Guidelines, Rules and Procedures then in effect, and EP GLOBAL
shall not make any representations or statements regarding VEMICS Services other
than those contained in the sales and marketing literature and promotional
materials provided to EP GLOBAL by VEMICS, without the prior written approval of
VEMICS. Upon reasonable advance notice from VEMICS, EP GLOBAL shall discontinue
use of any marketing literature or promotional materials that VEMICS no longer
deems acceptable. 

    

               (c) Quality
Control

    

               Each
party acknowledges the importance of upholding the good reputation of the other
party and its respective products and services. Accordingly, each party agrees
that it will maintain at all times during the Term of this Agreement the highest
quality controls, business practices and ethics in performing its obligations
and exercising its rights under this Agreement and will comply with all
applicable laws and regulations.

    

    (d)
Publicity

    

     On or
about the Effective Date, the parties agree to issue a joint press release
announcing the relationship contemplated by this Agreement. The press release
shall be subject to the written approval of each party, which approval shall not
be unreasonably withheld or delayed. During the term of this Agreement, subject
to the restrictions contained in Section 5 below, each party may post on its web
site the other party’s logo and/or a hyperlink to the other party’s web site, to
use the other party’s name in connection with proposals to other prospective
customers and otherwise refer to the other party and the co-branded service
offering contemplated herein in print or electronic form for marketing or
reference purposes. 

    

     (e) Customers

    

     During
the Term of this Agreement, EP GLOBAL shall be responsible for billing EP
GLOBAL’s Customers, except if agreed to in writing in advance by Vemics, for
their use of VEMICS Services based on individual programs or contractual
obligations approved in advance by VEMICS. Subject to VEMICS obtaining specific
advance written consent from EP GLOBAL’s Customers, VEMICS shall be entitled to
reference EP GLOBAL’s Customers on VEMICS’ web site and in marketing materials
as a VEMICS Services customer. All data pertaining to any of EP GLOBAL’s
Customers shall be deemed Confidential Information in accordance with the
provisions of Section 10 of this Agreement. In addition, no party shall use any
data pertaining to any of EP GLOBAL’s Customers in a manner that is inconsistent
with VEMICS’ published privacy policy, the applicable Customer Agreement, or
applicable legal requirements. 

    

                EP
GLOBAL customers shall be such customers who are customers of EP GLOBAL at the
time of the signing of this Agreement and those customers that are introduced to
the VEMICS System solely by EP GLOBAL efforts as the result of this Agreement.
VEMICS customers shall be such customers who are customers of VEMICS at the time
of the signing of this Agreement and those customers that are introduced to the
VEMICS System solely by VEMICS efforts as the result of this Agreement. In the
event that a Customer is presently and/or in the future a customer of both
parties to this Agreement, as defined herein, then they shall remain deemed
jointly Customers of both EP GLOBAL and VEMICS. 

    

    
      
        
        

      

      
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     4.
EP GLOBAL Personnel Training; Customer Support 

    

     (a)
Training 

    

     VEMICS
shall provide to EP GLOBAL’s sales and technical personnel, at VEMICS’ training
facility or, if VEMICS elects, at EP GLOBAL’s facilities: (i) a reasonably
sufficient number of training sessions and source training material to
reasonably enable EP GLOBAL’s sales and support staff to become knowledgeable
about the capabilities and operation of, and support for, the VEMICS
Intellectual Property and VEMICS Services, such training to include, at EP
GLOBAL’s request, a reasonable number of joint VEMICS/EP GLOBAL on-site calls,
and (ii) technical consulting services and training to reasonably ensure that EP
GLOBAL has the internal capability to, among other things, provide the necessary
services to EP GLOBAL’s Customers to perform its obligations under Customer
Agreements and provide the support for VEMICS Services to EP GLOBAL’s Customers
as contemplated in this Agreement. Each party shall be responsible for the
travel, lodging and meal expenses of its employees who attend any training
session. At the conclusion of such training, VEMICS will formally certify the
technical capability of each trainee who is qualified to represent the VEMICS
Services. 

    

     (b)
Customer Support 

    

     VEMICS
will provide technical support to EP GLOBAL and their customers to whatever
extent is required to successfully deploy an approved project. Upon the written
request by an authorized EP GLOBAL representative, VEMICS shall provide
technical support directly to any of EP GLOBAL’S Customer in accordance with
VEMICS’ standard technical support terms and conditions. Each party shall timely
provide its support obligations under this Agreement using knowledgeable,
appropriately trained and competent personnel. 

    

     5.
Content Responsibility; Intellectual Property Rights 

    

     (a)
Customer Content 

    

     In the
event that EP GLOBAL becomes aware of any EP GLOBAL’s Customer Content (the
“Customer Content”) that is being placed on and/or is utilizing the VEMICS
Service: (a) violates or infringes upon the intellectual property or other
rights of any third party, (b) distributes any libelous, defamatory,
pornographic or obscene material, or (c) violates any laws or regulations
applicable to such Customer Content, EP GLOBAL shall notify the applicable
customer of the violation and request that such customer remove such Customer
Content so that it will not be routed to or pass through VEMICS’ network. If
such customer fails to comply with EP GLOBAL’s request within a reasonable
period of time, EP GLOBAL shall notify VEMICS of the non-compliance. VEMICS may
then remove such Customer Content pursuant to and in manner set forth in the
Customer Agreement. EP GLOBAL’s Customers shall be solely responsible for
maintaining the availability of the Customer computer and network systems, the
connectivity of such computers and network systems to the Internet, and all
Customer Content, IP addresses, domain names, hyperlinks, databases,
applications and other resources necessary for EP GLOBAL’s Customer to access
the VEMICS Services. 

    

     (b)
EP GLOBAL’s Content 

    

     (i) EP GLOBAL’s Conditions of Use:
EP GLOBAL shall be solely and exclusively responsible for (1) all EP
GLOBAL’s content and activity: (2) obtaining legal written permission from the
right holder to display and/or utilize any material on the Vemics System; and
(3) ensuring that EP GLOBAL content of the web site does not violate the laws of
the jurisdiction where the content is displayed. EP GLOBAL furthermore hereby
agrees to comply with the requirements of the Communications Decency Act (CDA)
and the Digital Millennium Copyright Act (DMCA), and shall require its
subscribers in writing to so comply. 

    

     (ii) Limitations on EP GLOBAL
Content 

    

     EP
GLOBAL shall not intentionally place or cause to be placed on the Vemics System
unacceptable material or activity which includes, but is not limited
to: 

     (A)
defamatory or other tortuous activity; 

     (B)
criminal activity, including but not limited to theft of trade secrets, fraud,
child pornography, trafficking in obscene material, violation of US export
provisions, drug dealing, gambling, harassment, stalking, spamming, hacking,
sending of viruses or other harmful files, or illegal posting of computer
passwords or computer code for the purpose of circumventing copyright security
measures; 

     (C)
infringing activity including, but not limited to, the unauthorized display of
confidential, secret, or other proprietary material, trademark infringement,
copyright infringement, or patent infringement. 

    

    
      
        
        

      

      
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    (iii)  Removal of Customer Content:
VEMICS reserves the right in its sole discretion, and without prior
notice, to remove any material from Vemics System which is inconsistent with the
basic mission, goals and objectives of this Agreement.

    

    (iv)  Compliance with Lawful
Authorities: VEMICS will comply with all subpoenas and court orders that
appear to be lawful and valid, including subpoenas and court orders requesting
information about EP GLOBAL or its use of the Service, without prior notice to
EP GLOBAL. VEMICS reserves the right to report activity that it believes to be
potentially criminal to the appropriate law enforcement agencies.

    

    (v)      Indemnification against Third
Party Claims:

    

     (A) EP
GLOBAL agrees to defend, indemnify, and hold harmless VEMICS, its affiliates and
the respective officers, directors, employees, and agents, from and against all
actions, third party civil or criminal claims, liabilities, losses, damages and
expenses, including but not limited to reasonable attorneys’ fees, arising out
of or relating to the use of the VEMICS System material supplied by EP GLOBAL
for use on the VEMICS System or, arising out of or relating to any content
provided by EP GLOBAL or by EP GLOBAL’s use of VEMICS’s services. Such
indemnification shall operate whether or not VEMICS has been put on notice of a
claim. 

    

     (B)
VEMICS agrees to defend, indemnify, and hold harmless EP GLOBAL, its affiliates
and its and their respective officers, directors, employees, and agents, from
and against all actions, third party civil or criminal claims, liabilities,
losses, damages and expenses, including but not limited to reasonable attorneys’
fees, arising out of or relating to the use of the VEMICS System supplied by
VEMICS. Such indemnification shall operate whether or not EP GLOBAL has been put
on notice of a claim. 

    

     (c)
Intellectual Property and
VEMICS Services 

    

     As
between VEMICS and EP GLOBAL or any Customer of EP GLOBAL’s, VEMICS shall own
all right, title and interest in and to the Intellectual Property and VEMICS
Services. EP GLOBAL acknowledges that the Software, Documentation, and VEMICS
Services includes proprietary information and trade secrets which are the sole
and exclusive property of VEMICS or its licensors and that the Software,
Documentation and VEMICS Services are or may be protected by patent, copyright,
trade secret and/or similar laws and certain international treaty provisions.
The following shall not, however, be considered to be proprietary information
and trade secrets belonging to VEMICS: (i) information which is publicly known
or which becomes publicly known through no fault of EP GLOBAL’s; (ii)
information which is lawfully obtained by EP GLOBAL from a third party; and
(iii) information which is the lawful possession of EP GLOBAL prior to such
information having been initially disclosed by VEMICS pursuant to this
Agreement. This Agreement does not transfer or convey to EP GLOBAL or any of EP
GLOBAL’s Customers or any third party any right, title or interest in or to the
Intellectual Property of VEMICS Services or any associated intellectual property
rights, but only a limited right of use which is revocable in accordance with
the terms of this Agreement and any Customer Agreement. Nor does this Agreement
transfer any ownership or copyright interest in any intellectual property owned
by EP GLOBAL to VEMICS except as provided for in this
Agreement. 

    

     6.
Marks; Usage Restrictions 

    

     Either
party’s use, display or reference to the other party’s proprietary indicia,
trademarks, service marks, trade names, logos, symbols and/or brand names
(collectively “Marks”) shall be subject to the advance written approval of that
party, which approval shall not be unreasonably withheld. Neither party may
remove, destroy or alter the other party’s Marks. Each party agrees that it
shall not challenge or assist others in challenging the rights of the other
party or its suppliers or licensors in the Marks or the registration of the
Marks, or attempt to register any trademarks, service marks, trade names, logos,
symbols, brand names or other proprietary indicia confusingly similar to the
Marks. All use of a party’s Marks, including but not limited to use of any
co-branded logo comprised of each party’s Marks, shall be subject to such
party’s logo and trademark usage guide, as provided to the other party and as
the same may be updated from time to time. Neither party grants any rights in
the Marks or in any other trademark, trade name, service mark, business name or
goodwill of the other except as expressly permitted hereunder or by separate
written agreement of the parties. 

    

     7.
Fees; Pricing; Credits and Payment Terms 

    

    
      	
               (a)   

            	
               Prices;
      Fees 

            

    

    

                VEMICS’
current prices for VEMICS Services provided to EP GLOBAL, together with all
other payment terms and conditions, including service level commitments and
service level credits and/or bonuses, if any, are set forth in “Exhibit A” of
this Agreement .

    

    
      
        
        

      

      
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     (b)
Payment Terms; Taxes 

    

                All
prices are in United States dollars and do not include sales, use, value-added
or import taxes, customs duties or similar taxes that may be assessed by any
jurisdiction. Each party shall be responsible for the payment of all taxes,
withholdings, duties, fees and other governmental charges of any kind (including
sales and use taxes) which are imposed by or under the authority of any
government or any political subdivision thereof on the revenues it receives
under this Agreement. Any monies due and owing EP GLOBAL by VEMICS, pursuant to
this Agreement, shall be paid within twenty (20) business days. Any monies due
and owing VEMICS by EP GLOBAL, pursuant to this Agreement, shall be paid within
twenty (20) business days. Notwithstanding anything to the contrary herein, all
funds generated as the result of this Agreement between the parties herein will
be paid by Customers directly to EP GLOBAL and the payments will be distributed
by EP GLOBAL to VEMIC S within ten (10) days of receipt of said
funds. 

    

     (c)
Proforma Budget 

     

    Prior to
the parties jointly undertaking any new projects pursuant to this Agreement, EP
Global and Vemics shall mutually agree upon a pro-forma budget for the project,
which shall include the anticipated project costs and expenses of both VEMICS
and EP GLOBAL. The agreed upon proforma budget for the first project being
jointly undertaken by the parties as the result of this Agreement is attached
hereto and marked “Exhibit B.”

    

    8. Accurate Records; Right to
Audit

    

                VEMICS
and EP GLOBAL shall maintain complete and accurate records for two years from
the date of the invoice to support and document the fees charged to EP GLOBAL
customers in connection with this Agreement. EP GLOBAL shall maintain complete
and accurate records as required hereunder, and shall provide to VEMICS upon
request copies of all executed Customer Agreements. All Customer Agreements
shall be considered EP GLOBAL’s Confidential Information in accordance with the
provisions of Section 10 of this Agreement. During the Term and for two years
after expiration or termination of this Agreement, each party shall, upon
written request from the other, provide access to such records during regular
business hours at the non-requesting party’s convenience, to an independent
auditor(s) chosen by the requesting party for the purposes of audit. Each
party’s right to conduct such audits shall be reasonable as to duration and
frequency. All information derived as a result of such audits shall also be
considered such Confidential Information. 

    

                In
addition to the above, EP GLOBAL shall maintain accurate books and records which
enable the calculation of all fees due and owing VEMICS pursuant to this
Agreement that can be verified by VEMICS. EP GLOBAL shall retain the books and
records for two (2) years after the date in which payment is made to VEMICS
pursuant to this Agreement. Upon thirty (30) days prior notice to EP GLOBAL,
independent accountants selected by VEMICS and reasonably acceptable to EP
GLOBAL, after entering into a confidentiality agreement with EP GLOBAL, may have
access to EP GLOBAL’s books and records for the sole purpose of verifying EP
GLOBAL’s compliance with its payment obligations to VEMICS under this Agreement.
The accounting firm shall report to VEMICS whether there has been a underpayment
of fees due VEMICS pursuant to this Agreement and, if so, the amount thereof.
Such access shall be permitted solely during EP GLOBAL’s normal business hours
during the term of this Agreement and for two (2) years after the expiration or
termination of this Agreement. Any such inspection or audit shall be at VEMICS’s
expense; however, in the event an inspection reveals underpayment often percent
(10%) or more, EP GLOBAL shall pay the costs of the inspection and promptly pay
to VEMICS any underpayment. 

    

     9.
Representations and Warranties 

    

     (a)
VEMICS’s Representations and Warranties 

    

                VEMICS
represents and warrants that: (i) VEMICS and its licensors now and will
throughout the Term, own or possess the necessary rights, title and licenses in
and to the Intellectual Property and to operate the VEMICS Products and/or
Services, (ii) VEMICS has and will have throughout the Term the right to enter
into this Agreement and to perform its obligations hereunder, (iii) VEMICS has
obtained any and all consents, approvals and other authorizations necessary for
the performance of its obligations hereunder, (iv) the Intellectual Property and
the VEMICS Products and/or Services do not and will not throughout the Term
violate or infringe upon the intellectual property or other legal rights of any
other party, (v) the operation of the VEMICS Products and/or Services is and
will be throughout the Term in compliance with all applicable, material laws,
rules and regulations of all relevant governmental authorities, and (vi) the
VEMICS Products and/or Services will be operated throughout the Term
substantially in conformity with its specifications. 

    

                (b) EP GLOBAL’s Representations and
Warranties 

    

     EP
GLOBAL represents and warrants that: (i) EP GLOBAL and its licensors now and
will throughout the Term, own or possess the necessary rights, title and
licenses in and to its Intellectual Property, (ii) EP GLOBAL has and will have
throughout the Term the right to enter into this Agreement and to perform its
obligations hereunder, (iii) EP GLOBAL has obtained any and all consents,
approvals and other authorizations necessary for the performance of its
obligations hereunder, and (iv) the EP GLOBAL’s Intellectual Property does not
and will not throughout the Term violate or infringe upon the intellectual
property or other legal rights of any other party. 

    

    
      
        
        

      

      
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     (c)
Warranty Disclaimer 

    

                EXCEPT AS SPECIFICALLY PROVIDED IN
THIS SECTION 9, BOTH PARTIES EXPRESSLY DISCLAIM ALL WARRANTIES OF ANY KIND,
EXPRESS OR IMPLIED, TO THE FULLEST EXTENT PERMITTED BY LAW, INCLUDING BUT NOT
LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NONINFRINGEMENT. NEITHER PARTY SHALL MAKE ANY REPRESENTATIONS OR
WARRANTIES ON THE OTHER’S BEHALF WITHOUT SUCH OTHER PARTY’S EXPRESS WRITTEN
CONSENT. 

    

     10.
Confidential Information. 

    

                (a)
“Confidential Information” as used in this Agreement shall mean any and all
technical and nontechnical information including but not limited to patent,
copyright, trade secret, and proprietary information, techniques, sketches,
drawings, models, inventions, know-how, processes, apparatus, equipment,
algorithms, software programs, software source documents, and formulae related
to the current, future, and proposed products and services of each of the
parties and it’s affiliates, and includes, without limitation, each of the
parties and their affiliates information concerning research, experimental work,
development, design details and specifications, engineering, financial
information, procurement requirements, purchasing, manufacturing, customer
lists, business forecasts, sales and merchandising, and marketing plans and
information. “Confidential Information” also includes proprietary or
confidential information of any third party that may disclose such information
to either party in the course of the other party’s business. All Confidential
Information disclosed both orally and in writing by the disclosing party
(“Discloser”) will be considered Confidential Information by the receiving party
(“Recipient”) and subject to terms of this Agreement, even if such information
is not conspicuously designated as “Confidential” or even when provided orally
and not identified as confidential at the time of disclosure. 

    

                (b)
Recipient hereby agrees that it will not make use of, disseminate, or in any way
disclose any Confidential Information of the Discloser to any person, firm, or
business, except to the extent necessary for negotiations, discussions, and
consultations with personnel and/or authorized representatives of the Discloser,
any purpose of the Discloser authorized by this agreement and any purpose the
Discloser may hereafter authorize in writing. Recipient hereby also agrees that
it will use the Confidential Information disclosed by Discloser for
informational purposes only. Recipient hereby further agrees that it shall not
use the Confidential Information of Discloser in the production and/or the
providing of any products and/or services now or in anytime in the future, other
than permitted under this Agreement. 

    

                (c)
Recipient agrees that it shall treat all Confidential Information of Discloser
with the same degree of care as it accords to its own Confidential Information,
and Recipient represents that it exercises reasonable care to protect its own
Confidential Information. 

    

                (d)
Recipient hereby agrees that it shall disclose Confidential Information of the
Company only to those of its officer(s), manager(s), and/or employee(s) who need
to know such information and certifies that such officer(s), manager(s), and/or
employee(s) have previously agreed, either as a condition of employment or in
order to obtain the Confidential Information, to be bound by terms and
conditions substantially similar to those of this Agreement. 

    

     (e) Recipient will immediately give
notice to Discloser of any unauthorized use or disclosure of the Confidential
Information. Recipient agrees to assist Discloser in remedying any such
unauthorized use or disclosure of the Confidential Information. 

    

                (f)
Upon the request of the Discloser and/or termination of this Agreement, the
Recipient will promptly return all confidential information furnished hereunder
and all copies thereof. 

    

                (g)
Employees. During the term of this Agreement and for a period of two (2) years
thereafter, EP GLOBAL will not directly or indirectly: (a) solicit or encourage
any employee of VEMICS to leave the employ of VEMICS; or (b) hire any employee
who has left the employ of VEMICS if the hiring is proposed to occur within one
year after the termination of the employees employment with VEMICS. In addition,
during the term of this Agreement and for a period of two (2) years thereafter,
VEMICS will not directly or indirectly: (a) solicit or encourage any employee of
EP GLOBAL to leave the employ of EP GLOBAL; or (b) hire any employee who has
left the employ of EP GLOBAL if the hiring is proposed to occur within one year
after the termination of the employee’s employment with EP
GLOBAL. 

    

                (h)
Consultants. During the term of this Agreement and for a period of two (2) years
thereafter, EP GLOBAL will not directly or indirectly solicit or encourage any
consultant then under contract with the VEMICS to cease work for VEMICS. During
the term of this Agreement and for a period of two (2) years thereafter, VEMICS
will not directly or indirectly solicit or encourage any consultant then under
contract with the EP GLOBAL to cease work for EP GLOBAL. 

    

                (i)
Clients. For a period of two (2) years after the termination of this Agreement,
EP GLOBAL will not directly or indirectly solicit any customer introduced by
VEMICS. For a period of two (2) years after the termination of this Agreement,
Vemics will not directly or indirectly solicit any customer introduced by EP
GLOBAL. For purposes of this Agreement, VEMICS Customers shall not include those
Companies and/or Individuals that EP GLOBAL had a documented business
relationship with prior to the inception of this Agreement and/or Customers that
were not introduced to EP GLOBAL by VEMICS. In addition, for purposes of this
Agreement, EP GLOBAL Customers shall not include those Companies and/or
Individuals that VEMICS had a documented business relationship with prior to the
inception of this Agreement and/or Customers that were not introduced to VEMICS
by EP GLOBAL. 

    

    
      
         

      

      
         7 

        
          

        

      

      
         

      

    

     

                (j)
Remedies. In the event of a breach or a threatened breach of any of the
Provisions and/or Covenants set forth in this Section 9 of the Agreement above
(the “Covenants”), the non-breaching party will, in addition to the remedies
provided by law, have: 

    

      (1)
the right and remedy to have the Covenants specifically enforced by any
court  having equity jurisdiction, it being acknowledged and agreed
that any material breach of any of the Covenants will cause irreparable injury
to the non-breaching party and that money damages will not provide an adequate
remedy to the non-breaching party; and 

    

       (2)
the right and remedy to require a person to account for and pay over to the
non-breaching party all compensation, profits, moneys, accruals, increments or
other benefits (collectively the “Benefits”) derived or received by the
Breaching Party as a result of any transactions constituting a breach of any of
the Covenants, and Breaching Party hereby agrees to account for and pay over the
Benefits to the non-breaching party. 

    

                (k)
The obligations of the parties set forth in this paragraph 10 of this Agreement
shall survive the termination of this agreement. 

         

 

            
        11. Term and
Termination 

    

                 
   (a) Term,
Initial Term, Renewals 

    

      This Agreement shall
become effective as of the Effective Date and remain in full force and effect
until November 1, 2007, (the “Initial Term”). Upon the expiration of the Initial
Term, this Agreement will automatically renew for one additional term of three
years (“Renewal Term”) unless and until either party notifies the other party in
writing of its intent to terminate at least 90 days prior to the expiration of
the Initial Term or 90 days prior to the expiration of a Renewal Term. The
Initial Term, together with any and all Renewal Terms, is sometimes collectively
referred to as the “Term.” 

    

        
           (b) Termination Upon
Default 

    

     Either
party may terminate this Agreement in the event that the other party materially
breaches the terms of the Agreement or defaults in performing any obligation
under this Agreement and such breach or default continues unremedied for a
period of 30 days following written notice of default. 

    

     (c)
Termination Upon Insolvency 

    

     This
Agreement shall terminate, effective upon delivery of written notice by a party:
(i) upon the institution of insolvency, receivership or bankruptcy proceedings
or any other proceedings for the settlement of debts of the other party; (ii)
upon the making of a general assignment for the benefit of creditors by the
other party; or (iii) upon the dissolution of the other party. 

    

     (d)
Effect of Termination 

    

     Except
for the provisions in Section 7(b), 8, 10 and 13 herein, all rights and
obligations of the parties shall cease upon termination of this Agreement. The
term of any license or rights granted hereunder shall expire upon expiration or
termination of this Agreement. 

    

     12. Jurisdiction
Disputes 

    

     (a)
This Agreement shall be governed by the laws of the State of New
Jersey. 

    

     (b)
All disputes hereunder shall be resolved in the applicable state or federal
courts in the County of Bergen in the State of New Jersey. The parties consent
to the jurisdiction of such courts, agree to accept service of process by mail,
and waive any jurisdictional or venue defenses otherwise
available. 

    

     13.
General Indemnification 

    

     (a)
Limited Covenant to Defend Infringement Claims by Third
Parties. 

    

                Each
party (the “Indemnitor”), at its own expense and subject to the terms and
conditions of this Section 13, will (i) defend claims brought against the other
party, its permitted assignees and licensees, agents, officers and employees
(the “Indemnitee”) by third parties (other than affiliates of the Indemnitee)
that, if true, would constitute a breach by the Indemnitor of its
representations and warranties set forth in this Agreement, and (ii) will
indemnify and hold the Indemnitee harmless from and against any damages to real
or tangible personal property and/or bodily injury to persons, including death,
resulting from the negligence or willful misconduct of the employees or agents
of the Indemnitor. 

     

    
      
         

      

      
         8 

        
          

        

      

      
         

      

    

     

    
      	
               (i)   

            	
               Right
      to Replace 

            

    

    

     If a
claim of infringement under this Section occurs, or if Indemnitor determines
that a claim is likely to occur, Indemnitor will have the right, in its sole
discretion, to either: (i) procure for Indemnitee and its Customers the right or
license to continue to use the Software free of the infringement claim; or (ii)
replace or modify the Software to make it non-infringing provided that the
replacement software substantially conforms to Indemnitor’s then-current
specification for the Software. If these remedies are not reasonably available
to Indemnitor, Indemnitor may, at its option, terminate this Agreement without
liability, other than liability that may arise under Section 13(b), and
Indemnitor shall return any fees paid by Indemnitee in respect of Indemnitor
Services not provided. 

    

    
      	
               (ii)   

            	
               Limitations 

            

    

    

     Despite
the provisions of this Section 13, Indemnitor has no obligation with respect to
any claim of infringement that is based upon or arises out of: (i) any
modification to the Software if the modification was not made by or at the
written direction of Indemnitor; or (ii) the use or combination of the Software
with any hardware, software, products, data or other materials not specified or
provided by Indemnitor; or (iii) Indemnitee’s or any Customer’s use of the
Indemnitor Services other than in accordance with the Software documentation or
Indemnitor’s written directions or policies. 

    

     (b) Conditions
for Defense. 

    

     To be
entitled to defense by the Indemnitor against a third-party infringement
claim: 

    

             
(i) Indemnitee shall advise Indemnitor of the claim as contemplated by Section
(d); and 

    

     (ii)
Indemnitor shall have the sole right to control the defense or settlement of the
claim, in litigation or otherwise, provided that Indemnitor will not enter into
a settlement on behalf of Indemnitee without Indemnitee’s prior written
approval, such approval not to be unreasonably withheld. 

    

    
      	
               (c)   

            	
               Expenses
      and Monetary Awards. 

            

    

    

                If
a third-party claim, of which Indemnitor was notified and which Indemnitor has a
duty to defend in accordance with this Section 13, is brought, and if such claim
is sustained in a final judgment from which no further appeal is taken or
possible, then Indemnitor will pay or otherwise satisfy any monetary award
entered against Indemnitee as part of such final judgment to the extent such
award is adjudged in such final judgment to arise from such infringement,
without regard to limitation of liability set forth in Section
12. 

    

    
      	
               (d)   

            	
               Notices. 

            

    

    

     An
Indemnitee seeking to be defended against a claim under this Section 13, shall
notify the Indemnitor within thirty (30) days of the assertion of any claim(s)
or discovery of any fact upon which the Indemnitee intends to base a claim for
defense or indemnification. The Indemnitee’s failure to so notify the Indemnitor
will not relieve the Indemnitor from any liability under this Agreement to the
Indemnitee with respect to defense or indemnity with respect to such claim(s),
except to the extent the Indemnitor demonstrates that the defense of such claim
was prejudiced by the failure to so notify. 

    

     (e)  Counsel. 

    

     If the Indemnitor defends the
Indemnitee in a lawsuit, arbitration, negotiation, or other proceeding
concerning a claim pursuant to this Section 13, then the Indemnitee may engage
separate counsel, at the Indemnitee’s expense, to monitor and advise the
Indemnitee about the status and progress of the matter. 

    

     (f)
Exceptions to Duties to Defend and Indemnify. 

    

     Except as may be otherwise expressly
provided in this Agreement, neither party will be required to defend or
indemnify the other party with respect to losses, damages or expenses finally
adjudged to have been caused by the indemnified party’s own negligence or
willful misconduct. 

    

    
      
         

      

      
         9 

        
          

        

      

      
         

      

    

     

     14.
Limitation of Liability and Damages; Insurance 

    

     (a)
Limitation of Liability 

    

                   
EXCEPT FOR LIABILITY ARISING OUT OF A PARTY’S INDEMNIFICATION OBLIGATIONS WITH
RESPECT TO THIRD PARTY CLAIMS AND A BREACH OF THE PROVISIONS OF THIS AGREEMENT
RELATING TO CONFIDENTIAL INFORMATION AND TRADE SECRETS, EACH PARTY AGREES THAT
IN NO EVENT WILL THE OTHER PARTY OR ITS SUPPLIERS OR LICENSORS BE LIABLE, UNDER
ANY THEORY OF LIABILITY, HOWEVER ARISING, FOR ANY COSTS OF COVER OR FOR
INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING
ANY LOSS OF USE, INTERRUPTION OF BUSINESS, LOSS OF BUSINESS PROFITS, LOSS OF
BUSINESS INFORMATION, AND THE LIKE) ARISING OUT OF THIS AGREEMENT, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THESE LIMITATIONS
SHALL APPLY DESPITE ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED WARRANTY OR
REMEDY. 

    

     (b)
Limitation of Damages 

    

     EXCEPT
FOR LIABILITY ARISING OUT OF A PARTY’S INDEMNIFICATION OBLIGATIONS WITH RESPECT
TO THIRD PARTY CLAIMS AND A BREACH OF THE PROVISIONS OF THIS AGREEMENT RELATING
TO CONFIDENTIAL INFORMATION AND TRADE SECRETS, IF THERE SHALL BE ANY LIABILITY
OF ONE PARTY TO THE OTHER THAT ARISES OUT OF OR IS IN ANY WAY CONNECTED TO THIS
AGREEMENT, EACH PARTY’S AGGREGATE LIABILITY FOR ALL DAMAGES, LOSSES AND CAUSES
OF ACTION WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EITHER
JOINTLY OR SEVERALLY, SHALL NOT EXCEED TEN THOUSAND DOLLARS ($10,000.00). EACH
PARTY ACKNOWLEDGES THAT THE OTHER IS NOT AN INSURER; THAT THE PAYMENTS MADE
HEREUNDER ARE BASED SOLELY ON THE VALUE OF THE SERVICES AND ARE NOT SUFFICIENT
TO WARRANT ASSUMING ANY RISK OF CONSEQUENTIAL OR OTHER DAMAGES DUE TO NEGLIGENCE
OR FAILURE TO PERFORM. DUE TO THE NATURE OF THE SERVICES TO BE PERFORMED, IT IS
IMPRACTICABLE AND EXTREMELY DIFFICULT TO FIX THE ACTUAL DAMAGES, IF ANY, WHICH
MAY RESULT (PROXIMATELY OR OTHERWISE) FROM NEGLIGENCE OR FAILURE TO PERFORM
UNDER THIS AGREEMENT. THIS LIMITATION OF LIABILITY REFLECTS AN ALLOCATION OF
RISK BETWEEN THE PARTIES IN VIEW OF THE FEES CHARGED, IS NOT A PENALTY, AND
SHALL BE EXCLUSIVE. THE LIMITATIONS IN THIS AGREEMENT SHALL APPLY DESPITE ANY
FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED WARRANTY OR REMEDY. 

    

     (c)
Insurance 

    

     EACH PARTY AGREES TO MAINTAIN IN
EFFECT DURING THE TERM, AT SUCH PARTY’S EXPENSE, COMPREHENSIVE PROPERTY,
CASUALTY AND GENERAL LIABILITY INSURANCE OF THE TYPES AND AMOUNTS, AND COVERING
SUCH RISKS AS ARE REASONABLE AND CUSTOMARY FOR BUSINESSES ENGAGED IN A SIMILAR
BUSINESS AND COVERING PROPERTIES SIMILAR TO THE PROPERTIES OWNED, LEASED OR
OPERATED BY SUCH PARTY. IN ADDITION, EACH PARTY SHALL MAINTAIN IN EFFECT DURING
THE TERM AN ERRORS AND OMISSIONS POLICY INSURING AGAINST ITS ERRORS AND
OMISSIONS IN THE PERFORMANCE OF ITS SERVICES CONTEMPLATED UNDER THIS AGREEMENT
WITH COVERAGE OF AT LEAST FIVE MILLION DOLLARS AS TO A SINGLE CLAIM AND FIVE
MILLION DOLLARS AS TO ALL CLAIMS IN THE AGGREGATE. SUCH INSURANCE COVERAGE WILL
BE OBTAINED FROM REPUTABLE INSURANCE COMPANIES OR ASSOCIATIONS. UPON THE REQUEST
OF A PARTY, THE OTHER PARTY SHALL PROVIDE VALID CERTIFICATES OF
INSURANCE. 

    

     15.
Miscellaneous 

    

     (a)
Compliance with Laws 

    

     Each
party agrees to comply with all applicable laws, regulations, and ordinances
relating to their performance hereunder. 

    

     (b)
Notices 

    

    
      
         

      

      
         10 

        
          

        

      

      
         

      

    

     

     Any
notice required or permitted hereunder shall be in writing and shall be
delivered as follows (with notice deemed given as indicated): (i) by personal
delivery when delivered personally; (ii) by established overnight courier upon
written verification of receipt; (iii) by facsimile transmission when receipt is
confirmed in writing; or (iv) by certified mail, return receipt requested, upon
verification of receipt. All notices must be sent to the following
addresses: 

    

     If to
VEMICS: 

     Fred
Zolla, CEO 

     Vemics,
Inc 

     65 East Route
4 

     River
Edge, New Jersey 07661 

     

                                    
If to EP
GLOBAL: 

     Joseph
Valenzano, CEO 

     EP
GLOBAL Communications 

     65 East Route
4 

     River
Edge, New Jersey 07661 

    

     Either
party may change its contact person for notices and/or address for notice by
means of notice to the other party given in accordance with this
Section. 

    

     (c)
Assignment 

    

     Neither
party may, without the prior written consent of the other party, assign this
Agreement, in whole or in part, either voluntarily or by operation of law, and
any attempt to do so shall be a material default of this Agreement and shall be
void. Any change of control in the ownership of either party shall not be deemed
an assignment subject to the prohibitions of this Section. 

    

     (d)
Third Party Beneficiaries 

    

     This
Agreement is solely for the benefit of the parties and their successors and
permitted assigns, and, except as expressly provided herein or in any exhibit
hereto, does not confer any rights or remedies on any other person or
entity. 

    

     (e)
Governing Law 

    

                This
Agreement shall be interpreted according to the laws of the State of New Jersey
without regard to or application of choice-of-law rules or
principles. 

    

                (f)
Entire Agreement and
Waiver 

    

                This
Agreement and any Exhibits hereto shall constitute the entire agreement between
VEMICS and EP GLOBAL with respect to the subject matter hereof and all prior
agreements, representations, and statement with respect to such subject matter
are superseded hereby, including without limitation any non-disclosure agreement
previously executed between the parties. The terms of this Agreement shall
control in the event of any inconsistency with the terms of any Exhibit hereto.
This Agreement may be changed only by written agreement signed by both VEMICS
and EP GLOBAL. No failure of either party to exercise or enforce any of its
rights under this Agreement shall act as a waiver of subsequent breaches; and
the waiver of any breach shall not act as a waiver of subsequent
breaches. 

    

                (g)
Severability 

    

                In
the event any provision of this Agreement is held by a court of other tribunal
of competent jurisdiction to be unenforceable, that provision will be enforced
to the maximum extent permissible under applicable law, and the other provisions
of this Agreement will remain in full force and effect. The parties further
agree that in the event such provision is an essential part of this Agreement,
they will begin negotiations for a suitable replacement
provision. 

    

    
      
         

      

      
         11 

        
          

        

      

      
         

      

       

                
(h) Non-Disclosure of Agreement Terms 

    

    

                Neither
party shall disclose to third parties, other than its agents and representatives
on a need- to-know basis, the terms of this Agreement or any Exhibits hereto
without the prior written consent of the other party, except either party shall
be entitled to disclose (i) such terms to the extent required by law, and (ii)
the existence of this Agreement. 

    

                (i) Force
Majeure 

    

                If
either party is prevented from performing any of its obligations under this
Agreement due to any cause beyond the party’s reasonable control, including,
without limitation, an act of God, fire, flood, explosion, war, strike, embargo,
government regulation, act(s) of terrorism, civil or military authority, acts or
omissions of carriers, transmitters, providers, vandals, or hackers (a “force
majeure event”) the time for that party’s performance will be extended for the
period of the delay or inability to perform due to such occurrence; provided
however, that if a party suffering a force majeure event is unable to cure that
event within 30 days, the other party may terminate this
Agreement. 

    

                (j)
Counterparts 

    

                This
Agreement may be executed in any number of counterparts, each of which, when so
executed and delivered, shall be deemed an original, and all of which shall
constitute one and the same Agreement. 

    

     (k)
Remedies 

    

                Except
as provided herein, the rights and remedies of each party set forth in this
Agreement are not exclusive and are in addition to any other rights and remedies
available to it at law or in equity. 

    

     (1)
Binding Effect 

    

                This
Agreement shall be binding upon and shall inure to the benefit of the respective
parties hereto, their respective successors and permitted
assigns. 

    

     (m)
Amendments 

    

                Amendments
to this Agreement, including amendments to any Exhibits, shall be effective only
if they are in writing and signed by both parties. 

    

    
      
         

      

      
         12 

        
          

        

      

      
         

      

    

     

                  
IN WITNESS WHEREOF, each of the parties, by its duly authorized
representative has entered into this Agreement as of the Effective
Date. 

    

     Vemics
Inc.                                                                           EP
GLOBAL Communications, Inc. 

    
   

     By:
/s/ Fred Zolla,
CEO                                                        By: /s/ Joseph Valenzano,
CEO           
 

           
      Fred Zolla,
CEO                                                                    Joseph
Valenzano, CEO 

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
         13ex10-11.htm

     Exhibit
10.11 

     LEASE
AGREEMENT 

     3600
BEE CAVE ROAD, AUSTIN, TX 78746 

     THE
STATE OF TEXAS 

     COUNTY OF
TRAVIS 

    

     This
Lease Agreement, made and entered into this 10 day of August 2006
with effective date provided below, by and between CHERYL OGLE, an individual,
hereinafter called “Lessor”, and NuScribe, LP, hereinafter called
“Lessee’. 

    

     WITNESSETH: 

    

     That
for and in consideration of the covenants, agreements and stipulations herein
contained, Lessor does hereby demise and lease unto Lessee, upon the terms and
conditions hereinafter set out, a lease space at 3600 BEE CAVE ROAD, (the
“Building”) Austin, Travis County, Texas. 

    

     The
Building is located on the following described real property, as shown in
Exhibit “B”. The lease space hereby Demised (“the Demised Premises H) is known
as Suite 216, which
consists of 2330 square feet of space, which number is agreed by the parties to
be the number used for all purposes, whether or not actual square footage
varies. The Demised Premises are located at 3600 BEE SAVE ROAD, Austin, Travis
County, Texas, 78746. The Demised Premises are depicted on the floor plan
attached as Exhibit “C” and incorporated herein for all purposes. Lessor
reserves the right to place in, under, over or through the Demised Premises all
pipes, wires, lines and facilities serving other areas of the
Building. 

    

     1.
PURPOSE. Lessee
will use the Demised Premises for the following purpose only: GENERAL OFFICE
USE. Lessee will use the Demised Premises for no other purpose without the
written consent of Lessor. 

    

     2. TERM. The term of
this lease will begin upon completion of finish cut, but not later than April 1,
2006 (“Commencement Date”). This lease will terminate the last day of the
thirty-sixth (36) full month after the Commencement Date hereof, unless sooner
terminated in accordance with the terms and conditions hereinafter set
forth. 

    

     3.
RENTAL. As
minimum rental for the Demised Premises, Lessee agrees to pay Lessor $3300.83
per month on the first day of each month, payable in advance for each month in
the term of this Lease, beginning on the Commencement Date. Lessee shall have
free rent for April 2006 and May 2006. See Rental Schedule attached as Exhibit
‘NA” for annual base rate increases. All rental payments will be paid to Lessor
at its office in Travis County, Texas, at the address set out in Paragraph 28.
If any rent payment is not received by Lessor within five (5) days after its due
date, Lessee shall pay a late charge of ten percent (10%) of such past due
amount. This 10% fee shall be calculated monthly on all unpaid amounts and
deemed earned by Lessor in consideration of expected additional administrative
and collection costs. Payment of rent by Lessee shall be an independent
covenant, without right of set-off or deductions, except as obligations
hereunder are expressly contingent on the prompt payment of rent, arid the use
of the premises is obtained only on the condition that rent is paid when due. In
the event that rent is paid by an insufficient check, there shall be a $25.00
administrative charge for such insufficient check and the rent shall be
considered delinquent until paid in good funds. At owner’s option and without
notice, monies received may at any time be applied first to rent obligations of
resident, then to rent, regardless of notations on checks or money orders and
regardless of when the obligations arose. Resident may not withhold
rent or offset against rent. At owner’s option, owner may at any time
require that all rent and other sums be paid in either cash, certified, or
cashier’s check, money order, or one monthly check rather than multiple
checks. 

    

     4.
SECURITY DEPOSIT.
In addition to the rental for the first month of this lease, Lessee shall
pay to Lessor a Security Deposit of $6000.00, of which $3500.00 shall be due at
signing of Lease, with $1250 being paid by the first of April 2006 and $1250
being paid by the first of May 2006. If Lessee is not in default of terms of the
Lease, $2500 shall be credited to the monthly rental in month twenty of the
lease term, or November 2007. Such security deposit shall remain on deposit with
Lessor, without liability for interest, as security for the faithful performance
of all the terms and conditions of this lease by Lessee. If Lessee should
default in performing any term or provision of this lease, then the Security
Deposit, or any part thereof, may be applied to the damages or expenses
sustained by Lessor by reason of such default. Such application shall not be
construed as an agreement to limit the amount of Lessor’s claim or as a waiver
of any damages, but, on the contrary, Lessor’s claim for damages not covered by
such Security Deposit shall remain in full force and effect. If, at the end of
the terms of this lease, Lessee is not in default in the performance of any
provision of this lease, the Security Deposit, or any balance thereof remaining,
will be refunded to Lessee. No mortgagee of Lessor shall have a liability to
Lessee for such Security Deposit until such mortgages shall actually have
received possession thereof. 

    

     4.1.
GUARANTY. If
this Lease is executed in a corporate capacity, a personal guaranty will be
required by person Cr persons designated by Lessor. The Personal Guaranty for
this Lease Agreement shall be in the name of Tom C. Dorsett, but shall be
limited to a guaranty for six months total rent, which shall be due upon default
of payment of rent and shall be for the rental amounts due for the following six
months. 

    

     5.
ADDITIONAL
RENTAL. 

    

     (a.)
Rental escalation after occupancy shall be calculated as
follows: 

    

     (i)
The increase calculated on a per square foot basis where the actual operating
expenses in any lease year exceeds the base operating expense of the base year
which, for the purpose herein shall be 2006. A Schedule of
which is attached as Exhibit “D” and incorporated herein for all purposes. NO
SCHEDULE AVAILABLE. 

    

     (ii)
The rental escalation shall be the Lessee’s proportionate share of the increase
of the actual operating expense in any lease year over the base operating
expense factor. 

    

     (iii)
Lessor has the option to collect additional income based on an operating budget
any year after the base year. This collection shall be made on a monthly basis.
Lessor shall, within six months following the close of any calendar year for
which additional rental is due, provide actual costs to Lessee along with a
statement of Lessee’s share of such actual costs. 

    

    
      
         

      

      
         1 

        
          

        

      

      
         

      

    

     

     (b.)
Lessee agrees to pay as Additional Rental its pro-rata share of all Operating
Expenses of the Building over the base year, plus a management fee which is 15
of said expenses, as defined herein below. Lessor shall have the right to
estimate the amount of such Operating Expenses, which will be incurred with
respect to each Lease Year hereunder, and to estimate Lessee’s pro-rata share
thereof. Lessee shall pay to Lessor monthly, on the first day of each month, in
advance for each month in the term of this lease, beginning on January 1st of
the first calendar year after the Commencement Date of the lease, an amount
equal to the amount estimated by Lessor to be Lessee’s pro-rata share of the
actual operating Expenses for such Lease Year, divided by the number of months n
such Lease Year. If Lessee’s pro-rata share of the actual Operating Expenses
with respect to any Lease Year (as determined at the end of the Lease Year) is
less than the amount paid by Lessee as its pro-rata share of the estimated
Operating expense for such Lease Year a “effect ease Year”) then, provided that
Lessee is not then in
default in the performance obligations
under this lease, Lessor shall issue credit to lessee the amount by which the
amounts paid by Lessee as Lessee’s )pro rata share of the estimated Operating
Expenses exceeds Lessee’s pro-rata share of the actual Operating Expenses for
the Dec lease Year promptly following the determination of such actual Operating
Expenses; provided, however, in no event shall Lessee ever be entitled to a
refund in respect to any Lease Year in excess )f the Additional Rental payments
made under this Paragraph 5(c) in respect to such Lease Year. If the Lessee’s
pro-rata share of the actual Operating Expenses with respect to any Lease Year
exceeds :he amount paid by Lessee to Lessor as Lessee’s pro-rata share of
estimated Operating Expenses for such Lease Year, then Lessee shall ay to Lessor
the amount of such excess within ten (10) days allowing receipt of notice from
Lessor setting forth Lessee’s pro -at share of actual Operating Expenses with
respect to such Lease Pear and the payment due by Lessee. 

    

     (c.)
Base Year 2006 shall be calculated individually for four expense categories, as
defined in paragraph 5(d), as; (1) property axes; (2) property insurance; (3)
utilities and (4) all other operating expense categories. In the event that any
one expense decreases below such expense amount in any prior year, no offset
shall be made to other expenses that may have increased in such ear. After the
initial year of the Lease Lessee agrees to have he annual rent increased based
on an operating budget pro-forma. 

    

     (d.)
“Expenses”, as used herein, shall be construed as: 

    

     (i)
Property Taxes.
Any increases in real estate taxes and all other taxes and assessments
and governmental charges and fees, whether federal, state county or municipal,
excluding, however, federal and state taxes imposed upon or measured by the
gross receipts or income of Lessor; nevertheless, if due to a future change in
the method of taxation, any franchise, gross receipts, income, profit or other
tax shall be levied against Lessor in substitution in whole or in part for or in
lieu of or in addition to any tax which would be included as an Uncontrollable
expense hereunder, such franchise, gross receipts, income, profit r tax shall
(with appropriate adjustments, if any) be included as n Uncontrollable Expense
for the purposes hereof. 

    

     (ii)
Property Insurance.
Any increases in insurance premiums Lessor is required to pay pursuant to
the terms of this ease, including, without limitation, fire and extended
coverage insurance and liability insurance. If an increase in fire and extended
coverage premiums paid by Lessor for the Bui1dng is used by Lessee’s use and
occupancy of the Demised Premises, or lessee hen Lessee shall pay as Additional
Rental the amount of such increase to Lessor. 

    

     (iii)
Utilities. 

    

     (iv)
Operating Expenses.
All other operation expenses shall include, but not be limited to,
Lessor’s costs of repairs, on-site management, accounting, maintenance and
operation of the Building, sales and use taxes, costs of labor, and supp1ies for
maintenance, repair and operation of the building, heating, air conditioning,
janitorial supplies, cleaning the common areas and private offices and other
services, landscaping, landscape sprinklers, parking areas and general
maintenance and repairs. Except Capitalized Expenses. 

    

     (e.)
The term “Lease Year”, as used herein, will, in the case of the first Lease Year
(2006) means the period which begins with tie Commencement Date of the lease
term and which terminates on December 31 of the calendar year of the
Commencement Date, and such first Lease Year may, therefore, be less than twelve
(12) full calendar months, depending on the Commencement Date. Each subsequent
Lease Year will mean a period of twelve (12) full calendar months beginning on
January 1 of each year and ending on December 31 of each year. In the case of
the last Lease Year of he lease term, such period will include the period which
begins on January 1 of the calendar year in which the lease terminates and rids
upon the termination of the lease term, and the parties recognize that such last
Lease Year may be less than twelve (12) full calendar months, depending upon the
date of termination of the lease term. 

    

     6.
PERSONAL PROPERTY.
In addition to the above, Lessee will ay all taxes and assessments levied
or assessments upon any iterations, additions or fixtures and equipment, or any
other property or personal property which Lessee places on or about the leased
Premises. No portion of the taxes or assessments paid by lessee under the terms
of this paragraph shall be credited against any rental obligation
hereunder. 

    

     7.
LESSEE’S PREMISES.
Lessee accepts the space in an “as 

     is”
condition. Exhibit “C” is the current floor plan of the pace. 

    

     8.
ACCEPTANCE OF PREMISES
AND BUILDING
BY LESSEE.
The taking of possession of the Demised Premises by Lessee shall be
conclusive evidence as against Lessee that it accepts the Demised premises as
suitable for the purposes for which the same are leased. 

    

     9.
SERVICES BY
LESSOR. 

     (a.)
Lessor agrees to furnish for the occupied premises the Demised Premises during
such time as Lessee is not in default of its obligations hereunder, at Lessor’s
cost and expense, the following services: 

    

     (i)
Air conditioning, both heating and cooling (as required by the seasons), as may,
in the judgment of Lessor, be reasonably required for comfortable use and
occupancy under normal business operations and during normal business hours (as
determined by Lessor, the hours are currently 7am until 7pm, Monday thru
Friday), subject, however, to any governmental laws or regulations pertaining
thereto; 

    

    
      
         

      

      
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     (ii)
Cold water (at normal temperatures of the supply of water to the Building) for
lavatory purposes. The water service Co be supplied from the regular supply of
water to the building through fixtures installed by Lessor or by Lessor’s
consent; 

    

     (iii)
Janitorial cleaning service to the Demised Premises, including such window
washing and wall cleaning as may, in the judgment of Lessor, be reasonably
required; 

    

     (iv)
Electric services for all public areas and special services areas of the
Building in the manner and to the extent deemed by Lessor to be reasonable and
standard. 

    

     (b.)
Lessor shall provide or cause to be provided to the Demised Premises all
electrical current required by Lessee in the normal use and occupancy of the
Demised Premises. Without Lessor’s prior consent, Lessee shall not install any
equipment which shall require for its use other than the normal Building
standard electric current and electrical equipment supplied by Lessor. The
Obligation of Lessor to provide or cause to be provided electrical service shall
be subject to the rules and regulations of the supplier of such electricity and
of any municipal or other governmental authority regulating the business of
providing electrical utility service. Lessor shall not be liable or responsible
to Lessee for any loss or damage or expense which lessee may sustain or incur if
either the quantity or character of the electric service is changed or is no
longer available or no longer suitable for Lessee’s
requirements. 

    

     10.
INTERRUPTION OF
SERVICES. Lessor does not warrant :hat the services provided for in
Subparagraphs 9(a) and 9(b) will be free from interruption or stoppage caused by
maintenance, repair, substitution, renewal, replacement or improvements of any
if the equipment involved in the furnishing of any such services or equipment
involved in the furnishing of any such services or caused y the changes of
services, alterations, strikes, lockouts, labor controversies, accidents, Acts
of God or the elements or any other cause beyond the reasonable control of
Lessor. No interruption. or stoppage of any such services shall ever be
construed as an eviction, actual or constructive, of Lessee not shall the same
cause any abatement of the rent payable hereunder, or in any manner or for any
purpose relieve Lessee from any of its obligations hereunder. Lessor shall not
be liable for any interruption or stoppage of any such services or for any
damage to persons or property resulting therefrom, provided Lessor uses
reasonable diligence to resume the service or to cause the same to be
resumed. 

    

     11.
QUIET ENJOYNENT.
Lessor agrees to warrant and defend Lessee in the quiet enjoyment and
possession of the Demised Premises during the term, provided Lessee pays as and
when due and. payable the rent and all other sums payable hereunder and keeps
and fulfills all of the other terms, conditions, agreements and covenants on its
part contained herein. 

    

     12.
SIGNS. Lessee
will not place or suffer to be placed or maintain on the exterior of the Demised
Premises or in the halls, staircases, entrances, doors, parking area or
sidewalks of the Demised Premises, or on the interior of the Demised Premises so
as to be visible from the pubic areas or exterior of the Building, any sign,
lettering, decoration or advertising matter, or any other thing of any kind,
without first obtaining Lessor’s written approval and Lessee will maintain such
signs, lettering, advertising matter or the other things as may be approved in
good condition and repair at all times. 

    

     13.
MAINTENANCE, REPAIRS
AND USE. Lessor shall, as a part of the Operating Expenses for the
Building, provide for the cleaning and maintenance of the public portions of the
Building, including painting and landscaping surrounding the Building. Unless
otherwise expressly stipulated herein, Lessor shall not be required to make any
improvements or repairs of any kind or character on the Demised Premises during
the term of this lease, except such repairs as may be required by normal
maintenance operations. Lessor agrees to provide, at its expense, normal repairs
to the exterior walls, windows, roof and other structural elements and equipment
of the Building, and such additional structural maintenance as may be necessary
because of damages by persons other than Lessee, its agents, employees, invitees
of visitors. Lessor shall have sole control over the parking of automobiles and
other vehicles and shall designate parking areas and building service
areas.  Lessor, its officers, agents and representatives, subject to
any security regulations imposed by any governmental authority, shall have the
right to enter al parts of the Demised Premises at all reasonable hours to
inspect, clean, make repairs, a1teraions and additions to the Building or
Demised Premises which it may deem necessary or desirable, or to provide any
service Which it is ted to furnish to Lessee, and Lessee shall not be abatement
or reduction of rent by reason thereof. Lessor may, at its option and at the
cost and expense of e, repair or replace any damage or injury done to the part
thereof caused by Lessee, Lessee’s agents, employees, sees, invitees or
visitors; Lessee shall pay the cost thereof lessor on demand. Lessee further
agrees to maintain and interior of the Demised Premises in good repair and
condition lessee’s expense. Lessee agrees not commit or allow any waste mage to
be committed on any portion of the Demised Premises, at the termination of this
lease, by lapse of time or wise, to deliver up the Demised Premises to Lessor in
as good condition as on date of possession by Lessee, ordinary wear and alone
excepted, and, upon such termination of this lease, or shall have the right to
re-enter and resume possession of remised Premises. 

    

     Lessee
will not use, occupy or permit the use or occupancy of Demised Premises for any
purpose which is, directly or indirectly, forbidden by law, ordinance or
governmental or municipal regulation or order, which may be dangerous to life,
limb property, or permit the maintenance of any public or private place, or
permit any use of the premises that could cause harm, or do or permit any other
thing which may disturb the quiet enjoyment of any other Lessee of the Building,
or any substance or carry on or permit any operation which might offensive odors
or conditions into other portions of the building, or use any apparatus which
might make undue noise or set vibrations in the Building, or permit anything to
be done which increase the fire and extended coverage insurance rate on the or
contents, and, of there is any increase in such rates reason of acts of Lessee,
then Lessee agrees to pay such increase promptly upon demand therefore by
Lessor. 

    

     14.
ALTERATIONS AND
INSTALLATIONS. Lessee shall not make additions, alterations or changes in
the Demised Premises without first obtaining Lessor’s
written approval. Lessee may 11 equipment and trade fixtures necessary for the
conduct of business, and, upon the termination of the lease, provided is not
then in default hereunder, Lessee shall be entitled to move any such equipment
and trade fixtures installed by Lessee .e Demised Premises, with the
understanding, however, that s shall be obligated to place the Demised Premises
in their original condition, normal wear and tear excepted, in the event
alterations have to be made or damage is caused by the removal of property by
Lessee. 

    

     15.
INSPECTION OF DEMISED
PREMISES Lessor shall. have the to enter upon the Demised Premises at
reascnab1e hours for the purpose of inspecting same. Lessor has the right, in
be event Lessee
does not maintain the Demised Premises as required herein and after giving
Lessee written notice and five (5) days o cure such default, to order such
repairs or maintenance as may
be deemed necessary by Lessor, and to charge the cost thereof to the
Lessee, said cost to be an additional amount payable from Lessee on the first
day of the month following notice to Lessee than such work has been performed by
Lessor on behalf of Lessee. 

    

     16.
COMPLIANCE WITH
LAWS. Lessee
and Lessor will comply with all statutes, ordinances, rules, order, regulations
and requirements of the federal, state, county and city governments and all
departments thereof applicable to the Demised Premises or the business conducted
therein by Lessee. 

    

    
      
         

      

      
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     17. INDEMNITY. Lessor
shall not be liable to Lessee or to Lessee’s
employees, agents, invitees or visitors, or to any other person whomsoever, for
any injury to person or damage to or loss of property on or about the Demised
Premises or the common area of the Building caused by the negligence or
misconduct of Lessee, its employees, subtenants, licensees or concessionaires,
or of other persons entering the Building under express or implied invitation of
Lessee, or arising out of the use of the Demised Premises
by Lessee and the conduct of its business therein, or arising out of any breach
or default by Lessee in the performance of its obligations hereunder; and Lessee
hereby agrees to indemnify Lessor may hold it harmless from any loss expense or
claim arising out of 3uch damage or injury, and to defend Lessor, with attorneys
approved by Lessor, against any such claim. Moreover, Lessor shall not be liable
to Lessee or to Lessee’s employees, agents, Licensees, invitees or visitors, or
to any person whomsoever, for my damage to person or property resulting from any
act or omission r negligence of any co-tenant, visitor or other occupant of the
3uilding, or for any act or omission on the part of Lessee, or any of its
agents, employees, servants or invitees, or any other person, except to the
extent that Lessor’s own negligence or il1ful misconduct may contribute thereto.
Lessee shall maintain fire and casualty insurance coverage in n amount
sufficient to cover the value of its personal property at ill times during the
term of this lease. Lessor shall not be required to carry insurance on the
personal property of Lessee. lessee further agrees to maintain Comprehensive
General Liability insurance coverage to cover personal injury to any invitees on
eased premises, naming Lessor as additional insured, as follows: of less than
$1,000,000 for bodily injury and property damage liability protection for each
occurrence and a general annual aggregate of $1,000,000. Lessee shall deliver to
Lessor certificates and copies of all insurance, as required above, within ten
(10) days after date hereto and shall provide renewal certificates at least ten
(10) days prior to expiration of such insurance. 

    

     18.
CASUALTY INSURANCE.
Lessor will maintain in full force and effect during the term of this
lease fire and extended coverage casualty insurance on the Building. Lessee will
maintain fire and extended coverage casualty insurance on all fixtures and
equipment owned or placed in the Demised Premises. Lessee will not engage in any
activity or business, which would cause Lessor’s fire and extended coverage
insurance to be canceled. Should the nature or conduct of Lessee’s business in
the Demised Premises result in increased fire and extended coverage premiums or
the Demised Premises and/or in the adjoining and surrounding improvements owned
by Lessor, Lessee will pay Lessor during the term hereof an amount equal to such
increase so long as it shall continue in effect. 

    

     19.
CONDEMNATION.
In the event the Building, or the Demised Premises, or any portion
thereof, shall be taken or condemned, in whole or in part, for any public or
quasi-public purposes, then this lease shall thereupon at the option of the
Lessor, forthwith cease and terminate, and Lessor shall receive the entire award
in any such condemnation proceedings, and Lessee shall have no claim to any
portion thereof. In such event, Lessor shall return to Lessee any unearned rent
paid in advance. If only part of said Demised Premised be so taken, and Lessor
elects to rebuild, this lease shall cease only as to the part so taken and
continue as to the part not so taken. The minimum rent herein reserved shall be
abated in the proportion that the area so taken bears to the total area of the
Demised Premises, and it is expressly agreed and understood that all sums
awarded or allowed for such taking of said Demised Premises, or any part
thereof, or for damages for any such taking, shall belong to Lessor, and same
are hereby assigned to Lessor, and Lessee shall have no interest in or claim to
such award or any part thereof, whether such award be for the taking of such
property or for the damages or otherwise. 

    

     20.
DESTRUCTION OF DEMISED
PREMISES. If the Building or the Demised Premises are totally destroyed
and so badly damaged by fire, storm and explosion or other casualty that the
same are rendered unusable for the purposes hereby leased, the Lessor shall have
the option of terminating this lease or rebuilding same. If any such event shall
occur, Lessee shall immediately give written notice thereof to Lessor. Within
ninety (90> days after such casualty, Lessor shall notify Lessee in writing
of Lessor’s decision. In the event Lessor elects not to rebuild the same, then
this lease shall be considered terminated as of the date of the casualty, and
Lessor shall return any unearned rent paid in advance. If it is Lessor’s
decision to rebuild, the Lessor shall begin the work of rebuilding within ninety
(90) days following the date of such notice to Lessee, pursuing the work and
completing the construction with all reasonable dispatch and delivering the used
Premises to Lessee in substantially the same form as at the ginning of the term
hereof. In such event,
this lease shall continue in effect for the full term herein. If the
improvements the Demised Premises are partially destroyed by fire, storm,
explosion or other casualty, then the Demised Premises shall be stored by Lessor
to their previous condition and made safe. If such casualty makes the Demised
Premises or some part thereof temporarily unusable, the rental thereof shall
abate in full or operationally, as the case may be, during the period in which
the used Premises are not usable by Lessee. 

    

     21.
ASSIGNNENT.
Lessee may not assign, sublet or underlet e Demised Premises or any
portion thereof without the prior written approval of Lessor. Any attempt to do
so shall be null and void. Neither the acceptance of rent from any assignment,
sublease underlease, nor the passage of time, shall constitute a waiver this
prohibition. In the event Lessor’s written approval is yen to such assignment,
subletting or underletting, Lessee shall it be relieved from any
liability hereunder. Lessor shall charge a lease fee equal to one month’s rent
payable to the Lessor at the me of sublease request and Lessor shall be entitled
to one-half 1/2) of any excess between Lessee’s rental under the Lease and the
b-lessee’s rental under the sublease plus any other consideration owing directly
or indirectly from the sub-lessee or its agents to lessee or Lessee’s
agents. 

    

     22.
HOLDING OVER.
It. is agreed and understood that any holding over by the Lessee of the
Demised Premises after the expiration of this lease shall operate and be
construed as a tenancy from month to month at a rental equal to one hundred
fifty percent (150%) of the minimum rental and the Additional Rental rein
provided (computed on a monthly basis rather than Lease Year sis as hereinabove
provided) 

    

     23.
DEFAULT. Lessee
shall be considered in default if the leased Premises becomes vacant or
abandoned, or in the event such defaults in the payment of any of the rentals or
other sums provided to be paid hereunder and such default shall continue for a
nod of ten (10) days or, if Lessee defaults in the observance or performance of
any other covenant, condition, agreement or provision hereof, which is not
remedied within thirty (30) days after notice of such default from Lessor to
Lessee, then Lessor , at its option, exercise either of the following
remedies: 

    

     (a.)
Lessor may terminate this lease by giving to Lessee notice of Lessor’s intention
to do so, in which event the term of is lease shall end, arid all right, title
and interest of Lessee shall expire on the date stated in such notice, which all
not be less than five (5) days after the date mailing of the notice by Lessor of
its intention to terminate. Lessor shall be entitled to recover from Lessee all
of the rentals accrued and unpaid for the period up to and including such
termination date, as well as all other additional sums payable by Lessee, or for
which Lessee is liable or in respect of which Lessee, under the provisions
hereof, has agreed to indemnify Lessor, which may be then owing and unpaid, and
all cost and expense, including court costs and attorneys’ fees incurred by
Lessor in the enforcement of its rights and remedies hereunder; and, in
addition, Lessor shall be entitled to recover as damages the then fair market
value of the lease for the remainder of its term; or 

    

    
      
         

      

      
         4 

        
          

        

      

      
         

      

    

     

     (b.)
Lessor may, without termination of this lease, terminate the right of Lessee to
possession of the Demised Premises by giving notice to Lessee the Lessee’s right
of possession shall end on the date stated in the notice, which shall not be
less than five (5) days from the date of mailing of such notice, whereupon the
right of Lessee to the possession of the Demised Premises will terminate, and
Lessor may take possession of all or any part thereof, may remove any portion of
the equipment or apparatus thereof, which Lessor elects so to do, and, if it
desires, place same in storage at the expense of Lessee; and may sublet or relet
the Demised Premises or any part thereof from time to time for all or any part
of the unexpired part of the term hereof, or for a longer period, and Lessor may
collect the rents from such reletting and/or subletting, and apply the same,
first to the payment of the expense of re-entry and reletting and including,
without limitation, expense of removal and repairs, attorneys’ fees, court costs
and realtor’s commission, and, secondly, to the rentals and other sums herein
provided to be paid by Lessee, and, in the event that the proceeds of such
reletting or subletting are insufficient to pay in full the foregoing, Lessee
shall remain and be liable for, and Lessee promises and agrees to pay, the
amount of any such deficiency from time to time; and Lessor may at any time and
from time to time sue and recover judgment for any such deficiency or
deficiencies. Lessee shall not be entitled to the excess, if any, on such
rentals. 

     If
Lessor exercises either of the remedies provided above, Lessor may then or at
any time thereafter re-enter the Demised Premises and take complete and peaceful
possession of the Demised Premises with or without process of law, and may
remove all persons there from, and Lessee covenants in any such event to
peaceably and quietly yield and surrender the Demised Premises to Lessor. For
purposes of assessing damages to Lessor as a result of a default by Lessee
hereunder, in determining the rent which would be due and payable by Lessee to
Lessor hereunder, subsequent to such default, the annual rent for each year of
the unexpired term shall be cal to the average annual minimum and Additional
Rental paid by lessee from the Commencement Date of this lease to the time c
default or during the preceding three (3) full calendar years, whichever period
is shorter. 

    

     24.
NO WAIVER. No
acceptance of rent by Lessor or delay in enforcing any obligation shall be
construed as a waiver of any default in the performance of any obligation to be
undertaken by Lessee. Lessor’s failure to enforce the default provisions hereof
in the event of Lessee’s default hereunder shall not act as a waiver of Lessor’s
right to enforce the default provisions hereof. Lessor shall have the right to
declare the default at any time and take such action as is lawful or authorized
under this Lease. 

    

     25.
NO SMOKING. Not
withstanding anything set forth herein to the contrary and without limiting
Lessee’s responsibilities and obligations hereunder, it is specifically
understood and agreed by Lessee that the Demised Premises and the Building are
and shall be entirely and completely “no smoking” areas. Lessee shall not, nor
shall Lessee permit, any Smoking Activities (defined below) by any of its
employees, agents, representatives, contractors, invitees, patrons and other
personnel within the Demised Premises or the Building. Smoking Activities shall
include, without limitation, (i) the carrying or holding of a lighted pipe,
cigar or cigarette of any kind or of any other lighted smoking equipment or
device; (ii) the lighting of any pipe, cigar or cigarette of any kind or the
lighting of any other smoking equipment or device; (iii) the emission or
creation of smoke, fumes or odors from a pipe, cigar or cigarette of any kind;
or (iv) the creation of ashes or other by products from pipes, cigars or
cigarettes of any kind or from any other smoking equipment or
device. 

    

     If
Lessee and/or one or more of its employees, agents, representatives,
contractors, invites, patrons and other personnel engage in a Smoking Activity
in violation of this Lease, Lessor shall provide written notice to Lessee of
such violation, and Lessee shall pay to Lessor the following sums on or before
ten days following the date on which such notice is given: 

    

     1.
Upon the first Smoking Activity violation to occur within a 12-month period,
Lessee shall pay to Lessor an amount equal to $500.00.  This amount
shall be payable to Lessor in addition to all other monies due Lessor under this
Lease. 

    

     2. If
any second Smoking Activity violation occurs within a 12-month period, Lessee
shall give to Lessor an amount equal to $1000.00. This amount shall be payable
to Lessor in addition to all other monies due Lessor under this
Lease. 

    

     3. If
any third Smoking Activity violation occurs within a 12-month period, Lessee
shall be deemed in default under this Lease, and Lessor shall be entitled to
fully exercise its rights and remedies as set forth in Section 23 of this Lease.
: is expressly
understood and agreed by Lessee that if a third Smoking Activity violation
occurs within a 12-month period, Lessor shall not be required to give Lessee any
opportunity to cure or remedy the default, and Lessor shall have the right, but
not the obligation, to exercise any of the remedies available to it pursuant to
the terms of this Lease or at law or in equity, including without limitation,
the right to terminate this Lease. 

    

     26.
MECHANIC’S
LIENS. Nothing
in this lease shall be deemed or construed in any way as constituting the
consent or request of Lessor, express or implied, to any contractor,
subcontractor, laborer or material man for the performance of any labor or the
furnishing of any materials for any specific improvements, alteration to or
repair of the Demised Premises or any part thereof, nor as giving Lessee any
right, power or authority to contract for or permit the rendering of any service
or the Furnishing of any materials that would give rise to the filing of any
lien against the Building or any part thereon. Lessee agrees to ensure that no
mechanic’s or materialman’s lien will be filed against the Demised Premises or
the Building, or any part thereof, for any work claimed to have been done or for
any material claimed to have been furnished to Lessee, and, if any such liens,
are filed against the Demised Premises or the Building, or any part thereof,
lessee will discharge same within five (5) days thereafter. If lessee shall fail
to cause such lien, encumbrance or charge to be discharged within a five (5) day
period, Lessor may, but shall not e obligated to, discharge the lien, either by
paying the amount claimed to be due or by pursuing the discharge of the lien
through udicia1 proceedings. Lessee agrees to pay Lessor, upon demand, as
additional Rental, the sum paid by Lessor to discharge the mechanics or
materialman’s liens, together with court costs and easonab1e attorney’s fees. At
the request of Lessor, Lessee agrees to secure payment bond satisfactory to
Lessor, securing the payment of all amounts due to mechanics and materialmen in
connection with any work claimed to have been done or material claimed to have
been furnished to Lessee in connection with alterations or repairs to the
Demised Premises or to the Building. 

    

     27. 
BANKRUPTCY. The
event Lessee becomes insolvent or bankrupt or admits its inability to pay its
debts as they mature, monies due Lessor under this Lease. 

    

     28.  SMOKING ACTIVITY. If
any third Smoking Activity violation occurs within a 12-month period, Lessee
shall be deemed default under this Lease, and Lessor shall be entitled to fully
exercise its rights and remedies as set forth in Section
23 of this Lease is expressly understood and agreed by Lessee that if a third
Smoking Activity violation occurs within a 12-month period, Lessor shall not be
required to give Lessee any opportunity to cure or remedy he default, and Lessor
shall have the right, but not the obligation, to exercise any of the remedies
available to it pursuant to the terms of this Lease or at law or in equity,
including without limitation, the right to terminate this
Lease. 

    

    
      
         

      

      
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     29.
MECHANIC’S LIENS.
Nothing in this lease shall be deemed or construed in any way as
constituting the consent or request of Lessor, express or implied, to any
contractor, subcontractor, laborer or materialman for the performance of any
labor or the furnishing of any materials for any specific improvements,
1teration to or repair of the Demised Premises or any part thereof, nor as
giving Lessee any right, power or authority to contract for or permit the
rendering of any service or the furnishing of any materials that would give rise
to the filing of any lien against the Building or any part thereof. Lessee
agrees o ensure that no mechanic’s or materialman’s lien will be filed against
the Demised Premises or the Building, or any part thereof, for any work claimed
to have been done or for any material claimed :o have been furnished to Lessee,
and, if any such liens, are filed against the Demised Premises or the Building,
or any part thereof, lessee will discharge same within five (5) days thereafter.
If lessee shall fail to cause such lien, encumbrance or charge to be discharged
within a five (5) day period, Lessor may, but shall not e obligated to,
discharge the lien, either by paying the amount claimed to be due or by pursuing
the discharge of the lien through judicial proceedings. Lessee agrees to pay
Lessor, upon demand, as additional Rental, the sum paid by Lessor to discharge
the mechanics or materialman’s liens, together with court costs and seasonable
attorney’s fees. At the request of Lessor, Lessee agrees to secure payment bond
satisfactory to Lessor, securing the payment of all amounts due to mechanics and
materialmen in connection with any work claimed to have been done or material
claimed to have been furnished to Lessee in connection with alterations or
repairs to the Demised Premises or to the Building. 

    

     30.
BANKRUPTCY. In
the event Lessee becomes insolvent or bankrupt or admits its inability to pay
its debts as they mature, or makes an assignment for the benefit of creditors or
applies for and consents to the appointment of a trustee or receiver for Lessee,
or if bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings for relief under the Bankruptcy Law, or
similar law, for relief of debtors are instituted by or against Lessee, then
Lessor shall have the option of declaring this lease to be in default and shall
have the right to pursue the remedies provided in Paragraph 23
above. 

    

     31.
NOTICES. Any
notices, requests or other communication hereunder shall be deemed duly given if
made in writing and delivered or mailed 

     by
registered or certified mail as follows: 

    

     TO
Lessor: 

    

     CHERYL
OGLE 

     PD BOX
161086 

     AUSTIN,
TEXAS 78716 

     TO
Lessee: NuScribe, LP 

     3600
BEE CAVE ROAD, SUITE 216 

     AUSTIN,
TEXAS 78746 

    

     or, if
notice to Lessee from Lessor, notice may be posted on the front door of the
Demised lease space. 

    

     The
parties agree to execute a short form, recordable declaration of lease, to be
furnished by Lessor at the commencement of the term hereof, and any other
security documents necessary to perfect the landlord’s lien granted
hereunder. 

    

     32.
HEIRS AND ASSIGNS:
This lease
shall be binding upon and insure to the benefit of the heirs, legatees,
devisees, executors, administrators, successors and assigns of the respective
parties hereto who may come into possession of the Demised Premises in any
manner whatsoever, except as restricted by Paragraph 20 hereof. 

    

     33.
ESTOPPEL CERTIFICATES.
Lessor and Lessee agree that at any time and from time to time, upon riot
less than ten (10) days’ prior notice to the other, Lessor or Lessee will
execute, acknowledge and deliver to the other a statement in writing certifying
(a) that this lease is unmodified and in full force and effect (or, if there
have been modifications, that this lease is in full force and effect as modified
and identifying the modifications), (b) the date to which the rental and other
charges have been paid, and (c) that so far as the certifier knows, there is no
default under the provisions of this lease. It :s intended that any such
statement may be relied upon by any person hoping to acquire Lessor’s of
Lessee’s interest, as the case may be, this lease or any prospective mortgagee
or assignee of any mortgage upon such interest. Upon any failure of Lessee to
execute, acknowledge and deliver such certificate within fifteen i5) days of
first notification, Lessor shall have the right to execute same as
attorney-in-fact for lessee. 

    

     34.
SUBORDINATION AND
APPROVAL BY LENDER. Upon request of the Lessor, Lessee will, in writing,
subordinate its rights hereunder to the lien of any first mortgage or first deed
of trust to any bank, insurance company or other lending institution, now or
hereafter in force against the land and Building of which the Demised Premises
are a part, and upon any buildings hereafter placed on the land of which the
Demised Premises are a part, and to all advances made or hereafter to be made
upon the security thereof. In addition, Lessee acknowledges that this lease
shall not be in full force and effect unless and until approved by the holder of
any such lien, or by any lender who is going to provide funds for the
construction of the Demised Premises, and, if Lender can obtain such approval
only upon the basis of modification of the terms and provisions of this lease,
Lessor shall have the right to cancel this lease if Lessee refuses to approve in
writing any such modification within fifteen (15) days after Lessor’s request
thereof. Lessee agrees not to unreasonably withhold such approval.
Notwithstanding the foregoing, in the event of foreclosure by any mortgagee of
Lessor, if Lessee is not in default hereunder, such mortgagee shall recognize
Lessee’s rights hereunder and this lease shall continue in full force and effect
as provided herein.  In the event any proceedings are brought for
foreclosure, or in the event of the exercise of the power of sale under any
mortgage or deed of trust made by Lessor covering the Demised Premises, the
Lessee shall attorney to the purchaser upon any such foreclosure or sale and
recognize such purchaser as the Lessor under this lease. 

    

    
      
         

      

      
         6 

        
          

        

      

      
         

      

    

     

     32.
WAIVER OF
SUBROGATION. Lessor
and Lessee each, as the insured in any insurance policy or policies against loss
by tire and extended coverage or any form of liability, agree to waive and do
hereby waive any rights of recovery against the other party for any loss covered
by such insurance policies and such insurance policies shall expressly provide
that the insurance company or companies writing said insurance waive any right
to any assignment of or subrogation to such rights of its insured for recovery
of damages for any losses covered by said insurance policies, that the waiver by
the insured of its rights of recovery against the other party shall not
invalidate said insurance, and that such waiver by he insured will prevent such
insurance company or companies from pursuing any rights, by assignment or
subrogation or otherwise, which such insurance company or companies have against
the other party for damage :c the Demised Premises or any improvements thereon,
or any other property covered by such insurance policies. 

    

     33.
ANY CHANGE.
Lessee gives its approval to the change of the name of the Building in
which the Demised Premises are located, in the event Lessor chooses to change
such name. 

    

     34.
ATTORNEY’S FEES.
Court costs and attorneys fees incurred by either party hereto in
successful prosecution or
defense of any legal or equitable proceedings to construe this lease or
enforce any right or obligation arising from it shall become an obligation due
and payable from the other party. 

    

     35.
ENTIRE AGREENT.
This agreement constitutes the sole and only agreement of the parties
hereto in regard to this lease and the prior negotiations culminating in the
lease, and supersedes any prior understanding or written or oral agreement
between the parties respecting the within subject matter. No amendment,
modification or alteration of the terms hereof shall be binding unless the same
be in writing, dated subsequent to the date hereof, and duly executed by the
parties hereto. 

    

     36.
TENANT IMPROVEMENT
ALLOWANCE. Lessor shall allow an improvement allowance not to exceed
$9670 for changes to the suite as required by Lessee. 

    

     IN
WITNESS WHEREOF, Lessor and Lessee have caused this lease to be executed in one
original, this 10th day of March 2006. 

    

    
      	
               CHERYL OGLE, an
      individual 

            	
               NuScribe,
      LP 

            

    

    
      	
                
      

            	
               BY:   Tom
      Dorset 

            

    

    
      	
              /s/  Cheryl
      Ogle

            	
              /s/ TOM DORSET
      /

            

    

    

    

    

    

    
      
         

      

      
         7

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