Marinecorp International, Ltd. v. the Chopper Group, LLC and Outlaw Country, LLC

No. 01-14-00707-CV

IN THE FILED IN
1st COURT OF APPEALS
HOUSTON, TEXAS
FIRST COURT OF APPEALS 10/30/2015 1:52:16 PM
CHRISTOPHER A. PRINE
at HOUSTON, TEXAS Clerk

––––––––––––––––––––––––––––––––––––
MARINECORP INTERNATIONAL, LTD.
Appellant,
v.
THE CHOPPER GROUP, LLC, AND

OUTLAW COUNTRY, LLC
Appellees.
––––––––––––––––––––––––––––––––––––

Appealed from the 80th Judicial District Court of
Harris County, Texas, Trial Court Cause No. 2012-23983
________________________________________________________________

BRIEF FOR APPELLANT
________________________________________________________________

THE STROTHER LAW FIRM
Macon D. Strother
Texas Bar No. 19420000
4306 Yoakum Blvd., Suite 560
Houston, Texas 77006
Tel. (713) 557-9238
mstrother@strotherlawfirm.com
ATTORNEY FOR APPELLANT,
MARINECORP INTERNATIONAL, LTD.

APPELLANT REQUESTS ORAL ARGUMENT
 IDENTITY OF PARTIES AND COUNSEL

Appellant: Marinecorp International, Ltd.

Counsel for Appellant: The Strother Law Firm
Macon D. Strother
State Bar No. 19420000
4306 Yoakum Blvd., Suite 560
Houston, Texas 77006
Tel. (713) 557-9238
mstrother@strotherlawfirm.com

Appellees: The Chopper Group, LLC
Backwoods Country Club, LLC
Tony Miller

Counsel for Appellees: The Akers Firm
Brock C. Akers
State Bar No. 00953250
3401 Allen Pkwy., Suite 101
Houston, Texas 77019
Tel. (713) 877-2500
Fax (713) 583-8662
bca@akersfirm.com

Appellee: Kyle Tones

Counsel for Appellee: The Cochell Law Firm, PC
Stephen R. Cochell
State Bar No. 24044255
5555 W. Loop S., Suite 200
Bellaire, Texas 77401
Tel. (832) 767-1065
Fax (832) 767-1686
srcochell@gmail.com

i
Appellees: Lee Harless, pro se
Dawn Marie Harless, pro se

Counsel for Appellees: N/A

Trial Court: Hon. Judge Larry Weiman
Judge, 80th Judicial District Court
Harris County Civil Courthouse
201 Caroline, 9th Floor
Houston, Texas 77002
Tel. (713) 368-6100

ii
 TABLE OF CONTENTS

Identity of Parties and Counsel..........................................................................i-ii

Table of Contents……………………………………………………………..iii

Index of Authorities..........................................................................................vii-x

Statement of the Case....................................................................................... 1-3

Statement Regarding Oral Argument...............................................................3-4

Issues Presented...............................................................................................4-6

Statement of the Facts......................................................................................7-11

Summary of the Argument…………………………………………………..12-15

Argument:

Relative to Issue No. 1: Chopper and Outlaw's claims of a breach of
contract fail because they did not meet the conditions precedent of giving
written notice of the alleged defaults and allowing Marinecorp thirty days
to cure each such default as required by the subject leases. [Germane to
Motion to Disregard Jury Findings, CR 449 and Motion for New Trial,
CR 498]…………………………………………………………… 15-19

Relative to Issue 2: Chopper and Outlaw deprived themselves of any
excuse for ceasing performance on their part because they elected to treat
the leases as continuing. [Germane to Motion to Disregard Jury
Findings, CR 449 and Motion for New Trial, CR
498]……………………………………………………………… 20-22

Relative to Issue 3: The trial court should have rendered judgment
against Chopper and Outlaw for damages for past and future lease
payments, as ample evidence existed of Marinecorp’s mitigation of
damages. [Germane to Motion to Disregard Jury Findings, CR 449 and
Motion for New Trial, CR 498]………………………………… 23-24

iii
Relative to Issue 4: Outlaw should not have been awarded damages as a
result of not being able to open its dance hall for business as a result of
Marinecorp's actions because the overwhelming evidence attributes
causation of damages to Outlaw preventing it from opening earlier due to
its own actions or inactions. [Germane to Motion to Disregard Jury
Findings, CR 449 and Motion for New Trial, CR 498]………… 24-29

Relative to Issue 5: The trial court committed harmful error by not
submitting to the jury an instruction and question regarding mitigation of
damages as it relates to Outlaw. [Germane to Motion to Disregard Jury
Findings, CR 449 and Motion for New Trial, CR 498]……....... 24-29

Relative to Issue 6: Chopper and Outlaw’s claims constitute a breach of
contract action and not a DTPA violation…………………….. 30-41

Relative to Issue 7: Chopper and Outlaw’s claims for damages as a
result of an alleged wrongful eviction fail as a matter of law and do not
constitute a DTPA violation. [Germane to Motion to Disregard Jury
Findings, CR 449; Third Supplement to Motion to Disregard, CR 592-
593; and Motion for New Trial, CR 498]……………………… 30-41

Relative to Issue 8: The evidence does not support the jury's answers to
a violation of the DTPA by Marinecorp because:

(a) There was no evidence or insufficient evidence to establish that
Marinecorp did not have an intention of fulfilling its promise when
made. [Germane to Motion to Disregard Jury Findings, CR 449
and Motion for New Trial, CR 498]…………………….. 30-41

(b) There was no evidence or insufficient evidence that any
representation by Marinecorp was a producing cause of damages to
Chopper and Outlaw. [Germane to Motion for New Trial, CR
498]……………………………………………………… 30-41

(c) There was no evidence or insufficient to establish that
Marinecorp’s actions were unconscionable. [Germane to Motion to
Disregard Jury Findings, CR 449 and Motion for New Trial, CR
498]…………………………………………………….. 30-41

iv
 (d) There was no evidence of insufficient evidence to establish that
Marinecorp breached an implied warranty, as the lease provisions
stated the tenants accepted the property in its “as-is” condition.
[Germane to Motion to Disregard Jury Findings, CR 449 and
Motion for New Trial, CR 498]……………………… 30-41

Relative to Issue 9: The trial court should not have awarded Chopper
and Outlaw pre-judgment interest because the alleged damages were not
definitely determinable at a definite time……………………. 41-42

Relative to Issue 10: The trial court should have awarded Marinecorp
damages for Miller and Tones' breach of the subject guaranty agreements.
[Germane to Motion for New Trial, CR 498]……….. 42-43

Relative to Issue 11: The trial court should not have rendered judgment
for cumulative damages for concurrent causes of action arising out of the
same acts. [Germane to Supplemental Motion to Disregard Jury
Findings, CR 513]…………………………………………... 43-47

Relative to Issue 12: The trial court should have entered judgment
against Miller for the full amount of principal and interest owing on his
promissory note payable to Marinecorp. [Germane to Motion to
Disregard Jury Findings, CR 449 and Motion for New Trial, CR 498]
………………………………………………………………. 48

Relative to Issue 13: The evidence does not support the jury's answers
awarding Chopper and Outlaw damages for loss of the benefit of the
bargain; remedial damages; expenses; loss of income; loss of use; and
wrongful eviction. [Germane to Motion to Disregard Jury Findings, CR
449; Supplemental Motion to Disregard Jury Findings, CR 513-517;
Third Supplement to Motion to Disregard Jury Findings, CR 592-593;
and Motion for New Trial, CR 498]……………………….. 48-69

Conclusion and Prayer........................................................................... 70-73

Certificate of Service.............................................................................. 73

Certificate of Compliance With Tex.R.App.P. 9.4(i)(3)……………… 74

v
Appendix................................................................................................ 75

A. Charge of the Court

B. Modified Final Judgment

C. Standard Lease Contract by and between Marinecorp as Landlord and
Outlaw as tenant

D. Standard Lease Contract by and between Marinecorp as Landlord and
Chopper as tenant

vi
 INDEX OF AUTHORITIES

Cases: Page(s)

Alexander of Texas, Inc. v. Bacchus Indus., Inc.,
754 S.W.2d 252 (Tex.App.-- El Paso 1988, writ denied)………… 29

Alexander & Sorbus, Inc. v. UHW Corp.,
855 S.W.2d 771 (Tex.App.-- El Paso 1993, writ denied)………… 29

American Baler Co. v. SRS Systems, Inc.,
748 S.W.2d 243 (Tex. App.-- Houston [1st Dist.]
1988 , writ denied).......................................................................... 46

Bd. of Regents of the Univ. of Texas v. S & G Constr. Co.,
529 S.W.2d 90 (Tex.Civ.App.-- Austin 1975, writ ref’d n.r.e.)… 22

Bennett v. Bank United,
114 S.W.3d 75 (Tex.App.—Austin 2003, no pet.)……………… 36

Black Lake Pipe Line Co. v. Union Construction Co., Inc.,
538 S.W.2d 80 (Tex. 1976)……………………………………… 41

Briseno v. Martin,
561 S.W.2d 794 (Tex. 1977)……………………………………. 28

Cain v. Bain,
709 S.W.2d 175 (Tex. 1986)……………………………………. 16

Chastain v. Koonce,
700 S.W.2d 579 (Tex. 1985)……………………………………. 36

Cheung-Loon, LLC v. Cergon, Inc.,
392 S.W.3d 738 (Tex.App.-- Dallas 2012, no pet.)…………….. 17

Crawford v. Ace Sign, Inc.,
917 S.W.2d 13 (Tex. 1996)……………………………………… 31

Davis v. City of San Antonio,
752 S.W.2d 518 (Tex. 1988)…………………………………….. 15
vii
Daugherty v. Jacob,
187 S.W.3d 607 (Tex.App.-- Houston [14th Dist.] 2006, no pet.).. 36

El Dorado Motors, Inc. v. Koch,
168 S.W.3d 360 (Tex.App.-- Dallas 2005, no pet.)…………….. 53

Gym-N-I Playgrounds, Inc. v. Snider,
220 S.W.3d 905 (Tex. 2007)…………………………………… 40, 41

Harris v. Harris,
765 S.W.2d 798 (Tex.Civ.App.-- Houston
[14th Dist.] 1989, writ denied)…………………………………. 28

Hernandez v. Gulf Group Lloyds,
875 S.W.2d 691 (Tex. 1994)…………………………………… 22

Holt Atherton Industries v. Heine,
835 S.W.2d 80 (Tex. 1992)……………………………………. 53

James L. Gang & Associates, Inc. v. Abbott Labbs, Inc.,
198 S.W.3d 434 (Tex.App.-- Dallas 2006, no pet.)…………… 49, 59

Long Trusts v. Griffin,
222 S.W.3d 412 (Tex. 2006)(per curium)……………………… 22

Lyendecker & Associates, Inc. v. Wechter,
683 S.W.2d 369 (Tex. 1984)…………………………………… 45

McKenzie v. A.C. Carte,
385 S.W.2d 520 (Tex.Civ.App.-- Corpus Christi 1964,
writ ref’d n.r.e.)………………………………………………… 34

Merrell Dow Pharms., Inc. v. Havner,
953 S.W.2d 706 (Tex. 1997)…………………………………… 15

Pinson v. Red Arrow Freight Lines, Inc.,
801 S.W.2d 14 (Tex.App.-- Austin 1990, no writ)…………… 29

viii
Pool v. Ford Motor Co.,
715 S.W.2d 629 (Tex. 1986)…………………………………… 16

Pope v. Moore,
711 S.W. 622 (Tex. 1986)……………………………………… 24, 42, 47, 48

Prudential Ins. Co. of Am. v. Jefferson Assoc.,
896 S.W.2d 156 (Tex. 1995)…………………………………….. 40

Racko Properties, Inc. v. Alabama Great S.R.R.,
No. 07-2898, 2009 WL 178884 (E.D. La. Apr. 17, 2008)…….. 17

Stewart Title Guar. Co. v. Sterling,
822 S.W.2d 1 (Tex. 1991)……………………………………… 46

Texas Instruments, Inc. v. Teletron Energy Mgt, Inc.,
877 S.W.2d 276 (Tex. 1994)………………………………….. 53

Tony Gullo Motors LLP v. Chapa,
212 S.W.3d 299 (Tex. 2006)………………………………….. 32, 44, 46

Western Irr. Co. v. Reeves County Land Co.,
233 S.W.2d 599 (Tex.Civ.App.-- El Paso 1950, no writ)……. 22

W.O. Bankston Nissan, Inc. v. Walters,
754 S.W.2d 127 (Tex. 1988)…………………………………. 34

Statutes:
Tex.Bus. Comm. Code Sec. 17.45(5)………………………….. 35

Tex.Bus. Comm. Code Sec. 17.45(9)………………………….. 35, 38

Tex.Bus. Comm. Code Sec. 17.50(a)(2)……………………….. 39

Tex.Bus. Comm. Code Sec. 17.50(a)(3)……………………….. 35

Tex.Prop.Code 93.002(g)(1)…………………………………… 33

Tex.Prop.Code 93.002(g)(2)…………………………………… 33
ix
Rules:

Tex.R.App.P. 44.1(a)………………………………………….. 28

Tex.R.Civ.P. 279………………………………………………. 34

Tex.R.Evid. 801(e)(2)…………………………………………. 21

x
 STATEMENT OF THE CASE
The facts and issues in this case involve two commercial real property leases

by and between Appellant ("Marinecorp") 1, as the landlord, and Appellees

("Chopper and Outlaw") as the respective tenants and Tony Miller ("Miller") and

Kyle Tones ("Tones") as lease guarantors (See Standard Lease Contract by and

between Marinecorp as Landlord and Outlaw as Tenant, Appendix "C" and

Standard Lease Contract by and between Marinecorp as Landlord and Chopper as

Tenant, Appendix "D"). Chopper and Outlaw sued Marinecorp for breach of

contract, fraud, and violation of the Texas Deceptive Trade Practices Act (DTPA).

(CR 6). Marinecorp filed its counter-claim against Chopper and Outlaw for breach

of contract and asserted a third-party action against Miller and Tones on their

guaranty agreements and against Miller and Lee and Dawn Harless ("Harlesses")

for breach of a promissory note payable to Marinecorp. (CR 97). Tones filed a

cross-claim against Miller for fraud. Shortly before trial ended, Tones and Miller

entered into a settlement agreement and Tones' cross-claim was severed from the

underlying case.

1
The parties to this appeal will hereafter be referred to in this brief collectively as
“Appellees” or individually as follows:

•Appellant Marinecorp International, Ltd. on appeal as “Marinecorp.”
•Appellee Chopper Group, LLC on appeal as “Chopper.”
•Outlaw Country, LLC on appeal as “Outlaw.”
•Individuals Tony Miller will be referred to as “Miller” and Kyle Tones will be
referred to as “Tones.”

1
Course of Proceedings:
The jury trial below took place place between the dates of April 14 – 23,

2015. The Honorable Larry Weiman of the 80th District Court, Harris County,

Texas, was the presiding judge. The jury found the following: (1) Marinecorp

failed to comply with the agreements with Chopper and Outlaw; (2) Outlaw failed

to comply with the agreement with Marinecorp; (3) but found that Chopper did not

fail to comply with the agreement (CR 427); (4) Marinecorp failed to comply with

the agreements first (CR 423); and (5) Marinecorp violated the DTPA, and did so

knowingly. (CR 427) (See Charge of the Court, Appendix “A”)

The jury awarded Chopper actual damages for the breach of contract and

awarded actual damages for the DTPA violations in the amount of $223,000.00

together with attorney's fees in the amount of $104,483.50 and DTPA "knowingly"

damages in the amount of $11,000.00. (CR 427) It awarded Outlaw actual

damages in the amount of $370,000.00; attorney's fees in the amount of

$104,483.50, and DTPA "knowingly" damages in the amount of $11,000.00. (CR

427) (See Charge of Court, Appendix “A”). The Court entered judgment for such

amounts. (CR 427).

Marinecorp filed Motions to Disregard Jury Findings (CR 430 and 449) and

a Motion for a New Trial (CR 498), which the court denied. (CR 511). Marinecorp

also filed Supplemental, Second Supplemental, and Third Supplemental Motions to

2
Disregard Jury Findings and Motion for New Trial (CR 513, 519 and 592), which

the Court also denied. (CR 512). Appellees filed their Motion to Disregard the

Jury Answers, which the Court granted. (CR 479)

The Court subsequently reduced Chopper's actual damages to $210,000.00;

reduced its previous award prejudgment interest to $21,776.71, and post-judgment

interest; and attorney's fees in the amount of $104,483.50 were approved, however,

it awarded an additional $20,000 as attorney’s fees for an appeal to the court of

appeals and another $12,500 for an appeal to the Texas Supreme Court. (CR 589)

The Court subsequently reduced Outlaw's actual damages to $290,000.00;

reduced its previous award of prejudgment interest to $30,072.60, and post-

judgment interest; and attorney's fees in the amount of $104,483.50 were approved,

however, it awarded an additional $20,000 as attorney’s fees for an appeal to the

court of appeals and another $12,500 for an appeal to the Texas Supreme Court.

(CR 589)

Marinecorp challenges on appeal the jury’s verdict and the trial court’s final

Judgment.

STATEMENT REGARDING ORAL ARGUMENT
The Court should grant oral argument for the following reasons:

a. Oral argument would give the Court a more complete understanding of
the facts presented in this appeal.

3
 b. Oral argument would allow the Court to better analyze the complicated
legal issues presented in this appeal. This is true because of the
numerous theories sued upon, the apparent conflict in the jury answers,
and numerous issues raised by Appellant.

c. Oral argument would significantly aid the Court in deciding the case.

ISSUES PRESENTED FOR REVIEW
Issue 1: Chopper and Outlaw's claims of a breach of contract fail because they did
not meet the conditions precedent of giving written notice of the alleged defaults
and allowing Marinecorp thirty days to cure each such default as required by the
subject leases. [Germane to Motion to Disregard Jury Findings, CR 449 and
Motion for New Trial, CR 498]

Issue 2: Chopper and Outlaw deprived themselves of any excuse for ceasing
performance on their part because they elected to treat the leases as continuing.
[Germane to Motion to Disregard Jury Findings, CR 449 and Motion for New
Trial, CR 498]

Issue 3: The trial court should have rendered judgment against Chopper and
Outlaw for damages for past and future lease payments, as ample evidence existed
of Marinecorp’s mitigation of damages. [Germane to Motion to Disregard Jury
Findings, CR 449 and Motion for New Trial, CR 498]

Issue 4: Outlaw should not have been awarded damages as a result of not being
able to open its dance hall for business as a result of Marinecorp's actions because
the overwhelming evidence attributes causation of damages to Outlaw preventing
it from opening earlier due to its own actions or inactions. [Germane to Motion to
Disregard Jury Findings, CR 449 and Motion for New Trial, CR 498]

Issue 5: The trial court committed harmful error by not submitting to the jury an
instruction and question regarding mitigation of damages as it relates to Outlaw.
[Germane to Motion to Disregard Jury Findings, CR 449; Motion for New Trial,
CR 498; Appellant’s Requested Jury Instructions & Questions, CR 362 & 363]

Issue 6: Chopper and Outlaw’s claims constitute a breach of contract action and
not a DTPA violation. [Supp. RR Vol. 6-A at 11-12]
4
Issue 7: Chopper and Outlaw’s claims for damages as a result of an alleged
wrongful eviction fail as a matter of law and do not constitute a DTPA violation.
[Germane to Motion to Disregard Jury Findings, CR 449; Third Supplement to
Motion to Disregard, CR 592-593; and Motion for New Trial, CR 498]

Issue 8: The evidence does not support the jury's answers to a violation of the
DTPA by Marinecorp because:

(a) There was no evidence or insufficient evidence to establish that
Marinecorp did not have an intention of fulfilling its promise when made.
[Germane to Motion to Disregard Jury Findings, CR 449 and Motion for
New Trial, CR 498]

(b) There was no evidence or insufficient evidence that any representation
by Marinecorp was a producing cause of damages to Chopper and
Outlaw. [Germane to Motion for New Trial, CR 498]

(c) There was no evidence or insufficient to establish that Marinecorp’s
actions were unconscionable and were a knowing violation of the DTPA.
[Germane to Motion to Disregard Jury Findings, CR 449; Motion for
New Trial, CR 498; Supp. RR Vol. 6-A at 113-14]

(d) There was no evidence of insufficient evidence to establish that
Marinecorp breached an implied warranty, as the lease provisions stated
the tenants accepted the property in its “as-is” condition. [Germane to
Motion to Disregard Jury Findings, CR 449 and Motion for New Trial,
CR 498]

Issue 9: The trial court should not have awarded Chopper and Outlaw pre-
judgment interest because the alleged damages were not definitely determinable at
a definite time.

Issue 10: The trial court should have awarded Marinecorp damages for Miller and
Tones' breach of the subject guaranty agreements. [Germane to Motion for New
Trial, CR 498]

5
Issue11: The trial court should not have rendered judgment for cumulative
damages for concurrent causes of action arising out of the same acts. [Germane to
Supplemental Motion to Disregard Jury Findings, CR 513]

Issue 12: The trial court should have entered judgment against Miller for the full
amount of principal and interest owing on his promissory note payable to
Marinecorp. [Germane to Motion to Disregard Jury Findings, CR 449 and Motion
for New Trial, CR 498]

Issue 13: The evidence does not support the jury's answers awarding Chopper and
Outlaw damages for loss of the benefit of the bargain; remedial damages;
expenses; loss of income; loss of use; and wrongful eviction. [Germane to Motion
to Disregard Jury Findings, CR 449; Supplemental Motion to Disregard Jury
Findings, CR 513-517; Third Supplement to Motion to Disregard Jury Findings,
CR 592-593; and Motion for New Trial, CR 498]

6
 STATEMENT OF FACTS
Chopper opened its doors for business as a biker's bar in mid-July 2010. (3

RR 142:12) Chopper was operating under a lease agreement it signed with

Marinecorp. (8 RR 1, Exs. 1 and 2) After open for business, Outlaw negotiated

another lease for the adjoining former Walgreens space where Miller and Tones

intended to operate a country western dance hall. (3RR 140:1 & 147:17) The

parties to the lease were Marinecorp and Outlaw, with the lease date of September

20, 2010 and its commencement date was November 1, 2010. The Walgreens

store had been vacant for several years and it was structurally sound, however, it

needed repairs to make the premises ready for business. (3 RR 148:5) The lease

provided that Marinecorp must pay Outlaw a tenant improvement or “ build out”

allowance, which would be equal to a sum of $17.73 per square foot (10,998 s.f.)

for a total of $194,994.54 and that the completion date was January 31, 2011.

Prior to the Outlaw lease being executed, thieves stole the electrical wires

from the premises. (3 RR 148:10). The Outlaw lease therefore included a hand

written provision in the "as-is" section as follows: "Except for electrical, service

shall remain at 1000 amps and installed by landlord, HVAC at 60 tons.” (4 RR

32:9) Marinecorp's property manager told Outlaw that it would have the power

restored and AC units installed sometime during the first part of November 2010.

However, the electrical hook up was Outlaw’s responsibility because Marinecorp

7
does not supply the meters, but only has the ability to connect the meters. (6 RR

67:8)

On November 8, 2010, Marinecorp’s electrician presented his invoice for his

labor involved in installing the electrical power to Outlaw’s building. (9 RR P:Ex.

20) However, the power company did not approve the work. (5 RR 178:4). So,

the electrician talked to Marinecorp’s property manager and then he disassembled

it and rebuilt it. (5 RR 179:2) Outlaw had service on January 24, 2011. (3 RR

179:6)

Marinecorp bought and installed all the air conditioning as agreed and paid

AC Dang Heating $53,800 in the months of October and November of 2010 for the

units and installation (21 RR D-Exs. 11, 12 & 13)

Tones had no prior experience owning or operating a bar. (6 RR 97:15)

However, he had a considerable sum of money, having received a second million

dollar settlement in a personal injury accident many years ago. (6 RR 88:12) In

contrast, Miller had uncommon business sophistication as he was previously

involved in building commercial strip malls (3 RR 131:23) and projects such as the

Chopper and Outlaw business ventures. (3 RR 132:1) He had experience dealing

with bankers, lawyers, CPAs, realtors (3 RR 179:22); he had put a business plan

together (3 RR 134:13); he had worked with trustees (13 RR 137:6); and he owned

corporations (3 RR 141:9). The parties negotiated the terms of both leases, which
8
included the requirement that Miller guarantee both leases and Tones guarantee the

Chopper lease. (4 RR 18:2; 18:20; 18:21; 19: 22; 20:5)

Miller, Tones and their broker, Tibbs, all knew that the larger Outlaw

building that was going to be the country-western dance hall, which needed many

more repairs than the Chopper’s premises. Outlaw’s building had been sitting

vacant for several years; the roof leaked severely; there was insulation everywhere;

mold was present; the air conditioners had been stolen off the roof; and copper

thieves had stolen all the wires. (3 RR 148:5)

Marinecorp agreed to pay Miller the build-out monies and he would pay for

the labor and materials using Marinecorp's money for the build-out allowance in

the lease. (8 RR P Ex.2) Miller was aware of the condition of the buildings when

Chopper and Outlaw entered into the leases. (3 RR 148:5) The leases expressly

provided that except for those matters set forth on p. 29 of the lease, they were

leasing the building in an "as-is" condition. (8 RR, P. Ex. 1&2, Section 3.1) The

Outlaw lease was executed on September 28, 2010, but the commencement date

was November 1, 2010.

Chopper's restaurant next door was up and running the middle of July 2010.

(3 RR 142:12) However, after the restaurant had been in operation for some time,

thieves also stole the facility’s air conditioning units and underground electrical

lines. (3 RR 144:3 and 6 RR 7:10). The nature of the theft made it very difficult
9
to restore the power. (6 RR 7:11) During the period of time that Chopper's power

was not at full strength, Marinecorp brought in four 300 watt spotlights and big

diesel lights to illuminate the parking lot. (3 RR 145:7 and 146:9)

During the early part of Chopper's lease, the tenant complained that the roof

leaked and the air conditioners weren't working properly. In addition to the

electrical power problems, Outlaw also complained about leaks on the dance floor.

However, Marinecorp repaired all of the leaks to Outlaw’s satisfaction (4RR

64:16), with repairs occurring before there was damage to the dance floor. (4 RR

65:12)

From the very beginning, Outlaw failed to timely pay its rent. (5 RR 84:1).

It’s first payment was two months late but the check bounced (5 RR 83:21 & 3 RR

83:22). Outlaw was never current with its payments. (3 RR 84:1) Miller sold

Outlaw to the Harlesses in October 2011. (3 RR 69:21) After the Harlesses

purchased Outlaw, the delinquency in rent became so large that as a means of

avoiding having to evict Outlaw, Marinecorp accepted a personal promissory note

from Miller and the Harlesses for rent in arrears in the amount of $56,545.00. (RR

9, D Ex. 36) This represented the amount necessary to bring the lease payments

current. (5 RR 96:3 & 5 RR 96:3) However, they did not make these payments as

agreed either. The then current balance of the promissory note was $53,000. (5 RR

96:16). Subsequently, Chopper and Outlaw continued to fail to pay the rent,
10
causing Marinecorp to lock them out in January 2011. (3 RR 74:5) The

underlying lawsuit was filed by Chopper and Outlaw shortly thereafter.

11
 SUMMARY OF ARGUMENT
Neither Chopper nor Outlaw complied with the conditions precedent set

forth in the respective leases requiring that they give Marinecorp thrity (30) days

written notice to cure alleged defects and notice of default in the terms of the lease

agreement. They did not send the notice in writing to Marinecorp's offices; and

their texts and oral complaints wholly failed to comply with the lease notice

requirements.

Appellees treated the leases as continuing and, therefore, they were not

excused for ceasing performance on their part. They admitted at trial that they

wanted the leases to continue. They were only concerned about the repairs,

electrical power, air conditioning and general maintenance matters.

The Court refused to render judgment for Marinecorp and against Appellees

for damages and for past and future lease payments. The jury found that Outlaw

breached the lease and that its failure was unexcused but did not award Marinecorp

damages. Ample evidence exists that Chopper also breached its lease without

excuse and, therefore, Marinecorp was entitled to an award of past and future rents.

Therefore, as argued above, since Appellees continued to treat the lease as

continuing, they were not excused from future performance. The record is rife

with evidence of Marinecorp’s mitigation of damages.

12
 Damages should not have been awarded Outlaw because of the alleged

failure of Marinecorp to connect the power, as the overwhelming evidence

attributes any damages to Outlaw’s actions and inactions preventing it from

opening earlier. Its failure to open was due to Outlaw’s actions and inactions, not

Marinecorp’s failure to connect power.

The trial court erred by not submitting to the jury an instruction and question

regarding mitigation of damages as it relates to Outlaw.

Marinecorp challenges the jury’s award of DTPA damages. To begin with,

Outlaw’s damage claim relates to the alleged failure of Marinecorp to connect the

power, which sounds in contract, not in DTPA. Appellees’ remedy was in

contract, as any representations from Marinecorp regarding the provision of power

originated in the express terms of the subject leases. Also lacking is evidence that

Marinecorp intended not to perform when representations, thereby defeating all

DTPA claims. No evidence exists that any Marinecorp representation was a

producing cause of damages to Appellees.

Appellees never alleged or proved an action for wrongful eviction and the

jury did not consider the elements of such a cause of action; therefore, a wrongful

eviction cannot serve as the basis of a DTPA claim.

There could be no unconscionable DTPA violation by Marinecorp because

the Plaintiff, Miller, was a sophisticated businessman who had the knowledge,
13
ability, experience and capacity that would take him out of the unconscionable

category. No evidence exists that Marinecorp engaged in unconscionable action or

course of action that was a producing cause of damages to Chopper and Outlaw.

Also lacking was evidence of a knowing violation of the DTPA.

Evidence was lacking that Marinecorp breached an implied warranty, as the

lease provisions in question stated that tenants accepted the leased property “as-is.”

The judgment should not have awarded prejudgment interest because the

alleged damages were not definitely determinable at a definite time.

The trial court should have awarded Marinecorp damages for their cause of

action against Miller and Tones as a result of their breach of the personal Guaranty

Agreements.

Marinecorp challenges the judgment in that it improperly awards cumulative

damages for concurrent causes of action arising out of the same acts. This violated

Texas’ “one satisfaction” rule.

Marinecorp should have been awarded a judgment against Miller and the

Harlesses for the full amount of principal and interest owing on the promissory

note executed by them and payable to Marinecorp. Miller admitted he executed

the note but has not paid it. A directed verdict was rendered against the Harlesses.

Finally, Marinecorp challenges all the jury's damage awards because the jury

did not follow the court's instructions and there was no, or insufficient, evidence to
14
support the jury’s award of different elements of damages and, moreover,

Appellees failed to meet their burden in proving up such damages. The damages

awarded were also against the great weight and preponderance of the evidence and

manifestly unjust.

ARGUMENT
Issue 1: Chopper and Outlaw's claims of a breach of contract fail because
they did not meet the conditions precedent of giving written notice of the
alleged defaults and allowing Marinecorp thirty days to cure each such
default as required by the subject leases.

A. Standard of Review
In assessing whether the evidence supporting a jury finding is legally

sufficient, the appeals court only considers evidence favorable to the jury’s

decision and disregards all evidence and inferences to the contrary. See Davis v.

City of San Antonio, 752 S.W.2d 518, 522 (Tex. 1988). If there is more than a

scintilla of evidence to support the finding, the no evidence challenge fails. Id. A

legal sufficiency point will be sustained when (a) there is a complete absence of

evidence of a vital fact, (b) the court is barred by the rules of law or evidence from

giving weight to the only evidence offered to prove a vital fact is no more than a

mere scintilla, or (c) the evidence conclusively establishes the opposite of a vital

fact. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).

By comparison, in considering a challenge to the evidence’s factual

sufficieny, the appeals court is to review all of the evidence and reverse for a new
15
trial only if the challenged finding shocks the conscience, clearly demonstrates

bias, or is so great against the great weight and preponderance of the evidence that

it is manifestly unjust. See Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.

1986). A finding is set aside only if the evidence is so weak or the finding is so

contrary to the overwhelming weight of the evidence as to be clearly wrong and

unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curium).

b. Legally and Factually Sufficient Evidence Does Not Support the Jury’s
Findings that Marinecorp breached the Chopper and Outlaw lease agreements,
as the latter two parties did not meet contractual conditions precedent of
providing Marinecorp with notice of defaults and by allowing Marinecorp thirty
days to cure each alleged default, as expressly required by the subject leases.
The lease agreements required Appellees to give 30 days' written notice to

Marinecorp's offices of the matters giving rise to any alleged default by

Marinecorp of the terms of the leases. This would have allowed Marinecorp 30-

days to cure any such default. Neither Appellee complied with this condition

precedent. Their few complaints did not comply with the requirements set forth in

the leases providing that if the tenants, at any time, alleged Marinecorp was in

default in the terms of the lease, they agreed to give written notice to Marinecorp

specifying each default. Since they failed to comply with the agreements, their

claims fail.

16
 The case of Cheung-Loon, LLC v. Cergon, Inc., 392 S.W.3d 738

(Tex.App.— Dallas 2012, no pet.), involved was a similar lease provision

requiring the tenant to give “written notice of any failure by Landlord to perform

any of Landlord’s obligations under this Lease to Landlord…” (Supp. RR Vol. 6-A

at 7). Under the belief that it had exclusive use of a parking lot, the tenant gave

actual, but not written, notice to the landlord that other tenants were using the

parking lot. The court found this notice not sufficient and in noncompliance with

the requirement of the lease and it did not serve as notification of a breach. In

summary, the tenant bore the burden of showing all conditions precedent were met,

with a condition precedent being an act that must occur before there is a breach of

a contractual duty.

In the instant case, Appellees failed to produce any evidence that they

provided notice of any alleged breach to Marinecorp. Also see cf. Racko

Properties, Inc. v. Alabama Great S.R.R., No. 07-2898, 2009 WL 178884, at *4

(E.D. La. Apr. 17, 2008) (“[N]otice and cure requirements are entitled to no less

deference than the obligations imposed upon the lessee.”).

With regard to the matter of notice and the landlord’s right to cure, Sections

3.1 and 17.11 of the leases required that thirty (30) days’ notice be given at

Marinecorp’s offices, and Section 21.1 required the tenants to provide written

17
notice to the Houston address provided at Section 1.1c of the leases. Neither

Appellee complied with these conditions precedent. Appellees’ claim that actual

notice was provided is besides the point, as it remains undisputed that Marinecorp

never received actual notice of an alleged default. At the most, Marinecorp's

property manager received some texts and oral complaints--but no notice of an

alleged default. However, the property manager was not on the board of directors

of Marinecorp, nor did he have an interest in said corporation (5 RR 222:22 &

222:25), as he was simply a property manager in charge of day-to-day routine

matters related to the properties (5 RR 222:19). Any such notices or complaints

were never received by Marinecorp's officers, directors, principals, or corporate

management (6 RR 69:8), and Marinecorp never received any notice, actual or

otherwise, that Chopper and Outlaw were claiming that Marinecorp defaulted or

breached the subject leases.

It was especially important that Marinecorp’s management receive the notice

rather than one of its employees because the president and principal of the

company, Mr. Ayaz Nasser, testified without contradiction that he was "a hands-on

owner" (6 RR 68:14) and that he was personally involved in all tenant problems.

He met regularly with his employees, including the property manager. (6 RR

68:14) He would go over the many issues which would include any notices of

breach of contract or repairs needed. Mr. Nasser further testified that if he had
18
known that the power had not been connected, he would have hired someone to

make sure it was done (6 RR 69:16). He was denied this option by Appellees

because they did not comply with the lease by sending the company notice of any

default. As a result, Marinecorp cannot be held to have been in default of the terms

of the leases.

Miller testified that it was reasonable for Marinecorp to expect him to

comply with the lease until its higher management and even the owner could make

sure all problems were taken care of. (4RR 26:11) He doesn't know why once he

had learned of the electrician's problems with getting the power connected, that he

didn't give Marinecorp an opportunity to take care of it (4RR 41:22). He further

admits that he never told Marinecorp of the air conditioning problems in

November, December, or January. (4RR 48:11)

The evidence discussed above establishes that there is a complete lack of

evidence, or alternatively less than a scintilla of evidence, supporting a finding that

Marinecorp breached the subject lease agreements, as instead the uncontroverted

evidenced established that Appellees did not meet conditions precedent of

providing proper notice of default and providing an opportunity to cure. This same

evidence is against the great weight and preponderance of the evidence and is

manifestly unjust. For these reasons, Marinecorp’s arguments should be sustained

on appeal.
19
Issue 2: Chopper and Outlaw deprived themselves of any excuse for ceasing
performance on their part because they elected to treat the leases as
continuing.

A. Standard of Review
In this point of error, Marinecorp challenges the jury’s affirmative answer to

Question No. 3, wherein they answered that Marinecorp was the first party to fail

to comply with the agreement. (CR 423; Supp. RR Vol. 6-A at 7) The evidence

was legally and factually insufficient to support the jury’s answer to Question No.

3. The trial court further erred in failing to disregard the jury’s answer to Question

No. 3 because under the evidence and facts presented, this answer is immaterial,

improper, and prejudicial to Marinecorp in that the jury’s answer prevented the

jury from advancing to questions regarding damages to Marinecorp and its

attorney’s fees.

B. Appellees Elected to Treat the Lease Agreements as Continuing.

Even if Marinecorp is found to have committed a material breach of the

agreements, Appellees were not discharged or excused from their obligations to

perform because they elected to treat the lease agreements as continuing, thereby

depriving themselves of any excuse from continued performance under the lease

agreements (Supp. RR Vol. 6-A at 7). Evidence that Appellees elected to treat the

leases as continuing includes: (1) Appellees’ acknowledgements that monthly rent

20
was always due; (2) Appellees never claiming a set off for any alleged damages or

breach of the leases by Marinecorps; (3) continued operation of their businesses on

leased premises and their receipt of income; (4) continuing to request from the

landlord additional repairs and lighting; (5) continuing to work with the electrician

to obtain a permit; and (6) testimony by Miller (at 4 RR 135:24), which was

corroborated by Miller’s realtor (agent), Grady Tibbs (at 5 RR 8:13), that Miller

was not trying to get out of the lease agreements. 2

By continuing to operate under the lease agreements, rent became due with

each passing month, ultimately resulting in a total of $56,000 in rent in arrears for

Outlaw. Outlaw opted to continue business under its lease in spite of its

nonpayment of rent, ultimately resulting in its lock out by Marinecorp in January

of 2011.

It is a fundamental proposition of contract law that when one party breaches

its contract, the other party is put to an election of continuing or ceasing

performance, and any action indicating an intention to continue will operate as a

conclusive choice, not depriving the injured party of his cause of action for breach

which has already taken place, depriving him only of any excuse for ceasing

2
Such relevant testimony by Miller qualifies as a statement made by a party that is admissible
against that party This rule is known as “an admission by a party-opponent,” which is included
as statements not considered hearsay. See TexR.Evid. 801(e)(2).

21
performance on his own part. Bd. of Regents of the Univ. of Texas v. S & G

Constr. Co., 529 S.W.2d 90, 97 (Tex.Civ.App.-- Austin 1975, writ ref’d n.r.e.)

(citing Western Irr. Co. v. Reeves County Land Co., 233 S.W.2d 599

(Tex.Civ.App.-- El Paso 1950, no writ)). In Long Trusts v. Griffin, 222 S.W.3d

412 (Tex. 2006) (per curiam), the Supreme Court of Texas, citing Hernandez v.

Gulf Group Lloyds, 875 S.W.2d 691, 692 (Tex. 1994), held that "a party who

elects to treat a contract as continuing deprives himself of any excuse for ceasing

performance on his own part."

Since, as discussed above, the matter of who breached the subject lease

agreements first is wholly irrelevant, Marinecorp was entitled to damages that

resulted from the material breaches by Appellees of the express terms of the lease

agreements. Such an award of damages to Marinecorp is warranted in part in light

of the jury’s answer to Question No. 2, where it found that Outlaw failed to comply

with the agreement and that its failure was material.

Appellees waived their excuse for nonperformance, as explained in Long

Trusts, supra. Therefore, the Court should not have submitted jury Question No. 3

as to who breached the contract first. This error effectively prevented the jury

from answering the questions relating to Marinecorp's damages. Such appellate

error resulted in the rendition of an improper judgment, warranting reversal and

remand.
22
Issue 3: The trial court should have rendered judgment against Chopper
and Outlaw for damages for past and future lease payments, as ample
evidence existed of Marinecorp’s mitigation of damages.

The jury’s answers to Question No. 8 [where the jury found that Marinecorp

failed to exercise reasonable care and diligence to avoid or minimize its damages]

and Question No. 9 [where the jury found that Marinecorp would have suffered no

(zero damages) damages] are legally and factually insufficient and are against the

great weight and preponderance of the evidence and manifestly unjust.

The testimony of Marinecorp's real estate broker and its accountant, Ed

Wolochin, was the only testimony heard regarding the measure of damages for past

and future rentals. He established that with respect to Chopper, the past and future

damages, i.e., the lease payments, would be in the amount to $585,000.00, while

the past and future damages for Outlaw were valued at $1,172,000.00. Neither

Appellee offered any expert or other testimony or evidence to the contrary. Mr.

Wolochin testified positively regarding Marinecorp’s due diligence and its

reasonable efforts to re-lease the subject commercial premises through the date of

trial, yet such efforts had been unsuccessful.

Additional evidence of Marinecorp’s entitlement to delinquent rent and

future rent payments can be found at Pl-Ex. 38 (showing delinquent rents were

then due for $92,000), Pl. Ex. 39 (showing rent due for $15,814) and Pl. Ex. 40 (an

email from Appellees regarding rent payment delinquency).
23
 In summary, no evidence or insufficient evidence was presented supporting

the jury’s answers to (1) Question No. 8 finding that Marinecorp failed to mitigate

its damages, and (2) Question No. 9 finding that Marinecorp would have suffered

no damages if it had mitigated its damages. Both findings are also against the

great weight and preponderance of the evidence and are manifestly unjust. For

these reasons, reversal is warranted.

Issue 4: Outlaw should not have been awarded damages as a result of not
being able to open its dance hall for business as a result of Marinecorp's
actions because the overwhelming evidence attributes causation of damages to
Outlaw preventing it from opening earlier due to its own actions or inactions.

Issue 5: The trial court committed harmful error by not submitting to the
jury an instruction and question regarding mitigation of damages as it relates
to Outlaw.
[Since Issues Nos. 4 and 5 are interrelated in that they deal
with the issue of damages, they will be argued together.]

A. Causation Not Supported by Sufficient Evidence & Applicable Standard of
Review.

The jury’s award of damages to Outlaw “that resulted from such failure to

comply” in response to Question No. 6 (CR 409) is against the great weight and

preponderance of the evidence and is manifestly unjust. Such damages are also

not factually supported by sufficient evidence. The standard for a request for

remittitur is factual insufficiency of the evidence. Pope v. Moore, 711 S.W.2d 622,

624 (Tex. 1986).
24
 Even if Outlaw's electrical power would have been connected in November

of 2010, Outlaw could not have obtained an occupancy permit and could not have

opened for business until February 2011 (long after the power was connected) for

the following reasons:

a. On November 18, 2010, Outlaw, could not have opened for business
because on that date, it submitted for the first time a commercial permit
application with the City which was not approved. ( 9RR P Ex. 21);

b. On November 29, 2010, Outlaw could not have opened because its
electrician (which was also Marinecorp's electrician) was still working
for Outlaw installing wiring inside the building ( 9RR P Ex 22);

c. On December 3, 2010, Outlaw could not have opened for business
because on said date it was still getting quotes for the fire security work (
9RR, P Ex 24);

d. On December 27, 2010, Miller could not have opened for business
because on that date, he sent a text to a performer for the dance hall
stating that he couldn't even get an inspection scheduled with the City.
There is no mention that because of Marinecorp's failure to have the
electrical service connected, he was prevented from opening ( 9RR P Ex
25);
e. On February 10, 2011 Outlaw could not have opened because it had not
installed its refrigerator ( 9RR P Ex 28); and

f. Finally, even as late as February 26, 2011 (approximately a month after
the City approved the electrical service, Outlaw was still working to
obtain fire upgrades to meet City codes. ( 9RR P Ex 30 and P Ex 31)

This plethora of delaying factors, which were not directly attributable to

Marinecorp, caused repeated delays in Outlaw starting up its business.

25
 The overwhelming evidence establishes that if in fact Outlaw was damaged

in this case, as found in response to Question No. 6, it resulted from its own failure

to comply, and not that of Marinecorp. This fact is highlighted by the

uncontroverted testimony of Marinecorp’s experienced and knowledgeable

Property Manager, Michael Mirza. He testified regarding the simple process that a

person or entity can go through to get a temporary construction permit (6 RR

10:9):

Q. Now, explain to the jury how he could have done that.

A. … It’s very simple process. If you’re doing a construction you have to
line out the things and you can apply for – it’s called a construction meter
and they come and right away and connect that to that property. And then
you can perform all that, the construction you need to do. And then they
come out and inspect and you will be a permanent meter.

(6 RR 10:11) He had been previously successful in obtaining the temporary permit

and electricity involving another property where the wiring has been stolen. (6 RR

10:11)

Mr. Mirza’s uncontroverted testimony serves as overwhelming evidence of:

(1) Outlaw’s cause of its own damages specifically attributed to what it did
and did not do; and

(2) Outlaw’s failure to mitigate its damages as a reasonable person would
have done under the same or similar circumstances.

26
The uncontroverted evidence established that Outlaw wholly failed to mitigate its

damages, making insignificant and not credible Outlaw’s contention that

Marinecorp’s alleged failure to have the electrical power connected the first part of

November was the cause of its damages. In fact, overwhelming evidence to the

contrary was presented that Outlaw was the cause of its own damages. In this

connection, Outlaw claims that it could not get its permit until the power was

connected by Marinecorp. However, Mr. Mirza, essentially testified that Outlaw

could have obtained a temporary construction meter and that in his experience

working with Harris County and Reliant Energy, these entities would have allowed

the temporary meter to be used for inspection purposes. Appellees were just as

capable as Marinecorp in obtaining a temporary construction meter and

construction permit in the manner described above.

Appellees opted not take the simple measures needed to get a temporary

construction meter and permit. Most compelling in this regard is the fact that

Miller testified that with regard to other properties, he had previously taken out

temporary meters and obtained temporary construction permits. (6 RR10:7) Since

the evidence was factually insufficient to support the causation element to jury

Question No. 6 as it relates to Marinecorp and Outlaw’s alleged damages, if any,

the finding of damages in this case should be set aside. Considering the evidence

discussed above, the jury’s finding of causation as to Marinecorp is so against the
27
great weight and preponderance of the evidence that it is manifestly unjust,

warranting reversal and a remand for a new trial.

B. Harmful error in the trial court refusing Marinecorp’s request for a jury
instruction and question regarding mitigation of damages relative to Outlaw.
Appellees failed to mitigate their damages by failing to utilize the simple

two day procedure to get electricity. While the trial court granted an instruction

and question directed at Marinecorp’s alleged failure to mitigate damages (See

Jury Question 8 at CR 411), the court committed error in refusing to allow

Marinecorp’s similar properly requested instruction and question directed at the

Appellees (See CR at 362 and 363), which related to the vital defense of mitigation

of damages and was supported by more than a scintilla of evidence.

For reversible error purposes, the submission should be considered as a

whole to determine whether the error was prejudicial. Briseno v. Martin, 561

S.W.2d 794, 796 (Tex. 1977); also see Tex.R.App.P. 44.1(a). The decision to

submit a particular instruction, question or definition is reviewed for an abuse of

discretion with the essential question being whether the instruction or definition

aids the jury in answering the questions. See Harris v. Harris, 765 S.W.2d 798,

801 (Tex. Civ.App.—Houston [14th Dist.] 1989, writ denied). A court should

submit a mitigation instruction [and question] whenever the evidence raises an

issue as to whether the plaintiff could have avoided, in whole or in part, his or her

28
losses. Alexander & Sorbus, Inc v. UHW Corp., 855 S.W.2d 771, 775 (Tex.App.--

El Paso 1993, writ denied). The standard is that of ordinary care, or what an

ordinary prudent person would have done under the same or similar circumstances.

Pinson v. Red Arrow Freight Lines, Inc., 801 S.W.2d 14, 16 (Tex.App.-- Austin

1990, no writ). The burden of proving whether the plaintiff failed to do so is on

the party who caused the loss. Alexander of Texas, Inc. v. Bacchus Indus., Inc.,

754 S.W.2d 252, 253-254 (Tex.App.-- El Paso 1988, writ denied).

The trail court’s failure to grant Marinecorp’s requested jury instruction and

question on Outlaw’s mitigation of damages likely resulted in the rendition of an

improper jury verdict and judgment. The jury was given no instruction as to how

Outlaw’s failure to mitigate could effectively reduce and even eliminate any

recovery of damages by Outlaw. Even more troubling is the fact that even though

strong failure to mitigate damages evidence was presented to the jury against

Outlaw, the jurors were not given an option by means of a jury question to redirect

fault away from Marinecorp, taxing Outlaw for essentially causing its own

damages. In fact, the way the charge reads in this case, the jury never even

considered Outlaw’s failure to mitigate its damages much less allowing the jury to

tax Outlaw monetarily for causing its own damages. This was an abuse of

discretion which likely resulted in the rendition of an improper judgment, thereby

warranting reversal.
29
Issue 6: Chopper and Outlaw’s claims constitute a breach of contract action
and not a DTPA violation.

Issue 7: Chopper and Outlaw’s claims for damages as a result of an alleged
wrongful eviction fail as a matter of law and do not constitute a DTPA
violation.

Issue 8: The evidence does not support the jury's answers to a violation of the
DTPA by Marinecorp because:

(a) There was no evidence or insufficient evidence to establish that
Marinecorp did not have an intention of fulfilling its promise when
made.

(b) There was no evidence or insufficient evidence that any
representation by Marinecorp was a producing cause of damages to
Chopper and Outlaw.

(c) There was no evidence or insufficient to establish that Marinecorp’s
actions were unconscionable.

(d) There was no evidence of insufficient evidence to establish that
Marinecorp breached an implied warranty, as the lease provisions
stated the tenants accepted the property in its “as-is” condition.

[Issues 6, 7 & 8 will be argued together because they relate
to Appellees’ DTPA/Breach of Warranty Causes of Action.]

The jury found in answer to Question No. 13 that Marinecorp engaged acts

or practices in violation of the DTPA. (CR 416) It also found that Marinecorp

failed to comply with a warranty that was a producing cause of damages. (See Jury

Question No. 14; CR 417) The jury also found that Marinecorp engaged in an

unconscionable act or course of action that was a producing cause of damages to

30
Appellees (Jury Question No. 15; CR 418) and that Marinecorp engagement in

prohibited conduct knowingly, awarding each Appellee $11,000 (Jury Question

No.s 17 & 18; CR 421-422).

(ISSUES 6 & 8(a))

A. The claims of Chopper and Outlaw sound in breach of contract.

B. Marinecorp had every intention of fulfilling its promise when initially
made.

The Outlaw lease contains a commencement date of November 1, 2010, and

it required Marinecorp to provide electrical service. See Outlaw Lease at Section

3.1: “electrical services shall remain at 1000 amps and installed by landlord.” (Pl.

Ex. 4). Since electricity was a requirement or obligation of Marinecorp that was

set forth in the lease, its duty to act arose out of a contract. The fact that

Marinecorp’s Property Manager made a representation about the electricity

requirement did not change the character or nature of the representation, as the fact

remains that its genesis was in the subject lease (contract). According to the Texas

Supreme Court in Crawford v. Ace Sign, Inc., 917 S.W.2d 13, 14-15 (Tex. 1996),

“a failure to fulfill a [contractual] promise is actionable only under a breach of

contract theory and not under the DTPA.” Id. The Court added, “the failure [to

perform] actually caused the [alleged harm], and that injury is governed by

contract law, not the DTPA.” Id. Accordingly, any breach of the subject

31
representation would have constituted a breach of contract. (Supp. RR Vol. 6-A at

11-12)

The distinction between a mere breach of contract and the violation of the

DTPA comes down to whether there was an intent not to perform when the

representation was made and whether the representation was false or misleading

when it was made. See Tony Gullo Motors LLP v. Chapa, 212 S.W.3d 299 (Tex.

2006). In the instant case, Marinecorp’s Property Manager made his representation

to provide electricity fully intending to fulfill his promise and his representation

was not false or misleading. No evidence to the contrary was presented at trial.

The evidence presented showed that Marinecorp's electrician, Hofelich, by

November 8, 2010, had invoiced Marinecorp for the 1000 amp service to Outlaw

(Pl. Ex. 20) and Marinecorp ordered the electrical supplies on or about October 21,

2010.

Finally, even though the claims of Appellees both sound in contract, no

evidence, or insufficient evidence, exists supporting the measure of damages that

they would have been entitled to upon meeting their burden, specifically proof of

lost profits.

32
 (ISSUE 7)
C. Alleged wrongful eviction did not constitute a violation of the DTPA.
Appellees’ claims for damages as a result of an alleged wrongful eviction or

lockout, pursuant to Tex. Prop. Code §§93.002(g)(1) and 93.002(g)(2), fail and do

not constitute a DTPA violation. Appellees never specifically pled a cause of

action for wrongful eviction and they never proved up by a preponderance of the

evidence conduct by Marinecorp which rose to the level of an actionable violation

of the wrongful eviction provisions set out in the Texas Property Code. To the

contrary, Appellees and their legal counsel at trial were nonchalant in claiming that

Appellees had been “wrongfully evicted,” but anything short of evidence that there

had been a judicial finding of “wrongful eviction” cannot serve as the basis

supporting a violation of the DTPA. No evidence exists that any misrepresentation

was made or that Appellees relied on same to their detriment. Upon satisfying

their burden of proving up a wrongful eviction, which Appellees failed to do, the

Texas Property Code would have provided an array of remedies which would have

been available to the wronged commercial tenant.

The specific elements required to have a viable cause of action for

wrongful eviction were never alleged or proven in this case, See McKenzie v. A.C.

Carte, 385 S.W.2d 520, 528 (Tex.Civ.App.-- Corpus Christi 1964, writ ref’d

n.r.e.), and certainly such a complete cause of action was not contemplated by the

33
parties, their attorneys and the trial court when finalizing the Jury Charge at the

charge conference (Supp. RR Vol. 6-A).

Further, a party must submit a request for jury instruction, definition and

issue when it has the burden of proof, otherwise, the items never requested are

waived. See W.O. Bankston Nissan, Inc. v. Walters, 754 S.W.2d 127, 128 (Tex.

1988); Tex.R.Civ.P. 279. Since Appellees never requested any jury instruction,

definition and issue regarding a cause of action for wrongful eviction, such a cause

of action was completely waived and cannot serve as the basis for alleged DTPA

violations.

(ISSUE 8(b))

D. Statements and representations allegedly relied on by Appellees were not a
producing cause of any damages.

Provisions in the subject leases and oral representations made by

Marinecorp’s Property Manager in connection with these contractual provisions

regarding the provision of electricity were not a producing cause of DTPA

damages to Appellees. More specifically, such representations were not a

substantial factor in bringing about damages and any such damages would have

occurred with or without such representations. This is established in the evidence

more fully discussed immediately above under the discussion regarding Issues

Nos. 1, 4 and 7, supra, to wit:

34
 1. Appellees are not entitled to damages from Marinecorp because they
failed to comply with material notice of default and cure lease provisions;

2. Appellees caused any damages which they may have sustained; and

3. An unpled or unproved wrongful eviction of Appellees did not violate the
DTPA.

Plaintiffs testified that Chopper was making a profit and Outlaw was breaking

even. There was no evidence of any act or omission by Marinecorp that affected

this net income. Appellees failed to meet this burden of proof relative to the

DTPA element of causation.

(ISSUE 8(c))

E. There was no evidence or insufficient evidence to establish that Marinecorp’s
actions were unconscionable or knowingly in violation of prohibited conduct
under the DTPA.

Unconscionable Action
There was insufficient evidence to establish that Marinecorp's actions were

unconscionable in that it grossly took advantage of Chopper and Outlaw’s

principal, Miller. (See answer to Jury Question No. 15 at CR 418) Section

17.50(a)(3) of the DTPA provides that a consumer may recover actual damages for

"any unconscionable action or course of action" that is the producing cause of

damages. Tex. Bus. & Com.Code § 17.50(a)(3). Section 17.45(5) of the DTPA

defines “unconscionable action or course of action” to mean “an act or practice

which, to a consumer’s detriment, takes advantage of the lack of knowledge,
35
ability, experience, or capacity of the consumer to a grossly unfair degree.” For

purposes of the definition of unconscionable action, the term “gross” should be

given its ordinary meaning of glaringly noticeable, flagrant, complete, and

unmitigated. Chastain v. Koonce, 700 S.W.2d 579, 583 (Tex. 1985).

To prove an unconscionable action or course of action, a plaintiff must show

that the defendant took advantage of his lack of knowledge and "`that the resulting

unfairness was glaringly noticeable, flagrant, complete and unmitigated.'" Id. The

relevant inquiry into an alleged unconscionable action or course of action under the

DTPA examines the entire transaction, not only a defendant’s intent. Bennett v.

Bank United, 114 S.W.3d 75, 82 (Tex.App.-- Austin 2003, no pet.).

Another relevant inquiry on appeal is what the consumer could have or

would have done if he or she had known about the information, and there also

needs to be some showing of the consumer’s knowledge, ability, experience, or

capacity. Daugherty v. Jacob, 187 S.W.3d 607, 616 (Tex.App.-- Houston [14th

Dist.] 2006, no pet.).

In the instant case, there is no evidence that Marinecorp took an unfair

advantage of Miller to a grossly unfair degree. Miller was a sophisticated

businessman with a wealth of business experience and knowledge. He was

previously involved in building large commercial strip malls and he had previously

been involved in projects similar to the Chopper and Outlaw projects. He
36
commonly dealt with lawyers, bankers, CPAs and realtors. He was experienced in

putting together business plans and he often dealt with fiduciary settings involving

trustees. Miller also owned and had been involved in corporations in the past.

These personal and professional traits of Miller demonstrate his great capacity and

ability in dealing with the matters that he was presented with.

Absent from the record is evidence that Miller lacked knowledge from

which Marinecorp could have taken advantage, as Miller was business savvy and

had a sophistication which was not common to the average consumer that the

DTPA was intended to protect. No evidence exists that Marinecorp took

advantage of Miller’s lack of knowledge. Moreover, no evidence exists in the

record suggesting that there was a resulting unfairness in the subject transaction

that was unfair to the extent of being glaringly noticeable, flagrant, complete and

unmitigated. In evaluating the transaction, the evidence establishes that the parties

negotiated the terms of the leases, which included the requirement that Miller

personally guarantee both leases.

Miller was fully aware of the condition of the buildings when Chopper and

Outlaw entered into the leases. This fact was even accounted for in the lease,

which expressly provided that the parties were leasing the buildings in an “as is”

condition, yet still expressly excluding various matters at page 29 of the lease that

would not be subject to this agreed to “as is” clause. Finally, it was certainly
37
within the realm of Miller’s experience and knowledge that a consequence of a

commercial tenant not paying its rent is ultimately a lockout. The focal transaction

here involves the connection of power to the Outlaw structure. This obligation was

placed on Marinecorp pursuant to the lease agreements. In spite of numerous and

severe theft incidents where thieves stole copper electrical wiring from both

buildings, Marinecorp never ceased its attempts to restore the power. Fact of the

matter is that Marinecorp had the power to both buildings restored months before

Chopper and Outlaw were locked out.

As established above, there is insufficient evidence to support the jury’s

finding of unconscionability under the DTPA. (CR 418)

“Knowing” DTPA Violation
Further, there was no evidence or insufficient evidence to establish that

Marinecorp’s alleged representations constituted an engagement in DTPA

prohibited conduct “knowlingly.” The jury found that Marinecorp engaged in such

knowing conduct as to both Appellees in answer to Question No. 17 (CR 421),

awarding Appellees $11,000 each for related damages in answer to Question No.

18 (CR 422).

The Texas Business & Commerce Code, Sec. 17.45(9) defines “knowingly”

as meaning actual awareness, at the time the act of practice complained of, of the

falsity, deception, or unfairness of the act or practice giving rise to the consumer’s

38
claim or, in an action brought under subdivision (2) of subsection (a) of Section

17.50, actual awareness of the act, practice, condition, defect, or failure

constituting the breach of warranty, but actual awareness may be inferred where

objective manifestations indicate that a person acted with actual awareness.

The evidence presented at trial established that Marinecorp’s property

manager represented to Appellees that the electricity would be connected the first

week of November. When this representation was made, he had no idea that the

electricity would not be connected at a later date. No evidence exists that when

made, the subject representation was made with actual awareness of falsity,

deception or unfairness, nor do objective manifestations to the contrary exist in the

record. Therefore, there was no intentional or knowing misrepresentation. More

evidence of the lack of a knowing violation is shown by the hiring of the

electrician who represented to the Appellees that he connected the electricity and

that he had been paid for his work.

(ISSUE 8(d))

F. No implied warranty was breached and the “as-is” lease provision.

There was no evidence or insufficient evidence to establish that Marinecorp

breached an implied warranty (See Jury’s answer to Question No. 15 at CR 417;

39
Supp. RR Vol. 6-A at 12-13) because of the lease provisions stating the tenants

accepted the property in its "as-is" condition

In the case of Gym-N-I Playgrounds, Inc. v. Snider, 220 S.W.3d 905 (Tex.

2007), the Texas Supreme Court held that the implied warranty of suitability may

be contractually waived by a tenant who enters into an “as is” clause in a

commercial lease. Underlying the Court’s holding was its recognition of strong

public policy encouraging parties the freedom to contract. Id. at 913. The Court

held that by agreeing to lease property "as is," a lessee agrees to make his own

appraisal of the bargain and accepts the risk that he may misjudge its value. Id. at

914 (citing Prudential Ins. Co. of Am. v. Jefferson Associates, Ltd., 896 S.W.2d

156, 161 (Tex. 1995)). The lessor gives no assurances, express or implied,

concerning the value or condition of the premises. Gym-N-I, 220 S.W.3d at 914.

Thus, an "as is" agreement precludes the lessee from proving that the lessor's

conduct caused harm. Id. The commercial tenant in Gym-N-I contractually

disavowed any reliance upon any representation by the landlord. Id. By agreeing

to lease the building "as is," the tenant agreed to make its own appraisal of the

physical condition of the premises. Id. Thus, the sole cause of the tenant’s injury,

by its own admission, was itself. Id. The Court, therefore, held that the "as is"

clause negated the tenant’s claim regarding causation as to causes of action for

40
negligence per se, gross negligence, violations of the Deceptive Trade Practices-

Consumer Protection Act, and fraud. See Id. at 913-914.

Similarly, in the instant case, by agreeing to commercial leases which

contained similar “as is” clauses, as a matter of law Appellees were precluded from

proving that Marinecorp’s conduct caused them harm. Appellees were free to

inspect the premises for defects. If in fact they were damaged because of the

conditions of the subject premises, causation lies directly on them and not on

Marinecorp.

In conclusion, reversal and remand is warranted for reasons set out above in

connection with Issues Nos. 6, 7 and 8.

Issue 9: The trial court should not have awarded Chopper and Outlaw
pre-judgment interest because the alleged damages were not definitely
determinable at a definite time.

In the trial court’s Modified Final Judgment (attached as Appendix "B"), the

trial judge awarded actual damages to each Appellee and then proceeded to award

prejudgment interest to Chopper for $21,776.71 and Outlaw for $30,072.60. As to

both Appellees, the trial court’s award of prejudgment interest was erroneous.

While prejudgment interest is recoverable as a matter of right where

damages are established as of a definite time and the amount thereof if definitely

determinable, Black Lake Pipe Line Co. v. Union Construction Co., Inc., 538
41
S.W.2d 80, 95-96 (Tex. 1976), in the instant case the damages awarded to

Appellees are not “definitely determinable” at a definite time and, therefore, the

award of pre-judgment interest on such damages should not have been awarded.

This constitutes fundamental error. There is simply no reasonable means of

calculating prejudgment interest on the damages awarded without a determined

date or definite time from which an interest calculation can be made. For these

reasons, there is no evidence, or insufficient evidence, in the record to support an

award of prejudgment interest on the damages awarded by the jury and, more

specifically, a “definitely determinable at a definite time” reference date from

when prejudgment interest calculations could be made. Accordingly, Appellant

requests an appropriate remittitur under the authority of Pope v. Moore, 711

S.W.2d at 624, or, alternatively, it requests a reversal and remand.

Issue 10: The trial court should have awarded Marinecorp damages for
Miller and Tones’ breach of the subject guaranty agreements.
The parties negotiated the terms of the Chopper and Outlaw leases. The

Chopper lease was personally signed and guaranteed by Miller whereas the Outlaw

lease was personally signed and guaranteed by Miller and Tones; therefore, if the

terms of these leases were not fulfilled, the signatories would be personally liable

for each tenant’s failure to fulfill the lease’s terms. (4 RR 18:2; 18:20, 18:21,

19:22; 20:5)
42
 The jury found in answer to Question No. 2 (CR 404) that Outlaw failed to

comply with the lease agreement. In answer to jury Question No. 4 (CR 406-407),

the jury found that Outlaw’s failure to comply was not excused. However, in its

answer to Question No. 7 (CR 410), it declined to award any past or future rents to

Marinecorp as a result of Outlaw’s failure to comply.

Reversal is warranted and Marinecorp prays that the Court render judgment

in its favor for Outlaw’s past and future rents or, alternatively, that the Court

reverse the above-referenced finding and enter an order directing the trial court to

enter judgment accordingly or, in the final alternative, that the Court reverse and

grant Marinecorp a new trial.

ISSUE 11: The trial court should not have rendered judgment for cumulative
damages for concurrent causes of action arising out of the same acts.

In the trial court’s Modified Final Judgment, the trial judge awarded

$210,000 in actual damages to Chopper and $290,000 in actual damages to

Outlaw. These damages were awarded by the court under the DTPA theory of

recovery alleged by Appellees. These actual damage awards were made up of two

43
damage components awarded by the jury in their answer to Question No. 16 [CR

419-420]3, namely:

--For Chopper: $110,000 for expenses and $100,000 for loss of use, and

--For Outlaw: $150,000 for expenses and $140,000 for loss of use.

The award of these damages cumulatively in the final judgment is contrary

to Texas’ “one satisfaction rule,” which provides that there can be but one recovery

for one injury; and the fact that there may be more than one theory of liability does

not modify the rule. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 303

(Tex. 1991). The award of these damages also constitutes an impermissible double

recovery.

Included in the jury charge were definitions for the different measures of

damage which the Appellees sought to recover under the DTPA and for breach of

contract. The following table summarizes these definitions:

3
Note that the loss of benefit of the bargain damages that the jury awarded Appellees with
regard to the breach of contract and DTPA causes of action were ultimately omitted by the trial
44
Element of Damages Breach of Contract (Q. #6 DTPA (Q. #16 [CR 419-420])
[CR 409])

Loss of benefit of the bargain Difference, if any, between the Difference, if any, in the value
value of the premises as of the premises as received
agreed and the value of the and the value it would have
premises as provided by had if it had been represented.
Marinecorp.

Remedial damages/ Remedial damages: Expenses: The expenses
Expenses Reasonable and necessary cost incurred by Chopper in
to reimburse Chopper or constructing and equipping the
Outlaw for the loss of lease premises in order to
investment in construction and operate.
equipment costs.

Loss of income/Loss of use Loss of income: Loss of net Loss of use: The reasonable
income for the time Chopper value of the lease premises for
or Outlaw was unable to the time Chopper was unable
operate due to Marinecorp’s to operate due to Marinecorp’s
conduct. conduct.

Note that while different labels for the categories of damages listed above may

have been used in the jury charge, “remedial damages” and “expenses” are

essentially defined as the same measure of damages. Likewise, the jury charge’s

terms “loss of income” and “loss of use” are defined as the very same measure of

damages.

Plaintiffs cannot recover the same damages for the same injury, regardless of

Plaintiffs’ theories. Even Leyendecker & Associates, Inc. v. Wechter, 683 S.W.2d

369, 373 (Tex. 1984) prevents plaintiffs from recovering more than once for the

same injury.

court. (See CR 589).
45
 The one satisfaction rule also applies to prevent a plaintiff from obtaining more

than one recovery for the same injury, even if caused by different acts. Stewart

Title Guar. Co. v. Sterling, 822 S.W.2d 1, 7 (Tex. 1991), holding modified by

Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006). Appellate

courts have applied the one satisfaction rule when the defendants commit the same

act as well as when defendants commit technically differing acts which result in a

single injury. Stewart Title, 822 S.W.2d at 7. The Stewart Title court cited

American Baler Co. v. SRS Systems, Inc., 748 S.W.2d 243, 246 (Tex.App.--

Houston [1st Dist.] 1988, writ denied) with approval of that court’s conclusion that

the same wrongful act or misrepresentations connected with the sale of equipment

related to causes of action for fraud, breach of contract, negligent

misrepresentation and DTPA, thereby requiring the plaintiffs to elect a remedy.

Stewart Title, 822 S.W.2d at 7 (citing American Baler, 748 S.W.2d at 246).

Whether Appellees contend that Marinecorp made misrepresentations about

making repairs and the provision of power or its alleged actual failure to make

repairs and provide power, the resulting consequence would have been the same,

i.e., their inability to generate revenue. The trial court’s Modified Final Judgment

awarded Chopper and Outlaw damages for “expenses” and “loss of use” under a

DTPA theory, however, Appellees should not be entitled to both types of damages

because the wrongful conduct alleged against Marinecorp would have resulted in
46
the same consequence of Appellees’ inability to generate revenue. Plaintiffs

should not be allowed to recover twice (i.e., damages for expenses and for loss of

use) for the same resulting injury which was the consequence of the same

complained of act. The trial court’s Modified Final Judgment awarding both

measures of damages cannot stand under Texas law.

Finally, it is important to note that in jury Question No. 16’s definition of the

terms “expenses” and “loss of use” (CR 419), which incidentally was submitted by

the Appellees, Outlaw is selectively excluded and, therefore, by written instruction

from the Court these measures of damages only relate to Chopper and otherwise

selectively exclude Outlaw from recovering such these elements of damages.

Most disturbing is the fact that the jury obviously disregarded the express

instructions given to them by the trial court, as against the court’s directive they

proceeded to award Outlaw $150,000 for “expenses” and $140,000 for “loss of

use” in response to Question Nos. 16b and 16c (CR 420).

Marinecorp contends that the legal consequence is that Outlaw effectively

elected its remedy under the DTPA cause of action.

The appellate error discussed above warrants that the Court reduce the

damages awarded in the trial court’s Modified Final Judgment. Pope v. Moore,

711 S.W.2d at 624. Alternatively, Marinecorp asks that the Court to vacate said

Judgment, reverse and order a new trial of this matter.
47
Issue 12: The trial court should have entered judgment against Miller for the
full amount of principal and interest owing on the promissory note executed
by him and payable to Marinecorp.

The jury found by answering Question No. 10 that Tony Miller failed to

comply with the terms of the Promissory Note (CR 413) and proceeded to award

Marinecorp damages in answer to Question No. 11 for $15,000. (CR 414)

The jury’s award of only $15,000 to Marinecorp for Miller’s breach of the

subject promissory note (CR 414) is against the great weight and preponderance of

the evidence and is manifestly unjust. No evidence or insufficient evidence

supports the jury’s award of a mere $15,000 for damages attributed to Miller’s

failure to comply. Instead, the undisputed and only evidence is that the balance on

the promissory note payable to Marinecorp was $53,000 (5 RR 96:15), not

$15,000.

Issue 13: The evidence does not support the jury's answers awarding
Chopper and Outlaw damages for loss of the benefit of the bargain; remedial
damages; expenses; loss of income; loss of use; and wrongful eviction because
there was no evidence or insufficient evidence to support these findings of
damages.

A. Standard of Review
The legal and factual sufficiency of the evidence standards of appellate

review set out above under Issue 1 apply here, as well as the great weight and

preponderance of the evidence standard. The standard for a request for remittitur

is factual sufficiency of the evidence. Pope v. Moore, 711 S.W.2d at 624. To

48
better understand Issue 13 challenging the jury’s award of damages in this case,

Marinecorp requests that the Court review with a critical eye the “evidence”

presented to the trial court by Appellees in support of their claims for damages.

After all, Appellees had the burden of proof at trial. In their effort to prove up

damages, Appellees relied upon their bank statements, Chopper Px-75 and Outlaw

Px-76, respectively, along with documents called "weekly reports." However,

Marinecorp will show that this evidence was completely unreliable to serve as the

basis of damages awarded, in violation of the standard set out in James L. Gang &

Associates, Inc. v. Abbott Labs, Inc., 198 S.W.3d 434, 443 (Tex.App.-- Dallas

2006, no pet.), where it was held that a Plaintiff must have facts and figures to

support its claims; mere allegations of expenses without objective facts, figures, or

data do not amount to any evidence of out of pocket damages.

B. Breach of Contract Damages (Jury Question No. 6 [CR 409])
In answering Question No. 6, the jury awarded Appellees breach of contract

damages for: (1) loss of the benefit of the bargain 4, (2) remedial damages, and (3)

loss of income. Question No. 6 instructs the jury to consider the following

elements of damages and none other. (Id.).

4
This award of damages [Q. 6a at CR 409] as to each Appellee was omitted by the trial
court in its Modified Final Judgment. However, the jury awarded these damages by ignoring the
court’s unambiguous definition of this measure of damages.

49
 1. Remedial Damages
Question No. 6 defined “remedial damages” as the “reasonable and

necessary cost to reimburse Chopper and Outlaw for the loss of investment in

construction and equipment costs.” (CR 409) The jury ignored this definition and

Appellees failed to produce credible and reliable evidence entitling Appellees to an

award of such damages. Appellees, through Miller, testified at trial that evidence

of money spent in construction equipment costs was contained in bank statements

and weekly reports (4 RR 86, line 10), however, this proof promised by Appellees

simply does not exist in the record. Further undermining Appellees’ claim for

“remedial damages” is the fact that absent from the record is evidence that the

alleged costs were reasonable and necessary. (CR 409) Nevertheless, the jury

proceeded to award Chopper and Outlaw remedial damages for $110,000 and

$150,000, respectively (Id.). The jury did not even account for the $194,994.54 in

build-out costs paid to Outlaw in connection with the Outlaw lease property, for

which Marinecorp was entitled to a credit. Not surprisingly, Outlaw never

included this amount in its accounting and calculations and the jury simply ignored

Marinecorp’s undisputed evidence that such monies were paid out.

Appellees sought to prove their entitlement to remedial damages by relying

on Miller’s shoddy and incomplete accounting records which had no backup or

corroborating documentation. He submitted to the jury commingled records, as he

50
did not as much as separate “loss of investment” documentation related to the two

separate business ventures of Chopper and Outlaw, presumably leaving it to the

jury to sift through and figure out on its own.

Further confusing the issue of damages was the vacillating and inconsistent

testimony of Miller. He initially testified to investing half-million dollars. His

credibility was then placed into serious doubt when he subsequently testified that

he and Tones spent over $550,000 (CR 3, p. 162, line 19), yet still he would later

testify that they had invested over one million in the building alone (CR 4, p. 73,

line 3). He would once again change his testimony testifying that his operating

expenses were $2,455,000. None of this testimony was ever supported by

corroborating or credible evidence. Bank statements introduced into evidence

reveal no such capital investments or deposits in the referenced amounts.

Testimony was elicited that Miller and Tones were withdrawing monies from the

bank accounts on a regular basis, however, Miller testified that he had no idea why

the withdrawals were made (CR 4, p. 87 and p. 18). Appellees presented no

evidence from experts or other witnesses explaining the contents of the financial

records presented. Instead, Appellees passed on the burden of proof on to the jury

and left it to grapple with and try to make sense of the confusing, incomplete, and

contradictory documents introduced. This made it virtually impossible for the jury

to have awarded specific damages based on this “evidence.”
51
 2. Loss of Income
In Question No. 6, the jury was provided with the definition of “loss of

income” as “loss of net income for the time Chopper or Outlaw was unable to

operate due to Marinecorp’s conduct.” (emphasis added) The jury proceeded to

award breach of contract damages for loss of income in the amounts of $100,000

for Chopper and $140,000 for Outlaw. However, at no time was evidence of “net

income,” gross income and operating expenses presented, nor was the jury

provided with financial data that would have enabled it to make this calculation

and ultimately find that Appellees experienced a loss of income attributed to the

acts and/or omissions of Marinecorp. Both Chopper and Outlaw operated their

businesses throughout the applicable periods of time in 2010 and all of 2011.

Miller testified that Chopper was always making a profit and Outlaw was about

breaking even. (4 RR82:17)

Each business had its income and expenses. However, well aware that they

carried the burden of proof, Appellees fell short in this task by failing to produce

an accounting as to the amount of gross income each business received and their

related operating expenses, which would have allowed the “net” calculation to be

made. Bank reports and weekly reports presented by the Appellees had no

separation of the monies spent for equipment and making improvements and the

monies spent in the ordinary course of conducting business and the money

52
contributed as capital. Although it was his burden, Miller never explained which

of the expenses were operating expenses, which were for the construction and

equipment, and which were capital contributions. Nevertheless, the jury awarded

loss of income damages to both Appellees. There is no evidence or insufficient

evidence to support the jury’s award of such damages.

As set forth in El Dorado Motors, Inc. v. Koch, 168 S.W.3d 360, 366-

367(Tex.App.-- Dallas 2005, no pet.), at a minimum, opinions or estimates of lost

profits must be based on objective facts, figures, or data from which the amount of

lost profit can be ascertained. Mere conclusions are incompetent and do not

amount to any evidence at all. See Id. Further, the Texas Supreme Court held in

Holt Atherton Industries v. Heine, 835 S.W.2d 80 (Tex. 1992), the testimony was

legally insufficient because it did not provide any indication how they determined

what their lost profits were. See Id. at 84-86; also see Texas Instruments, Inc. v.

Teletron Energy Mgt., Inc., 877 S.W.2d 276, 279-280 (Tex. 1994) (holding that

while modern business methods have cost a relaxation of the rigid rule entitling

one to recover lost profits, the law still demands proof with a degree of certainty.).

The jury in the instant case had no basis for determining loss of income damages

with reasonable certainty. Its award of such damages was based on pure

speculation and mere conclusions. Miller’s testimony that Chopper was always

53
making a lot of money and that Outlaw was about breaking even further justifies

no recovery of damages for loss of income and a reversal of the verdict.

C. DTPA Damages (Jury Question No. 16 [ CR 419])

In answering Question No. 16, the jury awarded Appellees DTPA damages

similar to those it awarded them for breach of contract under Question No. 6, supra

(CR 409). Specifically, the damages awarded were for: (1) loss of the benefit of

the bargain 5, (2) expenses, and (3) loss of use. Importantly, note that the

definitions the jury was given in Question No. 16 for “expenses” and “loss of use”

damages were strikingly similar to those give to the jury in Question No. 6 for

“remedial damages” and “loss of income,” respectively. For this reason, the jury

considered identical measures of damages in answering Questions Nos. 6 and 16.

1. Expenses
In answer to Question No. 16 (CR 419), the jury awarded Chopper and

Outlaw $110,000 and $150,000, respectively, in “expenses.” (CR 419-420) The

trial court defined the “expenses” measure of damages as “The expenses incurred

by The Chopper Group in Constructing and equipping the lease premises in order

5
This award of damages [Q. 16a at CR 419] as to each Appellee was omitted by the trial
court in its Modified Final Judgment. However, the jury awarded these damages by ignoring the
court’s unambiguous definition of this measure of damages.

54
to operate.” (CR 419) (emphasis added) The jury obviously ignored the trial

court’s limited definition of expenses incurred only by Chopper, as in spite of this

limiting language it awarded Outlaw $150,000 in expenses. This award is also not

supported by sufficient evidence in the record.

A remittitur of the $150,000 awarded to Outlaw for expenses is warranted

because it is contrary to the express instructions and definitions provided in the

Court’s Jury Charge. Furthermore, Marinecorp paid Outlaw $194,994 in build-out

costs to get the premises business ready. Allowing Outlaw to recover an additional

$150,000 in “expenses”, i.e., expenses incurred in constructing and equipping the

premises in order to operate, would be the equivalent of compensating Outlaw

twice for the same costs that Marinecorp previously paid in build-out costs

pursuant to the lease agreement. Not surprisingly, Outlaw’s accounting and

calculations do not account for the build-out costs paid by Marinecorp as an offset

or credit.

Appellees failed to produce competent evidence entitling them to expenses

as damages. In challenging the jury’s $110,000 expenses damage award to

Chopper (CR 420), Marinecorp would show that the Chopper lease was signed in

April 18, 2010 and said Appellee opened its doors for business approximately three

months later in the middle of July 2010 (3 RR 142:12). Therefore, it would follow

that all checks identified by Chopper after this opening date were not for
55
construction costs but rather were for operating costs. Miller testified that he has

receipts for all expenses (4 RR 86:10) and he further testified that his proof is in

the check books (4 RR at p. 82). However, a review of Chopper’s bank statements

(Chopper Px-75) and weekly reports discloses that corroborating evidence of these

expenses was never produced, are not part of the record, and were never

considered by the jury in answering Question No. 16.

Miller never testified that any of the company checks issued during the time

period in question represented monies spent on construction costs. In fact, Miller

never even mentioned any repairs made to the Chopper leased premises. Chopper

did not have to do many repairs on the Chopper leased premises because the

premises were previously occupied by a Mexican restaurant, so the premises were

already built-out for Chopper’s business purposes as a biker’s restaurant and bar.

For this reason, the Chopper lease did not provide for any build-out allowance of

monies to be advanced. Finally, reviewing Chopper’s bank statement for the from

the April 18, 2010, discloses that lease signing through Chopper’s opening for

business in mid-July 2010, at best very few checks were cut on the Chopper bank

account during this short time period and the checks that were issued were for very

small amounts, nowhere near the $110,000 in expenses awarded by the jury to

Chopper.

56
 With regard to Outlaw, any expense documents relied on by the jury in

awarding Outlaw $150,000 in expenses damages in answer to Question No. 16

should have included a credit for the build-out allowance paid early on to Outlaw

by Marinecorp.

Weekly reports and bank statements introduced into evidence by Chopper

and Outlaw were wholly unreliable. Accounting and record-keeping produced by

Appellees did not separate Miller’s personal investments from the separate

Chopper and Outlaw investments. All records were commingled without there

ever being a separation from which the jury could have determined construction

and equipping the premises expenses needed to calculate recoverable expenses.

Equally problematic here was the lack of Miller’s credibility, with him

testifying to four significantly different values of his investment without

corroborating proof or evidence.

In spite of falling short of meeting their burden of proof, the jury awarded

Chopper and Outlaw expense damages for $13,000 and $80,000, respectively. Not

surprisingly, however, no credit was provided in Outlaw’s accounting and record

keeping for the $194,994 paid by Marinecorp for build-out.

Bank statements and weekly reports produced by Appellees did not prove up

any capital investment made or deposits into the bank in connection with the

Chopper and Outlaw investments. Evidence showed frequent bank account
57
withdrawals by Miller and Tones without ever providing an explanation behind the

withdrawals. The burden of proof in this case was always with the Appellees. It

was their burden to prove up their entitlement to damages for expenses which

specifically related to constructing and equipping the leased premises in order to

operate.

Appellees did not fulfill their burden of proof in that they failed to isolate for

the jury’s consideration “expenses,” as defined in jury Question Nos. 6 and 16.

More specifically, the financial records submitted by Appellees as evidence of

“expenses,” at best, accounted for comingled expenses and costs, some for

operating costs and perhaps others for constructing and equipping the premises in

order to operate. From what was presented to the jury, neither the jurors nor

witnesses with expertise in accounting could have isolated from Appellees’ proof

“remedial damages” or “expenses” contemplated under jury Question Nos. 6 and

16. Therefore, even if liability rests with Marinecorp, the Appellees wholly failed

to satisfy their burden of proof by failing to present competent and clear evidence

of “remedial damages” and/or “expenses, as expressly defined by the trial court in

its jury charge. In this regard, the jury clearly ignored the definition of “expenses”

set out in the jury charge, as no evidence or, alternatively, insufficient evidence

supports the jury’s award of “remedial damages” and/or “expenses in connection

with jury Question Nos. 6 and 16.
58
 In attempting to prove their alleged damages, Chopper and Outlaw relied

upon their bank statements and "weekly reports," which were totally unreliable, in

violation of the minimum proof standard set out in James L. Gang & Associates,

Inc. v. Abbott Labs, Inc., 198 S.W.3d 434, 443 (Tex.App.-- Dallas 2006, no pet.),

where the court held that a Plaintiff must have facts and figures to support its

claims; mere allegations of expenses without objective facts, figures, or data do not

amount to any evidence of out of pocket damages. They are inaccurate,

incomplete, contradictory and meet no known accounting standards. Appellees

claim they represent expenses paid, but many of the expenses they are claiming are

supported by only invoices for which no evidence established that they were ever

paid. In addition, many entries were merely for "cash," leaving us to wonder cash

for what?

Marinecorp directs the Court to Section “D” (i), (ii) and (iii), infra, detailing

the unreliability of bank statements, accountings and weekly reports upon which

Appellees relied on as evidence supporting their claims for damages.

Neither Miller nor any expert ever explained the numbers in the bank

statements and weekly reports. The numerical content of these records were never

categorized or itemized in detail for each income amount and source of income,

and expenses were at no time itemized or otherwise explained. Appellees' attorney

never argued that their claims for damages were supported by any specific detailed
59
analysis. It was like throwing receipts in a shoe box and telling the jury "here's my

evidence." It was impossible for the jury to have understood the weekly reports

and the bank statements without explanation by somebody.

3. Loss of Use
The Court instructed the jury in Question # 16 (CR 419) that they could

consider:

"The reasonable value of the leased premises for the time the Chopper
Group was unable to operate due to Marinecorp's conduct."

(emphasis added). Outlaw did not request the court to insert a jury question as to

the reasonable value of the leased premises for time it was unable to operate due to

Marinecorp's conduct. Therefore, the court instructed the jury they could only

consider the reasonable value of the lease premises for the time Chopper was

unable to operate due to Marinecorp's conduct. However, the jury ignored the

court's instructions and proceeded to award Outlaw $140,000.00 for its alleged loss

of use damages. It awarded Chopper $100,000 for similar damages. A remittitur

of these damages for $140,000 awarded to Outlaw is warranted, as it is contrary to

the express instructions and definitions provided in the Court’s Jury Charge.

Further, insufficient evidence supports loss of use damage awarded to each

Appellee.

The evidence clearly established that Chopper was always able to operate

and that Marinecorp's conduct did not inhibit this ability. Appellees never failed to
60
open their doors because of any alleged problems caused by Marinecorp. In this

regard Miller testified that Chopper was always making a profit and Outlaw was

about breaking even. (4 RR82:17) There was no evidence presented as to the

reasonable value of the Chopper and Outlaw leased premises at any time. It was

therefore impossible for the jury to calculate any such reasonable value as to both

Appellees. For these reasons, remittitur or, alternatively, reversal as to loss of use

damages for both Chopper and Outlaw is warranted.

D. Bank Statements and Weekly Reports relied on By Chopper and Outlaw
to prove up damages were unreliable, not based on objective facts, accurate
figures and data, and were without support of corroborating evidence.

Miller tesitified that the weekly reports and their totals represented his

damages. He testified that he has a copy of a receipt in the weekly reports for

every expense claimed (4 RR 86:10). He further testified, “It’s all in the bank

statements.” Contrary to Miller’s representation, an untold number of receipts and

proof of payment do not exist to corroborate Appellees’ claims for damages. The

following discussion explains the major flaws in the primary form of proof that

served as the basis of damages awarded to both Chopper and Outlaw (i.e.,

Appellees’ bank statements and weekly reports).

61
 i. Outlaw’s actual expenses and claimed expenses do not add up.
Weekly reports relied on by Appellees in their effort to prove damages in

this case were rife with claimed expenses that were false, uncorroborated and

simply not supported by credible evidence. While this evidentiary problem was

extensive and permeated the documents that purportedly supported Appellees’

claim for damages, a few examples of this extensive evidentiary shortfall follow:

Jim Hofelich: Outlaw claims that it paid Mr. Hofelich $37,121.15 for

property expenses, yet the only checks in the bank statement total $9,845.00

(Check Nos. 1004, 1186 & 114 at Outlaw Px-76), falling short $27,275.15 never

proven or corroborated with competent evidence.

Redhawk: Outlaw claims that it paid Redhawk $38,189.41 for Outlaw for

property related expenses, however, the only check in the bank statement for

expense payments to Redhawk was for $5,000 (Check No. 1025 at Outlaw Px-76,

), falling short $33,189.00 in claimed expenses which Outlaw was never able to

corroborate with competent evidence.

CRS: Outlaw claims that it paid CRS $34,783 for its property expenses.

However, only checks accounted for in the Outlaw bank account payable to CRS

total $13,541.25 (Check Nos. 1035, 1037, 1059, 1099 and 1141 at Outlaw Px-76),

falling short $21,242.72 in claimed expenses never proven or corroborated with

competent evidence.
62
 The above represents merely a few examples totaling $81,708.28 worth of

claimed expenses which were never corroborated with competent evidence.

Further examination of the financial records produced by the Appellees will exhibit

even more ambiguity which poisons the record as a whole with uncorroborated,

unverified, unreliable and questionable “evidence” which Appellees claim support

the jury’s award of “expense” or “remedial” damages. Outlaw’s expenses

damages should, therefore, be reduced or taken away as a whole.

ii. Discrepancies between bank statements and accountings of Appellees

Outlaw bank statements from October 10, 2010 through March 11, 2011,

disclose checks processed during this period in the amount of $389,014.78. This

figure would necessarily include operating expenses for Outlaw through March 11,

2011. During this same period of time, checks from this same account were made

payable to Miller, Tones, Karen Miller and Art Kunzeman in the amount of

$71,740.00. In stark contrast, during this same period of time, Outlaw’s

accounting claimed expenses in the amount of $664,838.43, however, this figure

does not represent solely “expenses,” but, instead, includes unrecoverable

operating expenses. However, note that Miller submitted a separate Outlaw

“Expense Report” claiming expenses for $620,655.69. In any event, such huge

discrepancies between alleged expenses and the total checks processed, supra,

63
make highly questionable and unreliable Outlaw’s accounting and its Expense

Report with regard to expenses claimed.

As expected, Outlaw never credits Marinecorp for checks it paid to build-out

costs totaling $194,994.00. The inclusion of this amount omitted from checks

processed results in a discrepancy of approximately $400,000 from what Outback

is claiming in expenses and that which is supported by competent corroborating

evidence. Chopper’s bank account from May to August of 2011 reports expenses

in the amount of $45,875.08, however, it is claiming $231,241.97.00 in expenses.

As a consequence of the unreliability of the financial records presented by

Appellees, Marinecorp asks that all damages awarded to the Appellees based on

this “evidence” be stricken and taken away from the Appellees. In the alternative,

Appellees’ recovery of damages should be reduced to the extent that such damages

are not supported by competent, clear and credible evidence in satisfaction of the

burden of proof placed on the Appellees.

iii. Outlaw’s Weekly Reports are unreliable without objective facts, accurate
figures, or supporting data.

On appeal, Marinecorp challenges the veracity, reliability and competency of

Outlaw’s Weekly Reports as they serve as nothing more than evidence of Miller

and Outlaw’s slipshod business bookkeeping/recordkeeping, accounting and

management. They hardly serve as competent evidence of the numerous expense
64
transactions which they purport to represent. At the heart of these Weekly Reports

are significant accounting problems, which include:

1. They purport to be a summary of all expenses incurred, however, many of
the documents attached are only invoices or quotes with no evidence of
payments;

2. They are not accurate, for every item listed under “payment” states “cash.”
Unaccounted for are payments made by credit card or by check;

3. “Mexican Labor” entries have no backup whatsoever;

4. Lists “payroll” or “labor” with no backup whatsoever;

5. Lists no credit for income;

6. Do not account for build-out payments made by Marinecorp.

The following table entitled, “Outlaw Weekly Report Review,” sets out in detail

transactions which Outlaw sought to qualify as costs and expenses in support of the

damage claims:

65
 Outlaw Weekly Report Review
Week Content-- Alleged Defects
payments, costs and expenses

1 Claim expenses of --Only one paid receipt for
$34,504.05….. $104.05

--$5,500 cash payments to
labor noted, however, no
payment receipts

--$25,000 cash payment to
Canon Enterprises, but no
supporting documents

2 Expense entitled “Deposit” for --No supporting documents
$13,289.25
--No explanation where
money went

“ Expense for “rent” for Rent not an expense for
$10,539.76 construction or cost of
equipping premises

4 Numerous cash payments for No documentation evidencing
“Mexican labor” and other money ever paid
labor

5 Electrician expense for “
$8,796.15

6 “Cash” payment to electrician Only have invoice from
for $6,000.00 electrician, which is not
evidence of payment

“ “Cash” payment to Wrap Stars No supporting documentation
for $5,775

7 Several thousand dollars in “
cash payments to laborers

“ Cash payment for hardwood “

66
 floors for $3,292.50

“ Cash payment to Farley “
Specialities for $2,104.66

7B Payment to Hajjis Restaurant No evidence of payment; only
Solutions for $14,505.50 note advising Miller to make
check

“ Expense to Wrap Stars for Total owed was $10,166.50,
$8,324 so payment of $1,842.50 was
made. No evidence $8,324
balance ever paid

“ Wrap Stars expense for $6,522 No evidence of payment

“ Wrap Stars expense for “
$38,400

“ Expense to Catalyst Design Is an invoice and quote, but
for $6,000 directed to Chopper, not
Outlaw.

“ Expense for payment to Merely a quote for products
Musician’s Friend for with no evidence of payment
$10,399.09

8 Cash payment to Red Hawk Only have a quote from Red
for $15,298.34 Hawk to sell products for
referenced amount; no
evidence of payment.

” Cash payment to Quality Air Only have document
Care for $2,976.88 requesting payment of
referenced amount.

“ Thousands of dollars in No supporting documentation.
alleged cash payments to
laborers

9 Cash payment to Deerwood Only document is an invoice
A/C & Heating for $10,312.90 for referenced amount.

67
12 Cash payment to Esi, Inc. for Only have quote from
$3,939 company

“ Cash payments for thousands No supporting documentation
of dollars to laborers of payments.

13 Cash payment to Quality Air Only have invoice showing
Car for $1,976.88 amount due, yet no evidence
of payment

14 Over $5,000 for cash No supporting documentation
payments to laborers

15 Cash payments to electrician Only have invoice, but no
for $8,820 evidence of payment

16 Cash payment to Houston No supporting documentation
Security for $3,425 other than invoice.

“ Cash payment to Hajjis No supporting documents
Restaurant for $6,845

“ Cash payment to Crs for “
$5,000

17 Over $18,000 in cash “
payments made to various
vendors

19 Cash payments to laborers for “
approximately $10,000

“ Over $6,000 in cash payments “
to various vendors

20 Payment of payroll by Miller No evidence of payment
for $7,635

21 $5,000 loan to Juan Gorde Not an expense or cost

“ Expenses in total of No documentation of payment
$39,306.52-- payments to
laborers

68
 “ Invoices for liquor sales, and No evidence of payment
sale of cleaning supplies,
office supplies and invoices to
Outlaw

22 Cash payment to ASCAP for Only have invoice advising
$10,260 that referenced amount is due.
No evidence of payment.

“ Cash payment to electrician Only have invoice advising
for $5,430 that referenced amount due.

“ Cash payment to Miller for No supporting documentation.
$6,900

23 Cash payment for $20,000 for “
liquor for resale

“ Payroll payment for “
$13,927.77

“ Two claims for payment to “
Miller for $4,879 and
$15,361.68

“ Cash payment to Red Hawk “
for $19,534.26

25 Approx. $15,000 in cash “
payments for laborers
(including Miller)

“ Thousands of dollars in “
smaller invoices

26 Expenses for $8,875 “

69
 Marinecorp contends on appeal that the damages awarded to the Appellees

based on defective, faulty, and inadequate claims of costs and expenses serves as a

basis for reversal and/or remittitur.

CONCLUSION AND PRAYER

The jury ignored overwhelming evidence that neither Appellee

complied with conditions precedent in both commercial lease agreements requiring

that Appellant be given written 30-day’s written notice to cure alleged defects of

default in the terms of the lease agreement. The Appellees were also not excused

from ceasing to perform under the leases, as they treated the leases as continuing

and, therefore, continued under the law to own Appellant rents due under the lease

agreements. The trial court erred in refusing to render judgment for Appellant

against Appellees for past and future lease payments. This failure is inconsistent

with the jury’s finding that Appellee Outlaw breached its lease without excuse.

Overwhelming evidence also existed of Appellee Chopper’s breach of its lease

agreement without excuse. Overwhelming evidence also existed of Appellee

Chopper’s breach of its lease without excuse, yet error was committed in failing to

award Appellant past and future lease payments.

The overwhelming evidence was that Appellant mitigated damages, yet this

evidence was ignored by the jury and trial judge. By comparison, any damages

70
sustained by Appellee Outlaw are attributable to its own action of inactions. In this

connection, the trial court erred in failing to approve a jury instruction and question

which related to Appellees’ failure to mitigate damages. As a consequence, the

jury was not allowed an opportunity to reduce damages awarded to Appellees for

their failure to mitigate.

The jury’s award of DTPA damages was improper as Appellee Outlaw’s

damage claim sounds in contract, not in DTPA. Lacking with respect to

Appellees’ DTPA claim was sufficient evidence of causation of damages,

unconscionable conduct, and a knowing violation of the DTPA. Further, it was

reversible error to allow Appellees to base their DTPA claim on claims that

Appellant wrongfully evicted the Appellees without first proving the elements of

such a cause of action and demonstrating a judicial finding of a wrongful eviction.

“As-is” lease provisions legally precluded Appellees from asserting an

implied warranty claim and, therefore, the award of DTPA damages was improper.

The trial court’s award of prejudgment interest on damages awarded to Appellees

in the Modified Final Judgment was improper and erroneous in that the alleged

damages were not definitely determinable at a definite time. Error exists in the

trail court’s failure to award Appellant damages against Miller and Tones for their

breach of personal guaranty agreements that they approved and signed. Texas’

71
“one satisfaction rule” was violated by the jury and trial court awarding Appellees

cumulative damages for concurrent causes of action arising out of the same alleged

acts . Damages awarded in this regard were excessive and not supported by the

evidence.

Error also existed in the court below failing to award Appellant judgment

against Miller and the Harlesses for the principal and interest owed pursuant to a

promissory note executed by them which was due and payable to Appellant for

rent in arrears. Finally, the record is rife with examples demonstrating how the

jury flat out ignored specific written instructions given to them in connection with

this case. For instance, when the trial court in the jury charge authorized, upon

sufficient supporting evidence, the award of expenses and loss of use damages only

as to Appellee Chopper, it ignored this instruction and proceeded to award

Appellee Chopper $290,000 in such damages, which has no support, or inadequate

support, in the evidence. The Appellees failed to prove damages with adequate,

competent, and clear evidence but, rather, opted to submit to the jury comingled

and confusing financial records that fell well short of the required level of proof to

recover damages.

For the reasons stated in this Brief, Appellant Marinecorp asks the Court to

sustain the legal sufficiency issues and render judgment for Appellant. If the Court

72
overrules the legal sufficiency challenges to the evidence, Appellant Marinecorp

requests that the court reverse and remand based on the factual sufficiency issues

of error. In the alternative, Appellant Marinecorp asks the Court to modify its

judgment and delete damages which the Appellees were not entitled to under the

law and evidence presented. In the final alternative, Appellant asks that the Court

to enter a remittitur for the complained of damages. Finally, Appellant asks the

Court for such other and further relief which the Court may deem appropriate.

Respectfully submitted,

THE STROTHER LAW FIRM

/s/ Macon D. Strother_______
MACON D. STROTHER
State Bar No. 19420000
4306 Yoakum Blvd., Suite 560
Houston, Texas 77006
(713) 557-9238 (Telephone)
mstrother@strotherlawfirm.com
ATTORNEY FOR APPELLANT
MARINECORP INTERNATIONAL,
LTD.

CERTIFICATE OF SERVICE
I hereby certify that Appellant’s Brief was e-filed by utilizing the Court’s
official e-filing system on this 30th day of October, 2015, which system should
also forward a true and correct copy via e-mail to all attorneys of record in this
case, including:

73
Brock C. Akers
The Akers Firm
3401 Allen Parkway, Suite 101
Houston, Texas 77019
bca@akersfirm.com

Stephen R. Cochell
The Cochell Law Firm, PC
5555 W. Loop South, Suite 200
Bellaire, Texas 77401
srcochell@gmail.com

I further certify that on this same date, a true and correct copy of Appellant’s
Brief was sent via First Class U.S. Mail, Certified Delivery, Return Receipt
Requested, to:

Lee Harless
Dawn Marie Harless
11435 Log Cabin Dr.
Tomball, TX 77375
CM/RRR 7013 0600 0001 1817 8599

/s/ Macon D. Strother__________
MACON D. STROTHER

CERTIFICATE OF COMPLIANCE WITH TEX.R.APP.P. 9.4(i)(3)
Relying on the word count function in the word processing software used to
produce this document, namely MS Word Version 7, I certify that the number of
words in this Appellant’s Brief, excluding any parts exempted by Tex.R.App.P.
9.4(i)(1), is 14,759.

/s/ Macon D. Strother__________
MACON D. STROTHER

74
 No. 01-14-00707-CV

IN THE

FIRST COURT OF APPEALS

at HOUSTON, TEXAS

MARINECORP INTERNATIONAL, LTD.
Appellant,
V.
THE CHOPPER GROUP, LLC, AND

OUTLAW COUNTRY, LLC
Appellees

APPELLANT'S APPENDIX

LIST OF DOCUMENTS

A. Charge of the Court ...................................................... TAB A

B. Modified Final Judgment, signed July 31, 2014...................TAB B

C. Standard Lease Contract by and between Marinecorp as
Landlord and Outlaw as tenant.......................................TAB C

D. Standard Lease Contract by and between Marinecorp
as Landlord and Chopper as tenant.................................TAB D

75
 ORIGINAL
CAUSE NO. 2012-23983
c'l

cl
THE CHOPPER GROUP, LLC AND § IN THE DISTRICT COURT OF
OUTLAW COUNTRY, LLC §
El
§
VS. § HARRIS COUNTY, T S,,
H
§
§
MARINECORP INTERNATIONAL, LTD. § 80TH JUDICIAL DISTRICT

CHARGE OF THE COURT

Members of the Jury:

After the closing arguments, you will go to the jury room to decide the case, answer the
questions that are attached, and reach a verdict. You may discuss the case with other jurors Only
when you are all together in the jury room.

Remember my previous instructions: Do not discuss the case with anyone else, either in
person or by any other means. Do not do any independent investigation about the case or
conduct any research. Do not look up any words in dictionaries or on the Internet. Do not post
information about the case on the Internet. Do not share any special knowledge or experiences
with the other jurors. Do not use your phone or any other electronic device during your
deliberations for any reason.

Any notes you have taken are for your own personal use. You may take your notes back
into the jury room and consult them during deliberations, but do not show or read your notes to
your fellow jurors during your deliberations. Your notes are not evidence. Each of you should
rely on your independent recollection of the evidence and not be influenced by the fact that
another juror has or has not taken notes.

You must leave your notes with the bailiff when you are not deliberating. The bailiff will
give your notes to me promptly after collecting them from you. I will make sure your notes are
kept in a safe, secure location and not disclosed to anyone. After you complete your
deliberations, the bailiff will collect your notes. When you are released from jury duty, the
bailiff will promptly destroy your notes so that nobody can read what you wrote.

Here are the instructions for answering the questions.

1. Do not let bias, prejudice, or sympathy play any part in your decision.

2 Base your answers only on the evidence admitted in court and on the law that is in
these instructions and questions. Do not consider or discuss any evidence that was not admitted
in the courtroom.

3. You are to make up your own minds about the facts. You are the sole judges of the

1
credibility of the witnesses and the weight to give their testimony. But on matters of law, you
must follow all of my instructions.

4. If my instructions use a word in a way that is different from its ordinary meaning, use
the meaning I give you, which will be a proper legal definition.

5. All the questions and answers are important. No one should say that any question or
answer is not important.

6. Answer "yes" or "no" to all questions unless you are told otherwise. A "yes" answer
must be based on a preponderance of the evidence. Whenever a question requires an answer
other than "yes" or "no," your answer must be based on a preponderance of the evidence.

The term "preponderance of the evidence" means the greater weight of credible evidence
presented in this case. If you do not find that a preponderance of the evidence supports a "yes"
answer, then answer "no." A preponderance of the evidence is not measured by the number of
witnesses or by the number of documents admitted in evidence. For a fact to be proved by a
preponderance of the evidence, you must find that the fact is more likely true than not true.

7. Do not decide who you think should win before you answer the questions and then
just answer the questions to match your decision. Answer each question carefully without
considering who will win Do not discuss or consider the effect your answers will have.

8. Do not answer questions by drawing straws or by any method of chance.

9. Some questions might ask you for a dollar amount. Do not agree in advance to decide
on a dollar amount by adding up each juror's amount and then figuring the average.

10. Do not trade your answers. For example, do not say, "I will answer this question
your way if you answer another question my way."

11. Unless otherwise instructed, the answers to the questions must be based on the
decision of at least 10 of the 12 jurors. The same 10 jurors must agree on every answer. Do not
agree to be bound by a vote of anything less than 10 jurors, even if it would be a majority.

As I have said before, if you do not follow these instructions, you will be guilty of juror
misconduct, and I might have to order a new trial and start this process over again. This would
waste your time and the parties' money, and would require the taxpayers of this county to pay for
another trial. If a juror breaks any of these rules, tell that person to stop and report it to me
immediately.

A fact may be established by direct evidence or by circumstantial evidence or both. A
fact is established by direct evidence when proved by documentary evidence or by witnesses
who saw the act done or heard the words spoken. A fact is established by circumstantial
evidence when it may be fairly and reasonably inferred from other facts proved.

2

401
 Do not increase or reduce the amount in one answer because of your answer to any other
question about damages. Do not speculate about what any party's ultimate recovery may or may
not be. Any recovery will be determined by the court when it applies the law to your answers at
the time of judgment.

3

402
 QUESTION NO. 1

Did MarineCorp International fail to comply with the agreements with The Chopper
Group or Outlaw Country?

A failure to comply must be material. The circumstances to consider in
determining whether a failure to comply is material include:
I. the extent to which the injured party will be deprived of the benefit which he
reasonable expected;
2. the extent to which the injured party can be adequately compensated for the
-part of the benefit of which he will be deprived;
3. the extent to which the party failing to perform or to offer to perform will
suffer forfeiture,
4. the likelihood that the party failing to perform or to offer to perform will cure
his failure, taking into account the circumstances including any reasonable assurances;
5. the extent to which the behavior of the party failing to perform or to offer to
perform comports with standards of good faith and fair dealing.

Answer "Yes" or "No" as to each agreement

Chopper agreement: Outlaw agreement______________

MA
 QUESTION NO. 2

Did The Chopper Group or Outlaw Country fail to comply with the agreement?

A failure to comply must be material. The circumstances to consider in
determining whether a failure to comply is material include -
]. the extent to which the injured party will be deprived of the benefit which he
reasonable expected;
2. the extent to which the injured party can be adequately compensated for the
part of the benefit of which he will be deprived;
3. the extent to which the party failing to perform or to offer to perform will
suffer forfeiture;
4. the likelihood that the party failing to perform or to offer to perform will cure
his failure, taking into account the circumstances including any reasonable assurances;
5. the extent to which the behavior of the party failing to perform or to offer to
perform comports with standards of good faith and fair dealing.

Answer "Yes" or "No" as to each agreement.

Chopper agreement: 4&.0 Outlaw agreement 1J2L

5

0
 If you answered "Yes" to any portion of both Question No. 1 and Question No. 2, then
answer Question No. 3. Otherwise, do not answer Question No. 3.

QUESTION NO. 3

Who failed to comply with the agreement first?

Answer "MarineCorp International" or "Chopper" or "Outlaw"

Answerv
pf~L~
-w

405
-

If your answer to any portion of Question No. 2 is Yes," then answer the following
question. Otherwise, do not answer the following question.

QUESTION NO. 4

Was Chopper or Outlaw's failure to comply excused?

Failure to comply by Chopper or Outlaw is excused by MarineCorp International's
previous failure to comply with a material obligation of the same agreement. Failure to comply
is also excused by fraud of MarineCorp International.

Fraud occurs when—

a. a party makes a material misrepresentation, and

b. the misrepresentation is made with knowledge of its falsity or made
recklessly without any knowledge of the truth and as a positive assertion,
and

C. the misrepresentation is made with the intention that it should be acted on
by the other party, and

d. the other party relies on the misrepresentation and thereby suffers injury.;

or

Fraud occurs when—

a. a party makes a false promise to do an act,

b. the promise is material,

C. the promise is made with the intention of not fulfilling it,

d. the promise is made to a person for the purpose of inducing that person to
enter into a contract, and

e that person relies on the promise in entering into that contract

"Misrepresentation" means:

• false statement of fact, or

• promise of future performance made with an intent, at the time the promise was made,
not to perform as promised.

7

M .
Failure to comply by Chopper or Outlaw is also excused if compliance is waived by MarineCorp
International.

Waiver is an intentional surrender of a known right or intentional conduct inconsistent with
claiming the right.

Answer "Yes" or "No" as to each agreement.

Chopper agreement:
I
Outlaw agreement ni V
U

M

407
 If your answer to Question No. I is "Yes," then answer the following question.
Otherwise, do not answer the following question.

QUESTION NO. 5

Was MarineCorp International, Ltd's failure to comply excused?

Failure to comply by MarineCorp International, Ltd is excused by The Chopper
Group, LLC's previous failure to comply with a material obligation of the same
agreement.
Failure to comply by MarineCorp International, Ltd is also excused if compliance
is waived by The Chopper Group, LLC. Waiver is an intentional surrender of a known
right or intentional conduct inconsistent with claiming the right.
Failure to comply by MarineCorp International, Ltd is also excused if The
Chopper Group, LLC ratified MarineCorp International, Ltd failure to comply A party's
conduct includes conduct of others that the party has ratified. Ratification may be
express of implied. Implied ratification occurs if a party, though he may have been
unaware of unauthorized conduct taken on his behalf at the time it occurred, retains the
benefits of the transaction involving the unauthorized conduct after he acquired full
knowledge of the unauthorized conduct. Implied ratification results in the ratification of
the entire transaction

Answer "Yes" or "No"

Answer:

I,]

EM
 If your answer to Question No. 5 is "No," then answer the following question. Otherwise,
do not answer the following question.

QUESTION NO. 6

What sum of money, if any, if paid now in cash, would fairly and reasonably compensate
Chopper and/or Outlaw for its damages, if any, that resulted from such failure to comply?

Consider the following elements of damages, if any, and none other.

Loss of the benefit of the bargain

The difference, if any, between the value of the premises as agreed and the
value of the premises as provided by MarineCorp International.

Remedial damages

The reasonable and necessary cost to reimburse Chopper or Outlaw for the
loss of investment in construction and equipment costs.

Loss of income

Loss of net income for the time Chopper or Outlaw was unable to operate
due to MarineCorp's conduct.

Do not add any amount for interest on damages, if any.
Answer separately in dollars and cents for damages, if any.

a. Loss of benefit of the bargain.

Answer for Chopper:jflQQ

Answer for Outlaw4
/
00
b. Remedial damages.

Answer for Chopper4 1 0 ) OOO
Answer for Outlaw: 4 I b0 1 gD
C. Loss of income.

Answer for Chopper j twD
Answer for Outlaw: !A 140 ?0Ô
10

III!I
 If your answer to Questions 3 or 4 is "No", then answer the following question.
Otherwise, do not answer the following question.

QUESTION NO. 7

What sum of money, if any, if paid now in cash, would fairly and reasonably compensate
MarineCorp International, Ltd for its' damages, if any, that resulted from such failure to
comply?

Consider the following elements of damages, if any, and none other:

Rents owed to MarineCorp International, Ltd under the Chopper Group, LLC
Lease Agreement.

Rents owed to MarineCorp International, Ltd under Backwoods Country Club,
LLC d/bla Outlaw Country Lease Agreement.

Do not add any amount for interest on damages, if any. Answer in dollars and cents for
damages, if any.

Answer for Chopper:

1. Rents sustained in the past.

Answer: -0
2. Rents that,in reasonable probability, will be sustained in the future.

Answer:

Answer for Outlaw:

1. Rents sustained in the past.

Answer: 0
2. Rents that, in reasonable probability, will be sustained in the future.

Answer 0

11

410
 If you have answered Question No. 7, then answer the following question. Otherwise, do
not answer the following question.
QUESTION NO. 8
Do you find from a preponderance of the evidence that MarineCorp international failed
to exercise reasonable care and diligence to avoid or minimize its damages, if any?
In connection with this question, you are instructed that a person is required to exercise
reasonable care and diligence to avoid loss and to minimize the consequences of damages.
If with reasonable care and diligence he can do so, he must protect himself from the
injurious consequences of the act of another. And if he fails to do so and by reason of his
failure, his damages become aggravated, he may not recover for such part of the damages
as may be attributed to his omission to take preventive measures and his recovery will be
limited only to those damages that would have resulted had he fulfilled his duty.
Answer "Yes" or "No"

Answer: u fe5

12

411
 If you have answered "Yes" to Question No. 8, answer the following question.
Otherwise do not answer the following question.

QUESTION NO. 9
What amount, if any, would have been the damages, if any, suffered by MarineCorp
International if it had exercised reasonable care and diligence to avoid or minimize its
damages?
Answer in dollars and cents, if any.

Answer: $

13

412
 If you have answered "No" to Question No. 4, or if you have answered "Yes" to Question
No. 2, then answer the following question. Otherwise, do not answer the following question.

QUESTION NO. 10

Did Tony Miller fail to,, complJth the terms of the Promissory Note?

Answer: __________
Ij

14
 If your answer to Question No. 10 is "Yes," then answer the following question.
Otherwise, do not answer the following question.

QUESTION NO. Ii

What sum of money, if any, if paid now in cash, would fairly and reasonably compensate
MarineCorp International, Ltd for its damages, if any, that resulted from such failure to
comply?

Consider the following elements of damages, if any, and none other:

The total amount Tony Miller agreed to pay under the Promissory Note less any
payments.

Do not add any amount for interest on damages, if any.

Answer in dollars and cents for damages, if any.

Answer: $I 5 , OD D

15

414
S *

If you answered "Yes" to Questions 2 and 4, then answer the following question.
Otherwise, do not answer the following question.

QUESTION NO. 12

What is a reasonable fee for the necessary services of MarineCorp International, Ltd 's
attorney, stated in dollars and cents?

Answer with an amount for each of the following:

a. For preparation and trial.

Answer: $

b. For an appeal to the Court of Appeals

Answer: $_______________

C. For an appeal to the Supreme Court of Texas.

Answer. $ 0

16

415
4 *

QUESTION NO. 13

Did MarineCorp International engage in any false, misleading, or deceptive act or
practice that The Chopper Group or Outlaw Country relied on to its detriment and that was a
producing cause of damages?

"Producing cause" means a cause that was a substantial
factor in bringing about the damages, if any, and without which the
damages would not have occurred. There may be more than one
producing cause.

"False, misleading, or deceptive act or practice" means any
of the following:

• Representing that goods or services had or would have sponsorship,
characteristics, uses or benefits that they did not have, or

• Representing that goods or services are or will be of a particular standard,
quality or grade if they were of another, or

• Advertising services with intent not to sell them as advertised, or

• Representing that an agreement confers or involves rights or remedies that
it did not have or involve, or

Breach of implied warranty,

• Failing to disclose information about goods or services that was known at
the time of the transaction with the intention to induce The Chopper Group
into a transaction it otherwise would not have entered into if the
information had been disclosed

Answer "Yes" or "No" as to each party

Answer for Chopper: Les Answer for Outlaw:

0

17

416
 QUESTION NO. 14

Was the failure, if any, of MarineCorp International to comply with a warranty a
producing cause of damages to Chopper or Outlaw?

"Producing cause" means a cause that was a substantial
factor in bringing about the damages, if any, and without which the
damages would not have occurred. There may be more than one
producing cause.

"Failure to comply with a warranty" means the failure to
provide commercial lease premises that are suited for their
intended commercial purposes

Answer "Yes" or "No" as to each party

Answer for Chopper: Answer for Outlaw:

417
. V

QUESTION NO. 15

Did MarineCorp International engage in any unconscionable action or course of action
that was a producing cause of damages to Chopper or Outlaw?

"Producing cause" means a cause that was a substantial
factor in bringing about the damages, if any, and without which the
damages would not have occurred. There may be more than one
producing cause.

An unconscionable action or course of action is an act or
practice that, to a consumer's detriment, takes advantage of the
lack of knowledge, ability, experience, or capacity of the consumer
to a grossly unfair degree.

Answer "Yes" or "No" as to each party

Answer for Answer for Outlaw:

19
 01
U 11

If your answer to any portion of Questions 13, 14 or 15 is "Yes," then answer the
following question. Otherwise, do not answer the following question.

QUESTION NO. 16

What sum of money, if any, if paid now in cash, would fairly and reasonably compensate
Chopper or Outlaw for their damages, if any, that resulted from such conduct?

Consider the following elements of damages, if any, and none other.

Loss of the benefit of the bargain

The difference, if any, in the value of the premises as received and the
value it would have had if it had been as represented.

Expenses

The expenses incurred by The Chopper Group in constructing and
equipping the lease premises in order to operate.

Loss of use

The reasonable value of the lease premises for the time The Chopper
Group was unable to operate due to MarineCorp's conduct.

Rental and other payments

Rental and other payments made by The Chopper Group to MarineCorp
International.

In answering questions about damages, answer each question separately. Do not increase
or reduce the amount in one answer because of your answer to any other question about
damages. Do not speculate about what any party's ultimate recovery may or may not be. Any
recovery will be determined by the court when it applies the law to your answers at the time of
judgment. Do not add any amount for interest on damages, if any.

Answer separately in dollars and cents for damages, if any.

a. Loss of benefit of the bargain.

Answer for Chopper: $I Answer for Outlaw: $ 2b

20

419
0

b. Expenses.

Answer for Chopper: $ 1)01 ODD Answer for Outlaw:

C. Loss of use.

Answer for Chopper: $____________ Answer for Outlaw: $ /4 )b

d. Rental and other payments.

Answer for Chopper: $ 0 Answer for Outlaw: $ 0 -

21
 13g'-/ '5
If your answer to any portion of Questions)or Wis "Yes," then answer the
following question. Otherwise, do not answer the following question.

QUESTION NO. 17

Did MarineCorp International engage in any such conduct knowingly?

"Knowingly" means actual awareness, at the time of the
conduct, of the falsity, deception, or unfairness of the conduct in
question or actual awareness of the conduct constituting a failure to
comply with a warranty. Actual awareness may be inferred where
objective manifestations indicate that a person acted with actual
awareness.

In answering this question, consider only the conduct that you have found was a
producing conduct of damages to Chopper or Outlaw.

Answer: "Yes" or "No"

Answer for Chopper: Answer for Outlaw:

22

421
U

If your answer to any portion of Question No. 17 is "Yes," then answer the following
question. Otherwise, do not answer the following question.

QUESTION NO. 18

What sum of money, if any, in addition to actual damages, should be awarded to Chopper
and/or Outlaw against MarineCorp International because MarineCorp International's conduct
was committed knowingly?

Answer in dollars and cents, if any.

Answer for Chopper: $ I /
Answer for Outlaw:

23

422
 If you answered "Yes" to any portion of Questions 1, 4, 13,14 or 15, then answer the
following question. Otherwise, do not answer the following question.

QUESTION NO. 19

What is a reasonable fee for the necessary services of Chopper and Outlaw's attorney,
stated in dollars and cents?

Answer with an amount for each of the following:

a. For representation in the trial court and trial.

Answer for Chopper: $o4, / a/8 S-Z)
Answer for Outlaw: $_______________

b. For representation through appeal to the court of appeals.

Answer for Chopper: 0
$_______________ Answer for Outlaw: $ D
C. For representation at the petition for review stage in the Supreme Court of
Texas.

Answer for Chopper: $________________ Answer for Outlaw: $ 0
d. For representation at the merits briefing stage in the Supreme Court of
Texas.

Answer for Chopper: $ 0 Answer for Outlaw: $ 0
e. For representation through oral argument and the completion of
proceedings in the Supreme Court of Texas.

Answer for Chopper: $______________ Answer for Outlaw: $_________

24

423
.,

When you go into the jury room to answer the questions, the first thing you will need to
do is choose a presiding juror.

Presiding Juror

The presiding juror has these duties:

a. Read the complete charge aloud.
b. Preside over your deliberations. This means the presiding juror will manage
the discussions, and see that you follow the instructions.
c. Give written questions or comments to the bailiff who will give them to the
judge.
d. Write down the answers you agree on.
e. Get the signatures for the verdict certificate.
f. Notify the bailiff that you have reached a verdict.

Do you understand the duties of the presiding juror? If you do not, please tell me now.

Instructions for Signing the Verdict Certificate

1. Unless otherwise instructed, you may answer the questions on a vote of 10 jurors. The
same 10 jurors must agree on every answer in the charge. This means you cannot have one
group of 10 jurors agree on one answer and a different group of 10 jurors agree on another
answer.
2. If 10 jurors agree on every answer, those 10 jurors sign the verdict.
If 11 jurors agree on every answer, those 11 jurors sign the verdict.
If all 12 of you agree on every answer, you are unanimous and only the presiding juror
signs the verdict.
3 All jurors should deliberate on every question. You may end up with all 112 of you
agreeing on some answers, while only 10 or 11 of you agree on other answers. But when
you sign the verdict, only those 10 who agree on every answer will sign the verdict.

Do you understand these instructions? If you do not, please tell me now.

ge

25

424
 Verdict Certificate

Check one:

Our verdict is unanimous. All twelve of us have agreed to each and every answer
The presiding juror has signed the certificate for all 12 of us.

Signature of Presiding Juror Printed name of Presiding Juror

Our verdict is not unanimous. Eleven of us have agreed to each and every answer
and have signed the certificate below.

Our verdict is not unanimous. Ten of us have agreed to each and every answer
and have signed the certificate below.

SIGNATURE NAME PRINTED

2

71 /1c)rJ€jJ
JR)p C-.

'lava ROM

26

425
 0
IWAVOOVID,
 5/14/20144:16:50 PM
Chris Daniel - District Clerk
Harris County
Envelope No: 1265887
By: DARN ELL, BRADLEY K

NO. 2012-23983
p'3
THE CHOPPER GROUP L.L.C. and § IN THE DISTRICT COURT
OUTLAW COUNTRY, L.L.C. § (
1t\
§
V. § HARRIS COUNTY, TEXAS
§ S
MARrNECORP INTERNATIONAL LTD. § 80TH JUDICIAL DISTRICT

I P?EL FINAL JUDGMENT
On April 14, 2014, came on to be heard the above entitled and numbered cause

Plaintiffs/CounterDefendants The Chopper Group L.L.C. and Backwoods Country Club, L L.C,

dfbla Outlaw Country, appeared in person and by and through their attorney of record.

Defendant/Counter-Plaintiff MarineCorp International Ltd. appeared in person and by and through

its attorney of record. Third Party Defendants Tony Miller and Kyle Tones appeared in pet son and

by and thiough their iespective attorneys of record. Third Party Defendants Lee Harless and Dawn

Hai-less failed to appeal. A jury having been previously demanded, a jury consisting of twelve (12)

good and lawful citizens was irnpanelled and the case proceeded to trial

During trial, by agreement of the parties, the claims by Third Party Plaintiff against Tony

Miller were severed from the trial and will be tesolved by the Court at a later date. These claims

are not part of the judgment hetein.

On Aptil 22, 2014, after piesentation of the testimony, othet evidence and argument of

counsel, special issues were submitted to the jury. The charge of the Court, including the special

issues, and the verdict of the jury ate incorporated betein for all purposes by reference.

On April 23, 2014, the jury answered the questions submitted by the Court. On the basis of

the answers to the special issues, the Cow t is of the opinion that on the met its, judgment should be

entered as follows:

I. Plaintiff The Chopper Gioup L.L C recover judgment against Defendant

RECORDERS MEMORANDUM
This instrument is 01 poor quality
at the time of imaging
I
589
 All
0.0
42Fø, o0
MarineCorp International Ltd. for its actual damages in the amount of WqMW further, The
,

Chopper Group L. L.C. recover judgment against MarineCorp International Ltd. for additional

damages for the knowing violation found by the jury under the Deceptive Trade Practices Act in the

amount of $11,000; further, The Chopper Group L.L.C. recover judgment against MarineCorp

International Ltd. for attorney's fees through trial in the amount of $104,483.50, The Court also

finds that the jury's answer of $0 for attorney's fees in the Court of Appeals and the Texas Supreme

Court is against the clear and uncontradicted evidence; accordingly, the Court enters judgment

notwithstanding the jury's verdict on these issues, and orders that The Chopper Group L.L.C.

recover judgment against MarineCorp International Ltd. for attorney's fees in the Court of Appeals

in the amount of $20,000 and in the Texas Supreme Court in the amount of $12,500.

2. Plaintiff Backwoods Country Club, L.L.C., d/b/a Outlaw Country recover judgment
qo, GO. DO
against Defendant MarineCorp International Ltd, for its actual damages in the amount of
&~ ,

further, Backwoods Country Club, L.L.C., dfb/a Outlaw Country recover judgment against

MarineCorp International Ltd. for additional damages for the knowing violation found by the jury

under the Deceptive Trade Practices Act in the amount of $11,000; further, Backwoods Country

Club, L.L.C., d/b/a Outlaw Country recover judgment against MarineCorp International Ltd. for

attorney's fees through trial in the amount of $104,483.50. The Court also finds that the jury's

answer of $0 for attorney's fees in the Court of Appeals and the Texas Supreme Court is against the

clear and uncontradicted evidence; accordingly, the Court enters judgment notwithstanding the

jury's verdict on these issues, and orders that Backwoods Country Club, L.L.C., d/b/a Outlaw

Country recover judgment against MarineCorp International Ltd. for attorney's fees in the Court of

Appeals in the amount of $20,000 and in the Texas Supreme Court in the amount of $12,500.

2

590
 3. Counter-Plaintiff MarineCorp International Ltd. take nothing on its claims for

breach of the lease agreement and guarantee agreements against Counter-Defendants The Chopper

Group L.L.C. and Backwoods Country Club, L.L.C., d/b/a Outlaw Country, and Third Party

Defendants Tony Miller, Kyle Tones, Dawn Harless and Lee Hatless.

4. It is further Ordered that re'udgrnent interest of 5% from April 25 2012 to May
1dl (
22, 2014, in the amount of be awarded to The Chopper Group L.L.C. and that post-
/L
judgment interest is awarded at the rate of 5% from the date ofjudgment until paid.

5. It is further Ordered that prejudgment interest of 5%, from April 25, 2012 to May

22, 2014, in the amount of $ft4119 be awarded to Backwoods Country Club, L.L.C., d/b/a

Outlaw Country, arid that post-judgment interest is awarded at the rate of 5% from the date of

judgment until paid.

6. It is further Ordered that Plaintiffs The Chopper Group L.L.0 and Backwoods

Country Club, L,L.C., d/b/a Outlaw Country, recover their costs of court from Defendant

MatineCorp International Ltd.

7. All relief not expressly granted in this final judgment is Denied. Except for the

severed claims, this judgment is Final and disposes of all claims of all parties, and is subject to

appeal.

8. The Court further Orders that Plaintiffs The Chopper Group L.L.C. and Backwoods

Country Club, L.L.C, dlb/a Outlaw Country, shall have all writs of execution and other piocess

necessary to enforce this judgment.

SIGNED this 31s day oft, 0l4.

3

591
 STANDARD LEASE CONTRACT

ARTICLE I

SUMMARY OF BASIC LEASE PROVISIONS AND CERTAIN DEFINED TERMS

Section 1.1 When used herein, the following terms shall have the indicated meanings:

a, DATE OF LEASE; (Reference Only) September 20, 2010

b. LANDLORD: MarineCmp international Ltd

-c: ADDRESS OF LANDLORD: 2900 Wilcrest, Suite 100
Houston, Texas 77042

d SHOPPING CENTER: Cypresswood U it commercial shopping Center which is located upon the lot,
tract, or parcel of land situated in Harris County, Texas, as more particularly described in Exhibit "A-I"
attached hereto, together with such additions and extensions as Landlord may from time to time designate as
included within the Shopping Center.

a. TENANT: OUTLAW COUNTRY. L.LC

DL #: (
Ss #..
DL #: 29057982

f. TENANT'S ADDRESS: 18443Kuykendahl
Spring, Texas 77379
phone #.

NOTICE ADDRESS: Same

Phone

BILLING ADDRESS: Same -

Phone #:

g. TENANT'S TRADE NAME: Same, OUTLAW COUNTRY, L.L.0

Ii. DEMISED PREMISES: An area of approximately 10,998 square feet

i. ADDRESS OF DEMISED PREMISES: 18443 Kuykendahl Road
Spring, Texas 77379

j. PERMITTED USE:

k. LEASE TERM: The term of this Itase shall commence on the "Commencement Date", and shall
terminate on the last day of the sixtieth (60) liiil calendar months thereafter, unless sooner terminated in
accordance with the provisions hereinafter sot forth.

1. COMMENCEMENT DATE: November 1, 2010

m. EXPIRATION DATE: October 31, 2015

n. ESTIMATED COMPLETION DATE: January 31,2011
(See Section3.3)

o. DEFAULT DEPOSIT: See Section 17.3) $13,289.25

p. PREPAID RENTAL: to be applied to S 10,539.75
first monthly installments of rental

q. MONTHLY SALES HURDLE:
(See Section 4.4)

2 U
r. MONTHLY PERCENTAGE RENTAL: N/A
(See Section 4.4)
s. SIGN CHARGES (See Section 8.1 & 8.2)
Pylon Sign Charge N/A
Under Canopy Sign Charge N/A
Fasria Sign Deposit NIA
November 1-February 29-2011 Free

t. MONTHLY RENTAL:(See Sections 4.1 & 4.2)
u. $10,539.75 per month for year Ifrom March 1,2011-October31 2011
$13,01430 per month for year 2 from November 1,2011-October 312012
$13,930.80 per month for year 3 from November 1,2012-October 312013
$14,847.30 per month for year 4 from November 1,2013-October 312014
$15,763.80 per month for year S from November 1,2014-October 312015

Charges Lcoeneeiueut Date - November 1, 2010 2011
Rent Start Date: March 1.
u. MONTHLY ESTIMATED COMMON $4,179.24 per month
AREA MAINTENANCE: (See Section 5.2) the demised premises.
v. MONTHLY ESTIMATED TAX AND Included in the CAM
INSURANCE CHARGE: (See Section 16.1)
w. MONTHLY REFUSE CHARGE: Included in the CAM
(See Section 6.4)
x. MONTHLY ESTIMATED UTILITY Responsibility of Tenant
CHARGE: (See Section 9.l)
y. MONTHLY ADVERTISING CHARGE: NIA
z. MISCELLANEOUS: Included in the CAM
as. GROSS LEASABLE RETAIL AREA: Presently comprises 46,998 square feet subject to expansion by
the construction of additional building, or the reduction of leasable retail area, if any, in the Shopping
Center,
bb. GUARANTY: The guaranty attached hereto and made a part hereof as Exhibit "B".
In the event of any conflict between any Summary of Basic Lease Provisions on the one band and
the balance of this Lease on the other, the latter shall control, Each of the foregoing basic lease provisions
and defined terms shall be construed In conjunction with the references thereto contained in the other
provisions of this Lease and shall be limited by such other provisions. Each reference in this Lease to any
of the foregoing basic lease provisions and defined terms shall be construed to incorporate each term set
forth above under such basic lease provision or defined tems.

ARTICLE El
GRANTING CLAUSE

Section 2.1. In consideration of the obligation of Tenant to pay rent as herein provided and in
consideration of the other terms, covenants and conditions hereof, Landlord hereby demises and leases to
Tenant, and Tenant hereby leases from Landlord the Demises Premises as described in Section 1.1(h). The
"area" of the Demised Premises when referred to in this Lease shall be computed from the measurements to
the exterior of outside walls of the building and to the center of interior demising walls. TO HAVE AND
TO HOLD said Demised Premises for a term commencing on the "Commencement Date" and extending for
said number of months specified in Section 1.1(k), all upon the terms and conditions set forth in this Lease.
Section 2.2. The purpose of the plot plan attached hereto as Exhibit "A" is to Set forth the outline 1
of the Demised Premises in relation to the general layout of the Shopping Center, and it is expressly
understood and agreed:
(a) That the general layout of the Shopping Center as set forth thereon is subject to all of the terms
and conditions of the Lease, including, without limitation, the provisions regarding future changes,
expansion, rules and regulations; and
(b) That no representation or warranty is made as to the exact location of any other particular
building, or as to the time, if ever, that any other buildings and/or store space or spaces may or might
be erected and occupied or as to the continued occupancy by other tenants of the Shopping Center of
any other building or buildings or store space or spaces, or the purpose for which said other building
or buildings and/or store apace or spaces may or might be used.

3 '25
 Section 2.3, So long as Tenant shall pay the Rental, Estimated Common Area Maintenance
Charge, Estimated Tax and Insurance Charge, and all other Sums or other payment due hereunder and shall
observe and perform all of the covenants on Tenant's part to be observed and performed hereunder, and
Tenant is not in default hereunder, Tenant shall peaceably and quietly hold and enjoy the Demised Premises
for the entire term hereof without interruption by Landlord or person or persons lawfully or equitably
claiming by, through or under Landlord, subject, nevertheless, to all of the terms and provisions of this
Lease and to all of the reservations, restrictions, encumbrances and limitations -of record affecting the title to
• or use of the demised Premises or the property upon which the Shopping Center is situated.

Section 2.4. Notwithstanding the fact that the Lease Term will commence at a date subsequent to
the execution of this instrument by Landlord and Tenant, such parties intend that each shall have vested
Tights immediately upon the signing of this instrument and that this instrument shall be Silly binding and in
Sill force and effect from and after execution hereof by Landlord and Tenant. In the event that the, lease•
term shall not have, in fact, commenced within two (2) years from the date hereof (and if this Lease shall
not theretofore have been canceled by Landlord as herein permitted), then, in addition to all the other rights
and remedies of Landlord set forth herein, this Lease shall thereupon be automatically null and void and of
no farther force and efibet, and neither party shall have any further obligation or liability hereunder.
ARTICLE Ili
CONSTRUCTIONS AND ACCEPTANCE OF PRRMJSES

Section 3.1. If this Lease is for a portion of the Shopping Center already constructed, Tenant
acknowledges that it has, prior to the exâcution hereof, inspected the Demised Premises, that Landlord's
work is completed (expect as may be otherwise expressly provided in Exhibit C attached hereto), and that
Tenant has accepted the Demised Premises in its "AS-IS" condition, it being agreed that Landlord shall
have no liability or responsibility for defects in the Demised Premises, including latent defects. By
occupying the Demised Premises, Tenant shall be deemed to have accepted the same and to have
acknowledged that the same Silly comply with Landlord's obligations and covenants hereunder, as site
on Exhibit C. 4€-
Aesiç' V,
Section 3.2. Subject to the provisions contained in Section 3,4 below, if this Lease is for a portion
of the Shopping Center to be constructed, Landlord shall construct and deliver to Tenant the Demised
Premises substantially in accordance with Landlord's and Tenant's Architectural and Construction Work
attached hereto as Exhibit "C".

Section 3.3. Tenant agrees to open the Demised Premises to the public for business within thirty
(30) days alter the same is ready for occupancy. Except as otherwise provided imdet Article! of this Lease,
the "Commencement Date" of this Lease shall be the earlier to occur 01(i) the date thirty (30) days after
Landlord has notified Tenant that the Demised Premises are ready for occupancy or (5) thedate upon which
Tenant opens the Demised Premises to the p[public fbr business. In the event the provisions of this Section
3.3 with respect to the establishment of the Commencement Date of this Lease conflict or are otherwise
inconsistent with the Commencement Date specified in Article I 'of this Lease, the provisions of Article ill
shall govern and control the provisions contained in this Section 3.3, which for all purposes shalt be
construed to have been superseded by the terms of said Article Ill. Any occupancy of the Demised
Premises by Tenant prior to the Commencement Date shall be subject to all of the terms and provisions of
this Lease excepting only those requiting the payment of Rental. Tenant agrees that at the request of
Landlord it will, following the Commencement Date, execute and deliver a recordable short form lease
containing the basic provisions of this Lease, acknowledging that Tenant has accepted possession, and
reciting the exact Commencement Date and termination date of this Lease.

• Section 3.4 N/A

Section 3.5. If Landlord shall not be able, by the use of such efforts and means as Landlord, in its
exclusive judgment, finds suitable and convenient, to obtain all requisite governmental, quasi-governmental,
regulatory authority and other permits, licenses, consents and permissions (collectively called "building
permit") relating to Landlord's construction with respect to the Demised Premises or any other requisite
consent in connection with such construction., then in any of the aforesaid circumstances, Landlord may
terminate this Lease at - any time prior to the Commencement Date by giving Tenant written notice thereof
Upon such termination, this Lease will be of no further force or effect, and neither party will have any
further obligation or liability hereunder. No expenditure by Tenant or incurring of any liability for
merchandise, fixtures, equipment or labor or material or otherwise shall alter or aEsct the rights of said
parties as set forth in this Section 3.5.

Section 3.6. Except as otherwise provided in this Article ffi above, all construction by Tenant
shall be governed by the provisions specified in Article VII hereof; including work to be performed by
Tenant as described in Exhibit "C".

Section 3.7. Landlord's obligation to construct and deliver to Tenant the Demised Premises within
the time period set tbrth hereinabove shall be extended by a period of time equal to the total of ''excusable
delays" (as hereinafter defined). For the purposes of this 'Section 3.7, the term "excusable delays" shall
mean all delays caused by governmental rastrictiona, strikes, lock-outs, shortages of labor or inatetial, acts
of God, war or civil consniotten, fire, unavoidable casualty, inclement weather or cause beyond the
reasonable control'ofLandlorcL -

4
,
26
ARTICLE IV
RENTAL
Section 4.1. All rental shall accrue hereunder from the Commencement Date as defined above,
and shall be payable at the place designated for the delivery of notices to Landlord at the time of payment

Section 4.2. Tenant shall pay to Landlord Rental in monthly installments in the amounts specified
in Section 1.1(t) above. The first such monthly installment shall be due and payable on or before the
Commencement Date, and installments in the respective amounts. specified In Section 1.1(t) shall be due
and payable on or before the first day of each succeeding calendar month during the Lease Term; Rental
will be considered late after the .10th day of each succeeding calendar month during the Lease Term;
Provided that if the Commencement Date should fall on date other than the first day of a calendar month
there shalt be due and payable on or before such date as Rental for the balance of the calendar month during
which such date shall fall, a sum equal to that proportion of the Rental specified for the first calendar month
as herein provided, which the number of days from the Commencement Date to the end of the calendar
month during which the Commenbentent Date shall fall bears to the total number of days in such month, and
all succeeding installments of the Rental shall be payable in the respective amounts specified In Section
11(t) on or before the first day of each succeeding calendar month during the Lease Term; provided,
ftuther, that if the Lease Term ends on other than the last day of the month, the last monthly installment
shall be reduced proportionately.

Section 4.3. Commencing with the second Lease Year (as hereinafter defined), the Rental shall be
automatically adjusted (without the necessity of the execution of any fUrther isistrument) after the end of
each Lease Year during the term of this Lease in the following manner

(a) Rental Schedule as per Article I, Section LI, Item t

Scctmon44. NA

Section 4.5. All Rental and all other sums hereunder provided to be paid by Tenant shall be due
and payable by Tenant without demand, deduction, abatement or off-set except as expressly provided
herein.

All other sums and charges of whatsoever nature required to be paid by Tenant to Landlord
pursuant to the terms of this Lease constitute additional rent and failure by Tenant to timely pay such other
sums or charges maybe treated by Landlord as a failure by Tenant to pay the Rental.

In the event of any failure to pay Rental or to make any other payment due Landlord hereunder, in
the manner or time provided for herein, and such Rental, or other payment Is not made by the tenth (10th)
day following the date on which said payment was due, Tenant shall pay to Landlord, In addition to the
amounts then due and without prior demand therefore and without any deduction or offsets, an
administrative charge in the amount of $50.00 per each occurrence, or 5% of the amount due, whichever is
greater.
Acceptance by Landlord of any late rent payment and administrative charge due therefor shall not
constitute a waiver of any of Landlord's rights and remedies available in connection with any subsequent
failure of Tenant to pay the Rental or to make any other payment due Landlord hereunder in the manner or
time provided for herein. If tender of late Rental or any other payment due Landlord hereunder Is made,
Landlord at its sole discretion, shall have the option to accept the tendered late Rental payment and
administrative charge computed as above specified, or to purse the rights and remedies provided in Article
)CVII without the necessity of any further notice or demand.

If within any six (6) month period during the tents of this Lease, Tenant shall fail for three (3)
times to make timely payment to Landlord of any Rental and/or any other payment due Landlord hereunder
on the date when due, the Landlord shall have the immediate right, without the necessity of giving any
notice of default, to pursue the rights and remedies provided in Article XVII hereof.

Section 4.6 (Insufficient Checks or Payments) Tenants shall pay to Landlord upon demand a fifty
and NO/lOO Dollar ($50.00) charge for each check tendered to Landlord in payment of Rental (or
Percentage Rental) or any other payment due Landlord hereunder which is returned uncollectible to
Landlord.

.&JtTICfV
COMMON AREA

Section 5.1. The "Common Area" of the Shopping Center is that part of the Shopping Center
designated by Landlord from time to time for the common use of all tenants, including among other
facilities, parking area, sidewalks, signs erected by Landlord advertising or identifying the SllQpping Center,
under canopy signs, landscaping, seasonal/permanent decorating, curbs, truekways, delivery passages,
loading areas, private streets and alleys, lighting facilities, and the like, all of which shall be subject to
Landlord's sole management and control and shall be operated and maintained in such wanner as Landlord.
in his discretion shall determine. Landlord reserves the right to change from time to time the dimensions

.
5 27
and location of the Common Area, as well as the dimensions, identity and type of any buildings, and to
construct additional buildings or additional stories on existing buildings or other improvements in the
Shopping Center. Landlord also reserves the right to dedicate. portions of the Common Area and other
portions of the Shopping Center (excepting only the Demised Premises) for street, park, utility and other
public purposes. Tenant, and its employees, customers, subtenants, licensees, and concessionaires shall
have the non-exclusive right to use she Common ..Area as constituted from time to time, such use to be in
COUUUQO with Landlord, other tenants of the Shopping Center and other persons entitled to use the same,
and subject to such reasonable rules and regulations governing such use as Landlord may from time to time
prescribe. Landlord may elect (without any obligation to do so) to designate from time to time, Tenant
employee, subtenant, licensee and concessionaire parking areas. Should Landlord so designate such
parking area, then Tenant, its employees, subtenants, licensees and concessionaires may have the non-
exclusive use, along with other Tenants and their employees, subtonants, licensees and concessionaires, of
only that available space so designated by Landlord for such use and neither Tenant, nor Tenant's
employees, subtenants, licensees or concessionaires shall use any other parking space in the Shopping
Center. Upon request otLandlord, Tenant will fithiish to Landlord a complete list of the license numbers of
all automobiles operated by Tenant, its employees, subtenants, licensees or concessionaires. If any
automobile or other vehicle' owned by Tenant or any of its employees or any of its subtenants, licensees or
• concessionaires, or any of their respective employed, shall at any tune be parked in any part of the Shopping
Center, other than the Specific areas designated by Landlord from time to time for employee parking,
Landlord shall be, and is hereby, authorized to cause such automobile or other vehicle to be removed to
such other location, either within or beyond the Shopping Center, and Tenant shall, and does hereby, agree
to indeninif' Landlord, his employees, and agents, and hold each of them harmless from any and all claims
of whatsoever sort which may arise by reason of such removal. Tenant shall not solicit business or display
merchandise within the Common Area, or distribute handbills therein, or take any action which would
interfere with the rights of other persons to use the Common Area. Landlord may temporarily close any
part of the Common Area for such periods of time as maybe necessary to prevent the public from obtaining
prescriptive rights or -to make repairs or alterations.

Section 52. Tenant agrees to pay as additional rent, as hereinafter provided, an amount equal to
"Tenant's Share" of "Common Area Maintenance Charges" (as such quoted terms are hereinafter defined)
adjusted from time to time, pursuant to the provisions hereinafter stated. For purposes of this Lease, the
phrase "Common Area Maintenance Charge" shall mean, for each calendar year (or portion thereof) during
the term, of this Lease, the aggregate of all costs, expenses, and liabilities of every kind or nature paid or
incurred by Landlord (to the extent that Landlord regards it as reasonable necessary or appropriate to
proved the services and materials hereinafter referred to and to pay the incurred costs, expenses, and
liabilities hereinafter referred to ) including appropriate and reasonable reserves in connection with:
sweeping, cleaning, removing debris from, maintaining, respiring and repairing the Common Area; lighting
the Common Area (including replacement of bulbs and ballast's and repair of light standards); the cost of
supplying water, electricity, gas, security, we disposal and/or garbage pick-up and disposal, if Landlord so
elects, providing project identification signs and the repair and maintenance of the pylon and all signs
thereon; providing traffic control and watchman service at the Common Area; constructing, maintenance,
and repairing and maintaining any on-site or off-site utilities necessary or appropriate for the operation of
the Common Area; providing and maintaining planting and landscaping with respect to the Common Area;
providing security services with respect to the Common Area; plus all other costs and expenses of every
kind or nature paid or incurred by Landlord relative to maintenance, managing, and equipping the Common
Area, including, without limitation, management fees for overall management of the Shopping Center,
subdivision maintenance fees or dues; property owners association fees or dues, and similar charges, annual
charhes for reserves established by Landlord for future replacements or improvements to the Common Area
(inclusive of periodic new black topping or concreting of the Common Area) included as administrative
fee of fifteen (150/o.) percent of the aggregate of all of the aforesaid costs and expenses and liabilities
(including, without limitation, the aforesaid reserve) paid or Incurred by Landlord.

The Phrase "Tenant's Share," as applied to the Common Area Maintenance Charges, shall refer to
a suns calculated by multiplying the Common Area Maintenance Charges by a fraction, the numerator of
which is the floor area (in square feet) of the Demised Premises (as indicated in Article I of this Lease) and
the denominator of which for which the calculation referred to in this paragraph is being made; provided,
however, for any period of less than twelve (12) full calendar months with respect to which such calculation
is being made, a pro rate portion of the resulting product 'shall be calculated to determine Tenant's share.

Monthly, during the first year of this Lease, Tenant will pay Landlord the Estimated Common Area
Maintenance Charge (as indicated in Section 1.1 (u), monthly in advance, payable at the same time and
place as the Rental is payable, except, however, if the tease Term does not begin on the first day of a
calendar month. Landlord shall have the right to adjust such monthly estimate on an annual basis, pursuant
to the following paragraph.

At the end of each calendar year occurring during the term of this Lease (or subsequent to the
expiration or other termination of this Lease, if such occurs on a date other than the last day of a calendar
year), Landlord will give Tenant notice of the total amount paid by Tenant for the relevant calendar year
together with the actual amount of Tenant's Share of the Common Area Maintenance Charges ("Total
Cost") for such calendar year. If the actual amount of Tenant's Share of the Total Cost with respect to such
period exceed the aggregate amount previously paid by Tenant with respect thereto during such period,
Tenant shall pay to Landlord the deficiency within Thirty (30) days following notice from Landlord; .A'
however, if the aggregate amount previously paid by Tenant with respect thereto' exceeds Tenant's Share of Y" -

6 28
the Total Cost for such period, then at Landlord's election, such surplus (net of any amounts then owing by
Tenant to Landlord) shall be credited against the next ensuing installment of any such cost due hereunder by
Tenant, or Landlord may refund such net surplus to Tenant. Periodically, during the term of this Lease,
Landlord shall have the right to estimate Tenant's Share of Common Area Maintenance Charges for the
near fiscal period (determined by Landlord) of the term of this Lease, whereupon, Tenant shall pay
Landlord such amounts as may be so indicated by Landlord in the same manner as the Estimated Common
Area Maintenance Charge.

Tenant shall have the right for the ninety (90) day period immediately following the end of each
calendar year during the team of this Lease, at Its sole cost and expense, to audit the cost of Common Area
Maintenance Charges at reasonable times during Landlord's regular business hours and at the office of the
Landlord upon twenty-four (24) hours advance written notice to the Landlord. In the event Tenant fails
either to notify.the Landlord in writing of its intent to audit the cost of Common Area Maintenance Charges
at least twenty-four (24) hours in advance of the date of its intended audit or to audit Common Area
Maintenance Charges within said ninety (90) day period, Tenant shall not thereafter be entitled to audit
Common Area Maintenance Charges for the Lease Year in question.

Section 5.3. If them is presently in effect or hereafter adopted any nature of sales tax or use tax or
other tax on rents or other sums received by Landlord under this Lease (herein referred to as "Rent Sales
Tax"), and in addition to all Rental and other payments to be made by Tenant as provided above, Tenant
will also pay Landlord a sum equal to the amount of such Rent Sales Tax, The term "Rent Sales Tax" shall
not include income taxes applicable tcLandl&d.

Section 5.4. NIA

ARTICLE VI
USE AND CARE OF PREMISES

Section 6.1. The Demised Promises may be used and occupied only for the purpose or purposes
specified in Section 1.1(j) above, and for no other purpose or purposes without the prior written consent of
Landlord. Tenant shall use in the transaction of business in the Demised Premises the trade name specified
in Section 1.1(g) above. Tenant shall not at any time leave the Demised Premises or any part thereof
vacant, and it is the essence of this Lease, that Tenant shall in good faith continuously throughout the term
of this Lease, during usual business hours, occupy and conduct and carry on in the entire Demised Premises
the type of business for which the Demised Premises are leased. Tenant shall operate its business in an
efficient, high class and reputable manner and shall, except during reasonable periods, fOr repairing,
cleaning and decorating, keep the premises properly equipped with fixtures, stocked with an adequate
supply of merchandise, and open to the public for business with adequate personnel in attendance on all
days and during all hours when other tenants of the Shopping Center are generally open lbs business to the
public and as maybe determined by the Landlord, except to the extent Tenant maybe prohibited from being
open for business by applicable law, ordinance or governmental regulation. Without anyway expanding the
use of the Demised Premises hereinabove expressly limited, Tenant shall not use any portion of the
Demised Premises for any purpose in conflict with any exclusive usage rights, now or hereafter existing in
favor of some other occupant of the Shopping Center or use the Demised Premises to some purpose
substantially duplicating some other usage of premises now or hereafter made in the Shopping Center,
without the prior written consent of Landlord.

Tenant shall remain open on regular business days during regular reasonable business hours, but
Tenant shall remain open for business not less than the hours of 10:00a.m. until 6:00p.m. Monday through
Friday.

Tenant shall warehouse, store and/or stock in the DemisedPreniises only such goods, wares and
merchandise as Tenant intends to offer for sale at retail at in from or upon the Demised Premises. This
shalt not preclude occasional emergency transfers of merchandise to other stores of Tenant, if any, not
located in the Shopping Center. Tenant shall use for office, clerical and other non-selling purposes only
such space of the Demised Premises as is from time to time reasonable required for Tenant's business in the
Demised Premises. No overnight lodging shall be permitted on the Demised Premises.

Section 6.2. Tenant shall not, without the Landlord's prior written consent, keep anything within
the premises or use the premises for any purpose which increases the insurance premium cost or invalidates
any Insurance policy carried on the Demised Premises or on other parts of the Shopping Center, If
Landlord should consent to such use and occupancy by Tenant, Tenant shall pay on demand as additional
rent the additional insurance premiums resulting from such use and occupancy. All property kept, stored, or
maintained within the premises by Tenant shall be at Tenant's sole risk.

Section 6.3. Tenant shall not conduct within the Demised Premises any tire, auction, "lost-our-
lease", "going out of business", bankruptcy or similar sales or operate within the Demised Premises a
cooperative store, a "second hand" store or a "surplus" store. Tenant shall not permit any objectionable or
unpleasant odors to emanate from the premises; nor place or permit any radio, television, loud speaker or
amplifier on the roof or outside the Deuiiscd Premises or where the same can be seen or beard from outside
the Demised Premises; nor place any antenna or other projection on the exterior-of the Demised Premises;
nor take any other action which would tonslitute a nuisance or would disturb or endanger other tenants of

Orr ce
the Shopping Center or unreasonable interfere with their use of their respective premises; nor do anything
which would tend to injure the reputation of the Shopping Center as may he determined by Landlord.
Section 6.4. Tenant shall take good care of the Demised Premises said keep the same free of
rodents and insects at all times. Tenant Will not commit any act which is a nuisance or annoyance to
Landlord or to other Tenants, or which might, in the exclusive judgment of Landlord, appreciably damage
Landlord's goodwill or reputation. Tenant shall keep the Demised Premises, and sidewalks, serviceways,
and loading area adjacent to the premises and the Common neat, clean, and free from dirt or rubbish at all
times, and shall carefully store in an orderly manner all trash and refuse within the area specified by
Landlord or in addition to any other remedies available to Landlord, Landlord shall have the right to do and
Tenant shall pay to Landlord the flail cost thereof. Landlord shall arrange for the regular pick-up of such
trash and refuse Included In the CAM expense, in which case Tenant shall use such refuse service and pay
the cost of such service as specified in Section 1.1(w). Tenant acknowledges that Landlord shall have the
right to increase the charge for refuse service from time to time, and Tenant shall be liable to Landlord
therefor. Receiving and delivery of goods and merchandise and removal of refuse and trash shall be made
only in the manner and areas prescribed by Landlord and shall- be subject to such regulations as Landlord
may from time to time prescribe. Tenant shall not operate an incinerator or burn trash or refuse within the
Shopping Center area.

Section 6.5. Tenant shall maintain all display windows in a neat and attractive condition and shall
keep said display Windows and exterior signs lighted from dusk until such time as other tenants of the
Shopping Center generally do.
Section 6.6. Tenant shall include the address and identity of its business activities In the Demised
Premises in all advertisements made by Tenant in which the address and identity of any similar local
business activity of Tenant is mentioned. Use by Tónant in advertising Ictterheads,or otherwise of the
name of the Shopping Center and buildings contained therein, or any distinctive trade name or trademark
used by Landlord shall be subject to such restrictions and regulations as Landlord may prescribe from time
to time.

Section 6.7. Tenant shall procure at its sole expense any permits and licenses required for the
transaction of business in the Demised Premises and otherwise comply with all applicable laws, ordinances,
and governmental regulations. Tenant shall also comply with all reasonable mica and regulations regarding
sanitation, cleanliness and other matters governing the conduct of business within the Shopping center
which Landlord may from time to time prescribe. Tenant will be responsible for causing its employees,
customers, subtetiants, licensees, and concessionaires to comply with all such laws, ordinances and
regulations.

Section 6.8, Tenant will at all times keep all merchandise and displays Within the Demised
Premises above described, and will not at any time display any merchandise or offer it for sale or (other
than during essential loading or unloading operations) permit it to be on any other point outside the
Demised Promises, nor will Tenant in any other way use or obstruct such area outside the Demised
Premises.

Section 6.9. Tenant, at Tenant's own expense, will furnish and maintain an adequate number of
fire extinguishers in good operating condition as maybe reasonable required by Landlord, and in any event
not less than such number of extinguishers as may be, from time to time, required by applicable statues,
laws, ordinances, and codes.

Section 6.10. If Tenant is a restaurant, or if otherwise required by Landlord or any governmental
agency having jurisdiction thereot Tenant shall at its sole cost and expense, install any and all grease hasps
and/or grease Interceptors which Landlord deems necessary or desirable or which any governmental entity
having jurisdiction thereof shalt dccci necessary to handle liquid waste, including grease, oil or any material
whatsoever which would or could damage, obstruct or overload any drainage, sewer or other systems. All
grease and oil traps and/or interceptors shall be constructed in accordance with the requirements
promulgated by any entity having jurisdiction thereof and Tenant shall at its sole cost and expense maintain
and make all necessary or required repairs and replacements and maintain said traps and/or interceptors at
Tenant's expense without liability to Tenant for any loss or damage by reason of such repairs, maintenance
or replacement (and Tenant shall indemnify and hold Landlord harmless therefrom), and Tenant shall pay to
Landlord upon demand as additional rental hereunder the cost of such maintenance, repairs or replacements
plus interest, at the then highest lawful contract rate which Tenant is authorized to pay under the laws of the
State of Texas or the United States of America, whichever is then in cifect
Section 6.11, N/A
Section 6.12. Tenant hereby stipulates and acknowledges that the attempted or threatened breach
of any covenant contained in this Article VI by Tenant would constitute a severe impediment to the ability
of Landlord to operate the Shopping Center and to receive the benefits contemplated by this Lease; that the
existence of such breach or threatened breach will cause irreparable harm thereto for which there would not
be an adequate remedy at law for 'which no other equitable remedy would.be adequate or available and shall
entitle Landlord to obtain an injunction prohibiting such breach or attempted breach in addition to alt other
legal remedies provided hereunder or by law.

30
ARTICLE VU
MAINThNANCE AND REPAIR OF PREMISES;
ALTERATIONS; LANDLORD'S RIGHT OF ACCESS

Section 7.1. Landlord shall keep the foundation, the exterior wails (except plate glass; windows;
doors; door closure devices; window and door frames, molding, locks and hardware; and interior painting
or other interior treatment of exterior walls), and roof of the Demised Premises In good repair, provided,
that Landlord shall not be required to make any repairs occasioned by the act, omission or negligence of
Tenant, its employees, subtenants, licensees, contractors and concessionaires; further provided, Landlord
shall not be required to make any roof repairs required as a result of maintenance work on Tenant's air
conditioning equipment or roof penetrations or perforations requir&l or necessitated by the installation of
Tenant's fixtures or the construction or remodeling of the Demised Premises for or by Tenant whether by
law, ordinance or otherwise. In the event that the Demised Premises should become in need or repairs
required to be made by Landlord hereunder, Tenant shall give immediate written notice thereto to Landlord,
and Landlord shall not be responsible in any way for failure to make any such repairs until a reasonable
time shall have elapshd after delivery of such written notice which in no event shall be less than thirty (30)
days therefrom.

Section 7.2. Tenant will not permit or commit waste and will not injure the Demised Premises, but
shall keep the Demised Premises in good, clean condition and shall at its sole cost and expense make all
needed repairs and replacements, including, but not limited to air conditioning and healing equipment,
electrical equipment and fixtures, doors, moldings, trim, window frames, door frames, closure devices,
hardware, and equipment, wiring (including that within the wall or ceiling or under flooring or floor
covering),, and plumbing lines (including water lines and gas lines) within walls or ceiling and under
flooring and floor covering, and further including replacement of cracked or broken glass, and repairs,
replacements and alterations required by ally governmental authority, except for repairs and replacements
required to be made by Landlord under the provisions of Section 7.1 and Article MI. Tenant shall also
make all necessary repairs and replacement of its fixtures required for the proper conduct of its business.
Additionally, Tenant shall pay to Landlord upon demand, and without contributiou from any other tenant or
Landlord, all costs and expenses for the maintenance, repair, replacement and/or construction of any utility
lines, including, without limitation, gas lines, sower lines, water lines and drains, drainage systems, drainage
piping, water service pipes, underground water pipes, storm sewer systems or storm sewer piping, sanitary
sewer systems and piping and any plumbing equipment, fixtures or appliances servicing the Demised
Premises, the Building of which the Demised Premises area part of the Shopping Center as a result of any
obstruction of the flow, clogging, backing-up or other malfunction or disrepair of said systems due to any
act or omission of Tenant in its use and/or occupancy of the Demised Premises or. the actor omission of any
other party holding the Demised Premise's by or through Tenant or any other party using or occupying the
Demised Premises. If any repairs required to be made by Tenant hereunder are not made within ten (10)
days after written notice delivered to Tenant by Landlord, Landlord may at his option make such repairs
without liability to Tenant for any loss or damage which may result to its stock or business by reason of
such repairs (and Tenant shall indemnify and hold Landlord harmless therefrom), and Tenant shall pay to
Landlord ñpon demand as additional rental hereunder the cost of such repairs plus interest, at the then
highest lawful contract rate which Tenant is authorized to pay under the laws of the State of Texas or the
United States of Ameriea,.whichever is then in effect. Upon termination of this lease, Tenant will surrender
and deliver up the Demised Premises to Landlord broom- clean and in the same condition in which the
Demised Premises existed at the commencement of the term of this Lease, excepting only ordinary wear and
tear and damage arising from any cause not required to be repaired by Tenant. Upon termination of this
Lease, Tenant will also surrender to Landlord all keys to the Demised Premises at the place stated herein for
the payment of rent.

Section 7.3. Tenant shall not snake any alterations, additions, or Improvements to the Demised
Premises without the prior written qonsent of Landlord, except for the installation of "Unattached, Movable
Trade Fixtures" (as hereinafter. defined which may be installed without drilling, cutting or otherwise
defacing the premises. All alteration, addition, improvements and fixtures (other than "Unattached,.
Movable Trade Fixtures") which may be made or installed by either party hereto upon the Demised
Premises shall remain upon, and be surrendered with, the premises and become the property of Landlord at
the termination of this Lease, unless Landlord requests their removal, in which event Tenant shall remove
the-same and restore the premises to their original condition at Tenant's expense. Any linoleum, carpeting,
or other floor coveting of similar character installed by Tenant on the Floor cf'tha Demised Premises shall
become the property of Landlord, all without credit or compensation to Tenant. Subject to the lien and
security interest right of Landlord hereinafter referred to, Tenant may remove "Unattached, Movable Trade
Fixtures" (as hereinafter defined) (not including, however, ducts, conduits, wiring, pipes, paneling or other
wall covering or floor covering) provided: (I) such removal is made prior to the termination of the term of
this Lease; (2) Tenant is not in deibult in the performance of any obligation or covenant under this Lease at
the time of such removal; and (3) such removal may br qffected without damage to the Demised Premises
and Tenant promptly repairs all damage caused by such removal. For purposes hereof, the phrase
"Unattached, Movable Trade Fixtures" means the following: counters, tables, chairs, desks, racks,
merchandisers and displays, standards, wall brackets, hand rods, shelves, mirrors, marking equipment, cash
registers and other business machines, provided that they are not permanently - attached in any way to the
floors, walls or ceilings.

All plumbing or electrical wiring connections exposed as a result of the removal of Tenant's
"Unattached, Movable Trade Fixturef', or other alterations, additions, fixtures, equipment and property

31
 installed or placed by it in the Demised Premises (Id such removal is so requested by Landlord) shall be
capped by Tenant in a safe and workmanlike manner.

in the event that Tenant shall have assigned this Lease or subleased the Demised Premises (in
whole or in part), but subject to and in accordance with the provisions of Article XV, alterations in the
Demised Premises of any scope or extent made (without prior notice to or consent of Tenant) by Landlord
or by the party occupying (or contemplating occupancy o the Demised Premises (with or without the
consent of Landlord) shall not have the effect of discharging or otherwise impairing or affecting the
continuing liability under this Lease of Tenant or anyone holding under Tenant, provided, however, the
foregoing shall not be interpreted as dispensing with the necessity for consent of Landlord to alterations of
the DemiSed Premises under the circumstances in which such consent is required under the other provisions
of this Lease.

Section 7.4. All construction work done by Tenant within the Demised Premises shall be
performed in a good and workmanlike manner, satisfactory to Landlord and in compliance with all
governmental requirements and applicable building codes, and at such times and in such manner as to cause
a minimum of interference with other construction in progress and with the transaction of business in the
Shopping Center. Without limitation on the generality of the foregoing Landlord shall have the right to
require that such work is performed during hours when the Shopping Center is not open for business, and In
accordance with other rules and regulations which Landlord may from time to time prescribe. Labor and
material used in the installation of Tenant's equipment, furniture and fixtures, and In any other work on the
Demised Premises performed by Tenant, will be subject to Landlord's prior written approval. Such written
approval shaft not be unreasonably withheld or unduly delayed. With respect to any contract for any
such labor or materials. Tenant acts as principal and not as the agent of Landlord, and Tenant shaft give
written notification to any contractor engaged by Tenant for construction of imp
movements on br within the Demised Premises that Tenant is no the agent of Landlord but is acting as
principal in its own behalt; and Tenant shall furnish a copy of said notice to Landlord prior to
commencement of any work on or within the Demised Premises. Tenant agrees to indemnify and hold
Landlord harmless for all claims (including coats and expenses of defending against such claims) arising or
alleged to arise from any act or omission of Tenant or Tenant's agents, employed, contractors,
subcontractors, laborers, niaterialmen or invitees or arising from bodily injury or property damage occurring
or alleged to have occurred incident to Tenant's work at the Demised Premises, Tenant shall not have
authority to place any lien upon the Demised Premises or any interest therein or in any way to bind
Landlord; and no action or failure to act by Landlord shall constitute a ratification by Landlord of Tenant's
contract for construction of improvements on or within the Demised Premises; and any attempt to do so
shall be void and of no effect. Landlord expressly disclaims liability for the cost of labor performed for or
materials iluirished to Tenant. All costs for such construction performed shall be paid promptly to prevent
the assertion of any liens for labor or materials. It because of any actual or alleged act or omission of
Tenant, or any contractor of Tenant or any such contractor's subcontractor or any laborer performing labor
or materialmen furnishing materials at or for the Demised Premises or by reason of any specially fabricated
material whether or not placed at the Demises Premises, any lien, affidavit, charge or order for the payment
of money shall be flied against Landlord, the Demised Premises or any portion thereof or interest therein,
whether or not such lien, affidavit, charge or order is valid or enforceable, Tenant shall, at its own coat and
expense, cause same to be discharged of record by payment, bonding or otheruiseno later than fifteen (15)
days after notice to Tenant of the filing thereof, but in all events prior to the foreclosure thereof, Tenant
shall, if requested by Landlord, furnish payment and performance bonds or other security satisfactory to
• Landlord against any such loss,. liability or damage. Whenever Tenant proposes to do any construction
work within the Demised Premises, it shalt first furnish to Landlord plans and specifications in such detail
as Landlord may request o covering all such work.. Tenant must have Landlord's prior written approval of
such plans and specifications prior to the commencement of any construction.

Section 75. Landlord (and any Mortgagee or Deed of Trust beneficiary as to the Demised
Premises) with advanced notification, shall have the right to enter upon the Demised Premises at any time
for the purpose of inspecting the some or of making repairs or additions to the Demised Premises, or of
making repairs, alterations, or additions to adjacent premises, or of showing the Demised Premises to
prospective purchasers, lessees, or lenders.

Section 7.6. Any penetrations or perforations through the roof of the Demised Premises
necessitated or required by the installation of Tenant's fixtures or the construction or remodeling of the
Demised Premises for or by Tenant shall be first approved in writing by Landlord and shalt be performed
by a contractor, sub-contractor, mechanic or repairman approved in writing by Landlord.

Section 7.7. Tenallt shall pay the full amount of all taxes, assessments, impositions, levies,
charges, excises, fees, licenses and other sums levied, assessed, charged or imposed by any governmental
authority or other taxing authority upon Tenant's leasehold interest under this Lease and all alterations,
additions, fixtures (including "Unattached, Movable Trade Fixtures), inventory and other property installed
or placed or permitted at the Demised Premises by Tenant Within thirty (30) days after notice from
Landlord, Tenant shall timsish Landlord a true copy of receipts evidencing such payment received by
Tenant from the Governmental authority or other taxing authority assessing such charges.

•
•
 Tenat will also pay all insurance premiums assessed or levied upon any alterations, additions,
fixtures or property installed in the Demised Premises by the Tenant and all insurance related to Tenant's
use, occupancy and operations within the Demised Premises and the Shopping Center.

ARTICLE sriii
SIGNS; STORE FRONTS; ROOF

Section 8. I. Tenant shall not, without Landlord's prior written consent (a) make any changes to
the store front or (b) install outside the interior surface of the perimeter walls of the Demised Premises any
lighting or awnings, or any decorations or paintings or (c) install any drapes, blinds, shades or other
coverings on display window or door lettering, placards, decorations or advertising media of any type which
can be viewed from outside of the Demised Premises, excepting only dignified displays of customary type
for its display windows. Tenant must pay for the installation of an exterior sign and the same shall conform
in all respects to the sign criteria established by Landlord for the Shopping Center and BE SUBJECT TO
LANDLORD'S PRIOR WRITTEN APPROVAL. If required by Landlord, Tenant shall also install an
under canopy sign and the same shall conform in all respects to the sign criteria established by Landlord for
the Shopping Center and be subject to Landlord's prior written approval; provided, however, Landlord may
elect, at the expense of Tenant, to install any such exterior sign, and Tenant shall pay the Under Canopy
Sign Charge (set forth in Article 1) and indemnify and save Landlord harmless from the coat and expense
thereof. If requested by Landlord, Tenant shall cause Tenant's exterior sign to be "hooked-up" to the
existing electrical connection and be placed on a time clock and photoelectric cell device such that the
electricity illuminating such sign shall keep Tenant's electric signs on from dusk until I l00 pin. every day
during the lease term. The failure of Tenant to install any such exterior sign within ninety (90) days of the
date hereof shalt constitute a default by Tenant hereunder and entitle Landlord to exercise any remedies
permitted under the term of" Lease withàut the necessity of further notice to Tenant (notwithstanding any
provision to the contrary contained in Article XVII). All signs installed shall be kept in gèod condition and
in proper operating order at all times and (except for the fascia sign) shall become the property of Landlord
at the termination of this Lease. Upon the expiration or earlier termination of this Lease, Tenant shall
remove the fascia sign and restore the surface, to which said sign was attached, to its original condition at
Tenant's expense. In the event Tenant fails to remove the fascia sign within three(3) days from the
expiration or earlier termination of this Lease, said sign shall become the property of Landlord without any
credit or compensation to Tenant, and Landlord may (but shall not be obligated to) remove and store or
dispose of said sign and Tenant shall be liable to Landlord for all costs incurred by Landlord in connection
with such removal and storage or disposal and Tenant shall indemnify and hold Landlord harmless from all
loss, damage, costs, expenses and liability in connection with such removal, storage or disposal. Use of the
roof is reserved - to the Landlord, and Landlord may install upon the roof equipment, signs, antenna, displays
and other objects and may construct additional stories abovC the Demised Premises, provided such use does
not reasonable interfere with Tenant's occupancy.

Section 82. Tenant, at Tenant's cost and expense, and upon payment of the Pylon Sign Charge,
shall have the right, subject however to the prior written consent of Landlord, to locate a sign advertising
Tenant upon the pylon structure, if Landlord elects to erect any such pylon structure Notwithstanding
anything herein to the contrary, Landlord shall in all cases retain the right and power to relocate Tenant's
sign located upon such pylon structure, if any, to another location on such pylon structure, to be determined
by Landlord, in the sole and absolute discretion of Landlord. The cost of installation, the cost of bringing
electrical service to Tenant's sign located upon the pylon structure, the sign itself and any cost incurred by
Landlord in repairing or maintaining such sign shall all be the sole cost and expense of Tenant, and Tenant
shall indemnify and bold harmless Landlord with respect to any claim, charge, expense, or liability for
same, Under no circumstances whatsoever will Tenant be allowed to remove such sign from the pylon
structure Without the prior written consent of Landlord. The placement of any such sign upon the pylon
stricture, and the design and construction, criteria therefbr shall be governed by such rules, regulations and
requirements as Landlord may, from time to timC, promulgate. Upon expiration or earlier termination of
this Lease and sign advertising Tenant upon the pylon structure (if Landlord elects to erect any such
structure) shall remain upon the pylon structure and be surrendered with the premises and become the
property of Landlord without credit or compensation to Tenant, unless Landlord requires removal of such
sign, in which event Landlord shall remove the same at Tenant's expense, and Tenant shall pay to Landlord
upon demand, the cost of removing Tenant's sign from the pylon structure.

ARTICLE IX
UTILITIES

Section 9.1. Tenant agrees to pay additional rent, as hercinaftrr provided, in an amount equal to
"Tenant's Share" of all "Utility Costs" (as such quoted terms are hereinafter defined) adjusted from time to
time, pursuant to the provisions hereinafter State.

The phrase "Utility Costs" as used herein shall mean all water, gas, electricity and other utilities
used in the Demised Premises.

If the utilities are presently separately metered (not submetered) directly to the DeinisedPretniaes,
then in such event Tenant shall pay all Utility Coats directly to the supplier of any such utilities separately
metered (or submetered), and will save and hold Landlord harmless from any charge or liability for same.

33
 Tenant shall If requested by Landlord, and at Tenant's sole cost, expense, risk and liability,
Install a submeter or subnieters for the calculation of all, utility services furnished to the Demised
Premises and Teuant shall pay all such utility costs directly to the supplier of such service separately
submetered and Tenant will save and bold Landlord harmless from any such charge or liability for
the same, or alternatively, if required by Landlord, Tenant shall pay all such utility charges directly
to Landlord.

The phrase "Tenant's Share" as applied to Utility Cost shall refer to the sum calculated by
Landlord on an equitable basis to be the cost, of Tenant's share of the Utility cost with respect to any such
utilities which are subinetered to Tenant In common with other occupants of the Shopping Center.
Monthly, during the first year of the term of this Lease, Tenant will pay to Landlord the Estimated
CAM Charge (as such term is defined in Article I of the Lease) monthly in advance, payable at the same
time and place as the Rental is paid, except, however, if the Lease Term does no begin on the first day of a
calendar month, Tenant shall pays pro rats portion of such sum for such partial month. Periodically, during
the term of this Lease, Landlord shall have the right to estimate Tenant's Share of CAM Costs for the next
fiscal period (determined by Landlord) of the term of this Lease, whereupon Tenant shall pay Landlord such
amount as may be so indicated by Landlord in the same manner as the Estimated CAM Charge,

Section 9.2. No interruption or malfunction of any utility services shall constitute an eviction or
disturbance of Tenant's use and possession of the t)etnised Premises or a breach by Landlord of any of Its
obligation hereunder or render Landlord liable for damages or entitle Tenant to be relieved from any of its
obligations hereunder (Including the obligation to pay rent) or grant Tenant right of set-off or recoupment.
Section 9.3. In addition, Tenant shall be solely responsible for and pay to Landlord, within ten
(10) days after receipt of 'Landlord's statement therefore, all costs and expenses incurred by Landlord,
including without limitation, fines, fees charges and repair, replacement or installation costs, which result
from Tenant's or Tenant's business operations and arc incurred by Landlord because of federal, state,
county or municipal legislation, or rules or regulations relating to environmental control; provided,
however, that in the event Tenant is ordered directly by any governmental authority to comply with any
such federal, state, county or municipal legislation, mules or regulation, Tenant shall proceed promptly and
expeditiously to fully comply with such 'order and Tenant shall be solely responsible for, and shall bear all
costs and expenses incurred In connection with Tenant's compliance.
ARTICLE X
INDEMNITY, PUBLIC LIABILITY, BUILDER'S RISK
AND OmEk INSURANCE

Section 10.1. Landlord shall not be liable to Tenant or to Tenant or to Tenant's employees, agents
or visitors, or to any other person whomsoever, for any injury to person or damage to property on or about
the Demised Premises or the Common Area cause by negligence or misconduct of Tenant, its employees,
contractors, subtenants, licensees, and concessionaires; customers, invitees, or other Tenants of the
Shopping Center, or of any other person entering the Shopping Center under express or implied invitation
of Tenant or arising out of any breech or default by Tenant in mhe'performancc of its obligations hereunder,
or arising out of or from any iiumy to or death of any person or persons or damage to or destruction of the
property of any person or persons occurring or about the Demised Premises or on the sidewalks adjacent
thereto, and Tenant hereby agrees to indemnify Landlord and hold him harmless from any loss, 4athages,
expense (including, without limitation, attorney's fees and court costs), or claims arising out of such damage
or injuiy. Tenant agrees to use and occupy the Demised Premises and place its fixtures, equipment,
merchandise and other, property, therein at its on risk and hereby releases Landlord and its agents from all
claims for any damage or injury to the full extent permitted by law.

Section 10.2. Tenant shall procure and maintain throughout the term of this Lease a policy or
policies of insurance, at its sole Cost and expense, insuriiig Tenant (and, naming Landlord as a co-insured)
against any and all liability for injury to or death or a person or persons, and for damage to or destruction of
property occasioned by or arising out of or in connection with the use or occupancy of the Demised
Premises, or by the condition of the Demised Premises, the limits of such policy or policies to be in an
amount not less that $100,000.00 in respect of injuries to or death of any one person, and in the not lets
than $300,000.00 in respect of any one accident or disaster, and in an amount not less than $50,000.00 in
respect of property damaged or destroyed, or with such other limits as may be required by Landlord, and to
be written by an insurance company or companies satisfactory to Landlord. Tenant shall obtain a written
obligation on the part of each insurance company to not4 Landlord at least ten (10) days prior to
cancellation of such insurance. Such policies or duly executed certificates of insurance shall be prior to
Tenant's occupancy of the Demised Premises, delivered to Landlord and renewals thereof as required shall
be delivered to Landlord at least thirty (30) days prior to the expiration of the respective policy terms.
Section 10.3. During the period Tenant may be remodeling or making alterations to the Demised
Premises, all builders' risk insurance shall be maintained by Tenant in the amount no less than the total
improvement cost. Said builder's risk insurance and liability insurance policies shall time Landlord as a
co-insured with Tenant and shall be non-cancelable with respect to Landlord, except after ten (10) days
written notice front the insurance company. Certificates of such Insurance shall be deposited by Tenant Ik 04
with Landlord prior to commencing any remodeling or alteration work.

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 ,. I.

Section 10.4. Tenant agrees at all times at its expense to keep its merchandise, fixtures and other
property situated within the Demised Promises insured against fire, with extended coverage, to the extent of
at least eight percent (80%0 of the value thereof. Tenant'tisithec agrees that, at all times, when a "boiler", as
that term is defined for the purposes of boiler insurance is located within the Demised Premises, it will carry
at its expense boiler insurance with policy limits of not less than $100,000.00 insuring both Landlord and
Tenant against loss or liability caused by the operation or malfunction of such boiler. Tenant shall also
carry at its own cost and expense plate glass insurance and flood insurance insuring both Landlord and
Tenant against loss or liability arising as a result thereof, Suck.israurance shall be carried with companies
satisfactory to Landlord, and shall be In form satisfactory to Landlord. Tenant shall obtain a written
obligation of each insurance company to notify Landlord at least ten (10) days prior to cancellation of such
insurance. Such policies or duly executed certificates of insurance shall be delivered to Landlord prior to
the commencement of Tenant's occupancy hereunder and renewals thereof as required shall be delivered to
Landlord at least thirty (30) days prior to the expiration of the respective policy terms. The proceeds
payable to Tenant on account of such insurance shall not be used, except with the consent of Landlord, for
any purpose other than the repair or replacement of merchandise, fixture and other property situated within
the Demised Premises.
Section 10.5. If Tenant should fail to comply with the foregoing requirements relating to
insurance, Landlord may declare Tenant in default of theLease of obtain such insurance and Tenant shall
pay to Landlord on demand as additional rent hereunder the premium. cost thereof plus interest, at the then
highest lawful contract rate Tenant is authorized to pay under the laws of the State of Texas or the laws of
the United States of America, from the date of payment by Landlord until repaid by Tenant.
ARTICLE Xl .
NON-LIABILITY FOR CERTAIN DAMAGES

Section 11.1. Landlord and Landlord's agents and employees shall not be liable to Tenant for any
injury or death to person or damage or destruction to property sustained by Tenant or any person claiming
through Tenant resulting from the Demised Premises or any other portions of the Shopping Center
becoming out of repair or by defect in or failure of equipment, pipes or wiring, or by broken glass, or by the
backing up of drains, or by gas, water, steam, electricity, or oil leaking, escaping or flowing into the
Demised premises, no shall Landlord be liable to Tenant for any loss or damage that may be occasioned by
or through the acts or omission of other Tenants of the Shopping Center or of any other persons
whomsoever.
ARTICLE XII
FIRE OR OTHER CASUALTY -
Section 12.1. Tenant shall give immediate written notice to Landlord of any damage caused to the
Demised Premises by fire, or other casualty.
Section 12.2. If at any time during the lease term,, (I) all or any portion of the Demised Premises
shall be damaged or destroyed by fire or other casualty, or (ii) the Building in which the Demised Premises
are located shall be destroyed or rendered untenantable to an extent in excess of 25% of the floor area
thereo then in any such eventuality Landlord shall have the election to terminate this Lease or to repair and
restore the Demised Premises to substantially the condition in which they existed immediately prior to such
damage or destruction,

Section 123. In the event that this Lease is terminated as herein pesmitted, Landlord shall retired
to Tenant the prepaid rent, if any (unaccrued as of the date of damage or destruction), less any sum then
owing Landlord by Tenant.

Section 12.4. In any of the aforesaid circumstances, Rental shall abate proportionately during the
period and to the extent that the Demised Premises are in the opinion of Landlord unfit for use by Tenant in
the ordinary conduct of its business, If Landlord has elected to repair and restore the Leased Premises, this
Lease shall continue in full force and effect and such repairs will be made Within a reasonable time
thereafter, subject to "excusable delays" as hereinabove defined. If Landlord has elected to repair and
reconstruct the Demised Premises, then, at the election of Landlord (exercised by notice to Tenant prior to
or within thirty (30) days following Landlord's completion of such repair and reconstruction) the Lease
Term Shall be extended by a period of time equal to the period of such repair and reconstruction.
Section 12.5. In any circumstances where Landlord elects to repair and restore the premises, this
Lease shall continue in full force and effect, and such repairs will be made within a reasonable time
thereafter, subject to "excusable delays" as hereinabove referred to. in any circuinstanâes where Landlord
elects to repair and restore the Demised Premises, Landlord shall not be required to repair any injury or
damage by lire or other cause to, or to make any repairs or replacements of any leasehold improvements,
fixtures or other personal property of Tenant. In any circumstances where Landlord elects to repair and
restere the Demised Premises, Landlord shall not be required to expend for such repairs and restoration any
sum in excess of the amount actually collected by Landlord from any insurance policies then in effect. In
the event any insurance proceeds are collected by any party holding a lien on Landlord's interest in the
Demised Premises or the Shopping Center, such proceeds shall not be deemed to have been collected by

13 - ';- r 35
Landlord and shall not be available for repair of the Demised Premises whether or not payment to such lien
bolder is with the approval of Landlord.

Section 124. 1enant agrees that during the period of reconstruction or repair of the Demised
Premises it Will continue the operating of its business within the Demised Premises to the extent practicable.

Section 12.7. Notwithstanding the provisions of Article XIII of this Lease. Tenant agrees that if at
any time during the term of this Lease all or any portion of the Demised Premises, the Building its which the
Demised Premises are located or any part of the Common Area of the Shopping Center shall be damaged or
destroyed by fire or other casualty caused in whole or in part by any act or omission of Tenant, Tenant's
employees, licensees, invitees, contractors or concessionaires and Landlord elects to repair and restore said
damage, Tenant shall Pay to Landlord upon demand, the amount that Landlord is obligated to pay under any
Deductible Clause provided in any insurance policy covering such loss or casualty up to the full amount of
said deductible. Tenant's failure to pay said deductible to Landlord within five (5) days from receipt by
Tenant of written notice from Landlord of the amount of said deductible shall constitute a default by Tenant
of its obligations hereunder and Landlord shall be entitled to pursue any of the remedies provided in this
Lease or which are available at law or in equity.

ARTICLE XIII
SUBROGATION

Section 13.1. To the extent that Landlord and Tenant may legally so agree, and to the extent that
any, insurance coverage by Landlord and/or Tenant will not be Invalidated thereby, it is' agreed and
understood that where either party hereto may sustain S loss or damage against which such party is
protected by an existing policy or policies of insurance, the party hereto sustaining such loss or damage
hereby waives and releases any and all claims, demands and causes of action which it might have against
the other party hereto to the extent and amount that such loss is covered by the claimants insurance,
irrespective of whether or not such damage or loss is occasioned by the negligence of the respective parties
hereto, or either of them, their respective agents, servants, employees, guests or invitees, it being the
intention of the parties that no insurance company with which either such party maintains insurance in effect
may be subrogated to the rights or causes of action which such party may have against the other party
hereto.

ARTICLE XIV
CONDEMNATION

Section 14.1. If there shall be taken during the rcnn of this Lease all of the Demised Premises, by
any authority having the power of condemnation, then and in that event, the term of this Lease shall cease
and terminate, and the date of such termination shall be, at Landlord's election, the earlier of either the date
upon which possession shall be tendered to such authority by Landlord or the date upon which possession is
taken by such authority. If a lesser part of the Demised Premises should be so taken, Landlord may elect to
terminate this Lease or to continue this Lease in effect, but if Landlord elects to continue this Lease in
effect, the Rental shall be reduced in proportion to the area of the Demised Premises so taken. Immediately
upon the taking of possession of the portion of the Demised Promises; taken by the condemning authority
above. When any such reduction in Rental has been computed by Landlord, Landlord shall notify Tenant as
to the amount of such Rental and such sum shall be due and payable by Tenant to Landlord in accordance
with the provisions of Article IV relating to the time and manner of Tenant's payment of Rental, At the
request of Landlord, Tenant will execute a letter or other memorandum setting forth the amount of such
Rental payable by Tenant. In the event that Landlord has elected to continue this Lease in effect, then upon
Landlord's collection of the entire suns due and payable by such authority to Landlord by the way of
compensation and damages, Landlord shall restore the remaining portion of the Demised Premises so as to
constitute such portion an enclosed building, with such nature of building improvements and facilities as
Landlord flirhished to Tenant at or prior to commencement of the Lease Tents, provided that Landlord shall
not -be obligated to expend of such restoration any sums in excess of the amount actually received, by
Landlord from the condemning authority. Such restoration work shall be performed by Landlord within a
reasonable period of time with reasonable allowances for "excusable delays" (as hereinabove defined).
Neither the restoration work, if any, by Landlord with respect to the Demised Premises nor the restoration
work, if any, by Landlord with respect to any other portion of the Shopping Center shall constitute an
eviction or disturbance of Tenant's use and possession of the Demised Premises or Shopping Center. or a
breach by Landlord of any of its obligations hereunder or render Landlord liable for damages or entitle
Tenant to be relieved from any of its obligations hereunder (with the exception of the aforesaid
proportionate reduction in Rental) or grant Tenant any right of off-set or recoupment In the event that any
condemnation proceeds, whether by way of compensation or damages, are collected by any party holding a
lien on Landlord's interest in the Demised Premises, such proceeds shall not be deemed to have been
collected by Landlord, whether or no the payment to such lion holder is with the approval of Landlord.

Section 14.2. Whether or not any portion of the Demised Premises may be taken by such
authority, Landlord may nevertheless elect to terminate this Lease or to continue this Lease in effect in the
event any portion of any building in the Shopping Center or more than ten percent (10%) of the Common
Area of the Shopping Center be. taken by such authority.
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 Section 14.3. All sums awarded or agreed upon between Landlord and the condemning authority
for the taking of the fee or the leasehold interest, whether as damages or as compensation, Will be the
property of Landlord. Tenant hereby assigns to Landlord all proceeds, whether by way of compensation or
damages, otherwise payable to Tenant for the leasehold interest by reason of such taking. Tenant further
grants to Landlord the exclusive authority to negotiate with such authority for payment both with respect to
the intetest of Landlord and the interest of Tenant in the Demised Premises and Tenant agrees that the
authority having the power of eminent domain shall cause all checks and drafts issued by it in connection
with any such taking of the fee or leasehold estate whether as compensation or as damages, to be issued
payable to the order of Landlord above or payable to the order of Landlord and "landlord's Mortgages" (as
hereinafter defined). Upon the request of Landlord, Tenant agrees to forthwith execute such instrument or
instruments as Landlord may reasonable request for the purpose of evidencing the cessation of Tenant's
interest in such portion of the Demised Premises as is taken by such authority and the continued
effectiveness of this' Lease as to the balance of the Demised Premises not taken. Any amount specifically
awarded or agreed upon by the Tenani and the condemning authority for the taking of Tenant's
"Unattached, Movable. Trade Fixtures" shall be the property of Tenant.

Section 14.4. If this Lease should be terminated under any provision of this Article XW, all
Rental and all other sums due and payable by Tenant hereunder shall be payable up to the date that
possession taken by the taking authority, and Landlord will refund to Tenant an equitable portion of any
such Rental and other sums paid in advance but not yet earned by such date.

Section 14.5. In the event that any authority having the power of condemnation requests that
Landlord convey to such authority all or any portion of the Shopping Center or all or any portion of the
Demised Premises, Landlord shalt have the right to make a voluntary conveyance to such authority of all or
any portion of the Shopping Center or all or any portion of the Demised Premises whether or not
proceedings have been filed by such authority; and in the event of any such voluntary conveyance, it shall
nevertheless for all purposes hereunder be deemed that there has been a taking by such authority of the
property voluntarily conveyed by Landlord. Accordingly, all of the provisions of Sections 14.1, 14.2, 14.3,
and 14.4 hereof shall be applicable notwithstanding such voluntary conveyance.

ARTICLE XV
ASSIGNMENT AND SUBLETTING

- Section 15.1. Tenant shall not assign or in any manner transfer this Lease or any estate or interest
therein or sublet the Demised, Premises or any part thereof without the prior written consent of Landlord.
Such consent shall not be unreasonably withheld. Consent by Landlord to one (1) or more assignments or
subletting shall not operate as a waiver of Landlord's rights as to any subsequent assignments and
subletting, Notwithstanding any assignment or subletting, Tenant shall at all times remain fully responsible
and liable for the payment of the Rental herein specified and for compliance with mill of its other obligations
under this Lease. The 'term "sublet" shall be deemed to include the granting of licenses, concessions, and
any other right of occupancy of any portion of the Demised Premises. Any attempt to do any of the
foregoing shall be void and of no effect.

If Tenant is a corporation, then any transfer of this Lease from Tenant by merger, consolidation or
dissolution or any change in ownership or power to vote a majority of the voting stock In Tenant
outstanding at the time of execution of this instrument shall constitute an assignment for purposes of this
Lease. For all purposes of this Section 15.1, the term "voting stock" shall refer to shares of stock regularly
entitled to vote for the election of directors of the corporation involved.

If Tenant is a general partnership having one or more corporations as partners or 11 Tenant is a
limited partnership having one or more corporations as general partners, the provisions of the preceding
paragraph shall apply to each of sucli'corporations as if such corporation alone had been the Tenant
hereunder.

If Tenant is a general partnership, then the transfer of a majority of the partnership interest of
Tenant as existing at the time of execution of this instrument shall constitute an assignment for purposes of
this Lease (or at any future time). If Tenant is a limited partnership, then the assignment of all or any
portion of the interest of a general partner of Tenant shall constitute an assignment for Site purpose of this
Lease.

Section 15.2. Notwithstanding that the prior written consent of Landlord to any of the aforesaid
transactions may have been obtained, the thilowing shall apply: (1) In the event of an assignment,
contemporaneously with the granting Landlord's aforesaid consent, Tenant shall cause the assignee to
expressly assume in writing and agree to perform all of the covenants, duties, and obligations of Tenant
hereunder and such assignee shall be jointly and severally liable therefor along with Tenant; Tenant shall
further cause such assignee to grant Landlord an express first and prior contract lien and security interest
(and execute one or more Uniform Commercial Code Financing Statements) in the manner hereinafter
stated as applicable to Tenant (2) a signed counterpart of all instruments relative thereto (executed by all
parties to such transaction with the exception of Landlord) shall be submitted by Tenant to Landlord prior
to or contemporaneously with the request for Landlord's written consent thereto (it being understood that no
such instrument shall be effective without the written consent of Landlord); (3) Tenant shall subordinate to
Landlord's statutory lien and Landlord's aforesaid contract lien and security interest, any liens or other
rights which Tenant may claim with respect to any fixtures, 'equipment, goods, wares, merchandise or other AQA

I
37
property owned by or leased to the proposed assignee, or sublessee or other party intending to occupy the
lemised Premises; (4) no usage of the Demised Premises different from the usage herein provided to be
made by Tenant shall be permitted, and all other terms and provisions of this Leath shall continue to apply
after any such assignment or subleasing; (5) in any case where Landlord consents to an assignment,
subleasing, grant of a concession or license or mortgage, pledge or hypothecation of the Leasehold or
sublease of the Demised Premises, the undersigned Tenant will nevertheless remain directly and
primarily liable for the performance of all of the covenants, duties and. obligations of Tenant
hereunder (including without limitation, the obligation to pay all rental and other aunts herein
provided to be paid), and Landlord shall be permitted to enforce the provisions of this Instrument
against the undersigned Tenant and/or any assignee without demand upon or proceeding In any way
against any other person, and (6) in the event that the rental due and payable by a sublessee under any
such permitted sublease (or a combination of the rental payable under such sublease plus any bonus or other
consideration therefor or incidónt thereto) exceeds the hereinabove provided rental payable under this Lease
or if with respect to a permitted assignment, permitted license or other transfer by Tenant permitted by
Landlord, the consideration payable to Tenant by the assignee, licensee or other transferee exceeds the
rental payable under this Lease, the Tenant' shall be bound and obligated to pay Landlord all such excess
rental and other excess consideration within ten (10) days following receipt thereof by Tenant from such
sublessee, assignee, licensee or other transferee, as the ease might be.

Section 15.3. Tenant shall not mortgage, pledge or otherwise encumber its interest in this Lease or
in the Demised Premises, without written consent of the Landlord and will not be unreasonably
withheld, nor may such interest be transferred by operation of law. Any attempt to do any of the foregoing
shall be void and of no effect

Section 15.4. If this Lease be assigned or if the Demised Premises be subleased (whether in whole
or in part) or in the event of the mortgage, pledge or hypothecation of the leasehold interest or grant of any
concession or license within the Demised Premises or if the Demised Premises be occupied in whole or in
part by anyone other than Tenant without the prior written consent of Landlord, Landlord may nevertheless
collect rental from the assignee, sublessec, mortgagee, pledge, party to whom the leasehold interest was
hypothecated, concessionaire or licensee or other occupant and apply the net amount collected to the rental
payable hereunder, but no such transaction or collection of rental or application thereof by Landlord shall
be deemed a waiver of these provisions or a release of Tenant from the further performance by Tenant of its
covenants, duties and obligations hereunder.

ARTICLE XVI
TAX AND INSURANCE COSTS

Section 16, 1. The Tenant agrees to pay as additional rent, as hereinafter provided, an amount
equal to "Tenant's Share" of "Taxes" and "Insurance Premiums" (as such quoted terms are hereinafter
defined) adjusted from time to time, pursuant to the provisions hereinafter stated.

The phrase "Taxes," as used herein, shall mean all taxes, assessments, impositions, levies, charges,
excises, fees, licenses, and other sums (whether now existing or hereafter arising, whether foreseen or
unforeseen and whether suede' under the present system of real estate taxation or some other system), levied,
assessed, charged, or imposed by any governmental authority or other taxing authority, or which accrue on
the Shopping Center for each calendar year (or portion thereof) during the term of this Lease; including,.
without limitation, all penalties, interest, and other charges (with respect to taxes) payable by reason of sup
delay and/or failure or refusal of Tenant to make timely payment as required under this Lease. In no event
shall the word "Taxes" be deemed to include any of Landlord's income taxes or the estate, inheritance, or
gift taxes of 'any party of "Landlord."

The phrase "Insurance Premiums" shall mean the total annual insurance premiums which accrue on
all fire and extended coverage insurance, boiler insurance, public liability and property damage insurance,
rent insurance, and any other insurance which, from time to time, may, at Landlord's election, be carried by
Landlord with respect to the Shopping Center during any applicable calendar year or portion thereof)
occurring during the term of this Lease; provided, however, in the event, during 'any such calendar year, all
or atiy pare of such coverage is written under a "blanket" policy" or otherwise in such manner that Landlord
was not charged a specific insurance premium applicable solely to the Shopping Center, then in such event,
the amount considered to be the Insurance Premium with respect to such coverage for such calendar year,
shall be that amount which would have been the annual Insurance Premium payable under the rates in effect
on the first day of such applicable calendar year for a separate Texas Standard Form insurance policy
generally providing such type and amount of coverage (without any deductible amount) with respect to the
Shopping Center (considering the We of construction and other relevant matters), irrespective of the fact
that Landlord did not actually carry such type policy.

The phrase "Tenant's Share," as applied to Taxes and Insurance Premiums, shall refer to a auto
calculated by multiplying the Taxes and Insurance Premiums (as the case may be ) by a fraction, the
numerator of which is the floor area (in square feet) of the Demised Premises (as indicated in Article I of
this Lease) and the denominator of which is the total Gross Leasable Retail Area within the Shopping
Center on the 1st day of January fro the relevant calendar year for which any calculation referred to in this
paragraph is being made; provided, however, for any period less than twelve (12) full calendar months with
respect to which such calOularibn is being made, it pro rats portion of the resulting product shall be
calculated to determine Tenant's Share.

711,. 7
16 38
 Monthly, during the first year of the term of this Lease, Tenant will pay to Landlord the Estimated
Tax and Insurance Charge (as such term is defined in Article I of the Lease), monthly in advance, payable at
the same time and place as the Rental is payable, except, however, if the Lease Term does not begin on the
first day of a calendar month, Tenant shall pay a pro rata portion of such sum for such partial month.
Landlord shall have the right to adjust such monthly estimate on an annual basis, pursuant to the following
paragraph hereof

At the end of each calendar year occurring during the term of this Lease (subsequent to the
expiration èr other termination of this Lease, if such occurs on a date other than the last day of the calendar
year), Landlord shall give Tenant notice of the total amount paid by Tenant for the relevant calendar year
together with the actual amount of Tenant's Share of Taxes and Insurance Premiums ("Total Cost") for such
calendar year. If the actual amount of Tenant's Share of the Total Cost with respect to such period exceeds
the aggregate amount previously paid by Tenant with respect thereto during such period, Tenant shall pay to
Landlord the deficiency within fifteen (15) days following notice from Landlord; however, if the aggregate
amount previously paid by Tenant with respect thereto exceeds Tenant's Share of the Total Cost for such
period, then, at Landlord's election, such surplus (net of any amounts then owing by Tenant to Landlord)
shall be credited against the next ensuing installment of any such cost due hereunder by Tenant, or Landlord
may refund such net surplus to Tenant. Periodically, during the term of this Lease, Landlord shall have the
right to estimate Tenant's Share of Taxes and Insurance Premiums for the next fiscal period (determined by
Landlord) of the term of this Lease, whereupon, Tenant shall pay Landlord such amount as may be so
indicated by Landlord in the same manner as the Estimated Tax and Insurance Charge.

ARTICLE XVII
DEFAULT BY TENANT AND RIMEDWS

Section 17.1 The following events shall be deemed to be events of default by Tenaiit under this Lease:

(1) Tenant shall fail or refuse to pay any installment of Rental, or any monies due and payable to
Landlord when due and such failure shall continue for a period of ten (10) days after such due date.

(2) Tenant or any guarantor of Tenant's obligations under this Lease shall become insolvent, or
shall snake a transfer in fraud of creditors, or shall make an assignment for the benefit of creditors.

(3) The entry of a decree or order by a court having jurisdiction over Tenant or any guarantor of
Tenant's obligations hereunder in an involuntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable, federal or state bankruptcy, insolvency or other similar
law, or appointing a receiver, liquidator, assignee, custodian, trustee, svquestrator (or similar
official) of Tenant or any guarantor of Tenants' obligation hereunder or for any substantial part of
either of said party's property, or ordering the winding-up or liquidation of either of said party's
airs.

(4) The commencement by Tenant or any guarantor of Tenant's obligations hereunder of a
voluntary case under the federal bankruptcy laws, as now constituted or hereafter amended, or any
other applicable, ibderal or state bankruptcy, insolvency or other similar law, or the consent by either
of such parties to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or other similar official) of any substantial part of the property of Tenant or any guarantor of
Tenant's obligations hereunder, or to the taking possession of any such property by any such
functionary or the making of any assignment for the benefits of creditors for either Tenant or any
guarantor of Tenant's obligations hereunder, or the failure of Tenant or any guarantor of Tenant's
obligations hereunder generally to pay its debts and such debts become due, or the taking of
corporate action by any corporate Tenant or any corporate guarantor of Tenant's obligations
hereunder in furtherance of any of the foregoing.

(5) Tenant shall abandon, desert or vacate any portion of the Demised Premises..

(6) Tenant shall do or permit to be done anything which creates a lien upon the Demised Premises

(7) Without Landlord's prior written consent, if, Tenant being a general partnership or joint venture,
there shall be any change in the membership of such partnership or joint venture subsequent to the
execution of this Lease, or if Tenant being a limited partnership, there shall be any change in the
general partners subsequent to liar execution of this Lease, or it; Tenant being a corporation, there
shall be any change in the control of the corporation subsequent to the execution of this Lease.

(8) Tenant shall fail or refuse to comply with any term, provision, or covenant of this Lease, other
then the payment of rent, and shall not cure such failure within 5u.an' (OG) days after written notice
thereof to Tenant, other than the aforementioned events of defaultpecitied ij (I) Sims (7) of this
Section 17.1. &O,/
Upon the occurrence of any of such events of default, Landlord shall have the option to pursue any one or
more of the following remedies without any notice or demand whatsoever:

17 39
 A. Terminate this Lease, in which event Tenant shall immediately surrender the Demised Premises
to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy
which he may have for possession or arsearages in rent, enter upon and take possession of the
Demised Premises and expel or remove Tenant and any other person who may be occupying said
premises or any part hereof; without being liable for prosecution or any claim of damages therefor,
and Tenant agrees to pay Landlord on demand the amount of all loss and damage which Landlord
may suffer by reason of such termination, whether through inability to relet the Premises on
satisfactory terms or otherwise.

B. Enter upon and take possession and expel or remove Tenant and any other person who may be
occupying said premises or any part thereof; without being liable for prosecution or any claim for
damages therefor, and, if Landlord so elects, relet the premises on such terms as Landlord may deem
advisable and receive the rent therefor, and Tenant agrees to pay to Landlord on demand any
deficiency that may arise by reason of such reletting.

C. Enter upon the Demised Premises (including altering locks and other security devices) without
being liable for prosecution or any claim for damages therefor, and do whatever Tenant is obligated
to do under the terms of this Lease; and Tenant agrees to reimburse Landlord on demand for any
expenses which Landlord may incur in this effecting compliance with Tenant's obligations under this
Lease, and Tenant further agrees that Landlord shall not be liable for any damages, resulting to the
Tenant from such action whether caused by the negligence of Landlord or otherwise.

Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies herein
provided or any other remedies provided by law or in equity, nor shall pursuit of any remedy herein
provided constitute a forfeiture or waiver of any rent payable to Landlord hereunder or of any damages
accruing to Landlord by reason of the violation of any of the terms, provisions and covenants herein
contained. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event
of default shall not be deemed or construed Co constitute a waiver of such default. In determining the
amount of loss or damage which Landlord may sufthr by reason of termination of this Lease or the
deficiency arising by reason of any reletting of the Demised Premises by Landlord as above provided,
allowance shall be made for the expense of repossession and any repairs or remodeling undertaken by
Landlord following repossession.

Section 17.2. 11, on account of any breach or default by Tenant in Tenant's obligations hereunder,
it shall become necessary for Landlord to employ an attorney to defend any of the Landlord's rights or
remedies. Tenant agrees to pay any reasonable attorney's fees Incurred by Landlord In such
connection.

Section 17.3. Tenant, contemporaneously with the execution of this Lease, has deposited with
Landlord the sum set forth in Article 1(o), the receipt of which is hereby acknowledged by Landlord; said
deposit being given to secure the faithful performance by the Tenant of all of the teams, covenants,'and
conditions of this Lease by the Tenant to be kept and performed during the term hereof. Tenant agrees that
If the Tenant shall fail to pay the Rental or any other sums due and owing by Tenant to Landlord herein
reserved promptly when due, said deposit may, at the option of the Landlord (but Landlord shall not be
required to be applied to any Rental or any other sums due and unpaid, and if the Tenant violates any of
)

the other terms, covenants and conditions of this Lease, said deposit may be applied to any damages
suffered by Landlord as a result of Tenant's default, to the extent of the amount of the damages suffered.
Nothing contained in this Article shall in any way diminish or be construed as waiving any of the
Landlord's other remedies as provided in this Article XVII, or by law or in equity. Should the entire
Default Deposit, or any portion thereof; be appropriated and applied by Landlord for the payment of
overdut rent or other sums due and payable to Landlord by Tenant hereunder, then Tenant shall on the
written demand of Landlord, forthwith remit to Landlord a sufficient amount in cash to restore said Default
Deposit to its original amount, and Tenant's failure to do so within ten (10) days after receipt of such
demand shall constitute a breach of this Lease. Should Tenant comply with all of the terms, covenants, and
conditions of this Lease and promptly pay all of the Rental herein provided for as it falls due and all other
sums payable by Tenant to Landlord hereunder, said Default Deposit shall be returned in full to Tenant at
the end of the term of this Lease, within 30 days provided Tenant has notified Landlord in writing of a
forwarding address or upon the earlier termination of this Lease less, however, any amounts that may be due
from Tenant to Landlord or any amounts that Landlord estimates will be due and owing from Tenant on
account of Tenant's Share of the Common Area Maintenance Charge of Tax and Insurance Charge (even
though final adjustments thereto are not made by Landlord until the end of the applicable calendar year.) In
the event this Lease is terminated prior to the expiration of the stated term as hereinabove provided, in
addition to all other remedies provided herein or available at law or in equity, Landlord may use, apply or
retain the whole or any part of the security so deposited remaining after applying said deposit to the
payment of any Rental due and unpaid and any other sum as to which Tenant is in default, and use, apply or
retain the balance of the Default Deposit for payment of any sum which Landlord may expend or may be
required to expend by reason of Tenant's default in respect of any of the terms, covenants and conditions of
this Lease, including but not limited to, any damages or deficiency in the relettiog of the Demised Premises,
whether such damages or deficiency accrued before or after summary proceedings or other re-entry by
Landlord. Landlord shall have the right to commingle said Default Deposit with other funds of the
Lanilord. Landlord may deliver the fends deposited hereunder by Tenant to the purchaser of Landlord's
interest in the Demised Premises in the event that such interest is sold, and thereupon Landlord shall be
discharged from farther liability with respect to such deposit. Notwithstanding that Landlord may hereafter

18 40
 9,

(but shall not be obligated to) approve any sublease or assignment by Tenant, no assignee or sublessee shall
have any right, title or interest In the Default Deposit unless otherwise provided in the sublease or
assignment instrument executed by Landlord to evidence its permission to such transaction. No such
assignment or sublease, however, shall alter, street or nsodilj any of the rights of Landlord with respect to
the Default Deposit. Tenant's tights hereunder with respect to the Default Deposit shall not in any other
manner be assigned, tzansfeued, pledged, mortgaged or encumbered by Tenant without the prior written
consent of Landlord, and any attempt by Tenant to do so shall be void and of no effect. In the event of the
Bankruptcy of Tenant (or said transferee) or other debtor-creditor proceedings, the Default Deposit, may be
applied by Landlord as an off-set against any obligation of Tenant (or said transferee due and owing of
Landlord. In the event this Lease should be terminated as provided in any construction addendum attached
hereto, Landlord may retainthe Default Deposit as liquidated damages for its cost of preparing and revising
the plans and spedifications and/or other administrative costs incurred prior to such termination.

Section 17.4. In the event that Landlord elects to repossess the Demised Premises without.
terminating the Lease, then Tenant shall be liable fox: and shall pay to Landlord at Houston, Harris County,
Texas, all rent and other indebtedness accrued to the date of such repossession, plus rent required to be paid
by Tenant to Landlord during the remainder of the Lease term until the date of expiration of the term
diminished by any net sums thereafter received by Landlord through retetting the Demised Premises during
said period (after deducting expenses incurred by Landlord as provided herein), In no event shall Tenant be
entitled to any excess of any rent obtained by reletting over and above the rent herein reserved. Actions to
collect amounts due by Tenant as, provided in this Section 17.4 may be brought from time to time, on one or
more occasions, without the necessity of Landlord's waiting until expiration of the Lease Term.

Section 17.5'. In case of an event of default. Tenant shall also be liable for and shall pay to
Landlord, at Houston, Harris County; Texas, in addition to any sum provided to be paid above: broker's
fees incurred by Landlord in connection with reletting the whole or any part of the Demised Premises; the
costs of removing and storing Tenant's or other occupant's property: the costs of repairing, altering,
remodeling or otherwise putting the Demised Premises Into condition acceptable to a new tenant or tenants;
and all reasonable expenses incurred by Landlord in enforcing Landlord's remedies or the State of Texas,
whichever is applicable. Past due rent and other pest due payments shall bear interest from maturity at the
then highest lawful contract rate which Tenant is authorized to pay under the applicable laws of the United
Slates.

Section 17.6. N/A

Section 17,7. In the event of termination or repossession of the Demised Premises for a default,
Landlord shall not have any obligation to relet or attempt to relet the Demised Premises, or any portion
thereof, or to collect rental after reletting; and in the event of retelling, Landlord may relet the whole or any
portion of the Demised Premises for any period, to any tenant and for any use and purpose,

Section 17.8. if Tenant should foil to make any payment or cure any default hereunder within the
time herein permitted, Landlord, without being under any obligation to do so and without thereby waiving
such default, may snake such payment and/or remedy such other default for the account of Tenant (and enter
the Demised Premises for such purpose), and Tenant shall be obligated to, and hereby agrees, to pay
Landlord, upon demand, all costs, expenses and disbursements (including reasonable attorney's fees)
incurred by Landlord in taking such remedial action,

Section 17S. in the event that Landlord shall have taken possession of the Demised Premises
pursuant to the authority herein granted, then Landlord shall have the right to keep in place and use all of
the furniture, fixtures and equipment at the Demised Premises, including that whieli is owned by or leased to
Tenant, at all tunes prior to any foreclosure thereon by Landlord or repossession thereby by any lessor
thereof or third party having a lien thereon. Landlord shall also have the right to remove from the Demised
Premises (without the necessity of obtaining a distres warrant, writ of sequestration or other legal process)
all or any portion of such furniture, fixtures, equipment and other property located thereon and place same
in storage at any premises within the county in which the Demised Premises is located, or at any other place
reasonable convenient to Landlord; and in such event, Tenant shall be liable to Landlord for all costs
incurred by Landlord in connection with such removal and storage and shall indemnify and hold Landlord
harmless from all loss, damages, cost, expense and liability In connection with such removal and storage,
Landlord shall also have the right to relinquish possession of all or any portion .of such furniture, fixtures,
equipment and other property to any person ("Claimant") claiming to be entitled to possession thereof who
presents to Landlord a copy of any instrument represented to Landlord by Claimant to have been executed
by Tenant (or any predecessor of Tenant) granting Claimant the right under various circumstances to take
possession of such furniture, fixtures, equipment or other property, without the. necessity on the part of
Landlord to inquire into the authenticity of said instrunirart copy of Tenant's (or Tenant's predecessor's)
signature thereon and without the necessity of Landlord's making any nature of investigation or inquiry as
to the validity of the factual or legal basis upon which Claimant piuports to act; and Tenant agrees to
indemnify and hold Landlord harmless from all cost, expense, loss damage and liability Incident to
Landlord's relinquishment of possession of all or any portion of such furniture, fixtures, equipment or other
property to Claimant 'the rights of Landlord herein stated shall be in addition to any and all other rights
which Landlord has or may hereafter have at law or in equity, and Tenant stipulates and agrees that the
rights herein granted Landlord are commercially reasonable.

19 . 41.
 Section I7. 0. To secure the payment of all Rental and any other sums due and to become due
hereunder and the faithful performance ofthis Lease by Tenant, Tenant hereby gives to Landlord an express
first and prior contract lien and security interest on all property (including fixtures, equipment, and chattels
which may be placed in the Demised Premises, and also upon all proceeds of any such property, and also
upon all proceeds of any insurance which may accrue to Tenant by reason of destruction of or damage to
any such property and also upon all of Tenant's interests as Tenant and rights options to purchase fixtures,
equipment, and chattels placed in the Demised Premises (in the case of fixtures, equipment and chattels
leased to Tenant which are placed in the Demised Premises). All exemption laws are hereby waived in
favor of said lien and security interest. This lien and security interest is given in addition to the Landlord's
statutory lien and shall be cumulative thereto. This lien may be foreclosed with or without court
proceedings by public or private sale, provided Landlord gives Tenant at least ten (10) days notice of the
time and place of said sale; and Landlord shall have the right to become the purchaser, upon being the
highest bidder at such sale. Contemporaneously with the execution of this Lease (and if requested hereafter
by Landlord) Tenant shall execute and deliver to Landlord Texas Uniform Commercial Code Financing
Statements in sufficient form so that when property filed, the security interest hereby given shall thereupon
be perfected. If requested hereafter by Landlord, Tenant shall also execute and deliver to Landlord Texas
Uniform Commercial Code Financing Statement Change instruments in sufficient form to reflect any proper
amendment of, modification in or continuation or extension of the aforesaid contract lien and security
interest hereby granted. Landjord shall, in addition to all of its rights hereunder, also have all of the rights
and remedies of a secured party under the Texas Uniform Commercial Code (the Texas Business and
Commerce Code).
Section 17.11. In the event of any default by Landlord, Tenant's exclusive remedy shall be an
action for damages (Tenant hereby waiving the benefit of any laws granting it a lien upon the property of
Landlord and/or upon rent due Landlord), but prior to any such action Tenant will give Landlord written
notice speoii'ing such default with particularity, and Landlord shall thereupon have a reasonable period, but
in no event less than thirty (30) days, in which to cure any such default, provided, however, if Landlord's
default is of such a nature that it cannot reasonable be cured within said thirty (30) day period then Landlord
will not be deemed to be in default hereunder if Landlord has promptly commenced to cure said default and
is diligently attempting to cure the same. Unless and until Landlord fails to so cure any default after such
notice, Tenant shalt not have any remedy or cause of action by reason thereof. All obligations of Landlord
hereunder will be construed as covenants, not conditions; and all such obligations will be binding upon
Landlord only during the period of its possession of the Shopping Center and not thereafter.
ARTICLE XV1TI
HOLDING OVER
p ç3m
Section 18.1. If Tcnan4should remain/rn poasessn of the Demised Premises after the expiration
of the term of this Lease, without the exeeutiosf a new Ise, then Tenant shall be deemed to be occupying
the Demised Premises as a tenantf from xnonto-monthjubject.to all the covenants and obligations of this
Lease and at a rental equal to iaae hundred percent (O/o) of the Rental herein provided (computed on a
monthly basis rather than the other periodic basis hereinabove provided), and including also i'&T
nF:k,f percent () of all other sums payable hereunder. If any property not belonging to Landlord remains at y'
theDemi1e'Fremises after the expiration of the term of this Lease, Tenant hereby authorizes Landlord to 7
• make such disposition of such property as Landlord may desire without liability for compensation or
damages to Tinant in the event that such property is the property of Tenant, and in the event that such
property is the property of someone other than Tenant, Tenant agrees to indemnify and hold Landlord
harmless from all suits, actions, liability, loss, damages and expenses in connectionwith or incident to any
removal, exercise or dominion over and/or disposition of such property by Landlord.

ARTICLE XIX
LANDLORD'S MORTGAGE

Section 19.1. This Lease is expressly subject, subordinate and inferior to any mortgage, deed of
trust, security agreement or other lien or encumbrance whatever resulting from any method of financing or
refinancing, presently or henceforth placed upon the land and/or improvements comprising the Shopping
Center and any future expansion thereof or additions thereto, and to all advances of money or other value
heretofore or hereafter made upon the security thereof; provided, however, the foregoing provisions of this
Article XIX to the contrary notwithstanding, it Landlord or the holder of any such mortgage, deed of trust,
security agreement or other lien or encumbrance shall elect to make this Lease superior, then this Lease
shall be deemed superior to any such mortgage, deed of trust, security agreement or other lien or
encumbrance. Without limiting the generality or effect of the foregoing provisions of this Article XIX,
Tenant covenants and agtees promptly upon request of Landlord within 10 days to execute and deliver, in a
recordable form provided by Landlord, and acknowledgment of subordination or-superiority of the Lease,
as. the case may be according to the election made by Landlord or the holder of such mortgage, deed of
trust, security agreement or other lien or encumbrance as hereinabove provided (and upon any failure of
Tenant to acknowledge such subordination or superiority as aforesaid, Landlord is hereby irrevocably
vested with fall power and authority to act on Tenant's behalf); however, notwithstatiding that this Lease
may be (or made to be) superior to such Mortgage, deed of trust or other security agreement or other lien or
encumbrance, the provisions of such mortgage, deed of trust beneficiary or secured party with respect to
proceeds arising from an eminent domain taking (including a voluntary conveyance by Landlord) and/or
arising from insurance payable by reason of damage to or destruction of the Demised.Premises shall be

20 ~ji 42.
prior and superior to any contrary provisions contained in this instrument with respect to the payment or
usage thereof.

Subject to the foregoing provisions of this Article XIX, Landlord reserved the right, without notice
to or consent of the Tenant, to assign this Lease and/or any and all rents hereunder as security for the
payment or any mortgage loan, deed of trust loan or other method of financing or refinancing.

Section 19.2. For purposes of this Article, the term "Landlord's Mortgagee" means any party
holdings mortgage or deed of trust on the Demised Premises or any part thereof or all or any portion of the
Shopping Center. A lien held by a Landlord's Mortgagee on the Demised Premises or any portion thereof
or Shopping Center or any portion thereof is herein referred to as a "Landlord's Mortgage".

Section 193. If the Demised Premises are at any time during the term of this Lease subject to a
Landlord's Mortgage then, in any instance in which Tenant gives notice to-Landlord alleging default be
Landlord in performance of any covenant or obligation under this Lease, Tenant will also simultaneously
give a copy of such notice to Landlord's Mortgagee (at the post offlce.addrets as to which such Landlord's
Mortgagee shall have given Tenant notice) and the Landlord's Mortgagee shall have the right (but no
'obligation) to cure or remedy such default of Landlord during the same item that is permitted to Landlord
hereunder for the remedying or curing of such default, plus an additional period of thirty (30) days; and
Tenant will accept such curative or remedial action taken by a Landlord's Mortgagee with the same effect
as if such action had been taken by Landlord, and Tenant shall not seek damages from Landlord or any
other relief or exercise or attempt to exercise any remedies by reason of any such, default of Landlord if
Landlord's Mortgagee shall have cured or remedied such default within the time allowed herein (including
the aforesaid.additional thirty (30) day period) or is then attempting to foreclose its lien upon or obtain
possession of the Shopping Center.

If the Demised Premises, are at any time during the term of this Lease subject to a l..andlord's
Mortgage and Landlord's Mortgagee shall have foreclosed under its Landlord's Mortgage or received a
conveyance of the mortgaged property (covered by Its Landlord's Mortgage) In lieu of foreclosure of shall
have taken poseasion of such mortgaged property or is collection rent from such mortgaged property
pursuant to e rent assignment, then covenants of Landlord in this Lease which pertain to property lying
beyond the boundaries of such mortgaged property shall have no force or effect as against Landlord's
Mortgagee (and Tenant may not, in the event of any violation of any of such covenants by Landlord, abate
rent, terminate this Lease, recover damages from Landlord's Mortgagee or exercise any other remedy
against Landlord's Mortgagee); however, Tenant shall nevertheless retain, as Tenant's sole and exclusive
remedy against Landlord, Tenant's right of action for daniages' on account of such violation as provided for
under Section 17.11 of this Lease.

Section 19.4. Landlord and Tenant each covenant and agree that so long as there is in effect any
collateral assignment of Landlord's rights under this Lease to any Landlord's Mortgagee, none of the
following actions shall be taken without the prior written consent of Landlord's Mortgagee in each instance
(except as maybe permitted in any Landlord's Mortgage):

(a) This Lease will not be modified, altered or amended in any way, unless in writing by both
parties;

(b) Landlord and Tenant will not agree to a cancellation of this Lease, nor will Tenant surrender its
rights hereunder to Landlord (except in instances where in the right to do so is expressly granted to
Tenant under the other terms and provisions of this Lease);

(c) Landlord will not convey its fee interest in the Demised Premises to Tenant in a manner which
will result in merger, nor take any other action which would result in merger, of Landlord's estate in
the Demised Premises with Tenant's leasehold under this Lease, unless, at the time of such
conveyance, Tenant assumes in writing any unpaid balance owing and to become owing .to any
Landlord's Mortgagee which is secured by a collateral assignment of this Lease; but this does not
prohibit an assignment of Landlord's estate to Tenant by assignment specifically made subject to this
Lease; and

(d) Tenant will not prepay and Landlord will not accept prepayment of any installment or payment
of Rental more than thirty (30) days in advance of the due date thereof.

The. provisions of this Section shall be for the benefit of Landlord. Tenant and each Landlord's Mortgagee,
and shall be enforceable by any one or more of such parties.

Section 19.5. Tenant shall execute and deliver to LandlOrd, at such time or times as Landlord may
request, an estoppel certificate stating:

(a) Whether or not the Lease is in fall three and effect

(b) Whether or not the Lease has been modified or amended in any respect, and submitting copies of
such modification or amendments, if any;
; fgd
43
 (c) Whether or not there are any existing delimIts under this Lease to the knowledge of the party
executing the Certificate, and specifying the nature of such defaults, if any; and

(d) Such other information as may be reasonable requested.

The aforesaid certificate(s) shall be delivered to Landlord promptly upon receipt of a written request
therefor, but in no event more than five (5) days following receipt of such request. Failure by Tenant to
timely deliver such information pursuant to such request and upon failure of Tenant to deliver aforesaid
certificate, Landlord is hereby-irrevocably vested with Fill power and authority to act on Tenant's behalf or,
at Landlord's option, shall constitute an event of default hereunder and entitle Landlord to exercise any
remedies permitted under the terms of this Lease without the necessity of farther notice to Tenant
(notwithstanding any prevision to the contrary contained in Article XVII).

Section 19.6. If in connection with Landlord obtaining a Landlord's Mortgage, Landlord's
Mortgagee shall request reasonable modifications in this Lease as a condition of Landlord's Mortgagee to
provide Landlord's Mortgage, Tenant will not unreasonable withhold, delay, or defer its consent thereto;
provided, that such modifications do not increase the obligations of Tenant hereunder or materially affect
the leasehold interest created hereby, or the use or enjoyment of the Demised Premises by the Tenant

Section 19.7, If Landlord herein does not own the fm, to any portion of the property which
constitutes the Shopping Center, but instead holds only a leasehold interest therein under a ground lease,
then in such event, this instrument shall be a sublease agreement subject and subordinate to the underlying
ground lease. If this Lease should be terminated as a result of termination of the said underlying ground
lease (regardless of the season for termination of "cli underlying ground lease), Tenant thall, have no right
or claim against Landlord by reason thereof. This Lease is made by Landlord and accepted by Tenant
subject to any and all matters of record affecting tiut Demised Premises or the Shopping Center.

!Ifl1CLE XX
MERCHANTS ASSOCIATION

Section 20.1. N/A

ARTICLE XX1
NOTICES

Section 21.1. Wherever any notice is required or permitted hereunder such notice shall be in
writing. Any notice or document required or permitted to be delivered hereunder shall be deemed to be
delivered whether actually received or not when deposited in the United States Mail, postage prepaid.
Certified Mail, Return Receipt Requested, addressed to the pasties hereto at the respective addresses set out
in Section 1.1(e) and I.I(Q above, or at such other addresses as they may hereafter specify by written notice
delivered in accordance herewith.

ARTICLE XXII
OPTION

Section 22.1. Contingent upon Tenant satisfying all of the following conditions, (the "Condition")
Tenant is hereby granted an option to extend the Lease Term, as set forth in Article 1(k) (the "Primary
Tent") for an. additional five (5) year period (60) months (the "Extension Term"), the Conditions being
that: (i) Tenant shall have Filly performed all of its covenants, duties and obligations hereunder during the
Primary Turin; and (ii) Tenant shall have given written notice to Landlord not less than one hundred eighty
(180) days prior to the expiration of the Primary Term of Tenant's exercise of such option. (Ill) The
renewal rate of the extended term will beat the then prevailing market rate.

Section 22.2. Time is of the essence in the exercise of this option and should Tenant fail to
exercise this option by timely notice or fail to satisfy the Conditions, this option shall lapse and be of no
further force or effect.

Section 22.3. In the event that Tenant satisfies all of the Conditions and effectively exercises the
option herein granted, then Landlord and Tenant shall execute a new Lease in form and content satisfactory
mall respects to both Landlord and Tenant except: (a) Tenant shall have no further right to renew or
extend the Lease Tciin after the expiration or other termination of the Extension Term, and (,) the Rental
for said oiton tarot shall be at a rate to be negotiated between Landlord and Tenant and mutually
satisfactory to both parties. In the event that Landlord and Tenant have not agreed as to the rental rate for
the option term on or before the expiration date of the Primary Term of this Lease, then either party may
terminate the option granted hereby by written notice delivered to the other party not later than the
expiration date of the Primary Tent of this Lease.

ARTICLE XXIII
MISCELLANEOUS

Section 23.1. Nothing herein contained shall be deemed or construed by the parties hereto, nor by
any third party, as creating the relationship of principal and agent or of a partnership or of a joint venture

22 144
between the parties hereto, it being understood and agreed that neither the method of computation of rent,
nor any other provision contained herein, nor any acts or the parties hereto, shall be deemed to create any
relationship between the parties hereto other than the relationship of Landlord and Tenant. The provisions
of this instrument relating to the payment of Rental, if any, payable by Tenant hereunder ate included solely
for the purpose of providing for the payment of rental in excess of the Rental, and providing for a method
whereby such additional rental is to be measured, ascertained and paid.
Section 23.2. The captions used in this Lease are for convenience only and do not in any way limit
or amplify the teens and.provisions hereof.
Section 23.3. Neither acceptance of Rental by Landlord nor failure by Landlord to complain of
any action, non-action or default of Tenant shall constitute a waiver as to any breach of any covenant or
condition of Tenant contained herein nor waiver of any of Landlord's rights hereunder. No right or remedy
of Landlord hereunder or convcnsnt, duty or obligation of Tenant hereunder shall be deemed waived by
Landlord unless such waiver be in writing, and signed by Landlord. One or more waivers of any covenant,
term or condition of this Lease by either party shall not be construed as a waiver of a subsequent breach of
the same covenant, term or conduliotr The consent or approval by either party to or any act by the other
party requiring such consent or approval shall not be deemed to waive or render unnecessary consent to or
approval of any subsequent similar act.
Section 23.4. Whenever a period of time is herein prescribed for action to be taken by Landlord,
Landlord shall not be liable or responsible for , and there shall be excluded from the computation of any
such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, was
governmental laws, regulations, or restrictions or any other causes of any kind whatsoever which are beyond
the reasonable control of Landlord. At any time when there is outstanding a mortgage, deed of trust or
similar security instrument covering Landlord's interest in the Demised Premises, Tenant may not exercise
any remedies of trust or similar security instrument covering Landlord's interest in the Demised Premises,
Tenant may not exercise any remedies for default by Landlord hereunder unless and until the holder of the
indebtedness secured by such mortgage, deed of trust or similar security instrument shall have received
written notice of such default and a reasonable time for curing such default shall thereafter have elapsed.
Section 23.5. All obligations of Landlord and Tenant under the terms of this Lease shall be
payable and perfonnable in Houston, Harris County, Texas.
Section 23.6. Landlord hereby covenants and agrees that if Tenant shall perform all of the
covenants and agreements herein required to be performed on the part of Tenant, Tenant shall, subject to
the terms of this Lease and any mortgages presently or hereafter existing against the Shopping Center, at all
times during the continuance of this Lease have the peaceable and quiet enjoyment and Possession of the
Demised Premises,

Section 23.7. This Lease contains the entire agreement between the parties, and no agreement
shall be effective to change, modify or terminate this Lease in whole or in part unless such agreement is in
writing and duly signed by the party against who enforcement of such change, modification or termination is
sought
Section 23.8 N/A. See Article XXV, Additional Miscellaneous
Section 23.9. Tenant agrees that it wilt from time to time upon request by Landlord execute and
deliver to the Landlord a statement in recordable form certifying that this Lease is unmodified and in fall
force and effect (or if there have been modifications, that the same is in bill farce snd.effect as so modified)
and further-stating the dates to which rent and other charges payable under this Lease have been paid.
Section 23.10. The laws of the State of Texas shall gowns the interpretation, Validity,
performance, and enforcement of this Lease. If any provision of this Lease should be held to be invalid or
unenforceable, the validity and enforceability of the remaining provisions of this Lease shall not be affected
thereby.

Section 23.11. The terms, provlsioss, and covenants contained in this Lease shalt apply to ,inure
to the benefit of and binding upon the parties hereto and their respective heirs, successors in interest and
legal representatives except as otherwise herein expressly provided.
Section 23.12. With respect to terminology in this Lease, each number (singular or plural) shall
include all numbers, and each gender (male, female or neuter) shall include all genders.
Sectioit 23.13. In any circumstances where Landlord is permitted to eater upon the Demised
Premises during the Lease Term, whether for the purpose of curing any default of Tenant, repairing damage
resulting from fire or other casualty or an eminent domain taking or is otherwise permitted hereunder or by
law to go upon the Demised Premises, no such entry shall constitute an eviction or disturbance of Tenant's
use and possession of the Demised Premises or a breach by Landlord of any of its obligations hereunder or
render Landlord liable for damages for loss of business or otherwise or entitle Tenant to be relieved from
any of its obligation hereunder or grant Tenant any right of set-off or recoupment or other remedy; and in
connection with any such entry incident to performance of repairs, replacements, maintenance or
Construction, all of the aforesaid provisions shall be applicable notwithstanding that Landlord may elect to

' ''
23 45
take building materi Is in, to or upon the Demised Promises (intl may be required or utilized in connection
with such entry by Landlord.

Section 23.14. In the event Landlord commences any proceedings against Tenant for non-
payment of Rental or any other sum due and payable by Tenant hereunder, Tenant will not interpose any
counterclaim or other claim against Landlord of whatever nature or description in any such proceedings,
Landlord and Tenant stipulate and agree that, in addition to any other lawflil remedy of Landlord, Upon
motion of Landlord, such counterclaim or other claim asserted by Tenant shall be severed out of the
proceedings instituted by Landlord and Landlord may proceed to final judgment separately and apart from
and without consolidation with or reference to the status of such counterclaim Or any other claim asserted by
Tenant.

Section 23.15. Tenant stipulates and acknowledges that the existence of any breach or Threatened
breach of any covenant, duty or obligation of Tenant herein contained would constitute a severe inspediinent
to the ability of Landlord to operate the Shopping Center and to receive the benefits contemplated by this
Lease; that the existence of such breech or threatened breach will cause irreparable damage to Landlord for
which there would not be an adequate remedy at law and for which no other equitable remedy would be
adequate or available, and accordingly Landlord shall be entitled to enjoin any such breach or threatened
breach without the necessity of proving the inadequacy of any legal remedy or irreparable harm. The
remedies of Landlord hereunder shall be deemed cumulative and no remedy o Landlord, whether exercised
by Landlord or not, shall be deemed to be in exclusion of any other. Except as maybe otherwise herein
expressly provided, in all circumstances under this Lease where prior consent of one party ("first party") is
required before the other party("second party") is authorized to take any particular type of action, the matter
of whether to grant such consent shall be within the sole and exclusive judgment and discretion of the first
party; and it shall not constitute any nature of broadi by the first party hereunder or any defense to the
performance of any covenant, duty or obligation of the second party hereunder whether or not the delay or
withholdingof'such consent was prudent or reasonable or baled on good cause.

Section 23.16, In all instances where Tenant is required hereunder to pay any sum or do any act at
a particular indicated time or within an indicated period, itis understood that time is of the essence.

Section 23.17. The obligation of Tenant to pay all rent and other sums hereunder provided to be
paid by Tenant and the obligation of Tenant to perform Tenant's other covenants and duties hereunder
constitutes independent, unconditional obligations to be performed at all times provided for hereunder, save
and except only when an abatement thereof or reduction therein is expressly provided for in this Lease and
not otherwise. Tenant waives, and relinquishes all nghts which Tenant might have to claim any nature of
lien against or withhold, or deduct from or off.tet. against any rent and other sums provided hereunder to be
paid Landlord by Tenant Tenant waives and relinquishes any tight to assert, either as a claim or as a
defense, that Landlord is bound to perlbrm or liable for the non-performance of any implied covenant or
implied duty of Landlord not expressly herein set forth.

Section 23.18. Under no circumstances whatsoever shall Landlord ever be liable hereunder for
consequential damages or special damages; and all liability of Laxidlord for damages for breach of any
covenant, duty or obligation of Landlord hereunder may be satisfied only out of.the interest of Landlord in
the Shopping Center existing at the tiate any such liability is adjudicated in a proceeding as to which the
judgment adjudicating such liability is non-appealable and not subject to further review. it is intended that
Landlord shall not have any personal liability under this Lease, and in no event shall a judgment for any
deficiency be shught, dbtained or enforced against any party of Landlord under the terms hereof.

Section 23.19 N/A

Section 23.20. In no event shall Landlord, including any successor 'or assignee of all or any.
portion of Landlord's, interest in the Shopping Center, be personally liable or accountable with respect to
any provision of this Lease. If Landlord shall be in breach or default with respect to any obligation
hereunder or otherwise, Tenant agrees to look for satisihetion solely to Landlord's interest in the Shopping
Center. The provisions, of this Section 23,20 are not intended to; and shall not, limit any right that Tenant
might otherwise have to obtain injunctive relief against Landlord or Landlord's successors in interest, or
any other action not involving the personal liability of Landlord to respond in monetary damages from
assets other than Landlord's Interest in the Shopping Center, or any suit or action in connection With
enforcement of collection of amount which may become owing or payable under or on account of insurance
maintained by Landlord,. In the event Landlord transfers this Lease, other than as security for a mortgage,
the Landlord (and, in case of any subsequent transfms or conveyances, the then Grantor) shall, upon such
transfer be relieved from alt liability and obligations hereunder arising after such transfer.

Section 23.21 N/A

Section 23.22. N/A

Section 23.23. No payment made b' Tenant or received by Landlord in an amount less than the
amount herein stipulated shall be deemed to be other than on account of the earliest received payment, nor
shall any endorsement or statement on any check or any letter accompanying any check or payment as
Rental or any other sum payable hereunder to deemed an accord and satisfaction, and Landlord may accept

24 u __ 46
any such check or payment without prejudice to Landlord's right to recover the balance of such amount
from Tenant or to pursue any other remedy in this Lease or by law provided.

Section 23.24. During the leon of this Lease Tenant shall not install any pay telephones in or
about the Demised Premises or the building (the "Building") of which said premises are a part without the
prior written consent of Landlord. Any attempt to install or the actual installation by Tenant of pay
telephones in or about the Demised Premises or the Building shall constitute a default by Tenant under this
Lease and Landlord may pursue any of the remedies provided in this Lease or available at law or in equity
for Tenant's defhult. In the event Tenant requests Landlord's consent to installation of pay telephones in or
about the Demised Premises or. the Building, Landlord shall have the right (in addition to its absolute right
to rethae to consent thereto) to condition its consent upon payment by Tenant to Landlord of all or any part
of the consideration to be received by Tenant from the use and operation of said pay telephone service.

ARTICLE XXIV
ENVIRONMENTAL LAW COMPLIANCE

Section 24.1. The parties acknowledge that there are certain federal, state and local laws,
regulations and guidelines relating to or affecting the Demised Premises in the Shopping Center concerning
the impact on the environment of construction, remodeling, land use, maintenance and operation of
structures in the conduct of business. Lessee will not cause, or permit to be caused, any act or practice, by
negligence, omission, or otherwise, that would adversely affect the environment or do anything or permit
anything to be done that would violate any of said laws, regulations or guidelines. Any violation of this
covenant shalt be an event of default under this Lease.

Lessor shall be responsible for any environmental problems in the Demised Premises that
originated before Lessee's occupancy. Lessor shall also be responsible for any environmental problem in
the Shopping Center common areas not the responsibility of Lessee. Such environmental problems include
but arc not limited to formaldehyde foam insulation, asbestos, dioxin and radon gas..

Lessor agrees to indemnify and hold Lessee harmless from and against any liability or damage
which Lessee may incur by reason of contaminants, hazardous waste or other similar types or forms of
hazards as long as such liability was not due to Lessee's fault or negligence. Lessee shall not be required to
pay rent for any period in which in its sole judgment, the Premises are not safe to occupy because of an
environmental problem not caused by Lessee. If Lessor cannot correct said problem within one hundred
twenty (120) days, Lessee, at its option, may cancel this Lease.

25 . - 1- 47.
 ADDITIONAL PROVISIONS

1st Extension Term

A period of sixty (120) months at the then fair market value

• The Conditions which must be met: (a) Tenant shall have filly performed all of its covenants,
duties and obligations hereunder .during the proceeding Term; and (b) Tenant shall have given written
notice to Landlord not less thank one hundred eighty (180) days prior to the expiration of the current Term
of Tenant's intention to exercise such option.

• , ,
4t'44'
EXECUTED this the day of Ap[, 2010 (as to LANDLORD) and the day of September
,2010(as to TENANT).

LANDLORD:
MarineCorp International IC

rme*
std

TENANT:
OUTLAW COUNTRY, L.LC

President
KYLE Toplars TQ,JY AtL •

26 1 48
EXHIBIT "A-I"

CYPRESS WOOD SHOPPING CENTER

Being a tract or parcel containing 7.0495-acres of land in the George H. Delesdernier Survey, Abstract 229,
Hams County, Texas, and being the remainder of that certain 7.1892 acre tract conveyed to Consni
Investment Properties of record in Harris County Clerk's File (H.C.C.F,) No. 0823180 and more
particularly described by metes and bounds as follows (all bearings arc referenced to the Texas State plane
CoOrdinate System, South Central Zone):

BEGINNING at a found 5/8 inch iron rod at the most easterly corner of said 7.1892 acre tract and the most
northerly corner of that certain 7.1016 acre tract of record in 1-LC.C.F. No. 11879992 in the southwesterly
right-of-way (R..O.W.) line of Kuykendabl Road, 100.00 teat wide;

THENCE, departing said southwesterly R.O.W. line, South 55°4349" West, 449.15 feet along the line
common to said 7.1892 acre tract and said 7.1016 acre tract to a found 5/8 inch iron rod at the most
southerly corner of said 7,1892 acre tract and the most westerly corner of said 7.1016 acre tract:

THENCE, North 34°161 I I" West, 731.24 feet along the line common to said 7.1892 acre tract and a 9.4153
acre tract of record in H.C.C.F. No. H806216 to a found 5/8 inch iron rod for the most westerly corner of
the herein described tract in the southeasterly R.O.W. line of Louetta Road, 100.00 that wide;

THENCE, North 55°56'OZ" East, 299.15 feet along said southeasterly R.O.W. line of Louetta Road to a
found one inch iron rod at the intersection with the line common to said 7.1892 acre tract and a 0.5514 acre
tract of record in H.C.C:F. No, 0882804 and corrected under H.C.C.F. Number 11384075;

THENCE, departing said southeasterly R.O.W. line, South WWII" East, 140.00 feet along a line
common to said 0.5514 acre tract and said 7.1892 acre tract to a found one inch iron rod;

THENCE, continuing along a line common to said 0.5514 acre tract and said 1.1892 acre tract, North
55°56102" East, 150.00 feet to a found 5/8 inch iron rod in the aforementioned southwesterly R.O.W. line
of Kuykendahl Road;

THENCE, South 34°161 1 1" East, 589.64 feet along said southwesterly R.O.W. line of Kuykendahl Road to
the POINT OF BEGINNING and containing 7.0495 acres of lend.

27
EXHIBIT "B"

GUARANTY

FOR VALUE RECEIVED, in consideration for and as an inducement to MarineCorp International LC, ("Landlord") to
enter into the foregoing Lease with OUTLAW COUNTRY, L.L.C.
"(Tenant"), for premises located in the Cyprcsswood II Shopping Center, the undersigned, Tony Miller,4.
("Guarantor") hereby guarantees to Landlord, its legal representatives successors and assigns, the full and faithful
perfonnance and observance by Tenant, its successors and assigns, of all terms, covenants, conditions, agreements,
restrictions and limitations of the Lease (of the aforementioned premises). Including without limitation the payment 01
all Rent, together with the payment of all costs, attorneys fees and other expenses incurred by Landlord in enforcing
such performance and observation.

s The Guarantor Is an Individual, and Guarantor represents that he will receive substantial benefit and
con ideration ass result of said Lease entered into with Tenant.

Guarantor further covenants that; (1) the liability of the Guarantor is primary, and shall not be subject to
deduction for any claim of offset, counterclaim or defense which Tenant may have against Landlord, and Landlord may
proceed against guarantor separately or jointly, before, after or simultaneously with any proceeding against Tenant for
default; (2) this Guaranty shall not be terminated or impaired in any manner whatsoever by reason of the assertion by
the Landlord against Tenant of any of the tights or remedies reserved to Landlord pursuant to the provisions of the
Lease, by reason of any summary or other proceedings against Tenant, or by reason of any extension of time or
Indulgence granted by Landlord to Tenant; (3) Guarantor expressly waives any requirement of notice of non-payment,
non-performance or non-observance, or proof of notice or demand; and (4) this Guaranty shall be absolute and
unconditional and shall remain and continue in full force and effect as to any and all renewals, extensions,
amendments, additions, assignments, subleases, transfers or other modifications of the Lease. All obligations and
liabilities of Guarantor pursuant to this Guaranty shall be binding upon the heirs, personal representatives, successors
and assigns of the Guarantor, This Guaranty shall be governed by and construed in accordance with the laws of Texas,
This Guaranty will remain in full effect up to and including October 31, 2015.

Dated: '- 10
Wlthess or Attest; Guarantor;

J CIO i
san Karen Jordan fony Miller ::1 ar
Witness Karen Jordan
6100=0
Social Security Number
iwv ~

18433 Kuykendalil, Spring- TX 77379
Address and. Telephone Number

STATE OF TEXAS
COUNTY OF HARRIS

____________________________
undersigned known to me to be
authority, on this day personally appeared
the person whose name is subscribed to the
foregoing ifftument and acknowledged to inc that he executed the same for t urPo se and consideration therein
expressed.

GiVEN UNDER MY HAND and scsi of otMcethisi(ay of

&Zia— 196~''
Notary
_P~

• ' I , cra

28 1 50
EXHIBIT "C"
"AS-IS" Except as follows:
Landlord will provide a new air-conditioning unit with a 90 day warranty. In addition , Landlord
will make all necessary repairs to the roof.
Landlord will provide a seventeen ($17.73) dollar and Seventy three PSF Tenant Improvement
allowance which will be paid to Contractor as follows:
Upon the signing of a construction contract with Tony Miller , receiving a certificate of Insurance
naming Landlord and Management Company as additional Insured , along with a list of all
subcontractors with their certificates of Insurance, approved construction plans and all required
permits, and the following work Is completed: all Plumbing, framing, electrical and security &
camera Rough In, Landlord will pay one third of the total allowance.
The second third will be paid upon the presentation of partial complete lien waivers from all
subcontractors and the completion of drywalis, bar fabrication, bathroom manufacturing and
bathroom fixture installation.
The last payment, less a ten (10%) percent retainer (payable with final sign off of Tenant
Improvements, between Landlord and Tenant), will be paid upon receipt of an occupancy permit and
all final lien waivers -
Landlord shall allow all leasehold improvements with a tenant allowaflee of $17.73 per RSF.

29 51
EXHIBIT "1)"
TENANT SIGNAGE CRITERIA

CYPRESS WOOD II SHOPPING CENTER

jACE

These sign criteria are hereby set forth by Zenith Real Estate Services, Inc. as agent MarineCoip,
International, LC, a Texas limited liability company ("Landlord") to govern any and all signage by tenants
leasing space in the above referenced shopping center.

These criteria serve to protect you, the tenant, from signs of poor quality. They also insure the center's
owners and attractive center with coordinated signage that is of good quality.

Signage Identification - Tenant will be permitted, at his expense, to install a sign on Xuykendahl
Street.. The sign will be located between the two oak trees directly south of the main pylon. The
specifications and exact location subject to final approval by Landlord.

REQUIREMENTS - ALLOWANCE - RESTRICTIONS

One of your approved sign contractors should be given a copy of this criteria to serve as the guide in
preparing a design and cost estimate for you.

Prior to manufacturing any Bignage, you or your sign company must submit three copies of the approved
sign company's design to the offices of the Landlord These drawings must clearly show the sign on the
building's facade and delineate all construction techniques and materials. It must state the center's name,
tenant's name and location of the lease space in the center.

No sign may be erected without first securing the written approval of the LandlorcL

The tenant and sign compahy shalt be held liable and shall bear all costs for removal and/or correction of
signs, sign installation and damage to building by signs that do not conform to sign criteria as put forth in
these specifications and accompanying drawings. This is at the discretion of the center's owner.

All signs are to be constructed and installed at tenant's expense,

All necessary permits for signs and their installation shall be obtained by the tenant or his sign contractor.
The City or other governmental agency having jurisdiction over the signage in this center is set forth in the
SPECIFICATIONS section of this criteria.

Sign companies must conform to the following criteria.

1. They must be licensed by the City of Houston under their own name; i.e., Acme Signs listed with
the city as A & b Electric is not acceptable.

2. They must be capable of manufacturing signs according to the basic criteria for that center.

3. They must be capable of manufacturing signs according to the criteria set forth by the National
Electrical code in Article 600 and Chapter 46 of the City of Houston Building Code (Houston Sign
code).

4. Sign companies whidh are acceptable by the Landlord and who meet all of the above
requirements are:

a. Federal Sign o. Texas Sign Source e, Neon Electric Corporation

h. Coast Graphics & Signs d. Advanced Signing

FASCIA SIGNAGE

All tenants must have an exterior illuminated sign that conforms to these sign criteria.

All signs are to be located on the shopping center's facade. Signs shall be in the form of individual full
metal channel letters, internally illuminated, and mounted on a full metal raceway which is attached to the
building's facade.

The overall maximum length of a sign shall not exceed 800K of the lease frontage.

30
iJ;< /52,
 thL It
Ir or
I I.mIer
I; 20 - u• -

V
I
I

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I
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- 35

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97m
m
 1/1

Tenant must use a clean, readable letter style. Tenant letters may vary between a minimum of 20" high and
a maximum of 36" high; subject to the limitations set forth under the specifications of the center. Sign
letters are to be 5" deep.

Raceway shall contain all secondary wiring and transformers. Raceways dimensions shall be determined by
letter height as follows:

LETTER HEIGHT RACEWAY DIMENSIONS
20"- 24" 8"h X 7"d
25" -30" (where allowed) 9"h X 7"d
31"- 36" (where allowed) 10"h X 7"d

Signs are to be mounted on the facade as set forth in the specifications for this center below. SEE
DRAWING A.

CONSTRUCTION SPECIFICATIONS

Fabricated metal letter backs and returns are to be constructed of .063 gauge aluminum with interrupted
Halyard electric welding, or .040 gauge aluminum with returns pop riveted to the back of the letter with on
pop rivets visible. Raceway to be of similar construction.

"Channel Lume" type, channel letters utilizing "Armor Ply" plywood as letter backs are prohibited for use
on the shopping center's facade.

The individual letters are to be either Iron Enamel over steel or Baked Enamel over aluminum. The interior
pf.a1l letters are to be painted white.
-

Note: These letters may take six to eight weeks to fabricate and install. Raceway to be of similar
construction.

Letters 24" high and larger shall have two rows of 13mm neon. Letters smaller then 24" shall have single
row 13mm neon.

Neon shall be 6500 K with 30 ma. transfonners.

All letters shall have a plexiglas face of 3/16" thick plexiglas. The plexiglas shall be retained with a I"
"Jewel Lite", or equal, acrylic over metal trim molding.

All fasteners, screws, bolts and spacers used in the fabrication 'of signs shall be'nonferrous and/or
noncorrosive.

I. LETTER HEIGHT:

2. . PLEXIGLAS COLOR

3, NEON COLOR:

4, LETTER RETURN COLOR:

5. TRIM CAP COLOR:

6. RACEWAY COLOR:

7. LOCATION ON FASCIA:

8. FASCIA MATERIAL:

The governmental agency with jurisdiction over the permitting and operation of signage at Cypresswood II
Shopping Center is the City of Houston.

INSTALLATIO

The sign will be attached to the building facade by having the raceway attached to the facade as per
attached "Drawing A".

Wiring from the letters shall pass first through conduit through facade to electrical service provided by the
tenant from the tenant's electrical panel. Where facade is penetrated for mounting and conduit, it shall be
sealed to be made watertight This is the responsibility of the sign contractor. SEE DRAWING B
ATTACHED.

PROHIETTED SIC,NAGE

Flashing, occulting or moving signs are prohibited.

31 1 54
 Sign text shall consist of store name only. D escription of service. products or trade names is prohsbitcd.
Box type of signs is prohibited.
Banner flags or pennants are prohibited.
Trailer, marquee type signs are prohibited. Any such signs installed on the premises of this center will be
removed by Landlord at Tenant's expense.
PYLON SIGN CRITERIA
The criteria for all pylon signs are as follows (unless a pylon supplement sheet is attached):
• a. Face material for signs smaller than 35 sq. ft. will be flat 3116" lextm with back sprayed copy.
I,. Face material for signs greater than 36 sq. ft will be flex face with heat transfer copy,
c. Lighting to be by 7800 in.u. high output fluorescent lighting.
d. Colors to be dark bronze background with white copy.
e. Copy on sign to consist of name of store only.
E Position of sign on pylon must be approved by owner.
JON SIGN PRICES ACCORDING TO SIZES

The maintenance agreement on the pylon sign is detailed below according to the size of the sign.
a. 24 s.f. or less No Charge to Tenant, In exchange for a Personal Guarasty.
b. 24 to 48 s.f. = $Q0.psr.eeth. IJ
c. Over 48 s.f. = $1 O...r.nth. .(J
Maintenance includes: replacenient of all lamps, ballasts, sockets, and wiring; crane service; annual
cleaning of Individual signs; and bi-annual painting of steel.

f\A

32 55
 EXHIBIT "E"

OPTION TO EXTEND LEASE

Contingent upon Tenant satisfying all of the required conditions, (thd"Conditions") Tenant is
hereby granted One (I) separate Option Period (the "Extension Terms") to extend the Lease Term, as set
forth in Article 1, 1.1(h) (the "Primary Term"), as follows:

1st Extension Term

A period of sixty(l2) months at the then fair market value

The Conditions which must be suet: (a) Tenant shall have filly performed all of Its covenants,
duties and obligations hereunder during the proceeding Term and (b) Tenant shall have given written
notice to Landlord not less thank one hundred eighty (I go) days prior to the expiration of the current Term
of Tenant's intention to exercise such option.

33 56
 EXIIII3IT 9"

OPTION TO TJiRMNATE LEASE

N/A

4;)\457.
34
 ,.. I.

EXHIBIT "0"

Between MarlueCorp international (Landlord) and THE CHOPPER GROUP L.L.C.. (Teiiant)

I. See Exhibit "C", items 1-2
2. See Exhibit "D", Preface section
3. See Exhibit "C", item 3
4. Upon signing this lease agreement the tenant will not forfeit any individual or corporate rights as
guaranteed by the State of Texas or the Federal Government.
5. See Article I, item h, and item u. See Exhibit "C", item 4
6.

Li

•
•

35 58
 STANDARD LEASE CONTRACT

CYPRESS WOOD II SHOPPING CENTER
SPRING, HARRIS COUNTY, TEXAS

BACKWOODS COUNTRY CLUB, L.L.C. as TENANT

Article Summary of Basic Lease Provisions and Certain Defined Terms ........................ L... 2
Article II G ranting Clause ............................ . .............................. ...........................................4 .

Article III Construction And Acceptance of Premises.... 5
Article IV Rentaland Percentage Rental ..... ... ................................................. .. ...................... .. 6
Article V CommonArea ........................................................................................................ .7
Article VI Use and Care of Premises ............................................. .. ..................................... 9
.

Article VII Maintenance and Repair of Premises; Alterations, Landlord's Right of Access.... .I
Article VIII Signs; Store Fronts; Roof .......... 14
Article IX Utilities....................................................... ............................................................ 15
Article X Indemnity, Public Liability, Builder's Risk, and Other Insurance............16
Article XI Non-Liability for Certain Damages ..................................................................... .. 17
Article XII Fireor Other Casualty.......................................................................................... 17
Article XIII Subrogation...........................................................................................................18
Axticle XIV Condemnation.................................................. 19
Article XV Assignmentand Subletting ......................... . ........................................................ ..20
Article XVI Taxand Insurance Costs ...................................................................................... 21 .

Article XVII Default by Tenant and Remedies ........................... .................................. ............22
.

Article XVIII HoldingOver ............. . ......................... .................... 27
Article XIX Landlord's Mortgagee ..................... . ................................................................... .. 27
Article XX MerchantsAssociation .................. . ............... . ......................................................... 30
Article XXI Notices ................... . .......................... . .................................................................. .. 30
Article XXII Option............................................... . ................................ . ................................. ..30
Article )CXIfl
Article XXIV Environmental Law
Article XXV Additional Miscella

7'V
- 59
 STANDARD LEASE CONTRACT

ARTICLE I

SUMMARY OF BASIC LEASE PROVISIONS AND CERTAIN DEFINED

Section 1.1 When used herein, the following terms shall have the indicated meanings:

a. DATE OF LEASE: (Reference Only) September 20,2010

b. LANDLORD: MarineCoep Internation I Ltd

c: ADDRESS OF LANDLORD: 2900 Wilcrest, Suite 10)
Houston, Texas 7742

d. SHOPPING CENTER: CypresswQod 11 a commercial shopping center which is located upon the lot,
tract, or parcel of land situated in Hauls County, Texas, as more particularly described in E) hibit "A-i"
attached hereto, together with such additions and extensions as Landlord may from time to time designate as
included within the Shopping Center.

e. TENANT: BACKWOODS COUNTRY CL JB, LLC

DL #: -
SS #'.
DL #: 29057982
f. TENANT'S ADDRESS: 18443KuykendaM
Spring, Texas 77379
Phone 4:

NOTICE ADDRESS: Same___________

Phone 4:

BILLING ADDRESS: Same___________

Phone #:
g. TENANT'S TRADE NAME: Same, BACKWOODS COUNTRY CLUB, L.L
ii, DEMISED PREMISES: An area of approximately 10,99 square feet
i. ADDRESS OF DEMISED PREMISES: 18443 KuykendahlRo
• Spring, Texas 77379

j. PERMITTED USE: Dance and Music Hall

k. LEASE TERM: The term of this lease shall commence on the "Commencement Date", and all
terminate on the last day of the sixty fourth (64) fill calendar month thereafter, unless sooner te mated in
accordance with the provisions hereinafter set forth.

I. COMMENCEMENT DATE: November 1, 2010

m. EXPIRATION DATE: February 29, 2016

n. ESTIMATED COMPLETION DATE: January 31,2011
(See Section 3.3)

o. DEFAULT DEPOSIT: (See Section 17.3) $ 13,28925

p. PREPAID RENTAL: to be applied to $ 10,539.75
first monthly installments of rental

q. MONTHLY SALES HURDLE: N/A____________
(See Section 4.4)
/

2
60
 r. MONTHLY PERCENTAGE RENTAL; N/A___________
(See Section 4.4)

a. SIGN CHARGES (See Section 8.1 & 8.2)
Pylon Sign Charge NIA_
Under Canopy Sign Charge N/A______________
Fascia Sign Deposit N/A_______________

November 1-February 2 -2011 Free

t. MONTHLY RENTAL -.(See Sections 4.1 & 4.2)
$10,539.75 per month for year I from March 1,2011-February 29,2012
$13,014.30 per month for year from March 1,2012-February 29,2013
$13,930.80 per month for year 3 from March 1,2013-February 29, 2014
$14,847.30 per month for year4 from March 1, 2014-Februnry29, 2015
$15,763.80 per month for year 5 from March 1, 2015-Febriiaiy 29, 2016
Charges
Rent Start Date: March 1,
I Commencement Date - November 1, 20j 2011
u. MONTHLY ESTIMATED COMMON $4,179.24 per month
AREA MAINTENANCE: (See Section 5.2) the demised premises.
v. MONTHLY ESTIMATED TAX AND Included in the CAM
INSURANCE CHARGE: (See Section 16.1)

w. MONTHLY REFUSE CHARGE: Included in the CAM
(See Section 6.4)

• x. MONTHLY ESTIMATED UTILITY Responsibility of Ten
• CHARGE: (See Section 9.1)

y. MONTHLY ADVERTISING CHARGE: N/A
z. MISCELLANEOUS; Included in the CAM

an. GROSS LEASABLE RETAIL AREA: Presently comprises 46,998 square fret subject to expansion by
the construction of additional building, or the reduction of leasable retail area, if any, in the Sho 3 ping
Center.
•
bb. GUARANTY: The guaranty attached hereto and made apart hereof as Exhibit 13".

In the event of any conflict between any Smnmary of Basic Lease Provisions on the dno hand and
the balance of this Lease on the other, the latter shall control. Each of the foregoing basic leae provisions
and defined terms shall be consitued in conjunction with the references thereto contained in the other
• provisions of this Lease and shall be limited by such other provisions. Each reference in this .,ease to any
of the foregoing basic lease provisions and defined terms shall be construed to incorporate 4ich teens set
forth above under such basic lease provision or defined term.

ARTICLE II
GRANTING CLAUSE

Section 2,1. Inconsideration of the obligation of Tenant to pay rent as herein p ided and in
• . consideration of the, other terms, covenants and conditions hereof, Landlord hereby demises ,nd leases to
Tenant and Tenant hereby leases from Landlord the Demises Premises as described in Section 1.1(h). The
"area" of the Demised Premises when referred to In this Lease shall be computed from the meaurements to
the exterior of outside walls of the building and to the center of interior demising walls. TO {AVE AND
TO HOLD said Demised Premises for a term commencing on the "Commencement Date" and 4xtending for
said number of months specified in Section 1.1(lc), all upon the terms and conditions set forth is1 this Lease.

Section 2.2. The purpose of the plot plan attached hereto as Exhibit "A" is to set forth the outline
of the Demised Premises in relation to the general layout of the Shopping Center, and it is expressly
understood and agreed:

(a) That the general layout of the Shopping Center asset Ibrth thereon is subject to all of the terms
and conditions of the Lease, including, without limitation, the provisions regarding future changes,
expansion, rules and regulations; and

(b) That no representation or warranty is made as to the exact location of any other articular
building, or as to the time, [fever, that any other buildings and/or store space or spaces mal or might
be erected and occupied or as to the continued occupancy by other tenants of the Shopping Center of
any other building or buildings or store space or spaces, or the purpose for which said oth building
or buildings and/or store space or spaces may or might be used.

3
 Section 2.3. So long' as Tenant shall pay the Rental, Estimated Common Area Maintenance
- Charge, Estimated Tax and Insurance Charge, and all other Sums or other payment due hereundr and shall
- observe and perform all of the covenants on Tenant's part to be observed and performed her4under, and
Tenant is not in default hereunder, tenant shall peaceably and quietly hold and enjoy the Demisd Premises
for the entire term hereof without , interruption by Landlord or person or persons lawfully qr equitably
claiming by, through or unlerLandiord, subject, nevertheless, to all of the terms and provisions of this
Lease and to all of the reservations, restrictions, encumbrances and limitations of record affectin* the title to
or use of the demised Premises or the property upon which the Shopping Center is situated.
• Section 2.4: Notwithstanding the fact that the Lease Term will commence at a date su bsequent to
• - :
the execution of this instrument by Landlord and Tenant such parties intend that each shallrave vested
•
rights immediately upon the signing of this instrument and that this instrument shall be fully bir ding and in
full force and effect from and after execution hereof by Landlord and Tenant. In the event d at the lease
term shall not -have, in fact; commenced within two (2) years from the date hereof (and if this Lease shall
• not theretofore have been canceled by Landlord as herein permitted), then, in addition to all the other rights
an d remedies of Landlord tet l'orth herein, this Lease shall thereupon be automatically null and void and of
. . no farther fomé and effect, and neither party shall have any fiather obligation or liability hererm or.
ARTICLE ill
CONSTRUCTIONS AND ACCEPTANCE OF PREMISES
. . •.. •• .
Section 3.1. If this Lease is for a portion of the Shopping Center already constructed, Tenant
acknowledges that it has, prior to the execution hereof; inspected the Demised Premises, that Landlord's
work is completed (expect as may be otherwise expressly provided in Exhibit C attached her o), and that
-. . . Tenant has accepted the Demifed.Prdmises in its "AS-IS" condition, it being agreed that dlord shall
••. . • . have no liability., or responsibility for defects in the Demised Premises, including latent efects. By
occupying the Demised Premises, Tenant shall be deemed to have accepted the se and to have
.. ..........
.' . acknowledged that the same fisl comply withLandlord's obligations and covenants boric T, as shown
on Exhibit C. Except for roof repair and Bvae units replaced with an amount equal to 60 tons.
Electrical servke brought into the space equal 1000 amps. -

Sectiosi 32. Subject to the provisions contained in Section 3.4 below, if this Lease is fur a portion
.. . .. . .. of the Shopping Center to be constructed, Landlord shall construct and deliver to Tenant t1e Demised
Premi ses subshmtially in accordace withLandlord's and Tenant's Architectural and Constri Work
•. attached hereto as Exhibit "C".
•. Section 13: Tenant agrees to open the Demised Premises to the public for business within thirty
(30) days after the same is ready for occupancy. Except an otherwise provided under Article I c f this Lease,.
...
..

. the "Commencement Date" of .this:Lèase shall be the earlier to occur of (I) the date thirty (30) days after
Landlord has notified Tenant that the Demised Premises are ready for occupancy or (ii) the datt upon which
• Tenant opens the Demised Premises to the p[public for business. In the event the provisions this Section
3.3 with respect to the establishment of the Commencement Date of this Lease conflict or ae otherwise
inconsistent with the Commencement Date specified in Article I of this Lease, the provisions )f Article Ill
shall govern and control the provisions contained In this Section 3.3, which for all purposes shall be
construed to have been aupeded by the terms of said Article Hi. Any occupancy of he Demised
. . . . Premises by Tenant prior to-the Commencement Date shall be subject to all of the terms and wovisions of
this Lease excepting only those-requiring the payment of Rental. Tenant agrees that at d a request of
Landlord it will, following the Commencement Date, execute and deliver a recordable she form lease
containing, the basic provisions of this Lease, acknowledging that Tenant has accepted posession, and
reciting the exact Commencement Date and termination date of this Lease.

Section 3.4 N/A

Secticti 3.5. If Landlord shall not be able, by theme of such efforts and means as dlord,in its
S
exclusive judgment findssuitable convënient,.to obtain all requisite governmental, quasi-g vemintntal,
-.. . regulatnty authority and oilxr-permits, licenses, consents and permissions (collectively cal ,d "builng
. . . .
.•.
- permit!) relating'to Landlord's'cottuction with respect to the Demised Premises or any other requisite
. ... S

..... .
consent 'in connection with sUch bhtruction., then in any of the aforesaid circumstances, L6ndlord may
- .. - S ,• terminate this Lease at any time prior to the Commencement Date by giving Tenant written fltice thereof.
• .• .• - '. - . . -. Upon such termination, this Letse will be of no further force or effect, and neither party i ill have any
.• •- • tlsrther' obligation Or liability heretinder. No expenditure by Tenant or incurring of any liability for
S
• • ,•. merchandise, fixtures equipnièntOE' labor or material or otherwise shall alter or affect the iiights of said
• .• -. . parties as set forth in this Section 3.5. -
• ..' S .
Section 36. Except he otheise provided in this Article 10 above, all conscti in by Tenant
- . .• •• shall be governed by the provisions specified In Article VII hereof, Including work to be 1 ierformed by
• Tenant as described in Exhibit "C".
• '
:
:' ' • .' Section 3.7 'Landld's bbljàflon to construct and deliver to Tenant the Demised P mises within
' .
the time period set forth herinabove shall be extended by a period of time equal to the total f"excussble
""'. ' ' - ...... • delays" (as hereinafter' defined). for. the purposes of this Section 3.7, the term "excusable delays" shall
-. •- •
• meah all dólays cated bjgoeimnental restrictions, strikes, lock-outs, shortages of labor or material, acts

r i-' 4
VIA
 ARTICLE IV
RENTAL

Section 4.1. All rental shall accrue hereunder from the Commencement Date as dfined above,
and shall be payable at the place designated for the delivery of notices to Landlord at the time fpaywent.
Section 4.2. Tenant shall pay to Landlord Rental in monthly installments in the amomts specified
in Section 1.1(t) above. The first such monthly installment shall be due and payable on jr before the
Commencement Date, and installments in the respective amounts specified in Section 1.1(t) shall be due
'and payable on or before the first day of each succeeding calendar month during the Lease Term Rental
will be considered late after the 10th day of each succeeding calendar month during the Lease Term;
Provided that if the Commencement Date should fall on date other than the first day of a calendar month
there shall be due and payable on orbefore such date as Rental for the balance of the calendar nonth during
which such date shall fall, a sum equal to that proportion of the Retital specified for the firstclendar month
as herein provided, which the number of days farm the Commencement Date to the end o the calendar
month during which the Commencement Date shall fall bears to the -total number of days in su$h month, and
all succeeding installments of the Rental shall be payable in the respective amounts specified in Section
11(t) on or before the first day of each succeeding calendar month during tIre Lease .Tcinr provided,
farther, that if the Lease Tenn ends on other than the last day of the month, the last month fr installment
shall be reduced proportionately.
Section 43. Commencing with the second Lease Year (as hereinafter defined), the Ptental shall be
automatically adjusted (without the necessity of the execution of any lisriber instrument) aer the end of
each Lease Year during the term of this Lease in the following manner.
(a) Rental Schedule as per Article I, Section 1.1, item *
Section 4.4. N/A
Section 4.5. All Rental and all other sums hereunder provided to be paid by Tenan shall be due
and payable by Tenant without demand, deduction, abatement or off-set except as expressly provided
herein, '
0

All other sums and charges of whatsoever nature required to be paid by Tenant to Landlord
pursuant to the terms of this Lease constitute additional rent and failure by Tenant to timely i ay such other
sums or charges may be treated by Landlord as a failure by Ten5nt to pay the Rental
In the event of any failure to pay Rental or to make any other payment due Landlord hereunder, in
the manner or time provided for herein, and such Rental, or other payment is not made by tenth (101h)
day following the date on which said payment was dire, Tenant shall pay to Landlord, In a1lditlon to the
amounts then due and without prior demand therefore and without any deduction o r offsets, an
administrative charge in the amount of $50.00 per each occurrence; or 5% of the.amount due' whichever is

• , Acceptance by Landlurel of any late rent payment and administrative charge due theçefor shall not
constitute a waiver of any of Landlord's sights and remedies available in connection with aijy subsequent
failure of Tenant to pay the Rental or to make any other payment due Landlord hereunder in i he manner or
time provided for herein. If tender of late Rental or any other payment due Landlord herei4ider is made,
• Landlord at its sole discretion, shall have the option to accept the tendered late Rental payment and
administrative charge computed as above specified, or to purse the tights and remedies provi$led in Article
XVII without the necessity of any farther notice oidemand.
If within any ax (6) month period during the term of this Lease, Tenant shall fat for three (3).
times to snake timely payment•to Landlord of any Rental andfor any other payment due Land] )rd hereunder
on the date when due, the Landlord shall have the immediate tight, without the necessity. )f giving any
notice of default, to pursue the rights and remedies provided in Article XVII hereof.
Section 46 (Insufficient Checks or Payments) Tenants shall pay to Landlord upon 4cmand a fifty
and NOI100 Dollar ($50.00) charge for each check tendered to Landlord in payment 4f Rental (or
Percentage Rental) or any other payment due Landlord hereunder which Is returned unpilectible to
Landlord.
ARTICLE
COMMON AREA
Section 5.1. The "Common Area" of the Shopping Center is that part of the Shipping Center
designated by Landlord from time to time for the common use of all tenants, including among other
facilities, parking area, sidewalks, signs erected by Landlord advertising or identifying the Shopping Center,
under canopy signs, landscaping, seasonal!permanent decorating, curbs, teuclavays, delitipsy passages,
loading areas, private streets and alleys, lighting facilities, and the like, all of which shall be subject to.
Landlord's sole management and cohtrol and shall be operated and maintained in such mannr as Landlord
in his discretion shall determine. Landlord reserves the right to change from time to time a dimensions

%
*1
63
 and location of the Common Area, as well as the dimensions, identity and type of any build ags, and to
construct additional buildings or additional sloths on existing buildings or other improves ants in the
Shopping Center. Landlord also reserves the right to dedicate portions of the Common Are and other
portions of the Shopping Center (excepting only the Demised Premises) for street, park, utilit and other
public purposes. Tenant, and its employees, customers, subtenants, licensees, and concessic ashes shall
have the non-exclusive right to use the Common Area as constituted from time to time, such iso tribe in
common with Landlord, other tenants of the Shopping Center and other persons entitled to w o the same,
and subject to such reasonable rules and regulations governing such use as Landlord may from line to time
prescribe. Landlord may elect (without any obligation to do so) to designate flare time to me, Tenant
employee, subtenant, licensee and concessionaire parking areas. Should Landlord so des gnnte such
parking area, then Tenant, its employees, subtenants, licensees and concessionaires may ha the non-
exclusive use, along with other Tenants and their employees, subtenants, licensees and conces ionaires, of
only that. available space so designated by Landlord for such use and neither Tenant, is r Tenant's
employees, subtenants, licensees or concessionaires shall use any other parking space in II e Shopping
Center. Upon request oLandlord, Tenant will furnish to Landlord a complete list of the licenst numbers of
all automobiles operated by Tenant, its employees, subtenants, licensees or concessionai es. If any
automobile or other vehicle owned by Tenant or any of its employees or any of its subtenants, licensees or
concessionaires, or any of their respective employed, shall at any time be parked in any part oft in Shopping
Center, other than the specific areas designated by Landlord from time to time for esnplo: se parking,
Landlord shall be, and is hereby, authorized to cause such automobile or other vehicle to be removed to
such other location, either within or beyond the Shopping Center, and Tenant shall, and does sreby, agree
to indemnify Landlord, his employees, and agents, and hold each of them harmless from any a ri all claims
of whatsoever sort which may arise by season of suds removal. Tenant shall not solicit busine S or display
merchandise within the Common Area, or distribute handbills therein, or take any action, hicb would
interfere withthe rights of other persons to use the Cbmnson Area. Landlord may teniporac 1)' close any
part of the Common Area for such periods of time as maybe necessary to prevent the public fir, in obtaining
prescriptive rights or to snake repairs or alterations.
Section 52. Tenant agrees to pay as additional rent, as hereinafter provided, an am it equal to
"Tenant's Share" of "Common Area Maintenance Charges" (as such quoted teens are hamlet T defined)
• adjusted from time to time, pursuant to the provisions hereinafter stated. For purposes of Ii Lease, the
phrase "Common Area Maintenance Charge" shall mean, for each calendar year (or portion lb uf) during.
the tnnn of this Lease, the aggregate of all costs, expenses, and liabilities of every kind ore re paid or
• incurred by Landlord (to the extent that Landlord regards. it as reasonable necessary or a
proved the services and materials hereinafter referred to and to pay the incurred costs, e cases, and
liabilities hereinafter referred to) including appropriate and reasonable reserves in cons stion with
sweeping, cleaning, removing debris from, maintaining, respiring and repairing the Common 4 eA, lighting
the Common Area (including replacement of bulbs and ballast's and repair of light standards the cost of
supplying water, electricity, gas, security, sere disposal and/or garbage pick-up and disposal, i .andlord so
elects, providing project identification signs and the repair and maintenance of the pylon d all signs
thereon; providing traffic control and watchman service at the Common Area; constructing,
and repairing and maintaining any on-site or off-site utilities necessary or appropriate for the operation of
the Common Area; providing and maintaining planting and landscaping with respect to the 0 mmon Area;
providing security services with respect to the Common Area plus all other costs and we sea of every
kind or nature paid or incurred by Landlord relative to maintenance, managing, aatL equipping he Common
Area, including, without limitation, management fees for overall management of the Shoi ping Center,
subdivision maintenance fires or dues; property owners association fees or dues, and similar cli ages, annual
charges for reserves established by Landlord for ilttux'e replacements or improvements to the C minon Area
(inclusive of periodic new black topping or concreting of the Common Area) included as ar
V fee of fifteen (151/6) percent of the aggregate of all of the aforesaid costs and expenses a liabilities
V
(Including, without limitation, ibe.aforesald reserve) paid or incurred by Landlord.
The Phrase "Tenant's Share," as applied to the Common Area Maintenance Charges, shall refer to
a sum calculated by multiplying the Common Area Maintenance Charges by a fraction, the numerator of
which is the floor area (In square fret) of the Demised Premises (as indicated in Article I of ti 4a Lease)and
the denominator of which for which the calculation referred to in this paragraph is being ma le, provided,
however, for any period of less than twelve (12) full calendar months with respect to which su4h calculation
is being made, a pro rate portion of the resulting product shall be calculated to determine Ten1t's share.
Monthly, during the first year of this Lease, Tenant will pay Landlord the Estimated dommon Area
Maintenance Charge (as indicated in Section 1.1 (u), monthly in advance, payable at the ssne time and
place as the Rental is payable, except, however, if the Lease Terse does not begin on the first day of a
calendar month- Landlord shall have the right to adjust such monthly estimate on an annual btis, pursuant
to the following paragraph. V•

At the end of each calendar year occurring during the term of this Lease (or subsquerzt to the
-
V expiration or other termination of this Lease, if such occurs on a date other than the last day of a calendar
year), Landlord will give Tenant notice of the total amount paid by Tenant for the relevant palendar year
• together with the actual amount of Tenant's Share of the Common Area Maintenance Charges ("Total
•
V • : Cosr) for such calendar year. If the actual amount of Tenant's Share of the Total Cost with respect to such
period exceed the aggregate amOunt previously paid by Tenant with respect thereto during such period,
•• Tenant shall pay to Latidlord the deficiency within Thirty (30) days following notice frrnu Landlord; -
VV
however, if the aggregate amount previously paid by Tenant with respect thereto exceeds Ton, nt'S Share of V

.•
V

...
 the Total Cost for such period, then at Landlord's election, such surplus (net of any amounts i owing by
Tenant to Landlord) shall be credited against the next ensuing instalhnent of any such cost 4w vunder by
Tenant, or Landlord may refined such net surplus to Tenant. Periodically, during the term his tease,
Landlord shall have the right to estimate Tenant's Share of Common Area Maintenance C s for the
next fiscal period (determined by Landlord) of the term of this Lease, whereupon, Tex shall pay
Landlord such amounts as may be so indicated by Landlord in the same manner as the Esifan Common
Area Maintenance Charge.
Tenant shall have the right for the ninety (90) day period immediately following th end of each
calendar year during the term of this Lease, at its sole cost and expense, to audit the cost of Common Area
Maintenance Charges at reasonable times during Landlord's regular business hours and at thi office of the
Landlord upon twenty-four (24) hours advance written notice to the Landlord. In the even:Tenant fails
either to notifythe Landlord in writing of its intent to audit the cost of Common Area Maintenance Charges
at least twenty-four (24) hours in advance of the date of its intended audit or to audit Cpmmon Area
Maintenance Charges within said ninety (90) day period, Tenant shall not thereafter be entItled to audit
Common Area Maintenance Charges for the Lease Year in question.
Section 5.3. If there is presently in effect or hereafter adopted any nature of sales tax or use tax or
other tax on rents or other sums received by Landlord under this Lease (herein referred to "Rent Sates
Tax"), and in addition to all Rental and other payments to be made by Tenant as provided a bove, Tenant
will also pay Landlord a sum equal to the amount of such Rent Sales Tax. The term "Rent Sal a Tax" shall
not include income taxes applicable to Landlord.
• Section 5.4. N/A
ARTICLE VI
• USE AND CARE OF PREMISES
Section 6.1. The Demised Premises maybe used and occupied only for the pwpo Or purposes
specified in Section 1,1(j) above. and for no other purpose or purposes without the prior wri consent of
Landlord. Tenant shall use in the transaction of business in the Demised Premises the trade e specified
in Section 1.1(g) above. Tenant shall not at any time leave the Demised Premises or an part thereof
vacant, and it is the essence of this Lease, that Tenant shall in good faith continuously throng lout the term
of this Lease, during usual business hours, occupy and conduct and carry on in the entire Dernsed Premises,
• the type of business for which the Demised Premises are leased. Tenant shall operate its business in an
efficient, high class and reputable manner and shall, except during reasonable periods, or repairing,
• cleaning and decorating, keep the premises properly equipped with fixtures, stocked with an adequate
supply of merchandise, and open to the public for business with adequate personnel in attedance on all
days and during all hours when other tenants of the Shopping Center are generally open for bjisiness to the
public and as maybe determined by the Landlord, except to the extent Tenant may be prohlbit4d from being
open for business by applicable-law. ordinance or governmental regulation. WithOut any way 4xpanding the
use of the Demised Premises hereinabove expressly limited, Tenant shall not use any prtion of the
Demised Premises for airy purpose in conflict with any exclusive usage sights, now or hereafter existing in
• favor of some. other occupant of the Shopping Center or use the Demised Premises to sme purpose
• substantially duplicating some other usage of premises now or hereafter made in the Shopiog Center,
without the prior written âonsent of Landlord.
Tenant shall remain open on regular business days during regular reasonable busii4s hours, but
Tenant shall remain open for business not less than the hones of 10:00a.m. until 6:00p.m. M4nday through
Friday. . . .
Tenant shall warehouse, stre and/or stock in the Demised -Premises only such goc4s, wares and
merchandise as Tenant intends to offer for sale at retail at in from or upon the Demised Prnnises. This
• . shall not preclude occasional emergency transfers of merchandise to other stores of Tenan if any, not
located in the Shopping Center. Tenant shall use for office, clerical and other non-selling r nsposes only
• such space of the Demised Premises as is from time to time reasonable required for Tenant's 4ssiness in the
• Demised Premises. No overnight lodging shall be permitted on the Demised Premises.
Section 62. Tenant shall not, without the Landlord's prior written consent, keep ar4lblng within
the premises or use the premises for any purpose which increases the insurance premium cost or invalidates
any insurance policy carried on the Demised Premises or on other parts of the Shoppin Center. If
Landlord should consent to such use and occupancy by Tenant, Tenant shall pay on demand las additional
rent the additional insurance premiums resulting from such use and occupancy. All property k4pt, stored, or
maintained within the premises by Tenant shall be at Tenant's sole risk. I
Section 6.3. Tenant shall not conduct within the Demised Premises any fire, an "lost-our-
lease", "going out of business", bankruptcy or similar sates Or operate within the Dens Premises a
cooperative store, a "second baud" store or a "surplus" store. Tenant shall not permit any, :tionable or
unpleasant odors to emanate from the premises; nor place or permit any radio, television, • speaker or
amplifier on the roof or outside the Demised Premises ci where the same car, be seenor h eA rem outside
the Demised Premises; nor place any antesma or other projection on the exterior of the Dc d Premises;
nor take any other action which would constitute a nuisance or would disturb or endanger r tenants of
 the Shopping Center or unreasonable interfere -M& their use of their respective premises; nor o anything
• which would tend to injure the reputation of the Shopping Center as maybe determined by Land1 ord.
Section 6.4. Tenant shall take good care of the Demised Premises and keep the si me free of
rodents and insects at all times. Tenant will not commit any act which is a nuisance or at moyanco to
Landlord or to other Tenants, or which might, in the exclusive judgment ofLandlord, apprecia Ay damage
Landlord's goodwill or reputation. Tenant shall keep the Demised Premises, and sidewalics, a .rviceways,
and loading area adjacent to the premises and the Common neat, clean, and free from dirt or blab at all
times, and shall carefully store in an orderly manner all trash and refuse within the area a ified by
Landlord or in addition to any other remedies available to Landlord, Landlord shall have the ri t to do and
Tenant shall pay to Landlord the Sill cost thereof Landlord shall arrange for the regular pie up of such
trash and refuse Included in the CAM expense, in which case Tenant shall use such refuse . cc and pay
• the cost of such service as specified in Section 1.1(w). Tenant acknowledges that Landlord U have the
• right to increase the charge for refuse service from time to time, and Tenant shall be liable Landlord
therefor. Receiving and delivery of goods and merchandise and removal of refuse and trash sh M be made
only in the manner and areas prescribed by Landlord and shall-be subject to such regulations Landlord
may from time to time prescribe. Tenant shall not operate an incinerator or bum trash or re within the
Shopping Center area.
Section 6. 5. Tenant shall maintain all display windows ins neat and attractive condition and shall
keep said display windows and exterior signs lighted from dusk until such time as other *8 of the
Shopping Center generally do.
Section 6.6. Tenant shall include the address and Identity of its business activities in t?le Demised
Premises in all advertisements made by Tenant in which die address and identity of any smiIar local
business activity of Tenant is mentioned. Use by Tenant in advcrtiain& letterheads-or otbeiwise of the
name of the Shopping Center and buildings contained therein, or any distinctive trade name O( trademark
used by Landlord shall be subject to such restrictions and regulations as Landlord may prescribe from time
to time.
Section 6.7. Tenant shall procure at its sole expense any permits and licenses reqeired for the
transaction of business in the Demised Premises and otherwise comply with all applicable laws, ordinances,
and governmental regulations. Tenant shalt also comply with all reasonable rules and regulatiois regarding
sanitation, cleanliness and other matters governing the conduct of business within the Shot ping center
which Landlord may from time to time prescribe. Tenant will be responsible for causing its employees,
customers, subtenants, licensees, and concessionaires to comply with all such laws, ordinances and
regulations. I
Section 6.8. Tenant will at all times keep all merchandise and displays within Dcraised
Premises above described, and will not at any time display any merchandise or offer It for s4le or (other
than during essential loading or unloading operations) permit it to be on any other point outside the
Demised Premises, nor will Tenant in any other way use or obstruct such area outside tie Demised
Premises.
•

Section 6.9. Tenant, at Tenant's own expense, will funhish and maintain an adequa4 number of
fire extinguishers in good operating condition as may be reasonable required by Landlord, and n any event
not less than such number of extinguishers as may be, from time to time, required by appli4ble statues,
Jaws, ordinances, and codes.
Section 6.10. If Tenant is a restaurant, or if otherwise required by Landlord or any gI,vemmental
agency having jurisdiction thereof Tenant shall at its sole cost and expense, install any and all grease. traps
and/or grease interceptors which Landlord deems necessary or desirable or which any govem4iental entity
having jurisdiction thereof shall deem necessary to handle liquid waste, including grease, oil or my material
whatsoever which would or could damage, obstruct or overload any drainage, sewer or other Systems. All
grease and oil traps and/or interceptors shall be constructed in accordance with the iequirements
promulgated by any entity having jurisdiction thereof and Tenant shall at its sole cost and expejise maintain
and make all necessary or required repairs and replacements and maintain said traps and/or interceptors at
Tenant's expense without liability to Tenant for any loss or damage by reason of such repairs, Inaintenance
or replacement (and Tenant shall indensnijy and bold Landlord harmless therefrom), and Tonai4 shall pay to
• Landlord upon demand as additional rental hereunder the cost of such maintenance, repairs or sepJacements
plus interest, at the then highest lawful contract rate which Tenant is authorized to pay under th(r laws of the
State of Texas or the United States of America, whichever is then in effect •

Section 6.11. N/A
Section 6.12. Tenant hereby stipulates and acknowledges that the attempted or three tned breach
• of any covenant contained in this Article VI by Tenant would constitute a severe impediment the ability
of Landlord to operate the Shopping Center and to receive the benefits contemplated by this I ; that the
existence of such breach or threatened breach will cause irreparable barns thereto for which the e would not
bean adequate remedy at law for which no other equitable remedy would be adequate or availa Dle and shall
entitle Landlord to obtain an injunction prohibiting such breach or attempted breach in additlo t to all other
legal remedies provided hereunder or by law. -

• -•

• 8
ARTICLE VII
MAINTENANCE AND REPAIR OF PREMISES,
ALTERATIONS; LANDLORD'S RIGHT OF ACCESS
Section 7.1. Landlord shall keep the foundation, the exterior wails (except plate gim windows;
doors; door closure devices; window and doer frames, molding, locks and hardware; and into r painting
,

or other interior treatment of exterior walls), and roof of the Demised Premises in good reps provided,
that Landlord shall not be required to make any repairs occasioned by the act, omission or a ligence of
Tenant, its employees, subtenants, licensees, contractors and concessionaires; further pwvidr
shall not be required to make any roof repairs required as a result of maintenance work on enant's air
conditioning equipment or roof penetrations or perforations required or necessitated by the it mtallalion of
Tenant's fixtures or the construction or remodeling of the Demised Premises for or by Tense whether by
law, ordinance or otherwise. In the event that the Demised Premises should become in ner I or repairs
required to be made by Landlord hereunder, Tenant shall give immediate written notice thereto D Landlord,
and Landlord shall not be responsible in any way for failure to make any such repairs until reasonable
time shall have elapsed after delivery of such written notice which in no event shall be less tin s thirty (30)
days therefrom.
Section 7.2. Tenant will not permit or commit waste and will not injure the Demised I emnires, but
shall keep the Demised Premises in good, clean condition and shall at its sole cost and expe a make all
needed repairs and replacements, including, but not limited to air conditioning and bestial equipment,
electrical equipment and fixtures, doors, moldings, trim, window frames, door frames, cio en devices,
hardware, and equipment, wiring (including that within the wall or ceiling or under flooi ig or floor
covering),, and plumbing lines (including water lines and gas lines) within walls or ceilin and under
flooring and floor covering, and further including replacement of cracked or broken glass, mmd repairs,
replacements and Aerations required by any governmental authority, except fur repairs and
required to be made by Landlord under the provisions of Section 7.1 and Article XII. Tens C shall also
make all necessary repairs and replacement of its fixtures required for the proper conduct of ts business.
Additionally, Tenant shall pay to Landlord upon demand, and without contribution from any ot er tenant or
landlord, all coats and expenses for the maintenance, repair, replacement andfor construction f any utility
lines, including, without limitation, gas lines, sewer lines, waterlines and drains, drainage systs L% drainage
piping, water service pipes, underground water pipes, storm sewer systems or storm sewer pi1
sewer systems and piping and any plumbing equipment, fixtures or appliances servicing
sanitary
to Demised
Premises, the Building of which the Demised Premises are a part of the Shopping Center as a emit of any
obstruction of the flow, clogging, backing-up or other malfunction or disrepair of said systen due to any
ant or omission of Tenant in its use and/or occupancy of the Demised Premises or the act or on salon of any
other party holding the Demised Premises by or through Tenant or any other party using ore copying the
Demised Premises. If any repairs required to be made by Tenant hereunder are not made w hiss tea (10)
days after written notice delivered to Tenant by Landlord, Landlord may at his option make mcli repairs
without liability to Tenant for any loss or damage which may result to its stock or business y reason of
such repairs (and Tenant shall indemnify and hold Landlord harmless therefrom), and Tenan shall pay to
Landlord upon demand as additional rental hereunder the cost of such repairs plus interes' at the then
highest lawful contract rate which Tenant is authorized to pay under the laws of the State of Cexas or the
United States of America, whichever is then in effect. Upon termination of this lease, Tenant ill surrender
and deliver up the Demised Premises to Landlord broom- clean and in the same condition a which the
Demised Premises existed at the commencement of thrtenn of this Lease, excepting only ordir my wear and
tear and damage arising from any cause not required to be repaired by Tenant Upon taunt elba of this
Lease, Tenant will also surrender to Landlord all keys to the Demised Premises at the place ste dhercin for
the payment of rent.
Section 7.. Tenant shall not make any alterations, additions, or improvements to Demised
Premises without the prior written consent of Landlord, except for the installation of"Unattacl Movable
Trade Fixtures" (as hereinafter, defined which may be installed without drilling, cutting otherwise
defacing the premises. All alteration, addition, improvements and fixtures (other than
Movable Trade Fixtures") which may be made or installed by either party hereto upon Demised
Premises shall remain upon, and be surrendered with the premises and become the property c
the termination of-this Lease, unless Landlord requests their removal, in which event Tenant hail remove
the same and restore the premises to their original condition at Tenant's expense. Any linolet i, carpeting,
or other floor covering of similar character installed by Tenant on the Floor of the Demised I emises shall
become the property of Landlord, all without credit or compensation to Tenant SubJect tc the lien and
security interest right of Landlord hereinafter referred to, Tenant may remove "Unattached, M vable Trade
Fixtures" (as hereinafter defined) (not including, however, ducts, conduits, wiring, pipes. pan, ling or other
wall covering or floor covering) provided: (I) such removal is made prior to the termination I the term of
this Lease; (2) Tenant is not in default in the performance of any obligation or covenant nude this Lease at
the time of such removal; and (3) such removal may be effected without damage to the Desn ad Premises
and Tenant promptly repairs all damage caused by such removal. For purposes berm the phrase
"Unattached, Movable Trade Fixtures" means the following: counters, tables, chairs, inks, racks,
merchandisers and displays, standards, wall brackets, hand rods, shelves, mirrors, marking eq ipnient, cash
registers and other business machines, provided that they arc not permanently' attached in a y vay to the
floors, walls or ceilings.
All plumbing or electrical wiring connections exposed as a result of the remoa of Tenant's
"Unattached, Movable Trade Fixtures", or other alterations, additions, fixtures, equipment d property r.
installed or placed by it in the Demised Premises (Id such removal is so requested by shall be
capped by Tenant in a safe and workmanlike manner.
In the event that Tenant shall have assigned this Lease or subleased the Demised ljreenises (in
whole one part), but subject to and In accordance with the provisions of Article XV, alterations in the
Demised Premises of any scope or extent made (without prior notice to or consent of Tenant) I Landlord
or by the party occupying (or contemplating occupancy o the Demised Premises (with or vithout the
consent of Landlord) shall not have the effect of discharging or otherwise impairing or aecting the
continuing liability under this Lease of Tenant or anyone holding under Tenant; provided, ls*wever, the
foregoing shall not be interpreted as dispensing with the necessity for consent of Landlord to a] orations of
the Demised Premises under the circumstances in which such consent is required under the other provisions
of this Lease. I
Section 7.4. All construction work done by Tenant within the Demised Pkemi+s shall be
performed in a good and workmanlike manner, satisfactory to Landlord and in compliaice with all
governmental requirementsand applicable building codes, and at such times and in such nianne as to cause
a minimum or interference with other construction in progress and with the transaction of bu4iness in the
Shopping Center. Without limitation on the generality of the foregoing Landlord shall have the sight to
require that such work is performed during hours when the Shopping Center is not open for busness, and in
accordance with other rules and regulations which Landlord may from time to time prescribe, I Labor and
materiaL used in the Installation of Tenant's equipment, furniture and fixturef, and in any other iwork on the
Demised Premises performed by fenant, will be subject to Landlord's prior wnittenapproval. Sschwrltten
approval shall not be unseasonably withheld or unduly delayed. With respect to any coniact for any
such labor or materials, Tenant acts as principal and not as the agent of Landlord, and Team t shall give
written notification to any contractor engaged by Tenant for construction of imp
movements on or within the Demised Premises that Tenant is no the agent of Landlord but his acting as
principal in its own bebalt; and Tenant shall famish a copy of said notice to Landld prior to
commencement of any work on or within the Demised Premises. Tenant agrees to lndemnIfy and hold
Landlord harmless for all claims (including costs and expenses of defending against such clain$ arising or
alleged to arise from any act or omission of Tenant or Tenant's agents, employed, Icontractors,
subcontractors, laborers, matctialsnen or invitees or arising from bodily injury or property damage occurring
or alleged to have occurred. Incident to Tenant's woik at the Demised Premises, Tenant shmll not have
authority to place any lien upon the Demised Premises or any interest therein or in any , ray to bind
at of Tenant's
Landlord; and no action or failure to act by Landlord shall constiiutc a ratification by Landlord
contract for construction ofimprovernents on or within the Demised Premises; and any to do so
shall be void and of no effect. Landlord expressly disclaims liability for the cost of labor pesfnned for or
1

materials ftmrnjshed to Tenant. All costs for such construction performed shall be paid ps'ompdr*o prevent
the assertion of any liens for labor or materials. it because of any actual or alleged act or omission of
Tenant, or any contractor of Tenant or any such contractor's subcontractor or any laborer perf4rming labor
or niaerlalsnen famishing materials at or for the Demised Premises or by reason of any spccialy fabricated
material whether or not placed at the Demises Premises, any lien, affidavit charge or order for lee payment
of money shalibe filed against landlord, the Demised Premises or any portion thereof or int4rcst therein,
whether or not such lien, adavIt charge or order is valid or enforceable, Tenant shall, at its wn cost and
expense, cause some to be discharged of record by payment bonding orOtherwiseno later that fifteen (15)
days after notice to Tenant of the filing thereot; but in all events prior to the foreclosure thel!of. Tenant
shall, if requested by Landlord, furnish payment and performance bonds or other security 9tisfactozy to
Landlord against any such loss, liability or damage. Whenever Tenant proposes to do any ronsIruction
work within the Demised Premises, it shall first furnish to Landlord plans and specifications iir such detail
as Landlord may. request o covering all such work.. Tenant must have Landlord's prior writtei approval of
such plans and specifications prior to the commencement of any construction. I

Section 7.5. Landlord (and any Mortgagee or Decd of Trust beneficiary as to tie Demised
Premises) with advanced notification, shall have the right to enter upon the Demised Premise; at any time
for the purpose of inspecting the same or ot'maldng repairs or additions to the Demised Prntises, or of
snaking repairs, alterations, or additions to adjacent premises, or of showing the Demised Premises to
prospective purchasers, lessees, or lenders.
Section 7.6. Any penetrations or perforations through the roof of the Demisd Premises
necessitated or required by the installation of Tenant's fixtures or the construction or remoeling of the
Demised Premises for or by Tenant shall be first approved in writing by Landlord and shall le performed
by a contractor, sub-contractor, mechanic or repairman approved in writing by Landlord.
Section 7.7. Tenant shall pay the full amount of all taxes, assessments, imnposiions, levies,
charges, excises, thes, licenses and other - sores levied, assessed, charged or imposed by any g ovemnmnental
authority or other taxing authority upon Tenant's leasehold interest under this Lease and aI,l alterations,
additions, fixtures (including "Unattached, Movable Trade Fixtures), Inventory and other prop sty installed
or placed or permitted at the Demised -Premises by Tenant. Within thirty (30) days after notice from
Landlord, Tenant shall furnish Landlord a true copy of receipts evidencing such payment received by
Tenant from the Governmental authority or other taxing authority assessing such charges.
 • • Tenant will also pay all insurance premiums assessed or levied upon any alteratio , additions,
fixtures or property installed in the Demised Premises by the Tenant and all insurance related to Tenant's
use, occupancy and operations within the Demised Premises and the Shopping Center.

• ARTICLE VIII
SIGNS; STORE 1tRONTS; 1001?

Section 8.1. Tenant shall not, without Landlord's prior written consent(a) make an changes to
the store front or (b) install outside the Interior surface of the perimeter walls of the Demised remises any
• lighting or awnings, or any deconitions or paintings or (c) install any drapes, blinds, aba es or other
coverings on display window or door lettering, placards, decorations or advertising media of an type which
can be viewed from outside of the Demised Premises, excepting only dignified displays of cu binary type
for its display windows. Tenant must pay for the installation of an exterior sign and the same s all conform
• in all respects to the sign criteria established by Landlord for the Shopping Center and BE S1 BJECT TO
LANDLORD'S PRIOR. WRITTEN APPROVAL. If required by Landlord, Tenant shall al o install an
under canopy sign and the same shall conform in all respects to the sign criteria established by ond for
the Shopping Center and be subject to Landlord's prior written approval; provided, however, L ndlord may
elect, at the expense of Tenant, to install any such exterior sign, and Tenant shall pay the Uj der Canopy
Sign Charge (set forth in Article I) and indemnify and save Landlord harmless from the cost nd expense
thereof: If requested by Landlord, Tenant shall cause Tenant's exterior sign to be "hook -up" to the
existing electrical connection: and be placed on a time clock and photoelectric cell device ch that the
electricity Illuminating such sign shall keep Tenant's electric signs on from dusk until 11:00 pa i. every day
during the lease term. The failure of Tenant to install any such exterior sign within ninety (90 days of the
date hereof shall consthute.a default by Tenant hereunder and entitle Landlord to exercise a y remedies
• : permitted tinder the term of this Lease without the necessity of farther notice to Tenant (notwith tanding any
-. - provision to the contrary contained in Article XVII). All signs installed shall be kept in good cpndilion and
in proper operating order at 01 times and (except for the fascia sign) shall become the property of Landlord
at tha tessnination of this Lease. Upon the expiration or earlier , termination of this Lcase jrenant shall
• •. remove the fascia sign and restore the surface, to which said sign was attached, to its original condition at
• . Tenant's expense. In the evdnt Tenant fails to remove the fascia sign within three(3) di ys from the
• •t expiration or earlier termination of this Lease, said sign shall become the property of Lalidiorl without any
. . . • credit or compesisation *0 Tenant, and Landlord may (but shall not be obligated to) remove and store or
dispose of said sign and Tenant shallbe liable to Landlord for all costs incurred by Landlord ii connection
with such removal and storage or disposal and Tenant shall Indemnify and bold Landlord ham less from all
loss, damage, costs, expenses and liability in connection with such removal, storage or disposM. Use of the
• roof is reserved to the Landlord, and Landlord may Install upon the roof equipment, signs, antelusa, displays
and other objects and-may construct additional stories above the Demised Premises, provided such use does
not reasonable interfere with Tenant's occupancy.
Sedtioá 8.2. Tenant pt Tenant's cost and expense, and upon payment of the Pylon Sign Charge,
shall have the right, subject however to the prior written consent of Landlord, to locate a sigt advertising
Tenant upon the pylon structure if Landlord elects to erect any such pylon structure. Nt4vithstanding
• . . S
anything herein to the contrary, Landlord shall in all cases retain the right and power to reloatc Tenant's
• • sign located upon such pylon structure, if any, to another location on such pylon structure, to b@ determined
• by Landlord, in the sole mid absolute discretion of Landlord. The cost of installation, the cosi of bringing
• . ,• • • .. .; .. . electrical service to Tenant's sign located upon the pylon structure, the sign itself and any cosç incurred by
'• .. . .- Landlord in repairing or maiistainitsg such sign shall alt be the sole coat and expense of Tenan, and Tenant
• • - • shall indemnify and hold barmltiss 'Landlord with respect to any claim, charge, expense, °'l liability for
....... •• same. Under no circumstances whatsoever will Tenant be allowed to remove such sign frm the pylon
structure without the prior written consent of landlord. The placement of any such sign u$n the pylon
• ... :. .• stricture, and the design and 'construction criteria therefor shall be governed by such rules, re4ulations and
• • .•-• - requirements as Landlord may, from time to time, promulgate. Upon expiration or earlier trminafion of
• • -: • this Lease and sign adveitisiuig Tenant upon the pylon structure (if Landlord elects to or ct any such
structure) shall remain upon the pylon structure and be surrendered with the premises and become the
•- .••. . property of Landlord without credit or compensation to Tenant, unless Landlord requires ren oval of such
• •'. • • . .- • sign, in which eveht Landlord shall remove the same at Tenant's expense, and Tenant shall pa3 to Landlord
- upon demand, the cost of removing Tenant's sign from the pylon structure.
• ARTICLE IX -
UTILITIES

• .- • . •- . - - •- Section 9.1 Tenant ngrties to pay additional rent, as hereinafter provided, In an sin tint equal to
• •• • "Tenant's Sbaró" of all "Utility Costs'- (as such quoted terms are hereinafter defined) adjusted from time to
• .......- time, pursuant to the provisions hereinafter state.

0
The phrase "Utility Costs"-as used herein shall mean all water, gas, electricity and other utilities
• • •
used in the Demised Premises. .
•- . •• - -. If the utilities are preseistly separtél metered (not submetere directly to the d Premises,
- •.::
•• limo in such event Tenant shall pay all Utility Costs directly to the supplier of any such ts separately
• •'••.• • - metered (or sObmetetud), and will save and hold Landlord harmless from any charge or for same. -

11
Me
 Tenant shall '[requested by Landlord, and at Tenant's sole cost, expense, risk a liability,
Install a subineter or subsneters for the calculation of all. utility services furnished to Demised
Premises and Tenant shall pay all such utility costs directly to the supplier of such servic
snbmetercd and Tenant will save and hold Landlord harmless from any such charge or Ility for
the same, or alternatively, If required by Landlord, Tenant shall pay all such utility clsas directly
to Landlord.

The phrase "Tenant's Share" as applied to Utility Cost shall refer to the sum c4culated by
Landlord on an equitable basis to be the cost of Tenant's share of the Utility cost with respect o any such
utilities which are submetered to Tenant in common with other occupants of the Shopping Cents1 -.
Monthly, during the first year of the term of this Lease, Tenant will pay to Landlord th Estimated
CAM Charge (as such term is defined in Article I of the Lease) monthly in advance, payable it the same
time and place as the Rental is paid, except, however, if the Lease Term does no begin on the f rst day of a
calendar month, Tenant shall pay a,pro rata portion of such sum for such partial month Periodidally, during
the term of this Lease, Landlord shall have the right to estimate Tenant's Share of CAM Costs çor the next
fiscal period (detetosined by Landlord) of the term of this Lease, whereupon Tenant shall pay La dlos-d such
amount as maybe so indicated by Landlord in the same manner as the Estimated CAM Charge.

Section 9.2. No interruption or malfimetion of any utility services shall constitute an eviction or
disturbance of Tenant's use and possession of the Demised Premises or a'breachby Landlord of any of its
obligation hereunder or render Landlord liable for damages or entitle Tenant to be relieved fron any of its
obligations hereunder (including the obligation to pay rent) or grant Tenant right of set-off or to oupment
Section 9.3. In addition, Tenant shall be solely responsible for and pay to Landlor4 within ten
(10) days after receipt of Landlord's, statement therefore, all costs and expenses Incurred Landlord,
including without limitation, fines, fees charges and repair, replacement or installation costs, tdsicb result
from Tenant's or Tenant's business operations and are incurred by Landlord because of fefleral, state,
county or municipal legislation, or rules or regulations relating to environmental contro provided,
however, that in the event Tenant is ordered directly by any governmental authority to consjjly with any
• such federal, state, county or municipal legislation, rules or regulation, Tenant shall proceed p$umptly and
expeditiously to fully comply with such order and Tenant shall be solely responsible for, and siall bear all
costs and expenses Incurred in connection with Tenant's compliance.
ARTICLE
INDEMNITY, PUBLIC LIABILITY, BUILDER'S RISK
AND OTHER INSURANCE

Section 10.1. Landlord shall not be liable to Tenant or to Tenant or to Tenant's empl4ees, agents.
or visitors, or to any other person whomsoever, for any injury to person or damage to property on or about
the Demised Premises or the Common Area cause by negligence or misconduct of Tenant, its employees,
contractors, subtenants, licensees, and concessionaires, customers, invitees, or other Ten arts of the
Shopping Center, or of any other person entering the Shopping Center under express or iznpli$d invitation
of Tenant or arising out of any breach or defisult by Tenant in theperformance of its obligatio4 hereunder,
or arising out of or from any injury to or death of any person or persona or damage to or destnction of the
property of any person or persons occurring or about the Demised Premises or on the sidowaks adjacent
thereto, and Tenant hereby agrees to indemnify Landlord and hold him harmless from any 1os, dthages,
expense (including, without limitation, attorney's fees and court costs), or claims -arising out ofs uch damage
or injury. Tenant agrees to use and occupy the Demised Premises and place its fixtures, I equipment,
merchandise and other property therein at its own risk and hereby releases Landlord and its ag4nts from all
claims for any damage or injury to the fall extent persnittedby law. I
Section 10.2. Tenant shall procure and maintain throughout the term of this Lease l a policy or
policies of insurance, at its sole coat and expense, insurisig Tenant (and. naming Landlord as a co-insured)
against any and all liability for injury to or death or a person or persons, and the damage to or d4struction of
Property occasioned by or arising out of or in connection with the use or occupancy of tse Demised
Premises, or by the condition of the Demised Premises, the limits of such policy or policies i to be in an
amount not less That $100,000.00 in respect of injuries to or death of any one person, and in the not less
than $300,000.00 in respect of any one accident or disaster, and in an amount not less than $0,000.0l) in
respect of property damaged or destroyed, or with such other limits as maybe required by Laraflord, and to
be written by an insurance company or companies satisfuctory to Landlord. Tenant shall obulin a written
obligation on the, part of each insurance company to notify Landlord at least ten (10) dsys prior to
cancellation of such insurance. Such policies or duly executed certificates of insurance sbal be prior to
Tenant's occupancy of the Demised Premises, delivered to Landlord and renewals thereof as r4quircd shall
be delivered to Landlord at least thirty (30) days prior to the expiration of the respective policy forms.
Section 10.3. Dining the period Tenant may be remodeling or making alterations to Demised
Premises, all builders' risk insurance shall be, maintained by Tenant in the amount no less V wn the total
improvement cost. Said builder's risk insurance and'liability insurance policies shall name Landlord as a
co-insured with Tenant and shall be non-cancelable with respect to Landlord, except after t (10) days
written notice from the insurance company. Certificates of such insurance shall be deposited by Tenant -.
with Landlord prior to commencing any remodeling or alteration
.
 Section 104. Tenant agrees at all tithes at its expense to keep its merchandise, flxtur, and other
property situated within the Demised Premises insured against fire, with, extended coverage, to I extent of
at least eight percent (80%0 of the value thereof. Tenant tijaiher agrees that, at all times, when a
that term is defined for the purposes ofbciiler insurance is located within the Demised Premises, twill essay
at its expense boiler insurance with policy limits of not less than $100,000.00 insuring both L adlord and
Tenant against loss or liability caused by the operation or malfunction of such boiler. Team shall also
essay at its own cost and expense plate glass insurance and flood insurance insuring both L adlord and
Tenant against loss or liability arising as a result thereof. Such insurance shall be carried will companies
satisfactory to Landlord, and shall be an form satisfactory to Landlord. Tenant shall obta a written
obligation of each insurance company to notify Landlord at least ten (10) days prior to cancells (on of such
insurance. Such policies or duly executed certificates of insurance shall be delivered to Land] rd prior to
the commencement of Tenant's occupancy hereunder and renewals thereof as required shall be elivered to
Landlord at least thirty (30) days prior to the expiration of the respective policy terms. T proceeds
payable to Tenant on account of such insurance shall not be used, except with the consent of L ndlord, for
any purpose other than the repair or replacement of merchandise, fixture and other property sit tied within
the Demised Premises.
Section 10.5. If Tenant should fail to comply with the foregoing requirements relating to
insurance, Landlord may declare Tenant in default of the,Lease of obtain such insurance, and t'enant shall
pay to Landlord on demand as additional rent hereunder the premium cost thereof plus intes'ea, at the then
highest lawful contract rate Tenant is authorized topay under the laws of the State of Texas o the laws of
the United States of America, fiom. the date of payrneatby Landlord until repaid by Tenant.
ARTICLE NI
N0N-LTARILr1'y FOR CERTAIrt UAM&GFS

Section 11.1. Landlord and Landlord's agents and employees shall not be liable to T ant for any
injury or death to person or damage or destruction to property sustained by Tenant or any per on claiming
through Tenant resulting from the Demised Premises or any other portions of the Shopping Center
becoming out of repair or by defect in or failure of equipment, pipes or wiring, or by broken gi as, orby the
backing up of drains, or by gas, water, steam, electricity, or oil leaking, escaping or flov ing into the
Demised premises, no shall Landlord be liable to Tenant for any loss or damage that maybe o casioned by
or through the acts or omission of other Tenants of the Shopping Center or of any o her persons
whomsoever.
ARTICLE XII
FIRE OR OTHER CASUALTY

Section 12.1. Tenant shall give immediate written notice to Lan&oid of any damage caused to the
Demised Premises by fire, or other casualty.
Section 12.2. If at any time dosing the lease earns, (1) alt or any portion of the Demit od Premises
shall be damaged or destroyed by fire or other casualty, or (as) the Building in which the Demi. ad Premises
are located shall be destroyed or rendered smtenantabte to an extent in excess of 25% of tl e floor area
thereof then in any such eventuality Landlord shall have the election to terminate this Lease or repair and
restore the Dânaiscd Premises to substantially the condition in which they existed Immediately mr to such
damage or destructiolL
Section 12.3. In the event that this Lease is terminated as herein permitted, Landlord shall refund
to Tenant the prepaid rent, if any (unaccxued as of the date of damage oi destruction), less aiy sum then
owing Landlord by Tenant.
Section 12.4. In any of the aforesaid circumstances, Rental shall abate p roportionatel y during the
period and to the extent that the Demised Premises are in the opinion of Landlord unfit for use. yTenant in
the ordinary conduct of its business. IfLandlordhias elected to repair and restore the Leased Pemisea, this
Lease shall continue in. hall force and effect and such repairs wilt be made within a rem onable time
thereafter, subject to "excusable delays" as hereinabove defined. If Landlord has elected t repair and
reconstruct the Demised Premises, then, at the election of Landlord (exercised by notice to Teaant prior to
or within thirty (30) days following Landlord's completion of such repair and reconsfructio) the Lease
Term shalt be extended by a period of time equal to the period of such repair and reconstructio4.
Section 12.5. In any circumstances where Landlord elects to repair and restore thTmableses, this
Lease shall continue in full force and effect, and such repairs will be made within a ffsea time
thereafter, subject to "excusable delays" as hereinabove referred to. In any circumstances andlord
elects to repair and restore the Demised Premises, Landlord shall not be required to repnjury or
em,ts,
damage by fire or other cause to, or to make anyrepairs or replacements of any leaseholvn
fixtures or other personal property of Tenant In any circumstances where Landlord elepair and
restorethe Demised Premises, Landlord shall not be required to expend for such repairsantion any
sum in excess of tlae amount actually collected by Landlord from any insurance policies tct In
the event any insurance proceeds are collected by any party holding a lien on Landlord's.' ktarest in the
Demised Premises or the Shopping Center, such proceeds shall not be deemed to have been collected by -

13,"
Landlord and shall not be available for repair of The Demised Premises whether or not payment" such lien
holder is with the approval of Landlord. I
Section 12.6. Tenant agrees that during the period of reconstruction or repair of tle Demised
Premises it will continue the operating of its business within the Demised Premises to the extent iractieable.
Section 12.7. Notwithstanding the provisions of Article XIII of this Lease, Tenant agres that if at
any time during the term of this Lease all or any portion of the Demised Promises, the Building $i which the
Demised Premises are located or any part of the Common Area of the Shopping Center shall be lamaged or
destroyed by fire or other casualty caused in whole or in part by any act or omission of Tena4t, Tenant's
employees, licensees, invitees, contractors or concessionaires and Landlord elects to repair and jestoxe said
damage, Tenant shall Pay to Landlord upon deniand, the amount that Landlord is obligated to pa under any
Deductible Clause provided in any insurance policy covering such lose or casualty up to the 64 amount of
said deductible. Tenant's failure to pay said deductible to Landlord within five (5) days froi4 receipt by
Tenant of written notice from Landlord of the amount of said deductible shall constitute a defar4t by Tenant
of its obligations hereunder andLandlord shall be entitled to pursue any of the remedies proded in this
Lease or which are available at law or in equity.
ARTICLE XIII
SUBROGATION

Section 13, 1. To the extent that Landlord and Tenant may legally so agree, and tO th extent that
any insurance coverage by Landlord and/or Tenant will not be invalidated thereby, it is agreed and
understood that where either party hereto may sustain it loss or damage against which sich party is
protected by an existing policy or policies of insurance, the party hereto sustaining such los or damage
hereby waives and releases any and all claims, demands and causes of action which it might Iltave against
the other party hereto to the extent and amount that such loss is covered by the claiman4 insurance,
irrespective of whether or not such damage or loss is occasioned by the negligence of the rcspe$tive parties
hereto, oreither of them, their respective agents, servants, employees, guests or lnviteea, t being the
intention of the parties that no insurance company with which either such party maintaisis insura4ice in effect
may be subrogated to the rights or causes of action which such party may have against the other party
hereto.
ARTICLE XIV
CONDEMNATION

Section 14.1. If there shall be taken during the term of this Lease all of the Demised rernisee,by
any authority having the power of condemnation, then and in that event, the term of this Leasf shall cease
and terminate, and the date of such termination shall be, at Landlord's election, the earlier of eiber the date
upon which possession shalt be tendered to such authority by Landlord or the date upon which ossession is
taken by such authority. If a lesser part of the Demised Premises should be so taken, Landlord nay elect to
terminate this Lease or to continue this Lease in effect but if Landlord elects to continue tsis Lease in
effect, the Rental shall be reduced in proportion to the area of the Demised Premises so taken. Jmmediately
upon the taking of possession of the portion of the Demised Pransises. taken by the condeannsg authority
above. When any such reduction in Rental has been computed by Landlord, Landlord shall notli Tenant as
to the amount of such Rental and such sum shall be due and payable by Tenant to Landlord ill accordance
with the provisions of Article IV relating to the time and manner of Tenant's payment of RestaI. At the
request of Landlord, Tenant will execute a letter or other memorandum setting forth the am+unt of such
Rental payable by Tenant, In the event that Landlord has elected to continue this Lease in cffe4t then upon
Landlord's collection of The entire sum due and payable by such authority to Landlord b the way of
compensation and damages, Landlord shall restore the remaining portion of the Demised Premses so as to
constitute such portion an enclosed building, with such nature of building improvements anc facilities as
Landlord furnished to Tenant at or prior to commencement of the Lease Term, provided that Lrnd1ord shall
not be obligated to expend of such restoration any sums in excess of the amount actually received by
Landlord from the condemning authority. Such restoration work shall be performed by Land Did within a
reasonable period of time with reasonable allowances for "excusable delays" (as herelnaboive defined).
Neither the restoration work if any, by Landlord with suspect to the DemisedPremises nor th restoration
work, if any, by Landlord with respect to any other portion of the Shopping Center shall $onstitute an
eviction or disturbance of Tenant's use and possession of the Demised Premises or Shopping Center or n
breach by Landlord of any of its obligations hereunder or render Landlord liable for damages or entitle
Tenant to be relieved from any of its obligations hereunder (with din exception of tile aforesaid
proportionate reduction in Rental) or grant Tenant any right of off-set or recoupment. In the efrent that any
condemnation proceeds, whether by way of compensation or damages, arc collected by any paty hoklinga
Ron on Landlord's interest in the Demised Premises, such proceeds shall not be deemed have have been
collected by Landlord, whether or no the payment to such lien holder is with the approval of Lardlord.
Section 14.2. Whether or not any portion of the Demised Premises may be tnlcen by such
authority, Landlord may nevertheless elect to terminate this Lease or to continue this Lease is effect in the
event any portion of any building in the Shopping Center or more than ten percent (10%) of pile Common
Area of the Shopping Center be taken by such authority. I

14
 Section 14.3. All sums awarded or agreed upon between Landlord and the conderne ig authority
for the taking of the fee or the leasehold interest, whether as damages or as corupensatior will be the
property of Landlord. Tenant hereby assigns to landlord all proceeds, whether byway of cor
damages, otherwise payable to Tenant for the leasehold interest by reason of such taking. '1 east farther
grants to Landlord the exclusive authority to negotiate with such authority for payment both v tb respect to
the interest of Landlord and the interest of Tenant in the Demised Premises and Tenant at yes that the
authority having the power of eminent domain shall cause all checks and drafts issued by it connection
with any such taking of the fee or leasehold estate whether as compensation or as damages to be issued
payable to the order of Landlord above or payable to the order of Landlord and "landlord's hI rtgagee" (as
hereinafter defined). Upon the request of Landlord, Tenant agrees to forthwith execute such sstsument or
instruments as Landlord may reasonable request for the purpose of evidencing the cessatie of Tenant's
interest in such portion of the Demised Premises as is taken by such authority and I e continued
effectiveness of this Lease as to the balance of the Demised Premises not taken. Any amouj specifically
awarded or agreed upon by the Tenant and the condemning authority for the taking of Tenant's
"Unattached, Movable, Trade Fixtures" shall be the property of Tenant.
Section 14.4. 11 this Lease should be terminated under any provision of this Art cle XIV, all
Rental and all other sums due and payable by Tenant hereunder shall be payable up to he date that
possession taken by the taking authority, and Landlord will refund to Tenant an equitable prtion of any
such Rental and other sums paid in advance but not yet earned by such date. I
Section 14.5. In the event that any authority having the power of condemnation equest$ that
Landlord convey to such authority all or any portion of the Shopping Center or all or any portion of the
Demised Premises, Landlord shall have the right to make a voluntary conveyance to such auIhrity of all or
any portion of the Shopping Center or all or any portion of the Demised Premises wiether or not
proceedings have been filed by such authority; and in the event of any such voluntary conveaace, it shall
nevertheless for all purposes hereunder be deemed that there has been a taldag by such au'hority of the
Property voluntarily conveyed by Landlord. Accordingly, all of the provisions of Sections 144 14.2, 14.3,
and 14.4 hereof shall be applicable notwithstanding such voluntary conveyance. I
ARTICLE XV
ASSIGNMENT AND SUBLETTING

Section 15.1. Tenant shall not assign or in any manner transfer this Lease or any estte or interest
therein or sublet the Demised Premises or any part thereof without the prior written consent of Landlord.
Such consent shall not be unreasonably withheld. Consent by Landlord to one (1) or more a4aigmnenta or
subletting shall not operate as a waiver of Landlord's tights as to any subsequent assiiunents and
subletting. Notwithstanding any assignment or subletting, Tenant shall at all times remain fullfr responsible
and liable for the payment of the Rental herein specified and for compliance with all of its othr obligations
under this Lease. The term "sublet' shall be deemed to include the granting of licenses, conessiOflS, and
any other right of occupancy of any portion of the DernisedPrecnises. Any attempt toco any of the
foregoing shall be void and of no effect I
If Tenant is a corporation, then any transfer of this Lease from Tenant by merger, co4solidation or
dissolution or any change in ownership or power to vote a nsority of the voting sso(k in Tenant
outstanding at the time of execution of this instrument shall constitute an assignment for pin poses of this
Lease. For all purposes of this Section 15.1, the term "voting stock" shall refer to shares of stpck regularly
entitled to Vote for the election of directors of the corporation involved. I
If Tenant lisa general partnership having one or more corporations as partners or iTenant is
limited partnership having one or more corporations, as general partners, the provisions of se preceding
paragraph shall apply to each of such corporations as if such corporation alone had bee, the Tenant
hereunder. I

If Tenant is a general partnership, then the transfer of a majority of the parinersi4p Interest of
Tenant as existing at the time of execution of this Instrument shall constitute an assignment fo purposes of
this Lease Or at any future time). If Tenant is limited partnership, then the assignment f all or any
Portion of the interest of a general partner of Tenant shall constitute an assignment for the psspose of this
Lease. .1.
Section 15.2. Notwithstanding that the prior written consent of Landlord to any o Ic aforesaid
transactions may have been obtained, the following shall apply; (1) In the event, of assignment,
contemporaneously with the granting Landlord's aforesaid consent, Tenant shall cause f assignee to
expressly assume in writing and agree to perform sll'of the covenants, duties, and obligat is of Tenant
hereunder and such assignee shall be jointly and severally liable therefor along with Teems Fenant shall.
further cause such assignee to grant Landlord an express first and prior contract lien and a irity interest
(and execute one or more Uniform Commercial Code Financing Statements) in the man hereinafter
stated as applicable to Tenant; (2) a signed counterpart of all instruments relative thereto ( cutedby all
parties to such transaction with the exception of Landlord) shall be submitted by Tenant to ndlonl prior
to or contemporaneously with the request for Landlord's written consent thereto (it being und itood that no
such instrument shall be effective without the written consent of Landlord); (3) Tenant shall
Landlord's statutory lien and Landlord's aforesaid contract lien and security interest, any or other
rights which Tenant may claim with respect to any fixtures, equipment, goods, wares, mcccli or other

15
property owned by or leased to the propoted assignee, or sublessee or other party intending to occupy the
Demised Premises; (4) no usage of the Demised Premises different from the usage herein pro tided to be
made by Tenant shall be permitted, and all other teems and provisions of this Lcae shall contie se to apply
after any such assignment or subleasing; (5) he any case where Landlord consents to an salgiunent,
subleasing, grant of a concession or license or mortgage, pledge or hypothecation of the It asehold or
sublease of the Demised Premises, the undersigned Tenant will nevertheless remain ti reetly and
primarily liable for the performance of all of the covenants, duties and obligations of Tenant
hereunder (including, without limitation, the obligation to pay all rental and other si ms herein
provided to be paid), and Landlord shall be permitted to enforce the provisions of this nslrument
against the undersigned Tenant and/or any assignee without demand upon or proceeding a any way
against any other person, and (6) in the event that the rental due and payable by a sublesse under any
such penisitted sublease (or a combination of the rental payable under such sublease plus any bo LU5 or other
consideration tberefor or incident thereto) exceeds the hereinabove provided rental payable unds r this Lease
or if with respect to a permitted assignment, pezniitted license or other transfer by Tenant p innitted by
Landlord, the consideration payable to Tenant by the assignee, licensee or other transferee xceeds the
rental payable under this Lease, the Tenani shall be bound and obligated to pay Landlord all itch excess
rental and other excess consideration: within ten (10) days following receipt thereof by Tense from such
sublessee, assignee, licensee or other transferee, as the case might be.
Section 15.3. Tenant shall not mortgage, pledge or otherwise encumber its interest let tis Lem or
in the Demised Premises, without written consent of the Landlord and will not be in reasonably
withheld, nor may such interest be transferred by operation of law. Any attempt to do any oft e ibregoing
shall be void and of no effect.
Section 15.4. If this Lease be assigned or if the Demised Premises be subleased (whet icr in whole
or in part) or in the event of the mortgage, pledge or hypothecation of the leasehold interest or rant of any
concession or license within the Demised Premises or ifthc Demised Premises be occupied is whole or in
part by anyone other than Tenant without the prior written consent of Landlord, Landlord may tevestheless
collect rental from the assignee, sublessee, mortgagee, pledge, party to whom the leasehold interest was
hypothecated, concessionaire or licensee or other occupant and apply the net amount collected ts the rental
payable hereunder, but no such transaction or collection of rental or application thereof by Li idlord shall
be deemed a waiver of these provisions or a release of Tenant from the further performance by
covenants, duties and obligations hereunder.
ARTICLE XVI
TAX AND INSURANCECOSTS

Section 16.1. The Tenant agrees to pay as additional rent, as hereinafter provided an amount
equal to "Tenant's Share" of "Taxes" and "Insurance Premiums" (as such quoted terms a .ro hereinafter
defined) adjusted from time to time, pursuant to the provisions hereinafter stated.
The phrase "Taxes," as used herein, shall mean all taxes, assessments, impositions, Ic les, charges,
excises, fees, licenses, and other sums (whether now existing or hereafter arising, whether j foreseen or
unforeseen and whether made under the present system of real estate taxation or some other syslem), levied,
assessA charged, or imposed by any governmental authority or other taxing authority, or whi,h accrue on
the Shopping Center for each calendar year (or portion thereon during the term of this Leasla; including,
without limitation, all penalties, interest, and other charges (with respect to taxes) payable by raSon of any
delay and/or failure or refusal of Tenant to make timely payment as required under this Lease. l In no event
shall the word "Taxes" be deemed to include any of Landlord's income taxes or the estate, ineeritance, or
gift taxes of'any party of "Landlord." I
The phrase "Insurance Premiums" shall mean the total annual insurance premiums w*h accrue on
all fire and extended coverage Insurance, boiler insurance, public liability and property dsniae insurance,
rent insurance, and any other insurance which, from time to time, may, at Landlord's election, e carried by
Landlord with respect to the Shopping Center during any applicable calendar year or portion thereof)
occurring during the term of this Lease; provided, however, in the event, during any such cale,dar year, all
or any part of such coverage is written under a "blanket" policy" or otherwise in such manner geat Landlord
was not charged a specific insurance premium applicable solely to the Shopping Center, then lilt such event,
the amount considered to be the Insurance Premium with respect to such coverage for such cdendar year,
shall be that amount which would have been the annual Insurance Premium payable under the elates in effect
on the first day of such applicable calendar year for a separate Texas Standard Form insurance policy
generally providing such type and amount of coverage (without any deductible amount) with ibspeot to the
Shopping Center (considering the typo of construction and other relevant matters), irrespectie of the fact
That Landlord did not actually carry such We policy. I
• The phrase "Tenant's Share," as applied to Taxes and Insurance Premiums, shall lifer to a sum
calculated by multiplying the Taxes and Insurance Premiums (as the case may be by a fraction, the
)

numerator of which is the floor area (in square feet) of the Demised Premises (as indicated ije Article I of
this Lease) and the denominator of which is the total Gross Leasable Retail Area within he Shopping
Center on the 1st day of January flu the relevant calendar year for which any calculation refercd to in this
paragraph is being made; provided, however, for any period less than twelve (12) full calendalt months with
respect to which such calculation is being made, a pro rats portion of the resulting pr [net shall be
calculated to determine Tenant's Share.
• .

• 16
74•
 Monthly, during the first year,of the term of this Lease, Tenant will pay to Landlord th Estimated
Tax and Insurance Charge (as such term is defined in Article I of the Lease), monthly in advance, payable at
the same time and place as the Rental is payable, except, however, if the Lease Term does not ijegin on the
first day of a calendar month, Tenant shalt pay a pro rata portion of such sum for such pattiaI month.
Landlord shalt have the right to adjust such monthly estimate on an annual basis, pursuant to dab following
paragraph hereof.

At the end of each calendar. year occurring during the term of this Lease (subs e4ient to the
expiration or other termination of this Lease, if such occurs on a date other than the last day of tse calendar
Year), Landlord, shall give Tenant notice of the total amount paid by Tenant for the relevant clendar year
together with the actual amount of Tenant's Share of Taxes and Insurance Premiums ("Total Co t") for such
calendar year. If the actual amount of Tenant's Share of the Total Cost with respect to such per od exceeds
the aggregate amount previousl3 paid by Tenant with respect thereto during such period, Tenant hail pay to
Landlord the deficiency, within fifteen (15) days following notice from Landlord; however, if aggregate
amount previously paid by Tenant with respect thereto exceeds Tenant's Share of the Total st for such
period, then, at Landlord's election, such surplus (net of any amounts then owing by Tenant P Landlord)
shall be credited against the next ensuing installment of any such cost due hereunder by Tenant, or Landlord
may refund such net sutplus to Tenant Periodically, during the term of this Lease, Landlord sh dl have the
right to estimate Tenant's Share of Taxes and insurance Premiums for the next fiscal period (del ermined by
Landlord) of the term of this Lease, whereupon, Tenant shall pay Landlord such amount as may be so
indicated by Landlord in the same manner as the Estimated Tax and Insurance Charge.

ARTICLE XVII
DEFAULT BY TENANT AND REMEDIES
•.. i, Section lid. The following events shall be deemed tube events of default by Tenant under this Lease:
(1) Tenant shall fail or,refisse to pay any installment of Rental, or any monies due and pa yable to
Landlord when due and such failure shall continue for a period of ten (10) days after such di e date.

(2) Tenant or any guarantor'of Tenant's obligations under this Lease shall become mao vent, or
shalt make a transfer in fraud of creditors, or shall make an assignment 'for the benefit of tom.

(3) The entry of a decree or order by a court having jurisdiction over Tenant or any guin antor of
Tenant's obligations hereunder in an involuntary case under the federal bankruptcy laws, w now or
hereafter constituted, or any other applicable, federal or state bankruptcy, insolvency or othe similar
law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequeslintor (or similar
official) of Tenant or any, guarantor of Tenants' obligation hereunder or for any substantial part of
either of said party's property, orordering the winding-up or liquidation of either of sak party's
affairs,

(4) The commencement by Tenant or any guarantor of Tenant's obligations here un er of a
voluntary case under the federal bankruptcy laws, as now constituted or hereafter amend , or any
other applicable, federal or state bankruptcy, insolvency or other similar law, or the consent y either
of such pasties to the appointment of a receiver, liquidator, assignee, trustee, custodian, seq estrator
(or other similar official) of any substantial part of the property of Tenant or any gum rator of
Tenant's obligationa herCunder, or to the taking possession of any such property by 4 ry such
functionary or the snaking of any assignment for the benefits of creditors for either Tenai or any
guarantor of Tenant's obligations hereunder, or the failure of Tenant or any guarantor of enant's
obligations hereunder ,generally to pay its debts and such debts become due, or the b king of
corporate action by any corporate Tenant or any corporate guarantor of Tenant's obligations
hereunder in flsrtheranceof any of the foregoing.

(5) Tenant shall abandon, desert or vacate any portion of the Demised Premises.

(6) Tenant shall do or permit to be done anything which creates a lien upon the Demised Pre ises.

(7) Without Landlord's prior weitten consent, it Tenant being a general partnership or joint Venture.
there shall be any change in the membership of such partnership or joint venture subseque4 it to the
execution of this Lease, or if Tenant being a limited partnership, there shall be any diang e in the
• general partners subsequentito the execution of this Lease, or if, Tenant being a corporation, there
shall be any change in the control of the corporation subsequent to the execution of this Lens

(5) Tenant shall fall or refuse to comply with any term, provision, or covenant of this Lea c,other
than the paymentof rent, and shell not cure such failure within thirty (30) days after written notice
thereof to Tenant, other than the aforementioned events of default specified in (I) dana (7) of this
Section 17.1.

Upon the oceutrence of any of such dvents of default, Landlord shall have the option to pursud any one or
more of the following remedies without any notice or demand whatsoever:
-/

17
V
75
 A. Terminate this Lease, in which event Tenant shall immediately surrender the Demised P unises
to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other edy
which he may have for possession or arrearagcs in rent, enter upon and take possessior of the
Demised Premises and expel or remove Tenant and any other person who may be occupy g said
premises or any part hereof, without being liable for prosecution or any claim of damages t =ibr,
and Tenant agrees to pay Landlord on demand the amount of all loss and damage which L uidlord
may suffer by reason of such termination, whether through inability to relet the Pre s on
satisfactory terms or otherwise.
B. Enter upon and take possession and expel or remove Tenant and any other person who may be
occupying said premises or any part thereot without being liable for prosecution or any 01 aim for
damages therefor, arid, if Landlord so elects, miet the premises on such terms as Landlord nx y deem
advisable and receive the rent therefor, and Tenant agrees to pay to Landlord on dorm nd any
deficiency that may arise by reason of such reletting.
C. Enter upon the Demised Premises (including altering locks and other security devices) without
being liable for prosecution or any claim for damages therefor, and do whatever Tenant is Aigated
to do under the terms of this Lease; and Tenant agrees to reimburse Landlord on demand for any
expenses which Landlord may incur in this effecting compliance with Tenant's obligations us der this
Lease, and Tenant further agrees that Landlord shall not be liable for any damages, maul to the
Fe;utfiom such action whether caused by the negligence of Landlord or.otherwisc.
Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other rem es herein
provided or any other remedies provided by law or in equity, nor shall pursuit of any rer èdy herein
provided constitute a forfeiture or waiver of any rent payable to Landlord hereunder or of a y damages
accruing to Landlord by reason of the violation of any of the terms, provisions and covet intshesuin
contained. Forbearance by Landlord to enforce one or more of the remedies herein provided an event
of default shall not be deemed air construed to constitute a waiver of such default In dete mining the
amount of loss or damage which Landlord may suffer by reason of termination of this I me or the
deficiency arising by reason of any teletting of the Demised Premises by Landlord as abov a provided,
allowance shall be made for the expense of repossession and any repairs or remodeling us lertaken by
Landlord following repossession.
Section 17.2. 1f on account of any breachor default by Tenant in Tenant's obligatio hereunder,
it shall become necessary for Landlord to employ an attorney to defend any of the Landlo 's rights or
remedies. Tenant agrees to pay any reasonable attorney's fees incurred by Landlord in such
connection.
Section 173. Tenant, contemporaneously with the execution of ibis Lease, has deAosited with
Landlord the sum set forth in Article 1(o), the receipt of which is hereby acknowledged by diord; said
deposit being given to secure the, faithful performance by the Tenant of all of the terms, coenants, and
conditions of this Lease by the Tenant tube kept and performed during the term hereoL Tomagrees that
if the Tenant shall fail to pay the Rental or any other sums due and owing by Tenant to an ord herein
reserved promptly when due, said deposit may, at the option of the Landlord (but Landlord ball not be
required to)be appliedto any Rental or any other stuns due hod unpaid, and ifthe Tenant vi lates any of
the other terms, covenants and conditions of this Lease, said-deposit may be applied to y damages
suffered by Landlord as a result of Tenant's default, to the extent of the amount of the damal es suffered,
Nothing contained in this Article shall in any way diminish or be construed as waiving any of the
Landlord's other resnedies as provided in this Article XVII, or by law or in equity. Shouli the entire
Default Deposit, 'or any portion thereot he appropriated and applied by Landlord for the payment of
oveesluô rent or other sums due and payable to Landlord by Tenant hereunder, then Tenant diall on the
written demand of Landlord, forthwith remit to Landlord a sufficient amount in cash to restore aid Default
Deposit to its original amount, and Tenant's failure to do so within ten (10) days after r' ipt of such
demand shall constitute a breach of this Lease. Should Tenant comply with all of the terms, co remains, and
conditions of this Lease and promptly pay all of the Rental herein provided for as it falls due i jadell other
sums payable by Tenant to Landlord hereunder, said Default Deposit shall be returned in Sill o Tenant at
she end of the term of this Lease, within 30 days provided Tenant has notified Landlord in, writing of a
forwarding address or upon the earlier termination of this Lease less, however, any amounts that may be due
from Tenant to Landlord or any amounts that Landlord estimates will be due and owing frat 1 Tenant on
account of Tenant's Share of the Common Area Maintenance Charge of Tax and Insurancebarge (even
though Seal adjustments thereto are aot'snade by Landlord until the end of the applicable calen year.) In
the event this Lease is terminated prior to the expiration of the stated term as hereinabove rovided, in
addition to all other remedies provided herein or available at law or in equity, Landlord may e, apply or
retain the whole or any part of the security so deposited' remaining after applying said osit to the
payment of any Rental due and unpaid and any other sum as to which'Tcnant is in default, and Se, apply or
retain the balance of the Default Deposit for payment of any sum which Landlord may cxpel or may be
required to expand by reason of Tenant's default in respect of any of the terms, covenants and jonditions of
this Lease, including but not limited to, any damages or deficiency in the reletting of the Deniisd Premises,
whether such damages or deficiency, accrued before or after summary proceedings or othesi re-entry by
Landlord. Landlord shall have the right to commingle said Default Deposit with other ¶unda of the
Landlord. Landlord may deliver the funds deposited hereunder by Tenant to the purchaser of Landlord's
interest in the Demised Premises in the event that such interest is sold, and thereupon Land'ord shall be
discharged from limber liability with respect to such deposit. Notwithstanding that Landlord r my hereafter
 (but shall not be obligated to) approve any sublease or assignment by Tenant, no assignee or su*lessee shall
have any right, title or interest in the Default Deposit unless otherwise provided in the sublease or
assignment instrument executed by Landlord to evidence its permission to such transaction. No such
assignment or sublease, houcver, shall alter, abct or modify any of the rights of Landlord with respect to
the Default Deposit. Tenant's rights hereunder with respect to the Default Deposit shall not n any other
manner be assigned, transferred, pledged, mortgaged or encumbered by Tenant without the prior written
consent of Landlord, and any attempt by Tenant to do so shall be void and of no effect In the event àf the
Bankruptcy of Tenant (or said transferee) or other debtor-creditor proceedings, the Default De4osit.maybe
applied by Landlord as an off-set against any obligation of Tenant (or said transferee due 4d owing of
Landlord. In the event this Lease should. be terminated as provided in any construction addend ni attached
hereto, Landlord may retain the Default Deposit as liquidated damages for its cost of preparing ind revising
the plans and specifications and/or other administrative costs incurred prior to such termination.I
Section 17.4, In the event that Landlord elccts to repossess the Demised Premses without
terminating the Lease, then Tenant shall be liable for and shall pay to Landlord at Houston, HE ids County,
Texas, all rent and other indebtedness acceded to the date of such repossession plus rent requir4 to be paid
by Tenant to Landlord during the remainder of the Lease term until the date of expiration of the teens
diminished by any net sumS thereafter received by Landlord through reletting the Demised Pre4iises during
said period (after deducting expenses incurred by Landlord as provided herein). In no event shall Tenant be
entitled to any excess of any rent obtained by relcuing over and above the rent herein reserved i Actions to
collect amounts due by Tenant as provided in this Section 17.4 may be brought from time to tinje, on one or
more occasions, without the necessity of Landlord's waiting until expiration of the Lease Term.
Section 113 'In case of an event of default, Tenantsball also be liable for and shall pay to
Landlord, at Houston, Harris County Texas, in addition to any awn provided to be paid above: broker's
fees incurred by Landlord in connection with reletting the whole or any part of the Demised Pemises the
costs of removing and storing Tenant's or other occupant's pmpeety, the costs of rcpairirg, altering,
remodeling Or otherwise putting the Demised Premises into condition acceptable to a new tena4t or tenants;
and all reasonable expenses incurred by Landlord in enforcing Landlord's remedies or the Stae of Texas,
whichever is applicable. Past due rent and other past due payments shall bear interest from n4turity at the
then highest lawful contract rate which Tenant is authorized to pay under the applicable laws c f the United
States.
Section 17.6. N/A
Section 17.7. In the event of termination or repossession of the Demised Premises r a default,
Landlord shall not have any obligation to relet or attempt to inlet the Demised Premises, or any portion
thereof: or to collect rental alter ruletting and in the event of reletting, Landlord may relet the i vbole or any
portion of the Demised Promises for say period, to any tenantand for any use and purpose.
Section 17.8. If Tenant should fail to make any payment or cure any default hereund T within the
time herein permitted, Landlord, without being under any,obiigatfon to do so and without ther •y waiving
such default, may make such payment and/or remedy such other default for the account of T (and enter
the Demised r'rendma for such purpose), and Tenant shall be obligated to, and hereby agves, to pay
Landlord, upon demand, all costs, ciepenses and disbursements (including reasonable atto ey's fees)
incurred by Landlord.in taking such remedial action.
Section 17.9. In the event that Landlord shall have taken possession of the Premises
pursuant to the authority herein granted, then Landlord shalt have the right to keep in place d use all of
the fisrulture, fixtures and equipment at the Demised Premises, including that which is ownedb or leased to
Tenant, at all rinses prior to any foreclosure thereon by Landlord or repossession thereby b any lessor
thereof or third party having a lien thereon. Landlord shall also have the right to remove from Demised
Premises (without the necessity ofobtaininga distress warrant, writ of sequestration or oilier I gal process)
all or any portion of such furniture, futures, equipment and other property located thereon place same
in storage at any premises within the county in which the Demised Premises is located, oral anj other place
reasonable convenient to Landlord, and in such event, Tenant shall be liable to Landlord or all costs
incurred by Landlord In coruiection with such removal and storage and shall indemnify and h Id Landlord
harmless from all loss, damages, cost, expense and liability in connection with such removal nd storage,
Landlord shall also have the right to relinquish possession of all or any portion of such fimaiti re,flxtures,
• equipment and other property to any person C'Claimant") claiming to be entitled to possession hereof who
presents to Landlord a copy of any instrument represented to Landlord by Claimant to have i.x M executed
by Tenant (or any.predeceasor of Tenant) granting Claimant the right under various cirwums ces to take
• possession of such furniture, fixtures, equipment or other property, without the necessity or the part of
Landlord to inquire into the authenticity of said instrument copy of Tenant's (or Tenant's pt Ddecessol's)
signature thereon and without the necessity of Landlord's making any nature of investigation or r irtquuy as
to the validity of the factual or legal basis upon which Claimant pbrports to act and Tent at agrees to
indemnify and hold Landlord harniless from all eosL ctepense, loss damage and liability incident to
Landlord's relinquishment of possession of all or any portion of such fumnutsire, fixtures, equip or other
property to Claimant The rights of Landlord herein stated shall be in addition to any and ali other rights
• which Landlord has or may hereafter have at law or in equity; and Tenant stipulates and a s that the
• rights herein granted Landlord are commercially reasonable.

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 Section 17.10. To secure the payment of all Rental and any other sums due and to become due
hereunder and the faithful performance of this Lease by Tenant, Tenant hereby gives to Landlord an express
first and prior contract lien and security interest on all property (including fixtures, equipment, d chattels
which may be placed in the Demised Premises, and also upon all proceeds of any such proport y,and also
upon all proceeds of any insurance which may acciue to Tenant by reason of destruction of or damage to
any such property and also upon all of Tenant's interests as Tenant and rights options *0 purchase fixtures,
equipment, and chattels placed in the Demised Premises (in the case of fixtures, equipment d chattels
leased to Tenant which are placed in the Demised Premises). All exemption laws are hereb waived in
favor of said lien and security interest. This lien and security interest is given in addition to the Landlord's
statutory lien and shall be cumulative thereto. This lien may be foreclosed with or wi hout court
proceedings by public or private sale, provided Landlord gives Tenant at least tea (10) days n rice of the
time and place of said sale; and Landlord shall have the right to become the purchaser, upo being the
highest bidder at such sale. Contemporaneously with the execution of this Lease (and if request d hereafter
by Landlord), Tenant shalt execute and deliver to Landlord Texas Unifbnn Commercial Codt Financing
Statements in sufficient form so that when property filed, the security interest hereby given shal 1. thereupon
be perfected. If requested hereafter by Landlord, Tenant shall also execute and deliver to Lass lord Texas
Uniform Commercial Code Financing Statement Change instruments in sufficient form to reflect any proper
amendment at modification in or continuation or extension of the aforesaid contract lien a id security
interest hereby granted. Landlord shall, in addition to all of its rights hereunder, also have all I the rights
and remedies of a secured pasty under the Texas Uniform Commercial Code (the Texas Bisiness and
Commerce Code). I
Section 17.11. In the event of any default by Landlord, Tenant's exclusive remedy shall be an
action for damages (Tenant hereby waiving the benefit of any laws granting it a lien upon the property of
Landlord and/or upon rent due Landlord), but prior to any such action Tenant will give Land ord written
notice specifying such default with particularity, and Landlord shall thereupon have a reasonable period, but
in no event lens than thirty (30) days, in which to cure any such default, provided, however, if Landlord's
default is of such a nature that it cannot reasonable be cured within said thirty (30) day period th4 n Landlord
will not be deemed to be in default hereunder if Landlord has promptly commenced to cure said default and
is diligently attempting to cure the same. Unless and until Landlord fails to so cure any deibu C after such
notice, Tenant shall not have any remedy or cause of action by reason thereof. MI obligations of Landlord
hereunder will be construed as covenants, not conditions; and all such obligations will be bi tiding upon
Landlord only during the period of its possession of the Shopping Center and not thereafter.
ARTICLE XVJII
HOLDING OVER

Section 18.1. If Tenant should remain in possession of the Demised Premises after Us expiration
of the term of this Lease, without the execution of a new tease, then Tenant shall be deemed to b occupying
the Demised Premises as a tenant from month-to-month, subject to all the covenants and obliga ions of this
Lease and at a rental equal to one hundred fifty percent (150 1/9) of the Rental herein provid (computed
on a monthly basis rather than the other periodic basis hereinabove provided), and Includii g also one
hundred fifty percent (150 919) of all other sums payable hereunder. If any property not t elonging to
Landlord remains at the Demised Premises after the expiration of the term of this Lease, To ant hereby
authorizes Landlord to make such disposition of such property as Landlord may desire without liability for
compensation or damages to Tenant in the event that such property is the property of Tenan and in the
event that such property is the property of someone other than Tenant, Tenant agrees to indem ty and hold
Landlord harmless from all suits, actions, liability, loss, damages and expenses in connect on with or
Incident to any removal, exercise or dominion over and/or disposition of such property by Landlord.
ARTICLE XIX
LANDLORD'S MORTGAGE

Section 19.1. This Lease is expressly subject, subordinate and inferior to any mo e, deed of
trust, security agreement or other lien or encumbrance whatever resulting from any method of inancing or
refinancing, presently or henceforth placed upon the land and/or improvements comprising d e Shopping
Center and any future expansion thereof or additions thereto, and to all advances of money or other value
heretofore or hereafter made upon the security thereoP provided, however, the foregoing provisions of this
Article XIX to the contrary notwithstanding, if, Landlord or the holder of any such mortgage, d ed of trust,
security agreement or other lien or encumbrance shall elect to make this Lease superior, thei k this Lease
shall be deemed superior to any such mortgage, deed of trust, security agreement or o er lien or
encumbrance. Without limiting the generality or effect of the foregoing provisions of this ) rtide XIX,
Tenant covenants and agrees promptly upon request of Landlord within 10 days to execute and leliver, in a
recordable form provided by Landlord, and acknowledgment of subordination or superiority o 2 the Lease,
as the case may be according to the election made by Landlord or the holder of such mortgt ge, deed of
trust, security agreement or other lien or encumbrance as hereinabove provided (and upon at y failure of
Tenant to acknowledge such subordination or superiority as aforesaid, Landlord is hereby irrevocably
vested with MI power and authority to act on Tenant's behalf); however, notwithstanding lb this Lease
may be (or made to be) superior to such mortgage, deed of trust or other security agreement or User lien or
encumbrance, the provisions of such mortgage, deed of trust beneficiary or secured party wi respect to
proceeds arising from an eminent domain taking (including a voluntary conveyance by Lan on!) and/or
arising from insurance payable by reason of damage to or destruction of the Demised Prom ses shall be

20
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1 8
prior and superior to any contrary provisions contained in this instrument with respect to the ayment or
usage thereof.
Subject to the foregoing provisions of this Article XIX, Landlord reserved the right, wii hout notice
to or consent of the Tenant, to assign this Lenseantlfr any and all rents hereunder as sccu 'ty for the
payment or any mortgage loan, deed of trust loan or other method of financing or refinancing.
Section 19.2. For purposes of this Article, the term "Landlord's Mortgagee" mean i any party
holding a mortgage or deed of trust on the Demised Premises or any part thereof or alt or any pc of the
Shopping Center. A lien held by a Landlord's Mortgagee on the Demised Premises or any pa 'On thereof
or Shopping Center or any portion thereof is herein refened to ass "Landlord's Mortgage".
Section 19.3. lithe Demised Premises are at any time during the term of this Lease ject to a
Landlord's Mortgage then, in any instance in which Tenant gives notice to Landlord allegin default be
Landlord in performance of any covenant or obligation under this Lease, Tenant will also ' taneously
give a copy of such notice to Landlord's Mortgagee (at the post office.address as to which such Landlord's
Mortgagee shall have given Tenant notice) and the Landlord's Mortgagee shall have the ri t (but no
obligation) to cure or remedy such defanit of Landlord during the same item that is permitted Landlord
hereunder for the remedying or curing of such default, plus an additional period of thirty (30 days; and
Tenant will accept such curative or remedial action taken by a Landlord's Mortgagee with the sine effect
as if such action had been taken by Landlord, and Tenant shall not seek damages from Land rd or any
other relief or exercise or attempt to exercise any remedies by reason of any such default of dlord if
Landlord's Mortgagee shall have cured or remedied such default within the time allowed here' (including
the aforesaid additional thirty (30) day period) or is then attempting to foreclose its lien or obtain
possession of the Shopping Center.
If the Demised Premises. are at any time during the term of this Lease subject to a Landlord's
Mortgage and Landlord's Mortgagee shall have foreclosed under its Landlord's Mortgage at receiveda
conveyance of the mortgaged property (covered by its Landlord's Mortgage) in lieu of foreclo, , ure of shall
have taken possession of such mortgaged property or is collection rent from such mortgag property
purauant.to a rent assignment, then covenants of Landlord In this Lease which pertain to pp iperty lying
beyond the boundaries of such mortgaged property shall have no force or effect as against Landlord's
Mortgagee (and Tenant may not, in the event of any violation of any of such covenants by Lan Hard, abate
rent, terminate this Lease, recover damages from Landlord's Mortgagee or exercise any o er remedy
against Landlord's Mortgagee); however, Tenant shall nevertheless retain, as Tenant's sole at d exclusive°
remedy against Landlord, Tenant's right of action for datnaget on account of such violation as 1 irovided for
under Section 17.11 of this Lease.
Section 19.4. Landlord and Tenant each covenant and agree that so long as there is' ii effect any
collateral assignment of Landlord's rights under this Lease to any Landlord's Mortgagee, none of the
following actions shall be taken without the prior written consent of Landlord's Mortgagee in a tch instance
(except as maybe permitted in any Landlord's Mortgage): .
(a) This Lease will not be modified, altered or amended in any way, unless in waiting yboth
parties;.
(b) Landlord and Tenant will not agree to a cancellation of this Lease, nor will Tenant sunjtmler its
tights hereunder to Landlord (except In instances where in the right to do so is expressly gianted to
Tenant under the other terms and provisions of this Lease);
(c) Landlord will not convey its fee interest in the Demised Premises to Tenant ins snans4r which
will result in merger, nor take any other action which would result in merger, of Landlord's estate in
the Demised Premises with Tenant's leasehold under this Lease, unless, at the time of such
conveyance, Tenant assumes in writing any unpaid balance owing and to become owln to any
Landlord's Mortgagee which is secured by a collateral assignment of this Lease; but this Ones; not
prohibit an assignment of Landlord's estate to Tenant by assignment specifically made subjejrtto this
Lease, and I
(d) Tenant will not prepay and Landlord will not accept prepayment of any installment or payment
of Rental more than thirty (30) days in advance of the due date thereof:
The provisions of this Section shall be for the benefit of Landlord, Tenant and each Landlord's Mortgagee,
and shall be enforceable by anyone or more of such parties.
Section 19.5. Tenant shall execute and deliver to Landlord, at such time or times as L wdlord may
request, an estoppel certificate stating:
(a) Whether or not the Lease Is in fall force and effect;
(b)Whether or not the Lease has been modified or amended in any respect, and submittingpies of
such modification or amendments, if any;
 (c) Whether or not there are any existing defuIt under this Lease to the knowledge of ti 0 party
executing the Certificate, and specifying the nature of such defaults, if any; and
(d) Such other information as maybe reasonable requested.
The aforesaid certificate(s) shall be delivered to Landlord promptly upon receipt of a writ request
therefor, but in no event more than five (5) days following receipt of such request. Failure b Tenant to
timely deliver such information pursuant to such request and upon failure of Tenant to dolivc r aforesaid
certificate, Landlord is hereby-irrevocably vested with full power and authority to act on Tenant' s behalf or,
at Landlord's option, shall constitute an event of default hereunder and entitle Landlord to e cercise any
remedies permitted under the tunas of this Lease without the necessity of farther notice to Tenant
(notwithstanding any prevision to the contrary contained in Article XVII).
Section 19.6. If in connection with Landlord obtaining a Landlord's Mortgage, Landlord's
Mortgagee shall request reasonable modifications in this Lease as a condition of Landlord's M Ditgagee, to
provide Landlord's Mortgage, Tenant will not unreasonable withhold, delay, or defer its cons t thereto;
pmvided,thnt such modifications do not increase the obligations of Tenant hereunder or mate ially affect
the leasehold interest created hereby, or the use or enjoyment of the Demised Premises by the Te unt
Section 19.7. If Landlord herein does not own the fee to any portion of the property which
constitutes the Shopping Center, but instead holds only a leasehold interest therein under a gi 3und lease,
then in such event, this instrument shall be a sublease agreement subject and subordinate to tht underlying
ground lease. If this I,ease should be terminated as a result of termination of the said underlying ground
lease (regardless of the reason for termination of such underlying ground leas), Tenant tltafl i ive no right
or claim against Landlord by reason tbereoE 'This Lease is made by Landlord and acceptec by Tenant
subject to any and all matters of record affecting the Demised Premises or the Shopping Center.
ARTICLE XX
MERCHANTS ASSOCIATION.
Section20.I. N/A
ARTICLE XXI
NOTICES

Section 21.1. Wherever any notice is required or permitted hereunder such notice shall be in
writing. Any notice or document required or permitted to be delivered hereunder shall be deemed to be
delivered whether actually received or not when deposited in the United States Mail, post; go prepaid,
Certified Mail, Return Receipt Requested, addressed to the parties hereto at the respective ad es set out
in Section 1.1(o) and 1.1(1) above, or at such other addresses as they may hereafter specify by'ttennoticc
delivered in accordance herewith.
ARTICLE XXII
OPTION
Section 22.1. Contingent upon Tenant satisfying all of the following conditions, (the' Condition")
Tenant is hereby granted an option to extend the Lease Term, as set forth in Article 1(k) (t to 'Primary
Term") for an additional five (5) year period (60) months (the "Extension Term"), the Conditions being
that: (a) Teflant shall have fully performed all of its covenants, duties and obligations hereundt r during the
Primary Term; and (ii) Tenant shall have given written notice to Landlord not less than one dred eighty
(180) days prior to the expiration of the Pritnasy Term of Tenant's exercise of such optic (ill) The
renewal rate of the extended term will beat the then prevailing market rate.
Section 22.2. Time is of the essence in the exercise of this option and should T4 mant fail to
exercise this option by timely notice or fail to satisfy the Conditions, this option shall lapse fad be of no
further force or effect.
Section 22.3. In the event that Tenant satisfies all of the Conditions and effectively 4xercises the
option herein granted, then Landlord and Tenant shall execute anew Lease in fain' and conten satisfactory
in all respects to both Landlord and Tenant except: (a) Tenant shall have no farther right to renew or
extend the Lease Term after the expiration or other termination of the Extension Term; and (ti) the Rental
for said option terra shall be at a rate to be negotiated between Landlord and Tenant asd mutually
satisfactory to both parties. In the event that Landlord and Tenant have not agrecl as to the r$ntal rate for
the option term on or before the expiration date of the Primary Term of this Lease, then eith$r party may
terminate the option granted hereby by written notice delivered to the other party not laer than the
expiration date of the Primary lean of this Lease. I

ARTICLE XXIII
MISCELLANEOUS
Section 23.1. Nothinghereln contained shall be deemed or construed by the parties t Dreto, nor by
any third party, as creating the relationship of principal and agent or of a partnership or of a joint venture -

22
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 between the parties hereto, it being understood and agreed that neither the method of computatoa of rent,
nor any other provision contained herein, nor any acts or the parties hereto, shall be deemed to creafe any
relationship between the parties hereto other than the relationship of Landlord and Tenant The provisions
Of this instrument relatmg to the payment of Rental, if any, payable by Tenant hereunder are included solely
for the purpose of providing for the payment of rental in excess of the Rental, and providing frr a method
whereby such additional rental is to be measured, ascertained and paid.
I
Section 23.2. The captions used in this Lease are for convenience only and do not in any way limit
or amplify the terms and provisions hereoL
I
Section 23.3. Neither acceptance of Rental by Landlord nor failure by Landlord to 04,1aia of
any action, non-action or default of Tenant shall constitute a waiver as to any breach of any covenant or
condition of Tenant contained herein nor waiver of any of Landlord's rights heretlnder. No right or remedy
of Landlord hereunder or convenant, duty or obligation of Tenant hereunder shall be deemed waived by
Landlord unless such waiver be in writing, and signed by Landlord. One or more waivers of an covenant,
• term or condition of this Lease by either party shall not be construed as a waiver of a subseque4t breech of
the same covenant, term or condition. The consent or approval by either party to or any act By the other
• party requiring such consent or approval shall not be deemed to waive or render unnecessary c4nsent to or
approval of any subsequent similar apt I
Section 23.4. Whenever a period of time is herein prescribed for action to be taken bfr Landlord,
Landlord shall not be liable or responsible for, and there shall be excluded firma the comput4tion of any
such period of time, any delays due to strikes, riots, acts of God, shortages of labor or nu berials. was
governmental laws, regulations, or restrictions or any other causes of any ldnd whatsoever whiclase beyond
the reasonable control of Landlord. At any time when there is outstanding a mortgage, dee4 of trust or
similar security instrument coveting Landlord's interest in the Demised Promises, Tenant may aot exercise
any remedies of trust or similar security instrument covering Landlord's interest in the Demis4I Premises,
Tenant may not exercise any remedies for default by Landlord hereunder unless and until the I4rider of the
Indebtedness secured by such mortgage, deed of trust or similar security instrument shall ha vo i received
written notice of such default and a reasonable time for curing such default shall thereafter have blapsed.
Section: 23.5.' All obligations of Landlord and Tenant under the terms of this La se shall be
payable and perfómrable in Houston, Harris County, Texas.
Section 23.6. Landlord hereby covenants and agrees that if Tenant shall perform all of the
covenants and agreements herein required to be performed on the part of Tenant, Tenant sisal', subject to
the terms of this Lease and any mortgages presently or hereafter existing against the Shopping Center, at all
times during the continuance of this Lease have the peaceable and quiet enjoyment and Posse ision of the
Demised Premises.
Section 23.7. This Lease contains the entire agreement between the parties, and no agreement
shall be effective to change, modify or terminate this Lem in whole orin part unless suchagr wmentisin
writing and duly signed by the party against who enforcement of such change, modification or te nuination is
sought
Section 23.8 N/A. See Article 3(XV, Additional Miscellaneous
Section 23.9. Tenant agrees that it will from time to time upon request by Landlord execute and
deliver to the Landlord a statement in recordable them certifying that. this Lease is unmodifie and in full
force and effect (or if there.have been modifications, that the same is in full force and.effectas t o modified)
and further stating the dates to which rent and other charges payable under this Lease have been paid.
Section 23.10. The laws of the State of Texas shall govern the interpretation, validity,
performance, and enforcement of this Lease. If any provision of this Lease should be held to I e Invalid or
unenforceable, the validity and enforceability of the remaining provisions of this Lease shall no be affected
thereby.
Section 23.11. The terms, provisions, sndcovenants contained in this Lease shall api lyto, inure
to the benefit of and binding upon the parties hereto and their respective hells, successors in interest and
legal representatives except as otherwise herein expressly provided.
Section 23.12. With respect to terminology in this Lease, each number (singular or lund) shall
include all numbers, and each gender (male, female or neuter) shall include all genders.
Section 23.13. In any circumstances where Landlord is permitted to enter upon e Demised
Premises during the Lease Term, whether for the purpose of curing any default of Tenant, repai mi g damage
resulting from fire or other casualty or an eminent domain taking or is otherwise permitted her under or by
law to go upon the Demised Premises, no such entry shall constitute an eviction -or disturbancA of Tenant's
use and possession of the Osmised Premises or a breach by Landlord of any of its obligations ernundcr or
render Landlord liable for damages for loss of business or otherwise or entitle Tenant to be lieved from
any of its obligation hereunder or grant Tenant any right of set-off or recoupment or other rei nedy, and In
connection with any such entry Incident to performance of repairs, replacements, maintenance or
construction, all of the aforesaid provisions shall be applicable notwithstanding that Landlord may elect to

23
• 81
take building materials in, to or upon the Demised Premises that may be required or utilized it connection
with such entry by Landlord. I
Section 23.14. In the event Landlord commences any proceedings against Ten at for non-
payment of Rental or any other sum due and payable by Tenant hereunder, Tenant will not i4terpose any
counterclaim or other claim against Landlord of whatever nature or description in any such jioceedings,
Landlord and Tenant stipulate and agree that, in addition to any other lawfld remedy of Lai4Iord, Upon
motion of Landlord, such counterclaim orother claim asserted by Tenant shall be severe 4 out of the
proceedings instituted by Landlord and Landlord may proceed to final judgment separately ar4 apart from
and without consolidation with or reference to the status of such counterclaim or any other clainj asserted by
Tenant
Section 23.15. Tenant stipulates and acknowledges that the existence of any breach o - threatened
breach of any covenant, duty or obligation of Tenant herein contained would constitute a severe impediment
to the ability of Landlord to operate the Shopping Center and to receive the benefits contemp'ated by this
Lease; that the existence of such breach or threatened breach will cause irreparable damage to iandlord for
which there would not be an adequate remedy at law and for which no other equitable reme4y would be
adequate or available, and accordingly Landlord shall be entitled to enjoin any such breach o threatened
breach without thc necessity of proving the inadequacy of any legal remedy or irreparable unit. The
remedies of Landlord hereunder shall be deemed cumulative and no remedy Landlord, whetbr exercised
by Landlord or not, shall be deemed to be in exclusion of any other. Except as may be othetwise herein
expressly provided, in all circumstances under this Lease where prior consent of one party ("flst party") is
required before the other party("second party") is authorized to take any paxticu]ar type of actioll, the matter
of whether to grant such consent shall be within the soleand exclusive judgment and discretior of the first
part and it shall not constitute any nature of breach by the first party hereunder or any defbnse to the
performance of any. covenant, duty or obligation of the second party heretindár whether or not khe delay or
withholding of such consent was prudent or reasonable or based on good cause. I
Section 23.16. In all instances where Tenant is required hereunder to pay any sum or 4o any act at
a particular indicated time or within an indicated period, it is understood that time is of the essei1ce.
Section 23.11. The obligation of Tenant to pay all rent and other sums hereunder pr, vided to be
Paid by Tenant and the obligation of Tenant to perform Tenant's other covenants and dutis hereunder
constitutes independent, unconditional obligations to be performed at all times provided for her under, save
and except only when an abatement thereof or reduction therein is expressly provided for in tbs Lease and
not otherwise. Tenant waives and relinquishes all rights which Tenant might have to claim aiy nature of
lien against or withhold, or deduct from or offset against any rent and other sums provided her under to be
paid Landlord by Tenant Tenant waives and relinquishes any right to assert, either as a c'aim or as a
defense, that Landlord is bound to perform or liable for the non-performance of any implied icovenant or
implied duty of Landlord not expressly herein set forth.
I
Section 23.18. Under no circumstances whatsoever shall Landlord ever be liable hianunder for
consequential damages or special damages; and all liability of Landlord for damages for brcach of any
covenant, duty or obligation of Landlord hereundcr'snay be satisfied only out of the interest of Landlord in
the Shopping Center existing at the time any such liability is adjudicated in a proceeding as to which the
judgment adjudicating such liability is non-appealable and not subject to farther review. It is iirtendtd that
Landlord shall not have any personal liability under this Lease, and in no event shall a judg4ient for any
deficiency he sought, obtained or enforced against any party of Landlord under the tennsbereo
Section 23.19NIA
Section 23.20. In no event shall Landlord, including any successor orassignee 4t'
all or any,
portion of Landlord's interest in the Shopping Center, be personally liable or accountable wi$h respect to
any procision of this Lease. If Landlord shall be in breach or default with respect to anfr obligation
hereunder or otherwise, Tenant agrees to look far satisfaction solely to Landlord's Interest In re Shopping
Center. The provisions of this Section 2320 are not Intended to, and shall not, limit any righ that Tenant
might otherwise have to obtain injunctive relief against Landlord or Landlord's successors ii interest or
any other action not involving the personal liability of Landlord to respond in monetary d4tnages from
assets other than Landlord's interest in the Shopping Center, or any suit or action in conrectiott with
enforcement of collection of amount which may become owing or payable under or on accountofimuemce
maintained by Landlord. In the event Landlord transfers this Lease, other, than as security for la mortgage,
the Landlord (and, in case of any subsequent transfers or conveyances, the then Grantor) shalt, upon such
transfer be relieved from all liability and obligations hereunder arising after such transfer. I
Section 23.21 N/A
Section23.22. N/A
Section 23.23. No payment made by Tenant or received by landlord in an amount less than the
amount herein stipulated shall be deemed to be other than on account of the earliest received I ayment, nor
shall any endorsement or statement on any check or any letter accompanying any check or payment as
Rental or any other sum payable hereunder to deemed an accord and satisfaction, and Landlon I may accept -

24
82
any such check or payment without prejudièe to Landlord's right to recover the balance of amount
from Tenant or to pursue any other remedy in this Lease or by law provided.
Section 23.24. Busing the term of this Lease Tenant shall not install any pay te!epones in or
about the Demisd Premises or the building (the 'Building") of which said premises are a part without the
prior written consent of Landlord. Any attempt to install or the actual installation by Ter ant of pay
telephones in or about the Demised Premises or the Building shall constitute a default by Tenasjt under this
Lease and Landlord may pursue any of the remedies provided in this Lease or available at law Dr in equity
for Tenant's default. In the event Tenant requests Landlord's consent to installation of pay telhones in or
about the Demised Premises or the Building, Landlord shall have the right (in addition to its at solute right
to relbse to Consent thereto) to condition its consent upon payment by Tenant to Landlord of allor any part
of the consideration to be received by Tenant fromthe use and operation of said pay telephone *rvice.
ARTICLE XXIV
ENVIRONMENTAL LAW COMPLIANCE

Section 24.1. The parties acknowledge that there are certain federal, state and local laws,
regulations and guidelines relating to or affecting the Demised Premises in the Shopping Centerl concerning
the impact on the environment of construction, remodeling, land use5 maintenance and 4eration of
structures in the conduct of business. Lessee will not cause, or permit to be caused, any act or practice, by
negligence, omission, or otherwise, that would adversely affect the environment or do anythisg or permit
anything to be done that would violate any of said laws, regulations or guidelines. Any viol; don of this
covenant shall be an event of default under this Lease. I
Lessor shall be responsible for any environmental problems in the Demised Pipmises that
originated before Lessee's occupancy. Lessor shall also be responsible for any environmentsl problem in
the Shopping Center common areas not the responsibility of Lessee. Such environmental probbms include
butane not limited to formaldehyde foam insulation, asbestos, dioxin and radon gas. I
Lessor agrees to lndeninifr and hold, Lassee harmless from and against any 1iabiIit or damage
which Lessee may incur by reason of contaminants, hazardous waste or other similar types or forms of
hazards as long as such liability was not due to Lessee's fault or negligence. Lessee shall not is required to
pay rent for any period in which in its sole jndgment the Premises are not safe to occupy hr cause of an
environmental problem not caused by Lessee. If Lessor cannot correct said problem within me hundred
twenty (120) days, Lessee, at its option, may cancel this Lease.

25
ADDITIONAL PROVISIONS.

1st Extension Term

A period of sixty (120) months at the then fair market value

The Conditions which must be met: (a) Tenant shall have fully performed all of covenants,
duties and obligations hereunder during the proceeding Term; and (b) Tenant shall have ren written
notice to Landlord not less thank one hundred eighty (180) days prior to the expiration of the treat Term
of Tenant's intention to exercise such option,

c- sr Y14. I

EXECUTED this theday of-April, 2010 (as to LANDLORD) and the Lday
,2010_(as to TENANT).

LANDLORD:
MarineCo International LC

TENANT:
O1JTJ4W COUNJ11Y, L.LC

President
ANp-10r41 /A i K'r TJS

26
84
EXHIBIT "A-i"

CYPRESS WOOD SHOPPING CENTER

Being a tract orpancel containing 7.0495 acres of land in the George IL. Delesdernice Survey, A stract 229,
Hams County, Texas, and being the remainder of that certain 7.1892 acre tract oonveye to Conan
Investment Properties of record in Harris County Clerk's File (U.C.C.F.) No. 0823181 and more
particularly described by metes and bounds as follows (all bearings are referenced to the Texas irate plane
Coordinate System, South Central Zone):

BEGINNING at a found 5/8 inch iron rod at the most easterly corner of said 7.1892 acre tract d the most
northerly corner of that certain 7.1016 acre tract of record in }LC.C.F. No. 11879992 in then thwesterly
right-of-way (RO.W.) line of Kuykendaid Road, 100.00 feet wide;
THENCE, departing said southwesterly R.O.W. line, South 55 °4349" West, 449.15 feet all ig the line
common to said 7.1892 acre tract and said 7.1016 acre tract to .a found 518 inch iron rod the most
southerly corner of said 7.1892 acre tract and the most westerly corner of said 7.1016 acre tract;
THENCE, North 340 16'1l" West, 73124 feet along the line common to said 7.1892 acre tract da9.4153
acre tract of record in XLC.C,F No. 11806216 to a found 5/8 mIt iron rod for the most westei ' corner of
the herein described tract in the southeasterly R.O.W. lineofLouet*aRndd, 100.00 feet wide;

THENCE, North 5556'02" East, 299.15 feet along said southeasterly 1LO.W. line of Loucti Road to a
found one inch iron rod at the intersection with the line common to said 7.1892 acre tract and a .5514 acre
tract of record in ILC.CF. No. 0882804 and corrected under ILC.CE. Number 11384075;
THENCE, departing said southeasterly R.O.W. line, South 340161tD East, 140.00 feet Dug a line
common to said 0,5514 acre tract and said 7.1892 acre tract toafound one inch iron rod;
THENCE, continuing along a line common to said 0.5514 acre tract and said 7.1892 acre ract, North
55056'02" East, 150.00 feet to a found 518 inch iron rod in the aforementioned southwesterly ,O.W. line
of Kuykendahl Roast,
THENCE, South WWII" East, 589.64 feet along said southwesterly 1LO.W. li/se of Kuykeni tid Road to
the POINT OF BEGINNING and containing 7.0495 acres of land.

27
 EXHIBIT "0"

GUARANTY

FOR VALUE RECEIVED, in consideration for and as an inducinent to MaiineCorp international LC. ("La ant") to
enter into the foregoing Lease with OUTLAW COUNTRY, L.L.C.
"(Tenant"), for premises located In the Cypresswood II Shopping Center, the undersigned, TO
("Guarantor") hereby guarantees to Landlord, its legal representatives successors and assigns, the fill a faithful
performance and observance by Tenant, its successors and assigns, of all terms, covenants, conditions, Smelts,
restrictions and limitations of the Lease (of the aforementioned premises), Including without limitation the nent of
all Rent, together with the payment of all costs, attorneys feet and other expenses intoned by Landlord ii
such peiTonnance and observation.

The Guarantor Is an individual, and Guarantor represents that he will receive substantial and
consideration as a result of said Lease entered into with Tenant

Guarantor further covenants that (I) the liability of the Guarantor is primary, and shall not be to
deduction for any claim of ofilset, counterclaim or defense which Tenant may have against Landlord, and Lai
proceed against guarantor separately or jointly, before, after or simultaneously with any proceeding against
default; (2) this Guaranty shall not be terminated or. impaired in any manner whatsoever by reason of the a rrtion by
the Landlord against Tenant of any of the rights or remedies reserved to Landlord pursuant to the provis as of the
Lease, by reason of any summary or other proceedings against Ten*nt, or, by reason of any extension 'time or
indulgence granted by Landlord to Tenant, (3) Guarantor expressly waives any requirement of notice of no payment,
non-performance or non-observance, or proof of notice or demand; and (4) this Guaranty shall be at lute and
unconditional and shall remain and continue in full force and effect as to. any and- all renewals, tensions,
amendments, additions, assignments, subleases, transfers or other modifications of the Lease. All obili ions and
liabilities of Guarantor pursuant to this Guaranty shall be binding upon the heirs, personal representatives, sccessors
and assigns of the Guarantor. This Guaranty shall be governed by and construed in accordance with the lay of Texas.
This Guaranty will remain in full effect up to and including October 31, 2015.

Dated: o, IC)
Witness or Attest:

W eat Jordan

Witness Karen Jordan Security Number

18433 Kuykendabl, Spring. TIC 77379
Address and Telephone Number

STATE OF TEXAS
COUNTY OF HARRIS
BEF9,ZJE, - the undersigned authority, on this day personally appeared
/ 4J .S , known to me to be the person whose name is subscribed to the
foregbmg inurement and acknowledged to me that he executed the same for the purpose and considerf don therein
expressed. . .

GIVEN UNDER MY HAND and seal of office this . dayof_________ 2010 :

Noubl_ asZC" county, Texas my Corn R is, 2OA 0
AI DE, CF

• . 28
• . . S

86
EXHIBIT "B"

GUARANTY

FOR VALUE RECEIVED, in consideration for and as an inducement to MarineCorp International LC, ("L ndlord") to
enter into the foregoing Lease with BACKWOODS COUNTRY CLUB, L.L.C.
"CI'cnant"), for premises located in the Cypresswood It Shopping Center, the undersigned, Anthony Mill and Kyle
Tones ("Guarantor") hereby guarantees to Landlord, its legal representatives successors and assigns, se full and
faithful performance and observance by Tenant, its successors and assigns, of all terms, covenants, conditions,
agreements, restrictions and limitations of the Least (of the aforementioned premises), including without Ii sitasion the
payment ofailKent, together with the payment of all costs, attorneys fees and other- expenses Incurred by ,asdlord in
enforcing such performance and observation.

The Guarantor is an individual, and Guarantor represents that. he will receive substantial renetit and
consideration as a result of said Lease entered into with Tenant.

Guarantor further covenants that: (I) the liability of the Guarantor is primary, and shall not subject to
deduction for any claim ofotihet, counterclaim or defense which Tenant may have against Landlord, and ndlord may
proceed against guarantor separately or jointly, before, after or simultaneously with any proceeding agat Tenant for
default; (2) this Guaranty shall not be terminated or impaired in any manner whatsoever by reason of th issertion by
the Landlord against Tenant of any of the rights or remedies reserved to Landlord pursuant to the pro ions of the
Lease, by reason of any summary or other proceedings against Tenant, or by reason of any extensii of time or
indulgence granted by Landlord to Tenant; (3) Guarantor expressly waives any requirement of notice of si-payment,
non-performance or non-observance, or proof of notice or demand; and (4) this Guaranty shall be nolute and
unconditional and shall remain and continue in dill force and effect as to any and all renewal extensions,
amendments, additions, assignments, subleases, transfers or other modifications of the Lease. All ol gstions and
liabilities of Guarantor pursuant to this Guaranty shall be binding upon the hairs, personal representaliv successors
and assigns of the Guarantor. This Guaranty shall be governed by and construed in accordance with the I is of Texas.
This Guaranty will remain in dill effect up to and including October 31, 2015.

Dated:

WI ass orAttest: Guarantor

Tony Miller Kyle Tomes

Witness 1a1 Security Number
1M33 Kuikendahl. Sprin g, TX 77379
Address and Telephone Number

STATE OF TEXAS
COUNTY OF HARRIS
BEFORE ME,the undersigned authority, on this day person
I 4'5bS4/ ,rnii.tat-X known to me to be the person whose name is to the
foicgolng i$trument and acknowledged to me that he executed the same for the purpose and eoi therein
expressed.
7)
GIVEN UNDER MY HAND and seal of office this . day of(J Z'&- .2010

N
O NOTARY PUBLIC
and i STATE OF TEXAS -

A.
28

FMA
EXIflBIT "C"

"AS-IS" Except as follows:
Landlord will provide a new air-conditioning unit with a 90 day warranty. In addition Landlord
Will make all necessary repairs to the roof.
Landlord will provide a seventeen ($17.73) dollar and Seventy three PSP Tenant In provenleflt
allowance which will be paid to Contractor as follows:
Upon the signing of a construction contract with Tony Miller, receiving a certificate o Insurance
naming Landlord and Management Company as additional insured , along with a list of all
subcontractors with their certificates of insurance, approved construction plans and I required
permits, and the following work is completed: all Plumbing, framing, electrical and tecurity &
camera Rough lit, Landlord will pay one third of the total allowance.
The second third will be paid upon the presentation of partial complete lien waive a from all
subcontractors and the completion of drywalls, bar fabrication, bathroom manufsc uriug and
bathroom fixture Installation.
The last payment, less a ten (10 0/4) percent retainer (payable with final sign off of Tenant
Improvements, between Landlord and Tenant), will be paid upon receipt of an occupancy
all final lien waivers
Landlord shall allow all leasehold Improvements with it tenant allowance *1117.73 per 11SF.
EXHIBIT 9)"
TENANT SIGNAGE CRITERIA
CYPRESSWOODII SHOPPING CENTER
PREFACE
These sign criteria are hereby set thetis by Zenith Real Estate Services. Inc. as agent
International, LC, a Texas limited liability company ("Landlord") to govern any and all signagi by tenants
leasing space in the above referenced shopping center.
These criteria serve to protect you, the tenant, from signs of poor quality. They also insure I he center's
owners and attractive center with coordinated signage that is of good quality
Signage Identification - Tenant will be permitted, at his expense, to Install a sign on E uykendahl
Street. The sign will be located between the two oak trees directly south of the main F ylon. The
specifications-and exact location subject to final approval by Landlord.
REQUIREMENTS - ALLOWANCE - RESTRICTIONS
One of your appro*d sign contractors should be given a copy of this criteria to serve as t 2e guide in
preparing a design and cost estimate for you.
Prior to manufacturing any signage, you or your sign company must submit three copies of d e approved
sign company's design to the offices of the Landlord. These drawings must clearly show the sign on the
building's facade and delineate all construction techniques and materials. It must state the cel ktor's name,
tenant's name and location of the lease apace in the center.
No sign may be erected without first securing the written approval of the Landlord.
The tenant and sign company shall beheld liable and shall bear all costs for removal and/or c Drrection of
signs, sign installation and damage to building by signs that do not conform to sign criteria as put forthin
these specifications and accompanying drawings. This is at the discretion of the center's owner.
All signs are to be constructed and installed at tenant's expense.
All necessary permits for signs and their installation shall be obtained by the tenant or his si contractor.
The City or other governmental agency having jurisdiction over the signage in this center is se forth in the
SPECIFICATIONS section of this criteria.
Sign companies must conform to the following criteria.
1. They must be licensed by the City of Houston under their own name; i.e., Acme Signs li4ted with
the city asA&b Electric is not acceptable.
2. They must be capable of manufacturing signs according to the basic criteria for that ccii
3. They must be capable of manufacturing signs according to the criteria set forth by the National
Electrical code in Article 600 and Chapter 46 of the City of Houston Building Code (How n Sign
code).
4. Sign companies which are acceptable by the Landlord and who meet all of t1e above
requirements are:
a. Federal Sign o. Texas Sign Source e. Neon Electric Coxpo ration
b. Coast Graphics & Signs d. Advanced Signing
FASCIA SIGNAGE
All tenants must have an exterior illuminated sign that conform to these sign criteria.
Alt signs are to be located on the shopping center's facade. Signs shall be in the form ofisdividual fall
metal channel letters, internally illuminated, and mounted on a fullmetal raceway which is atlacbed to the
building's facade.
The overall snarrinsum length of a sign shall not exceed 80% of the lease frontage.

All
• 'M'
p
30
• 89
 Tenant must use a clean, readable letter style. Tenant letters may vary between a minimum of 0" high and
a maximum of 36" high; subject to the limitations set forth under the specifications of the 4 enter. Sign
letters are to be 5" deep,

Raceway shall contain all secondary wiring and transformers. Raceways dimensions shall be 'ed by
letter height as follows:
LETTER HEIGHF RACEWAY DTh4ENS ONS
20"- 24" 8"hX 7"d
25" -30" (where allowed) 9"h X 7"d
• 31" -36" (where allowed) 10"hX 7"d
Signs are to be mounted on the facade as set forth in the specifications for this center I elow. SEE
DRAWING A.
• CONSTRUCTION SPECWECATIONS
• .
Fabricated metal letter backs and returns are to be constructed of .063 gauge aluminum wi interrupted
• .• Halyard electric welding, or .040 gauge aluminum with returns pop riveted to the back of the I ettef with on
pop rivets visible. Raceway to be of similar construction.
• .
"Channel Lume" type, channel letters utilizing "Armor Ply" plywood as letter backs are proh bited for use
on the shopping center's facade.
The individual letters are to be either loon Enamel over steel orBàked Enamel over aluminum. The interior
• of all hitters are -to be painted white.

Note: These letters may take six to eight weeks to fabricate and Install. Raceway to be f similar
construction.

Letters 24" high and larger shall have two rows of 13mm neon. Letters smaller then 24" shal I have single
row 13mm neon.
• . Neon shall be 6500 Kwith 30 ma. transformers.
• All letters shall have a plexiglas face of 3/16" thick plexiglas. The plexiglas shall be retait ad with a 1"
• "Jewel Lite", or eqtaI, acrylic over metal trim molding,
• All fasteners, screws, bolts and spacers used in the fabrication of signs shall be nonfi rrous and/or
noncorrosive.
1. LETTER HEIGHT:
• . - PLEXIGLAS COLOR

• ' 3. NEON COLOR:
4. LETTER RETURN COLOR:
,5. TRIM CAP COLOR:
6. .. -RACEWAY COLOR:
• - .
- .7.. LOCATION ON FASCIA-
]FASCIA MATERIAL:
• . •. . .
The governmental agency with jurisdiction over the permitting and operation of sigeage at resswood IT
• Shopping Center is the City of Houston.
INSTALLATION

The sign will be attached -to the building facade by having the raceway attached to the i kcade as per
attached "Drawing A".

Wiring fedin the letters shall pass first through conduit through facade to electrical service provided by the
• ' •' tenant from the tenant's electrical panel. Where facade is penetrated for mounting and condi 'hit shall be
• • seated to be 'diade 'tetight. This is the responsibility of the sign contractor. SEE r HAWING B
ATTACHED.
PROHIBITED SIGNAGE

Flashing, occulting or moving higos are prohibited. .
.

31
90
Sign text shall consist of store name only.
Box type of signs are prohibited.
Banner flags or pennants are prohibited.
Trailer, marquee type signs are prohibited. Any such signs installed on the premises of this ccc will be
removed by Landlord at Tenant's expense.
PYLON SIGN CRiTERIA

The criteria for all pylon signs is as follows (unless a pylon supplement sheet is attached):
a. Face material for signs smaller than 35 sq. ft. will be flat 3/16" lexan with back sprayed co
b. Face material for signs greater than 36 sq. A. will be flex face with heat transfer copy.
c. Lighting to be by 7800 ma. high output fluorescent lighting.
d. Colors to be dark bronze background with white copy.
e. Copy on sign to consist of name of store only.
E Position of sign on pylon must be approved by owner.
PYLON SIGN PRICES ACCORDING TO SIZES

The maintenance agreement on the pylon sign is detailed below according to the size of the sign.
a. 24 st or less = No Charge to Tenant, In exchange for a Personal Guaranty.
1. 24 to 48 s.f. =No charge to Tenant
c. Over 48 s.f. =No charge to Tenant
Maintenance includes: replacement of all lamps, ballasts, sockets, and wiring; crane annual..
cleaning of individual signs; and bi-aimual painting of steel.

/

32
91
 EXHIBIT "E"

OPTION TO EXTEND LEASE

Contingent upon Tenant satisfying all of the required conditions, (the "Conditions") Tenjmt is
hereby granted One (I) separate Option Period (the "Extension Terms") to extend the Lease, as set
forth in Article 1, 1.1(h) (the "PrimaiyTenn'),as follows: I

1st Extension Terns

Aperiodof sixty (120) months at the then fair market value
The Conditions which must be mete (a) Tenant shall have fiulyperfbnned all of its covenants,
duties and obligations hereunder during the proceeding Tenn and (b) Tenant shall have given w ritten.
notice to Landlord not less thank one hundred eighty (180) days prior to the expiration of the cu4entTenn
of Tenant's intention to exercise such option. I

•

9
 EXRIBIT"F"

OPTION TO TERMINATE LEASE

WA

34
/ 93
 EXHIBIT "G"

Between MarineCorp International (Landlord) and THE CHOPPER. GROUP LLC.. (Tenant)
1. See Exhibit "C", items 1-2
2. See Exhibit "D", Preface section
3. See Exhibit "C", item 3
4. Upon signing this lease agreement the tenant will not forfeit any individual or corporate rigi teas
guaranteed by the State of Texas or the Federal Government
S. See Article I, item b, and item u. SceExhibit"C', item 4
6.

35,
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 "/l•

FIRST AMENDMENT TO LEASE AGREEMENT

This FIRST AMENDMENT TO LEASE AGREEMENT ("First Amendment") is made
and entered into this Vt day of November, 2011 by and between Marinecorp
International Ltd (the "Landlord") and Outlaw Country, LLC ("Tenant").

Whereas, Landlord and Tenant hereby confirm and ratify, except as modified below, all
the terms, conditions and covenants in that certain Lease Agreement dated September 20,
2010 for the rental of the property located at 18443 Kuykendahl Rd, Spring, Texas,
77379 (the "Building") herein called the "Lease" between Landlord and Tenant.

Now, therefore, in consideration of One Dollar ($1.00) and other good and valuable
consideration, receipt and sufficiency of which are hereby acknowledged, Landlord and
Tenant agree as follows:
1. Term of Lease: As defined in section 1.11 & m. of the above mentioned Lease,
Tenant has been granted an extension of the Lease Term until December 31, 2016
2. Monthly Rental: The rent for the month of November 2011 will be abated. The
rent for November 2012 will be deferred ($13,930.80) and will be amortized over
the remaining term of the Lease.
Monthly Rental- $13,014.30 per month for December 1, 2011—October 31, 2012
$14,162.98 per month for December 1, 2012October 31.2013
$15,079.48 per month for November 1,2013-October 31, 2014
$15,995.98 per month for November 1,2014-October 31, 2015
$16,830.80 per month for November 1,2015-December 31, 2016
3. Failure of Anthony Miller and Lee Harless to execute a promissory note at the
same time of this Amendment will make this First Amendment null and void

IN WITNESS WHEREOF, This First Amendment has been executed as of the
above date.

LANDLORD: TENANT;

MarineCorp International, Ltd utlaw Country, LC
By: Zenith Real Estate Services, Inc.,
As Agent

Ay ser
Lee Hart ess

LEk
 ACCEPTED
01-14-00707-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
10/30/2015 1:52:16 PM

the strother law firm
CHRISTOPHER PRINE
CLERK

4306 yoakum blvd., suite 560
houston, texas 77006
telephone: 713-557-9238
mstrother@strotherlawfirm.com

October 30, 2015

Hon. Christopher A. Prine
Clerk of the Court
First Court of Appeals
VIA E-FILING

RE: Cause No. 2012-23983; The Chopper Group, LLC and Outlaw Country, LLC vs.
MarineCorp International, Ltd.; In the 80th Judicial District Court of Harris
County, Texas

RE: Court of Appeals Cause Number 01-14-00707-CV

Dear Clerk:

Enclosed for filing in the above-referenced cause of action is Marinecorp International,
Ltd.'s Brief for Appellant.

Your prompt and kind attention hereto will be greatly appreciated.

Yours truly,

MACON D. STROTHER

MDS/kmc
Enclosures
cc: Brock Akers
via email bca@akersfirm.com

cc: Steve Cochell
via email srcochell@gmail.com

cc: Lee Harless and Dawn Marie Harless
11435 Log Cabin Dr.
Tomball, TX 77375
via CM/RRR 7013 0600 0001 1817 8599

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