LEASE AGREEMENT BETWEEN SINACOLA COMMERCIAL PROPERTIES, LTD., AS LANDLORD AND OXYSURE SYSTEMS, INC., AS TENANT MARCH 6, 2007 LEASE SUMMARY

 

 

 

 

 

 

 

 

 

Any capitalized terms not defined in this Exhibit "C" have the meaning set forth in the Lease to which this Exhibit "C" is attached.

 

1. Sidewalks, doorways, vestibules, halls, stairways, and similar areas may not be obstructed, nor will refuse, furniture, boxes or other items be placed therein by Tenant or Tenant-Related Parties. Such areas are to be used solely for ingress and egress to and from the Premises, or for going from one part of the Building or Complex to another part of the Building or Complex. Tenant will be responsible, at its sole cost, for the removal of any large boxes or crates not used in the ordinary course of business. Nothing may be swept or thrown into the corridors, halls, elevator shafts or stairways.

 

2. Canvassing, soliciting, distributing handbills, advertising and peddling in the Building and Complex are prohibited.

 

3. Plumbing fixtures and appliances may be used only for the purpose for which such were constructed or installed, and no unsuitable material may be placed therein. Tenant will bear the cost of repair of any stoppage or damage to any such fixtures or appliances from misuse on the part of Tenant or Tenant-Related Parties, guests and customers.

 

4. No signs, directories, posters, advertisements, or notices visible to the public will be painted or affixed on or to any of the windows or doors, or in corridors or other parts of the Building, except in such color, size, and style, and in such places, as have been first approved in writing by Landlord. Landlord has the right to remove, at the expense of Tenant, all unapproved signs, directories, posters, advertisements or notices following reasonable prior notice to Tenant.

 

5. Tenant may not do, or permit to be done, anything in or about the Building or Complex, or bring or keep anything therein, that will in any way increase the rate of fire or other insurance on the Building, or on property kept therein, or otherwise increase the possibility of fire or other casualty. No cooking (other than cooking through the use of a microwave oven), including grills or barbecues, will be permitted within the Premises or on any patio adjoining the Premises.

 

6. Landlord has the power to prescribe the weight and position of heavy equipment or objects that may overstress any portion of the floor of the Premises. Tenant will bear the cost of repair of damage done to the Building by the improper placing of such heavy items. Tenant must notify the Building manager when safes or other heavy equipment are to be taken in or out of the Building. The moving of such equipment may be done only after written permission is obtained from Landlord and must be performed under such conditions as Landlord may reasonably require.

 

        7. Corridor doors, when not in use, must be kept closed.

 

        8. Tenant must cooperate with Landlord's employees in keeping the Premises neat and clean.

 

        9. Tenant may not cause or permit any improper noises in the Building, or allow any unpleasant odors to emanate from the Premises, or otherwise interfere, injure or annoy in any way other tenants, or persons having business with such tenants.

 

 

10. No animals or birds, other than those assisting the disabled, may be brought into or kept in or about the Building.

 

11. No machinery of any kind, other than ordinary office machines such as copiers, fax machines, personal computers and related mainframe equipment, electric typewriters and word processing equipment, may be operated on the Premises without the prior written consent of Landlord, which consent will not be unreasonably withheld or delayed.

 

12. Tenant may not use or keep in the Building any flammable or explosive fluid or substance (including Christmas trees and ornaments), or any illuminating materials, without the prior written approval of the Building manager.

 

         13. No bicycles, motorcycles or similar vehicles are allowed in the Building.

 

14. No nails, hooks, or screws (other than those necessary for hanging artwork, diplomas, posterboards and other such items on interior walls) may be driven into or inserted in any part of the Building (including doors), except as approved by Landlord.

 

15. Landlord may evacuate the Building in the event of an emergency or catastrophe. Tenant will cause its officers, agents and employees to participate in any fire safety or emergency evacuation drills scheduled by Landlord.

 

16. No food or beverages may be prepared, cooked or distributed from the Premises without the prior written approval of Landlord, which approval will not be unreasonably withheld or delayed. However, Tenant will be pennitted to install refrigerators, microwave ovens, coffee machines and vending machines for the use of its own employees and guests.

 

17. No additional or replacement locks may be placed upon any doors without the prior written approval of Landlord, which approval will not be unreasonably withheld or delayed. All keys necessary to enter the Premises will be furnished by Landlord. Upon termination of the Lease, Tenant must return all keys to Landlord and provide to Landlord the combination of all locks on doors or vaults. No duplicates of keys may be made by Tenant.

 

18. Tenant may not locate furnishings or cabinets adjacent to mechanical or electrical access panels or over air conditioning outlets in a manner that will prevent Landlord's personnel or contractors from servicing such units as routine or emergency service may require. Tenant will pay the cost of moving such furnishings for Landlord's access. Tenant will instruct all of its emnlQvees to refrain from any attempts to adjust thermostats. The lighting and air conditioning equipment of the Building will be exclusively controlled by Landlord's personnel.

 

         19. No portion of the Building may be used for the purpose of lodging rooms.

 

20. Tenant must obtain Landlord's prior written approval, which approval will not be unreasonably withheld or delayed, for the installation of window shades, blinds, drapes or any other window treatment or object that may be visible from the exterior of the Building or affect the heating and cooling of the Building. Landlord will control all internal lighting that may be visible from the exterior of the Building and will have the right to change, at Tenant's expense, any unapproved lighting following reasonable prior notice to Tenant.

 

21. No supplemental heating, air ventilation or air conditioning equipment, including space heaters and fans, may be installed or used by Tenant without the prior written consent of Landlord.   _

 

 

22.      No smoking may be permitted within the Premises or anywhere else within the Complex, other than those smoking areas designated by the Building manager.

 

24.      No unattended children are allowed within the Complex.

 

25.      Tenant and its employees, agents, subtenants, licensees and visitors will follow the following rules and regulations for the Parking Areas:

          (a)      Cars must be parked entirely within the stall lines painted on the ground or on the floor.

         

          (b) All directional signs and arrows must be observed       

 

          (c) The speed limit is 5 miles per hour.

 

          (d) Parking is prohibited in areas not striped for parking, aisles, areas where "no parking" signs are posted, in cross-hatched areas and in such other areas as may be designated by Landlord or Landlord's agent(s) (including areas designated as "Visitor Parking").

 

          (e) Every vehicle owner is required to park and lock his own car.

 

          (f) Spaces which are designated for small, intermediate or full-sized cars will be so used. No intermediate or full-size cars may be parked in parking spaces limited to compact cars.

 

          (g) No vehicle may be stored in the Parking Areas. Any vehicle remaining in the Parking Areas without interruption for 5 business days is deemed to have been stored in the Parking Areas.

          (h) Landlord is entitled and is hereby authorized to place a wheel lock or other device restricting mobility upon such vehicle or have any such vehicle towed away, at the sole risk and expense of the vehicle owner.

 

27.    In the event of anv inconsistency between these Rules and Regulations and the terms of the Lease, the terms of the Lease will control.

 

 

 

This Tenant Improvements Agreement (herein so called) describes and specifies the rights and obligations of Landlord and Tenant under the Lease to which this Exhibit "D" is attached, with respect to the design, construction and payment for the completion of the Tenant Improvements within the Premises.

 

1. Definitions. Any capitalized terms not defined in this Tenant Improvements Agreement shall have the meaning set forth in the Lease. Additionally, as used in this Tenant Improvements Agreement, the following terms (when delineated with initial capital letters) shall have the respective meaning indicated for each as follows:

 

(a) "Architect" means the architect selected by Landlord or selected by Tenant and approved in writing by Landlord to assist in performance of the Work.

 

(b) "Change Costs" means any increase in the Cost of the Work attributable to any change in the scope of the Work requested or made necessary by Tenant or its representatives, including, without limitation, (1) a direction by Tenant to add to, modify or omit any item of Work contained in the Plans and Specifications, (2) any additional architectural, design or engineering services, (3) any changes to materials in the process of fabrication, (4) the cancellation or modification of supply or fabricating contracts, or (5) the removal or alteration of any Work completed or in process.

 

(c) "Construction Manager" means any third party engaged by Tenant to manage or inspect the performance of the Work. The choice of Construction Manager shall be subject to the prior written approval of Landlord, such approval not to be unreasonably withheld.

 

(d) "Contractor" means the general contractor selected by Landlord to perform the Work or the general contractor selected by Tenant and approved by Landlord to perform the Work. Landlord reserves the right to replace the initial Contractor and/or to engage other contractors if the initial Contractor fails or refuses to perform the Work to Landlord's satisfaction.

 

(e) "Cost of the Work" means the cost of performing the Work, and all permit fees (including, without limitation, any fee payable to the Texas Department of Licensing and Regulation [or any successor thereto]).

 

(f) "Landlord's Costs" means the cost of (i) preparing the Plans and Specifications (as defined herein), and (ii) performing the Work.

 

(g) "Plans and Specifications" means the plans and specifications prepared in accordance with Section 2 of this Tenant Improvements Agreement.

 

(h)           "Work" means all materials and labor to be added to the existing improvements in the Premises, if any, in order to complete the installation of the Tenant Improvements within the Premises for Tenant in accordance with the Plans and Specifications, including, without limitation, all air balancing and other mechanical adjustments to Building equipment serving the Premises. Tenant acknowledges and agrees that only Building Standard materials may be utilized in the performance of the Work unless otherwise approved by Landlord in writing, such approval not to be unreasonably withheld. The Work shall not include the purchase and installation of any voice and data cabling, telephone or other communications equipment unless specifically included on the Plans and Specifications.

 

2. Approval of Plans and Specifications; Critical Path for Construction.

 

(a) Tenant and Landlord shall reasonably and mutually agree upon the Plans and Specifications for the Tenant Improvements to the Premises, including, without limitation, the color scheme and the types of materials and finishes that Tenant desires to use within the Premises. Landlord shall commence preparation of the construction documents promptly after the later to occur of (i) the Date of the Lease and (ii) the payment by Tenant to Landlord of a $20,000 deposit (the "Document Preparation Deposit") within fifteen (15) days after the Date of the Lease, to be held by Landlord and used in accordance with the terms hereof. Once prepared, Landlord shall deliver, not less than 20 business days after the later of (x) the Date of the Lease or (y) the payment of the Document Preparation Deposit, the construction documents to Tenant for Tenant's review and approval. Tenant shall approve or disapprove such construction documents in Tenant's reasonable discretion within five (5) business days after receipt thereof. The failure of Tenant to reasonably disapprove such construction documents within such five (5) business day period shall constitute Tenant's approval of same. If Tenant timely disapproves such construction documents, Tenant shall specifically identify its reasonable objections and Landlord shall revise such construction documents taking Tenant's objections under consideration and promptly re­submit the same to Tenant for approval by Tenant within five (5) business days after re-submittal. The foregoing process shall be repeated until Tenant shall have approved the construction documents. Upon approval by Landlord and Tenant, such construction documents shall constitute the "Plans and Specifications" hereunder. If either party delivers the notice of termination pursuant to Section 2.1 of the Lease, Landlord shall promptly return to Tenant any unused balance of the Document Preparation Deposit, together with the copies of any and all receipts and invoices accounting for the used portion of the Document Preparation Deposit.

 

(b) Within 40 business days after the Date of the Lease, Tenant shall notify Landlord in writing that Tenant has made its assessment of the finish-out bids received by Tenant and identifying Tenant's proposed contractor (subject to Landlord's approval). Further, Tenant and Tenant's Contractor must be ready to commence construction within five (5) business days after delivery of such notice.

 

(c) Landlord shall promptly provide Tenant and the project Architect with finish-out Plans and Specifications as is reasonably required for Tenant to provide to potential finish-out contractors for pricing of same.

 

(d) Tenant and the project Architect shall diligently pursue and Landlord shall undertake good faith efforts to cooperate as required, for the building permit to be obtained during the bidding process so as not to delay the commencement of the Work once contractor is selected and approved by Landlord.

 

(e) If (i) Tenant has satisfied each of the time deadlines set forth in this Section 2, (ii) the construction documents have been approved by Tenant within twenty (20) business days after the Date of the Lease (subject to any unreasonable delay in the approval process that was directly caused by Landlord), and (iii) Tenant commences the Work on or before May 15, 2007 in accordance with and in satisfaction of the requirements hereunder, then Tenant shall receive a full refund of the Document Preparation Deposit.

 

(f) If, however, any of the following occur (i) Tenant has not satisfied any of the time deadlines set forth in this Section 2, (ii) the construction documents are not approved by Tenant within twenty (20) business days after the Date of the Lease (subject to any unreasonable delay in the approval process that was directly caused by Landlord), or (iii) Tenant fails to commence the Work on or before May 15, 2007 in accordance with and in satisfaction of the requirements hereunder, then Landlord may, in its sole discretion, (x) terminate the Lease in which event Tenant will immediately surrender

 

 

possession of the Premises to Landlord in accordance with the terms of the Lease and Landlord may utilize the Document Preparation Deposit to pay all costs and expenses incurred by Landlord in connection with the Lease or the construction documents (and promptly return the balance, if any, to Tenant) or (y) extend the time period for finalization and completion of the construction documents or the applicable items under Section 2(b) subject to a continuing right to terminate in accordance with item (i).

 

3. Compliance with Applicable Laws. Tenant acknowledges that Landlord shall have no responsibility for compliance of the Plans and Specifications with applicable federal, state and local statutes, codes, ordinances and other regulations, and the approval of the Plans and Specifications by Landlord shall not constitute a representation or warranty by Landlord that such Plans and Specifications are in compliance with said statutes, codes, ordinances and other regulations.

 

4. Change Costs. Tenant shall at all times pay all Change Costs incurred by Landlord, which Change Costs shall be paid as a condition precedent to Landlord implementing the change in question.

 

5. Change Orders. All changes and modifications in the Work from that contemplated in the Plans and Specifications, whether or not such change or modification gives rise to a Change Cost, must be evidenced by a written change order (a "Change Order") executed by both Landlord and Tenant. In that regard, Tenant shall submit to Landlord such information as Landlord shall require with respect to any Change Order requested by Tenant. Landlord shall then return to Tenant either a proposed form of Change Order (which shall show any increase in the Cost of the Work), to evidence Landlord's approval thereof, or a statement disapproving such requested Change Order and stating the reasons for disapproval. Tenant shall execute and return any approved Change Order to Landlord as a condition precedent to the implementation of the change in question.

 

6. Failure to Pay. The amounts payable by Tenant to Landlord hereunder shall constitute Rent, and Tenant's failure to make any such payment when due shall constitute a default under the Lease, entitling Landlord, subject to any applicable notice and/or grace periods provided in the Lease, to exercise any or all of its remedies under the Lease or this Tenant Improvements Agreement.

 

7. Performance of Work and Delays. Following final approval of the Plans and Specifications, Landlord shall instruct the Contractor to proceed with the Work. If a delay shall occur in the completion of the Work as the result of:

 

(a)           any occurrence described in the definition of Change Costs,

 

(b) Work that is non-Building Standard that requires a lead time (not due to a Landlord default or error) to obtain materials or construction time to perform in excess of that required for Work which is Building Standard, as reasonably determined by Landlord, or

 

(c) any other act, omission, delay or default of Tenant or Tenant's agents, representatives or employees or the Construction Manager, including any violation of the provisions of the Lease or any delay in giving authorizations or approvals pursuant to this Tenant Improvements Agreement, then any such delay shall be considered a Tenant Delay and will be subject to the terms of Section 3.3 of the Lease.

 

 8. Cost of Tenant Improvements.

 

 

(a) Payment of Costs. Tenant shall promptly pay any and all costs and expenses incurred in connection with or arising out of the performance of the Tenant's Work in constructing the Tenant Improvements.

 

(b) Tenant Improvements Allowance. Notwithstanding the provisions of subparagraph (a) above, Landlord shall provide Tenant with a Landlord's Allowance of $324,000.00 towards the Tenant Improvements Allowance in accordance with Section 2.2 of the Lease. The Tenant Improvement Allowance, which also contains any FEDC Funds obtained by Tenant, shall be used for the performance of Tenant's Work and Tenant's Improvements. The Tenant Improvements Allowance shall not be used for any purposes other than for payment of Tenant's Improvements and the cost of performing Tenant's Work or as otherwise provided by this Section 8; provided, however, Tenant may use a portion of the Tenant Improvements Allowance (not to exceed 10% of the Tenant Improvements Allowance) as payment for the cost of preparing Tenant's Plans and Specifications. Tenant, in its sole discretion, may also apply any and all unused portions of the Tenant Improvements Allowance to (i) the payment of the Base Rent on a prorated basis over the first sixty (60) months of the Initial Term of the Lease in proportion to the rent schedule for the Initial Term, and/or (ii) the purchase of furniture, fixtures, and equipment ("FF&E"), provided that all Tenant Improvement Costs have been finalized and any FF&E so purchased shall be applicable to Landlord's lien right as defined in Section 11.2 of the Lease.

 

(i) If Tenant's Contractor is performing the work, as Tenant's Work progresses, Tenant may submit to Landlord a request (a "Draw Request") no later than the 5th day of each month in writing for a portion of the Tenant Improvements Allowance, which request shall include: (i) a detailed breakdown of Tenant's construction costs, together with invoices therefor, incurred through the date of such Draw Request, (ii) a certified, written statement from Tenant's Architect that the Tenant Improvements for which the payment is being requested have been completed in accordance with the Plans and Specifications, to the extent of the costs that are the subject of such Draw Request and (iii) lien waivers in form and substance satisfactory to Landlord from the Tenant's Contractor (and any subcontractors performing work which is the subject of such Draw Request), waiving any applicable mechanic's liens relating to such work ("Lien Waivers"). Upon Landlord's receipt and approval of a Draw Request, Landlord shall pay to Tenant the portion of the Tenant Improvements Allowance requested within 30 business days of Tenant's submission of the Draw Request, unless Landlord notifies Tenant in writing of Landloard's rejection (and the reasons therefor) of such Draw Request. If the actual cost of performance of the Tenant's Work exceeds the Tenant Improvements Allowance, then Tenant shall pay all such excess costs ("Excess Costs") in a timely manner and Landlord shall have no responsibility therefor. Notwithstanding anything to the contrary set forth herein, once Tenant has exhausted the Tenant Improvements Allowance, Tenant shall still nevertheless continue to deliver to Landlord not later than the 5th day of each month all of the information required to be delivered with the Draw Request set forth in Section 5(b) above.

 

(ii) If Landlord's Contractor is performing the work, Landlord shall credit the Tenant Improvements Allowance against the cost of the Tenant's Work and the Excess Costs shall be paid by Tenant. Landlord may, at its option, prior to the commencement of Tenant's Work, provide Tenant with an estimate, prepared by Landlord, of the Excess Cost. In such event, Tenant shall, as a condition of the commencement of Tenant's Work, deposit the full amount of the estimated Excess Costs with the Landlord (the "Construction Deposit"). The Construction Deposit shall be applied by Landlord against the Excess Costs. Any amount remaining in the Construction Deposit shall be refunded to Tenant within 30 days following the Commencement Date and any deficiency in the Construction Deposit shall be paid by Tenant to Landlord within 30 days following written demand by Landlord. If Landlord does not require a Construction Deposit, Landlord shall provide Tenant an invoice for the Excess Costs following completion of Tenant's Work and Tenant shall pay such sum to Landlord within 30 days after receipt of such invoice.

 

 

(iii) Tenant may request that a portion of the Tenant Improvements Allowance be used for the construction of six (6) covered parking spaces (the "Covered Spaces") on the south side of the Premises. Landlord shall have sole discretion in determining (i) the design of the Covered Spaces, (ii) the building materials used in their construction, and (iii) where the Covered Spaces will be located on the south side of the Premises. The Covered Spaces will immediately become the property of the Landlord upon completion.

 

9. Punchlist. Prior to the Commencement Date, Landlord and Tenant shall conduct a walk-through of the Premises (the "Inspection") and specify in writing the Punchlist Items that remain to be performed by Landlord. Except for the Punchlist Items so identified, and the obligation of Landlord to correct defective work pursuant to Section 9 of this Tenant Improvements Agreement, and latent defects pursuant to Section 2.3(d) of the Lease, all obligations of Landlord in regard to the Work shall be deemed to have been satisfied upon completion of the hispection. Landlord shall have the right to enter the Premises to complete the Punchlist Items, and entry by Landlord, its agents, servants, employees or contractors for such purpose shall not relieve Tenant of any of its obligations under the Lease or impose any liability on Landlord or its agents, servants, employees or contractors.

 

If Landlord's contractor performed the Work, Landlord shall complete or cause the completion of the Punchlist Items within 60 days after the Punchlist Items were specified in writing and agreed to by Landlord, unless Tenant and Landlord agree otherwise in writing at the time of the Inspection. In the event that the Punchlist Items are not completed within the time period designated herein, the Tenant shall have the right to complete such Punchlist Items pursuant to the Tenant "self-help" provision under Section 7.4.

 

10. Notices. All notices required or contemplated hereunder shall be given to the parties in the maimer specified for giving notices under the Lease.

 

11. Non-Compliance of Tenant Improvements. If, within ninety (90) days after the hispection, Tenant shall provide to Landlord written notice that any of the Tenant Improvements do not comply with the Plans and Specifications in all material respects (Tenant agreeing, however, to promptly provide such written notice upon discovery of non-compliance), Landlord will correct such non-compliance at its own expense. Any non-compliance of which Tenant has not given Landlord written notice within such ninety (90) day period is deemed waived; provided, however, Tenant shall continue to have the rights with respect to latent defects set forth in Section 2.3(d) of the Lease. Notwithstanding anything contained herein to the contrary, Landlord is not required to correct non-compliance with the Plans and Specifications of any non-Building Standard materials incorporated by Tenant into the Tenant Improvements nor any workmanship defects with respect to contractors or subcontractors specially requested by Tenant and not generally utilized by Landlord.

 

Landlord shall correct such non-compliance within 60 days after a written notice from Tenant was provided to Landlord. In the event that such non-compliance is not corrected within the time period designated herein, the Tenant shall have the right to correct such non-compliance pursuant to the Tenant "self-help" provision under Section 7.4.

 

 

 

This ACCEPTANCE OF PREMISES MEMORANDUM ("Memorandum") is given on___________, 200___ , by_________________, a ____________________________ ("Landlord").

 

RECITALS

 

A.           Landlord and Tenant entered into that certain Office Lease Agreement dated___________, 200 ____________ (the "Lease"). All terms used but not defined herein have the meanings set forth

in the Lease.

B.           Landlord wishes to confirm certain matters relating to the Lease and the work performed by Landlord at the Premises.

 

 

2.           Acceptance of Premises.    Except for the items listed on the Punch List dated__________, 200 ____(a copy of which is attached to this Memorandum), Landlord has completed all work required to be completed by Landlord under the Lease.

 

4.          Reliance. This Memorandum, pursuant to the terms of Section_______________of the Lease, may be relied upon by Landlord, Landlord's partners and prospective purchasers, and __________("Landlord's Lender"), and each of their respective successors and assigns.

 

 

EXECUTED as of the date set forth above.

 

 

___________________________________,

 

a.__________________________________

 

By: ________________________________

 

Name: ______________________________

 

Title:_______________________________

 

 

 

So long as the Lease is in full force and effect and there is no uncured Event of Default under the Lease, if during the initial Lease Term, Landlord receives an offer which Landlord is willing to accept (the "Offer") to lease all or any portion of 50,000 sf of the vacant space located in either of the 2 buildings that are currently scheduled for future construction, as depicted on Exhibit "F-l" attached hereto (the "Refusal Space"), Tenant will have a one-time right of first refusal ("Right of First Refusal") to lease all (but not part) of the space that is the subject of the Offer (the "Subject Space") upon the same terms and conditions contained in the Offer, except that the lease term for the Subject Space will be the same as the remaining Lease Term of the Lease (and if the remaining Lease Term is shorter than the lease term stated in the Offer, all allowances, concessions or other costs to be paid by Landlord will be proportionately reduced or the rental rate in the Offer will be adjusted upward by Landlord in accordance with its standard pricing procedures to take into account the shorter period within which Landlord may recover any allowances, concessions or other costs to be paid by Landlord as set forth in the Offer). If, within 5 days after Tenant receives written notice of the Offer (including a statement of the material terms and conditions thereof), Tenant does not notify Landlord in writing that Tenant elects to lease the Subject Space, then Landlord may enter into a lease with the prospective tenant who made the Offer on substantially the same terms and conditions contained therein, hi addition, if the Subject Space is less than all of the Refusal Space, and the remainder of the Refusal Space is adjacent to the Premises, Tenant's failure to exercise the Right of First Refusal with respect to the Subject Space will not prejudice its Right of First Refusal with respect to the remainder of the Refusal Space. Except as provided in the preceding two sentences, the failure of Tenant to exercise the Right of First Refusal within the time period set forth herein will constitute a waiver and termination of the Right of First Refusal. If Tenant timely notifies Landlord of its intention to lease the Subject Space, Landlord and Tenant will promptly enter into an amendment to this Lease adding the Subject Space to the Premises and otherwise incorporating the terms and conditions of the Offer. This Right of First Refusal is personal to Tenant and is not assignable to any third parties, including, but not limited to, any assignee or sublessee of Tenant. Tenant acknowledges that the construction plans for the 2 buildings containing the Refusal Space have yet to be finalized and that the Landlord may alter, in its sole discretion, any aspect of the buildings' construction, including, but not limited to, the buildings' location, size, design, and construction schedule and whether the buildings are actually built. This Right of First Refusal is only applicable to the building that is constructed first, if any.

 

Any capitalized terms not defined in this Exhibit "F" will have the meaning set forth in the Lease to which this Exhibit "F" is attached.

 

 

 

So long as the Lease is in full force and effect and there is no Event of Default under this Lease at the time of Tenant's exercise of the Renewal Option (defined below) and upon the commencement of the Renewal Term (defined below), Tenant will have the option ("Renewal Option") to renew this Lease as follows:

 

Tenant may, by notifying Landlord of its election in writing ("Renewal Notice") not less than 120 days prior to the end of the Lease Term, renew this Lease for an additional term ("Renewal Term") beginning on the date next following the expiration date of the Lease Term and continuing for 60 months thereafter. Such renewal will include the Premises, as well as any other space within the Building then being leased by Tenant as of the date of exercise of the Renewal Option. The renewal of this Lease will be upon the same terms, covenants and conditions applicable during the Lease Term, as provided in the Lease, except that:

 

(a) the Base Rent payable during the Renewal Term will be an amount equal to the Market Rental Rate (as defined below) as of the date on which the Renewal Term commences;

 

(b) the term "Lease Term" will be deemed to include the Renewal Term;

 

(c) no concessions applicable during the initial Lease Term (such as construction allowances, moving allowances or free rent) will be applicable during the Renewal Term; and

(d) Tenant will possess no further renewal options beyond the number of options granted in this Exhibit "G".

 

As used herein, the phrase "Market Rental Rate" means the rate of Base Rent being charged for similar transactions for comparable space (including factors such as size, age, location and condition of the premises and the improvements in place therein) within buildings (including, but not limited to, the Building) within the Market Area during the previous 6 months with tenants of a size and having a financial condition comparable to that of Tenant. In no event, however, will the rate be less than the Base Rent payable under the Lease for the last year of the initial Lease Term.

 

Within 15 days after receipt of Tenant's Renewal Notice (and any required supporting information), Landlord will notify Tenant in writing of Landlord's estimate of the Market Rental Rate. Landlord and Tenant will in good faith attempt to determine the Market Rental Rate to be used to calculate the Base Rent. In the event that the parties cannot agree on the Market Rental Rate within 30 days after Landlord's initial communication to Tenant, Landlord will select an M.A.I, appraiser, who will determine the Market Rental Rate to be used to calculate the Base Rent and communicate his or her determination to the parties within 15 days after his or her appointment, which determination will be binding upon the parties. Each party will pay 1/2 of the cost of the appraisal. Within 15 days thereafter, Tenant will notify Landlord that Tenant either (i) accepts the Market Rental Rate established by the appraiser in which event the parties will promptly enter into an amendment to the Lease incorporating such terms, or (ii) reject Landlord's renewal terms, in which event the Lease will end at the expiration of the initial Lease Term and Landlord will have no further obligations or liability hereunder. The failure of Tenant to respond within such 15-day period will be deemed rejection of Landlord's terms.

 

The failure of Tenant to exercise the Renewal Option within the time period set forth herein will constitute a waiver and termination of such Renewal Option. This Renewal Option is personal to Tenant and is not assignable to any third parties, including, but not limited to, any assignee or sublessee of Tenant.

 

Any capitalized terms not defined in this Exhibit "G" will have the meaning set forth in the Lease to which this Exhibit "G" is attached.

 

 

 

 

 

1. "Basic Operating Costs" means all direct and, to the extent provided in Paragraph 1(a), indirect costs and expenses incurred in each calendar year of operating, maintaining, repairing, managing and, to the extent specifically provided below, owning the Complex. "Basic Operating Costs" includes, without limitation, the following:

 

(a) Wages, salaries and other compensation of all employees engaged in the direct operation and maintenance of the Complex, employer's social security taxes, unemployment taxes or insurance and any other taxes which may be levied on such wages, salaries and other compensation, and the cost of medical, disability and life insurance and pension or retirement benefits for such employees (but if employees are engaged in the operation and maintenance of other buildings owned by Landlord or an affiliate of Landlord, other than the Complex, the employee-related costs will be fairly apportioned among all such buildings);

 

(b) Electricity Costs for the Complex incurred in the use, occupancy and operation of the Complex and all related improvements and appurtenances, including, but not limited to, electricity use for heating and air conditioning and perimeter lighting for the Complex, net of Submetered Power;

 

(c) Cost of leasing or purchasing all supplies, tools, equipment and materials used in the operation, maintenance, repair and management of the Complex;

 

(d) Cost of all utilities for the Complex (both interior and exterior), such as, water and power, sewage, heating, lighting, air conditioning and ventilation (but specifically excluding Electricity Costs for the Complex);

 

(e) Cost of all maintenance and service agreements for the Complex and surrounding grounds, such as janitorial service, pest control for the Common Areas and Service Areas, security service, equipment leasing, energy management system leasing, landscape maintenance, alarm service, window cleaning, metal finishing and elevator maintenance;

 

(f) Cost of all insurance relating to the Complex, such as fire and extended coverage insurance, flood insurance, rental interruption insurance and liability insurance applicable to the Complex and Landlord's personal property used in connection with the Complex, plus the cost of all deductible payments made by Landlord in connection with the insurance coverage (but only to the extent not already deducted as a Basic Operating Cost);

 

(g) All Taxes (if the amount of Taxes payable for any calendar year, including the amount of Taxes included in the Base Operating Cost Amount, is changed by final determination of legal proceedings, settlement, or otherwise, such changed amount shall be the Taxes for such year);

 

(h) Cost of repairs and general maintenance for the Complex (excluding such repairs and general maintenance paid by insurance proceeds or by Tenant or other third parties);

 

(i) Legal expenses incurred with respect to the Complex which relate directly to the operation of the Complex and which benefit all of the tenants of the Complex generally, such as legal proceedings to abate offensive activities or uses or to reduce property taxes, but excluding legal expenses related to the collection of Rent or to the sale, leasing or financing of the Complex;

 

(j) Fees for management services for the Complex, whether provided by an independent management company, by Landlord or by any affiliate of Landlord, but only to the extent that the costs of such services do not exceed competitive costs for comparable services in comparable buildings of the class, type, size, age and location of the Building in the Market Area;

 

(k) Expenses incurred in order to comply with any federal, state or municipal law, code or ordinance, or regulation which was not promulgated, or which was promulgated but not in effect or applicable to the Complex, as of the Effective Date of this Lease;

 

(1) Amortization of the cost of capital investment items which (i) Landlord reasonably believes will either (A) reduce (or avoid increases in) Basic Operating Costs, or (B) promote safety, or (ii) may be required in order to comply with any federal, state or municipal law, code or ordinance, or regulation which was not promulgated, or which was promulgated but was not in effect or applicable to the Complex as of the Effective Date (all costs of such capital investment items will be amortized, together with an amount equal to interest at 12% per year, in accordance with generally accepted accounting principles, but the amortization period will not extend beyond the remaining useful life of the Building); and

 

(m)     Costs of ad valorem tax consultants.

 

2. "Basic Operating Costs" will not include any expenses or costs for the following items:

 

          (a) Building Specific Operating Costs;

 

(b) Except as provided in Paragraph 1, costs that, under generally accepted accounting principles, are required to be classified as capital expenditures;

 

(c) Except as provided in Paragraph 1, depreciation or amortization of the Building or its contents or components;

 

(d) Expenses for the preparation of space (including tenant finish out costs) or other similar type work that Landlord performs for any tenant or prospective tenant of the Building;

 

(e) Expenses incurred in leasing or obtaining new tenants or retaining existing tenants, such as marketing costs and leasing commissions;

 

(f) Except as provided in Paragraph 1, legal expenses

 

(g) Interest, amortization or other costs associated with any Mortgage; or

 

(h) Any ground rent incurred for the Complex.

 

 

Sinacola Commercial Properties, Ltd., a Texas limited partnership ("Landlord") is the landlord of real property commonly known as Frisco Center Building 1, 10880 Research Road, Suite 600, Frisco, TX 75034 ("the Premises"). Landlord rents space of the Premises to OxySure Systems, Inc., a Delaware Corporation ("Tenant") and in comiection with such provision of rental space, Tenant may place on the Premises that certain equipment, which is leased to Tenant by ABC Company ("Leasing Agent").

 

1. Landlord acknowledges that it has received notice that Tenant has or will enter into one or more Lease Schedules to the Master Lease Agreement (the "Equipment Leases") with Leasing Agent, whereby Tenant will lease from Leasing Agent certain equipment, including, but not limited to, all assets, as amended from time to time by Tenant and Landlord (the "Equipment"), all or part of which is currently or may be located upon or affixed to the Premises.

 

2. Landlord agrees that Leasing Agent's rights in the Equipment are superior to any right or claim which Landlord may have and hereby subordinates any and all rights it may have against the Equipment for any rent or other sums due or to become due, under any agreement with Tenant or otherwise, and all claims and demands of eveiy kind against the Equipment.

 

3. Landlord agrees that the Equipment will remain personal property and will not become part of the Premises, regardless of the manner in which it may be affixed to real property. In the event of default by Tenant on any of its Equipment Leases with Leasing Agent, Landlord will allow Leasing Agent or its agents to enter the Premises to remove the Equipment in the exercise of its rights and remedies arising under the Equipment Lease, provided Leasing Agent gives Landlord ten (10) days prior written notice. Each of Tenant and Leasing Agent, jointly and severally, shall indemnify and hold Landlord harmless for any and all costs, expenses and damages caused by Tenant and/or Leasing Agent, their agents or employees, in connection with the exercise of Leasing Agent's rights under this instrument.

 

4. This instrument shall be binding upon the heirs, administrators, executors, successors and assigns of Landlord, and shall inure to the benefit of the successors and assigns of Leasing Agent.

 

5. Except as expressly provided herein, Landlord's rights under this agreement with Tenant remain unmodified.

 

IN WITNESS WHEREOF, the undersigned have executed and delivered this instrument this______________day of___________________, 2007.

 

a Delaware corporation

 

By:_____________________________________

 

Name:___________________________________

 

Title:____________________________________