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Rolling Oaks MC-CN080418AGREEMENT OF LEASE between CITY OF COPPELL, TEXAS Landlord, and S. E. Funeral Home of Coppell, Texas, Inc. d/b /a/Restland funeral Home - Coppell Chapel Tenant. Dated: Premises: A Specified Portion of Land at Rolling Oaks Cemetery Coppell, Texas 25348 TABLE OF CONTENTS ARTICLE I PREMISES ARTICLE 2 TERM/RENT ARTICLE 3 CONSTRUCTION OF THE BUILDING ON THE LAND ARTICLE 4 CONDITION OF THE PREMISES ARTICLE 5 TAXES /ASSESSMENTS ARTICLE 6 NET LEASE ARTICLE 7 USE AND OCCUPANCY ARTICLE 8 REPAIRS ARTICLE 9 REQUIREMENTS OF LAW ARTICLE 10 INSURANCE, LOSS, REIMBURSEMENT, LIABILITY ARTICLE 11 DAMAGE BY FIRE OR OTHER CAUSE ARTICLE 12 QUIET ENJOYMENT ARTICLE 13 UTILITIES ARTICLE 14 LANDLORDS REPRESENTATIONS, WARRANTIES AND COVENANTS ART 1 CLE 15 TENANT'S REPRESENTATIONS, WARRANTIES AND COVENANTS ARTICLE 16 BROKERAGE ARTICLE 17 PROHIBITIONS ON MORTGAGES; LIENS ARTICLE I8 NOTICES ARTICLE 19 EMINENT DOMAIN 11 Page 1 2 4 8 8 10 11 12 12 13 15 16 16 16 18 19 20 20 21 EXHIBITS EXHIBIT A DESCRIPTION OF LAND EXHIBIT B SURVEY OF LAND EXHIBIT C FORM OF OFFICE SUBLEASE iii Page ARTICLE 20 INDEMNITY 21 ARTICLE 21 ASSIGNMENT, SUBLETTING. ETC. 22 ARTICLE 22 EVENTS OF DEFAULT 24 ARTICLE 23 LANDLORD'S RIGHTS UPON TENANT'S DEFAULT 25 ARTICLE 24 MEMORANDUM OF LEASE 25 ARTICLE 25 IMPAIRMENT OF LANDLORD'S TITLE 26 ARTICLE 26 ESTOPPEL CERTIFICATE 26 27 ARTICLE 27 SIGNS ARTICLE 28 ENVIRONMENTAL COMPLIANCE 27 ARTICLE 29 TERMINATION BY TENANT 28 ARTICLE 30 MUTUAL COOPERATION 29 ARTICLE 31 MISCELLANEOUS 29 EXHIBITS EXHIBIT A DESCRIPTION OF LAND EXHIBIT B SURVEY OF LAND EXHIBIT C FORM OF OFFICE SUBLEASE iii AGREEMENT OF LEASE THIS AGREEMENT OF LEASE ( "Lease ") is made as of the /,� day of 520(9,,5— , between the CITY OF COPPELL, a Texas city having its principal office at 255 Parkway, Coppell, Texas 75019 ( "Landlord "), and S. E. Funeral Home of Coppell, Texas, Inc., d/b /a Restland Funeral Home - Coppell Chapel, a Texas corporation ( "Tenant "), having its principal office at 1333 South Clearview Parkway, Jefferson, Louisiana 70121. WITNESSETH: WHEREAS, Tenant has for many years owned and operated funeral homes and, as a result, possesses significant expertise and experience in providing at -need and pre -need funeral home services for residents of the State of Texas; and WHEREAS, Landlord is a city that owns and operates Rolling Oaks Cemetery at Coppell, Dallas County, State; of Texas (the "Cemetery"); and WHEREAS, Landlord and Tenant believe that it would be in their best interests and in the best interests of the families and communities which they serve to combine their skills and abilities in a manner that, while maintaining their respective independent identities and operations, will provide more complete and convenient funeral home and cemetery services to their patrons. NOW, THEREFORE, the parties hereto, for themselves and their respective successors and permitted assigns, hereby covenant and agree as follows: ARTICLE I PREMISES Landlord hereby leases to Tenant, and Tenant hereby hires from Landlord, the land described on Exhibit A annexed hereto and made a part hereof (the "Land'), the buildings, improvements and appurtenances of every kind and description now located or hereafter erected, constructed or placed on the Land (the "Building "), and the fixtures currently or hereafter located in or on or permanently attached to the Building (the Land and the Building and its fixtures are jointly hereinafter referred to as the "Premises "), for a term hereinafter stated, for the rents hereinafter reserved and upon and subject to the terms, covenants and conditions hereinafter provided. Each party hereby expressly covenants and agrees to observe and perform all of the conditions and covenants herein contained on its part to be observed and performed. -1- ARTICLE 2 TERM/RENT 2.01. Landlord hereby leases to Tenant, and Tenant hereby hires from Landlord, the Premises for the term (the "Term ") commencing on the date hereof (the "Commencement Date ") and ending at noon local time on December 31 of the year in which the thirtieth (30th) anniversary of the Rent Commencement Date (defined in Section 2.02) occurs (the "Expiration Date "), or until the Term shall sooner terminate as hereinafter provided. 2.02 Rent A. In consideration for the possession and use of the Land, Tenant will pay to Landlord, at such place as Landlord may from time to time specify by notice given to Tenant, without deduction or offset of any kind, an annual rental in an amount equal to the greater of (a) $50,000 (the "Fixed Rent ") or (b) six percent of Tenant's annual Adjusted Gross Revenues, as defined in Section 2.06 (the "Revenue Rent "). The Fixed Rent will be payable, without notice or demand, in monthly installments of $4,166.66 on or before the first day of each month commencing on the the day Tenant obtains a funeral establishment license from the Texas Funeral Service Commission (the "License ") permitting Tenant to operate a fully- licensed funeral establishment and crematory on the Premises, (such day being the "Rent Commencement Date "). For any period less than a full calendar month, the monthly installment of Fixed Rent will be reduced proportionately. Notwithstanding the foregoing it is specifically agreed that during Lease years 1, 2 and 3 of the Lease, Tenant shall not be obligated to pay the Fixed Rent and the rental to be paid by Tenant hereunder during Lease years shall be limited to the Revenue Rent. It is further agreed that Tenant shall be entitled to an annual credit in the amount of $5,000 that is to be applied to the rental due hereunder with respect to any water and sewer charges that are incurred with respect to the Leased Premises (the "Water and Sewer Credit "). B. Any other charge for which Tenant may become liable under this agreement will be due and payable on demand as additional rent hereunder. C. Time is of the essence as to all required payments by Tenant under any provision of this Lease. If any monthly installment of rent is not received by the Landlord on or before the 10th day of the month for which said monthly rental installment is due, a service charge of $50.00 will become due and payable in addition to the monthly installment owed. The date that a check is dated or mailed is not relevant in determining Tenant's liability for a late fee; Landlord's accounting records are the determining record of the date of receipt of a rent payment. The service charge is for the purpose of reimbursing Landlord for the extra costs and expenses incurred in connection with the handling and processing of late monthly rental. -2- D. If any installment of Fixed or Revenue Rent is not paid within 10 days of the date it is due, then the delinquent amount (not including the service charge) shall bear interest at the lesser of: (1) 12 per cent per annum, or (2) the maximum lawful contract rate. Such interest shall begin to accrue on the 1st of the month following the delinquency and continue until payment of the delinquent amount is made. E. If any check that is tendered to Landlord by Tenant for any charges due under this Lease is returned to Landlord by Tenant's financial institution for any reason (including but not limited to absence of Tenant's signature, insufficient funds, stop payment, or closed account) then, in addition to any other liability of Tenant for the amount of the check, Tenant shall be liable to Landlord for a service fee of $50.00 for each returned check. Landlord has no obligation to redeposit any check that is returned for any reason and Tenant shall immediately cure the non - payment that has resulted from the returned check. If Landlord receives two or more returned checks during the term of this Lease, then Landlord may require that all future payments from Tenant be made by cashier's check. 2.03. On or before February 15 of each calendar year during the Term of this Lease, commencing with the calendar year in which the Rent Commencement Date occurs, Tenant shall pay to Landlord as additional rent an amount equal to the excess, if any, of the Revenue Rent over the Fixed Rent. 2.04. All sums other than Fixed Rent or Revenue Rent as shall become due and payable by Tenant to Landlord hereunder shall be deemed additional rent ( "Additional Rent "), and shall be paid promptly by Tenant to Landlord as and when the same shall become due and payable, without demand therefor. 2.05. Tenant shall pay the Fixed Rent, Revenue Rent and Additional Rent in lawful money of the United States of America, by check of Tenant payable to Landlord or Landlord's designee at the address designated by Landlord in writing to Tenant, without any offset, abatement or deduction whatsoever. 2.06. For purposes of this Lease, the term "Annual Adjusted Gross Revenues" shall mean, with respect to any calendar year or portion thereof, total gross revenues less sales taxes, discounts, cash advances, amounts received in connection with the sale of pre -need funeral services and merchandise and all amounts required by Texas law or regulation to be placed in trust generated in each such calendar year by Tenant's operations on the Premises, as such amount is determined by Tenant from the books and records maintained by Tenant in the ordinary course of its business. A "Cash Advance" item is an item obtained for a consumer from a third party not under Tenant's control and paid for by Tenant on such consumer's behalf, which items may include but are not limited to cemetery or crematory services, pallbearers, public transportation, clergy honoraria, flowers, musicians or singers, nurses, obituary notices, -3- gratuities and death certificates. On or before January 31 of each calendar year during the Term, Tenant shall submit a statement to Landlord, satisfactory to Landlord in form and substance, certified as correct by a Certified Public Accountant, or at Landlord's election, by Tenant's chief financial officer, showing the amount of total gross revenues for the period January 1 through December 31 of the preceding calendar year, together with an itemization of all claimed deductions therefrom. Tenant shall provide Landlord with access to Tenant's books and records, including bank statements, upon not less than three (3) days prior written notice by Landlord, for the purpose of verifying Tenant's Annual Adjusted Gross Revenues. Landlord shall, and shall cause its officers, employees and authorized representatives to, treat in confidence any information received from Tenant in connection with the review of Tenant's books and records. "Control" for purposes of this Section shall mean the ownership of fifty -one percent (51 %) or more of the voting shares or interests of a given entity. 2.07. Promptly following the Rent Commencement Date, Landlord and Tenant shall enter into a recordable supplementary agreement confirming the Rent Commencement Date and the Expiration Date. 2.08. If the Rent Commencement Date occurs on a day other than the first day of a calendar month, the Fixed Rent for such calendar month shall be prorated. 2.09. Notwithstanding anything set forth in this Lease to the contrary, at Tenant's option, all obligations of Tenant pursuant to this Lease shall terminate if Tenant is unable to obtain after its reasonable best efforts (but in no event later than eighteen [18] months following the Commencement Date) all consents and approvals of any governmental entity (including, without limitation, approval of the State of Texas, the County of Dallas, and the City of Coppell) necessary to the construction of the Building or the operation of Tenant's business on the Premises, including obtaining the License, Landlord and Tenant, at Tenant's sole cost and expense, shall take or cause to be taken any and all action reasonably required by either to obtain all such approvals. ARTICLE 3 CONSTRUCTION OF THE BUILDING ON THE LAND 3.01. Landlord hereby grants, consents to, and requires, and Tenant hereby agrees to, the erection, construction, placement, operation and maintenance of the Building on the Land by Tenant, at Tenant's sole cost and expense; provided however, that expense of the entry gate and signage shall be split equally by the Landlord and Tenant. The cost of the Building shall be paid in cash or its equivalent so that the Premises shall at all times be free from liens, labor and materials supplied or claimed to have been supplied to the Premises. A survey depicting the Land shall be made, and when completed and approved by the parties, shall be annexed hereto as Exhibit B and made a part hereof. Landlord and Tenant agree that if Tenant does not commence ME to construct or erect the Building on the Land, through no fault of Landlord, within two (2) years from the Commencement Date, Landlord shall have the right to terminate this Lease. IF THIS LEASE IS TERMINATED IN ACCORDANCE WITH THE TERMS AND PROVISIONS OF THIS SECTION 3.01, LANDLORD AND TENANT AGREE THAT THE DAMAGES THAT LANDLORD SHALL SUSTAIN AS A RESULT THEREOF SHALL BE DIFFICULT TO ASCERTAIN, AND THEREFORE LANDLORD AND TENANT FURTHER AGREE THAT TENANT SHALL BE OBLIGATED TO PAY TO LANDLORD, AND LANDLORD SHALL BE ENTITLED TO RECEIVE FROM TENANT, THE SUM OF FORTY THOUSAND AND 00 /100s DOLLARS ($40,000.00) AS LIQUIDATED DAMAGES AND NOT AS A PENALTYAOLLOWING LANDLORD'S TERMINATION OF THIS LEASE UNDER THIS SECTIO 01. LANDLO S INITIALS TENANT'S INITIALS Notwithstanding the foregoing, such liquidated damages shall not apply if Tenant cannot commence construction or erect the Building on the Land because of Tenant's inability to obtain all needed approvals as set forth in Section 2.09. 3.02. Prior to the Commencement Date, at Tenant's sole option and expense Tenant shall cause to be conducted, a Phase I environmental study regarding the Land upon which the funeral home is to be located (the "Study "). Tenant shall furnish to Landlord a complete copy of the Study. Tenant does hereby indemnify, defend and hold harmless Landlord from and against any and all claims, causes of action, losses, liabilities, damages, fines, penalties, costs and expenses, including without limitation., reasonable attorneys fees ( "Claims "), arising or resulting from any act, omission or negligence of Tenant or its agents, employees, representatives or consultants in conducting the Study. 3.03. Upon receipt of Landlord's approval of the Construction Documents, Tenant shall, at its sole cost and expense, diligently apply for and seek to obtain all necessary building and other governmental permits, licenses and approvals required (i) for the use, occupancy, operation and maintenance of the Building and the business to be conducted by Tenant therein ( "Tenant's Use Approval "), and (ii) for the construction and erection of the Building ( "Tenant's Construction Approval'), Tenant's Construction Approval, together with Tenant's Use Approval, being sometimes hereinafter referred to collectively as "Tenant's Approvals ". Tenant shall have procured and paid for all permits and authorizations required from time to time by Legal Requirement (defined in section 9.01) and upon completion of Building, Tenant shall deliver to Landlord copies of such permits or authorizations, including a Certificate of Occupancy. -5- 3.04. As soon as practicable, but in no event later than six (6) months after Tenant's Approvals have been obtained, subject to force majeure (defined in Section 3.08), Tenant shall, at its sole cost and expense, commence the construction of the Building and shall prosecute same diligently to completion. Tenant shall maintain a complete set of "as built" plans and specifications with respect to the Building and shall, when and as requested by Landlord, deliver a copy to Landlord. Tenant shall comply, in all material respects, with all laws, rules, orders, ordinances, regulations, statutes, requirements, codes and executive orders of any governmental agency, department, commission, board, bureau or instrumentality having jurisdiction over the Premises or any portion thereof. 3.05. Landlord and Tenant shall fully and timely cooperate with each other, and shall cause their respective officers, employees, agents and representatives to cooperate with each other, in obtaining Tenant's Approvals and in performing their respective obligations and responsibilities under this Lease. Each party shall cause its officers, employees, agents, representatives, consultants, experts, contractors and sub - contractors to work in a professional, diligent and workmanlike manner with respect to such obligations and responsibilities. 3.06. "Force majeure" shall mean any and all causes beyond the reasonable control of Landlord or Tenant, as the case may be, including, without limitation, delays caused by governmental restrictions, regulations or controls (including, without limitation, energy and water conservation measures imposed by virtue of governmental laws, rules, regulations or orders), labor disputes, accidents, mechanical breakdown, shortages or inability to obtain labor, fuel, steam, water, electricity or materials, acts of God, enemy action, civil commotion, fire or other casualty or the process; of settling insurance claims; but shall not include lack of funds or financial inability to perform. 3.07. Notwithstanding anything contained herein. Landlord shall at all times (including without limitation during and following the Term) be the owner of the Building. 3.08. All movable fixtures and partitions, telephone equipment, machinery and equipment relating to funeral home, crematory and chapel purposes, and all computer systems, furniture, furnishings, installations, decorations and other items of personal property ( "Tenant's Property") purchased or leased by Tenant and installed by Tenant at its own cost and expense prior to and during the Term shall remain the property of Tenant, and upon the Expiration Date or earlier end of the Term, shall be removed from the Premises by Tenant. Tenant shall repair any damage to the Premises caused by the removal of Tenant's Property. Failure by Tenant to remove any Tenant's Property within thirty (30) days following the Expiration Date or earlier end of the Term shall be deemed an abandonment of such Tenant's Property by Tenant. 3.09. After completion of construction of the Building during the Term, Tenant, at its sole cost and expense, shall have the right to make additions, alterations and changes (collectively the "Alterations ") in or to the Premises provided no Event of Default (defined in Article 22) shall have occurred hereunder, subject in all cases to the following: Eel (1) No Alterations greater than $25,000.00 shall be commenced until Tenant shall have obtained the prior written consent of Landlord which shall not be unreasonably withheld or delayed. Landlord shall respond to Tenant's request for Landlord's consent within ten (10) business days from Landlord's receipt of such request. Each such request by Tenant shall include, in reasonable detail, a description of the nature of the proposed Alterations, the estimated cost and time schedule for making same, and Tenant's evaluation of the impact such Alterations will have on the value of the Premises; (ii) No Alterations shall be undertaken until Tenant shall have procured and paid for all permits and authorizations required from time to time by Legal Requirements (defined in Section 9.01) and, upon completion of the Alterations, Tenant shall deliver to Landlord copies of any such permits or authorizations, including a certificate of occupancy or an amendment thereto, which affect the Alterations as completed; (iii) Any Alterations (a) involving in the aggregate an estimated cost of more than $50,000.00, or (b) which any governmental authority having jurisdiction requires to be certified or supervised by an architect or engineer, shall be conducted under the supervision of an architect or engineer selected by Tenant and approved in writing by Landlord, which approval shall not be unreasonably withheld or delayed, and no such Alterations shall be made except in accordance with detailed plans, specifications and cost estimates prepared and approved in writing by such architect or engineer and approved in writing by Landlord, which approval shall not be unreasonably withheld or delayed; (iv) Any Alterations shall be of a quality or class equal or superior to the original work of construction, shall be made promptly, subject to force majeure, in a good and workmanlike manner and in compliance with all Legal Requirements and all Insurance Requirements (defined in Section 9.01); (v) The cost of all Alterations shall be paid in cash or its equivalent so that the Premises shall at all lames be free from liens for labor and materials supplied or claimed to have been supplied to the Premises; (vi) If the estimated cost of any Alterations shall be in excess of $50,000.00, Tenant, or Tenant's contractor, at their sole cost and expense, as applicable, shall furnish to Landlord a surety company performance bond, issued by a company reasonably acceptable to Landlord, or other security satisfactory to Landlord, in an amount at least equal to the estimated cost of such Alterations guaranteeing the completion thereof within a reasonable time, subject to force majeure, free and clear of all encumbrances, chattel mortgages, conditional bills of sale and other charges, and in accordance with the plans and specifications approved by Landlord. In the event the estimated cost of any Alterations exceeds `,50,000, Tenant shall reimburse Landlord for all reasonable expenses -7- (including attorneys'., architects' and engineers' fees and disbursements) incurred in connection with Landlord's review of any Alterations proposed or made by Tenant; and (vii) Tenant shall maintain a complete set of "as built" plans and specifications with respect to all Alterations and shall, when and as requested by Landlord, deliver a copy thereof to Landlord. 3.10. Whether under the provisions of this Lease or otherwise, neither Tenant nor any agent, employee, representative, contractor or subcontractor of Tenant shall have any power or authority to do any act or thing or to make any contract or agreement which will bind Landlord, or which may create or be the foundation for any mechanic's lien or other lien or claim upon or against the Premises or Landlord's interest in the Premises, and Landlord shall have no responsibility to Tenant or to any contractor, subcontractor, supplier, materialman, workman or other person, firm or corporation who shall engage in or participate in any construction of the Building or any Alterations, unless Landlord shall expressly undertake such obligation by an agreement in writing signed by Landlord and made between Landlord and Tenant or such contractor, subcontractor, supplier, materialman, workman or other person, firm or corporation. 3.11. Landlord, at Tenant's cost and expense and upon the request of Tenant, shall cooperate with Tenant and join in any application for any permits, approvals or certificates required to be obtained by Tenant in connection with the Building and not otherwise contemplated herein and in connection with any and all further Alterations performed by Tenant at the Premises during the Term in a manner consistent with all Legal Requirements. ARTICLE 4 CONDITION OF THE LAND Tenant has examined the Land and agrees to accept the same "as -is ", in the condition and state of repair existing as of the Commencement Date. Tenant shall, at Tenant's sole cost and expense, perform all work. necessary on the Land to prepare the same for Tenant's use, occupancy and enjoyment, and Landlord shall have no obligation whatsoever to perform any work or make any installation on the Land of any nature whatsoever. ARTICLE 5 TAXES /ASSESSMENTS 5.01. From and after the Rent Commencement Date, Tenant shall pay all real estate taxes and assessments (ordinary and extraordinary, unforeseen as well as foreseen), and subject to the Water and Sewer Credit provided for hereinabove, sewer charges and water rents, and such other charges, and taxes, duties and charges, fees or payments imposed on the Premises by any governmental, quasi - governmental, or public authority, utility or entity, any of which is imposed, assessed, levied or becomes due or payable or becomes a charge or lien upon or arises solely in connection with the ownership, use, occupancy or possession of the Premises, or any part thereof, or any improvement thereon, or any appurtenance thereto or the leasehold estate created hereby, during the Term (all of the foregoing being hereinafter sometimes collectively referred to as "Assessment" or "Assessments "). If the Premises are not billed separately and directly for Assessments by the appropriate taxing authorities, Landlord shall deliver a copy of any bill for Assessments to the Tenant, and Tenant shall pay such Assessments (i) directly to the appropriate taxing authority if all of the Assessments are Tenant's obligation to pay, or (ii) to Landlord if Landlord is responsible for some portion of the Assessments, but in no event later than the last day before any fine, penalty, interest or cost may be added thereto for nonpayment. Tenant shall use its best efforts to cause all the Assessments for which Tenant is responsible to be billed separately and directly to Tenant, and Landlord shall cooperate towards that end. For all Assessments paid directly by Tenant, Tenant shall furnish to Landlord, within twenty (20) days after the date of payment, official receipts or photocopies thereof, evidencing that such Assessments have been paid. 5.02. If Tenant shall fail to comply with or perform its obligations under Section 5.01 hereof at any time during the Term, at Landlord's option, Landlord may, at any time thereafter and in addition to any other rights or remedies Landlord may have hereunder, by written notice to Tenant, require Tenant thereafter to deposit with Landlord on the first (1st) day of each calendar month or portion thereof falling within the Term an amount equal to one - twelfth (1/12) of the annual Assessments, as estimated by Landlord, such amount to be held by Landlord without interest and to be applied against the payment of the Assessments as they become due. If on any payment date for Assessments the amount so deposited with Landlord shall be insufficient to pay the same in full, Tenant shall promptly deposit with Landlord sufficient funds to cover the deficiency. 5.03. Nothing herein contained shall require Tenant to pay at any time (i) municipal, state or federal income taxes assessed against Landlord, or (ii) municipal, state or federal capital levy, estate, succession, inheritance or transfer taxes of Landlord, or (iii) corporation franchise taxes imposed on Landlord. 5.04. Tenant may contest the validity or amount of any Assessment for which Tenant is responsible, in whole or in part, by an appropriate proceeding diligently conducted in good faith. Tenant shall only conduct such a contest after payment of the challenged Assessment unless Tenant shall (i) give Landlord prior written notice to the effect that the payment of such Assessment would, in the opinion of Tenant's counsel, prejudice or render moot Tenant's contest, and (ii) within fifteen (15) days after such Assessment shall have become due, have deposited with Landlord, as trustee, an amount sufficient to pay such contested Assessment, together with the interest and penalties thereon (as reasonably estimated by Landlord), which amount Landlord, as trustee, shall apply to the payment of such Assessment when the amount thereof shall be finally fixed. and determined. Nothing herein contained shall be so construed as in to allow such Assessment to remain unpaid for such length of time as shall permit the Premises, or any part thereof, or the lien thereon created by such Assessment, to be sold by a governmental authority for the nonpayment of the same and, if at any time in the judgment of Landlord it shall become necessary or proper to do so, Landlord, after written notice to Tenant, may, in its capacity as trustee, apply the said monies so deposited, or as much thereof as may be required, in payment of the challenged Assessment to prevent the sale of the Premises or any part thereof. If the amount so deposited as aforesaid shall exceed the amount required to satisfy the challenged Assessment as finally fixed and determined, the excess (or the entire amount if no such payment is required) shall be paid to Tenant. If the amount so deposited is insufficient to satisfy the challenged Assessment as finally fixed and determined, the amount of such deficiency shall be forthwith paid by Tenant, including any interest, penalty or legal fees required by the assessing authority. 5.05. Tenant may, at its sole expense, endeavor at any time or from time to time, upon prior written notice to Landlord, to obtain a reduction of the assessed valuation on the Premises for the purpose of reducing Assessments thereon and, in such event, Landlord shall offer no objection and, at the request of Tenant, shall cooperate with Tenant, but without expense to Landlord, in effecting such a reduction. Tenant shall be authorized to collect any Assessment refund payable as a result of any proceeding Tenant may institute for that purpose and any such Assessment refund shall be the property of Tenant to the extent to which it is based on a payment made by Tenant, subject, however, to an apportionment between Landlord and Tenant with respect to any such Assessment paid in the year in which the Rent Commencement Date occurs and in which the Expiration Date occurs, after deducting from such refund the costs and expenses, including legal fees, incurred in connection with obtaining such refund. 5.06. Landlord shall not be required to join in any action or proceeding referred to in Section 5.04 or Section 5.05 unless required by law or any rule or regulation in order to make such action or proceeding effective, in which event any such action or proceeding may be taken by Tenant in the name of, but without expense to, Landlord. Tenant hereby agrees to indemnify and hold harmless Landlord from and against any and all Claims arising out of any such action or proceeding, including reasonable attorneys' fees and costs. ARTICLE 6 NET LEASE It is the purpose and intent of Landlord and Tenant that, commencing on the Rent Commencement Date, the Fixed Rent, Revenue Rent and Additional Rent shall be absolutely net to Landlord, so that this Lease shall yield, net to Landlord, the Fixed Rent, Revenue Rent and Additional Rent specified in Article 2 hereof from and after the Rent Commencement Date, and that all costs, expenses and charges relating to the Premises which may arise from and after the Rent Commencement Date shall be paid by Tenant (except as may be otherwise specifically -10- provided in this Lease), and that Tenant shall indemnify and hold harmless Landlord from and against same. ARTICLE 7 USE AND OCCUPANCY 7.01. The Premises shall be used as a first class funeral home and chapel and for other related purposes, including without limitation, as a flower shop and for the sale of monuments, grave markers and other interment receptacles in accordance with all applicable laws, rules and regulations, and for any other purpose permitted under the laws of the State of Texas in connection with the operation of a funeral home and chapel and for no other purpose except as may first be consented to in writing by Landlord in its sole discretion. Landlord offers for sale burial rights, memorials and services in the Cemetery. Nothing herein shall limit the rights of Landlord or its agents from offering for sale such burial rights, memorials or services except as follows: (a) Tenant may provide, at the patron's option, such commodities and services if said patron owns burial rights in a cemetery other than the Cemetery. (b) Tenant may provide, at the patron's option, vaults or liners, to said patron where a death has occurred and the patron has not purchased such services previously or to patrons as a part of a pre - arranged funeral service contract. It is specifically agreed that Landlord shall not engage of the sale of vaults. 7.02. Tenant shall sublease to Landlord office space in the Building as shall be adequate for Landlord's administration of the Cemetery on the terms and conditions as are set forth in the Office Sublease annexed hereto as Exhibit C and made a part hereof 7.03. Tenant shall not use or occupy the Premises, or permit the same to be used or occupied, nor do or permit anything to be done in, on or to the Premises, in whole or in part, in a manner which would in any way (1) violate any construction permit or certificate of occupancy affecting the Premises for the use set forth in Section 7.01, (ii) make void or voidable any insurance in force with respect thereto, or which may make it impossible to obtain fire or other insurance required to be furnished by Tenant hereunder, (iii) cause or be apt to cause structural damage to the Building or any part thereof, (iv) constitute a public or private nuisance, or (v) violate any provision of this Lease. -11- ARTICLE 8 REPAIRS 8.01. Tenant shall take good care of the Premises, shall make all necessary structural repairs to the Building and shall keep in good order, condition and repair the foundations of the Building, the windows, doors, plate glass and signs, and shall at its sole cost and expense make all repairs required by any casualty or other event, interior and exterior, ordinary and extraordinary, foreseen and unforeseen, and Tenant shall be responsible for making any and all repairs to the roof and for painting the exterior and interior of the Building, and Tenant shall maintain and keep the Premises, including the access roads, streets, sidewalks and curbs adjacent to the Premises, in good order, repair and condition, and shall keep the same free and clear from litter, debris and graffiti, and shall not encumber or obstruct the same or allow the same to be encumbered or obstructed in any manner. For the purpose of this Lease, a structural repair shall be defined as any repair to the structural steel, footings, foundations, masonry walls or roof of the Building or of any other structure located on the Premises, including perimeter walls. 8.02. Tenant shall use its best efforts to operate the Premises as other comparable properties of like nature similarly situated are operated, and shall keep the Premises fully equipped and in good order and repair, it being understood that Tenant's covenants herein with respect to the maintenance and operation of the Premises are of paramount importance to Landlord. Tenant shall not take, nor permit any occupant or other person to take, any action which would materially and adversely affect the operation of the Premises. Tenant covenants and agrees that throughout the term of this Lease (i) all exterior unpaved areas shall be attractively landscaped and maintained, (ii) all Building, operating equipment and Tenant's Property shall be maintained in good operating order and repair, and (iii) the Premises shall at all times have adequate means of ingress and egress to public streets and to the sidewalks and service roadways used in connection therewith. For the purpose of this Lease, the standard of operation of the Premises shall be deemed to be that generally applicable to similar types of property similarly situated. Tenant shall indemnify and hold harmless Landlord from and against any and all Claims arising out of the failure of Tenant to perform the foregoing covenant or arising out of any accident, injury or damage to any person or property which shall or may happen in or upon the Premises or any part thereof, or upon the sidewalks and roads adjacent thereto, however caused, except for the intentional acts or gross negligence of Landlord or its agents. ARTICLE 9 REQUIREMENTS OF LAW 9.01. Tenant shall not use or occupy or permit the Premises to be used or occupied, nor do or permit anything to be clone in, on or to the Premises, in whole or in part, in a manner which would in any way violate any and all present and future laws, rules, ordinances, statutes, requirements, codes, orders or regulations of federal, state, county, municipal or other -12- governmental authorities or bodies, or any direction of any public officer or officers ( "Legal Requirements "); the requirements of any insurer insuring the Premises or Tenant or Tenant's interest in the Premises ( "Insu.rance Requirements'). 9.02. Tenant may in good faith, upon prior written approval from Landlord, which consent shall not be unreasonably withheld (and, wherever necessary, in the name of but without expense to Landlord), and after having secured Landlord against loss or damage by cash or by a surety bond in an amount, with a company and in form and substance reasonably satisfactory to Landlord, contest the validity of any Legal Requirements or Insurance Requirements and, pending the determination of such contest, Tenant may postpone compliance therewith, except that Tenant shall not postpone compliance therewith so as to subject Landlord to any fine or penalty or to prosecution for a crime or to cause the Premises or any part thereof to be condemned or foreclosed, to be vacated, to become uninsurable or to suffer any material interference with the purposes set forth in Article 7. Tenant shall indemnify and hold harmless Landlord from and against any and all Claims arising out of any breach of the foregoing obligations, including reasonable attorneys' fees and costs. ARTICLE 10 INSURANCE, LOSS, REIMBURSEMENT, LIABILITY [please note that there may be further revisions to this section once the individual who handles insurance matters at Stewart has reviewed this draft of the lease] 10.01. During the term of this Lease, Tenant shall, at its sole cost and expense, keep and maintain policies of- (i) Insurance on the Building against loss or damage by fire and against loss or damage by other rusks now embraced by the so- called all risk coverage endorsement, including flood and earthquake risks in an amount not less than one hundred percent (100 %) of the then Full Insurable Value of the Building. The term "Full Insurable Value" shall mean actual replacement cost of the Building exclusive of the cost of non - insurable portions thereof such as excavations, foundations and footings, as evidenced by an appropriate replacement cost endorsement to the insurance policy. Landlord and Tenant shall be named as Loss Payees under such insurance as their respective interests may appear. (ii) General public liability insurance and automobile liability insurance protecting and indemnifying Tenant and Landlord on an occurrence basis from and against any and all claims for damages or injury to persons or property or for loss of life or of property caused in whole or in part by Tenant, its agents, employees, representatives and invitees (1) occurring upon, in, or about the Premises and the adjoining streets and sidewalks and/or (2) arising from the conduct of business in or management of the Premises or any work: or thing whatsoever done or any condition created in or about the Premises during the Term, including before, during and after construction of the -13- Building, such insurance to afford immediate protection to the limit of not less than $3,000,000 combined single limit, with not more than $250,000 deductible. Landlord shall have the right, from time to time of reasonably requiring Tenant to increase the amount of such coverage. (iii) Workers' compensation insurance for Tenant's employees in full compliance with all requirements of the laws of the State of Texas: and (iv) Such other insurance on the Building or the Premises and in such amounts as may from time to time be reasonably required by Landlord against other insurable hazards which at the time are commonly insured against in the case of premises similarly situated. 10.02. All insurance provided for in Section 10.01 shall be effected under manuscript form policies issued by insurers holding a "General Policy Rating" of A -, VIII or better, as set forth in the most current issue; of "Best Key Rating Guide ". 10.03. Upon the execution and delivery of this Lease and thereafter prior to the expiration dates of the expiring policies theretofore furnished under this Article 10, Certificates of Insurance and all additional insured endorsements required by this Article 10, bearing notations evidencing the payment of premiums or accompanied by other evidence satisfactory to Landlord of such payment, shall be delivered by Tenant to Landlord. 10.04. Tenant shall cause to be included in the insurance policies procured pursuant to this Lease (1) a Waiver of the insurer's right of subrogation against Landlord in the workers compensation policy, and (ii) an express agreement that such policy shall not be invalidated if the assured waives the right of recovery against any party responsible for a casualty covered by the policy before the occurrence of the casualty. If such waiver or agreement shall not be or shall cease to be obtainable, Tenant shall so notify Landlord promptly after learning thereof and the requirements of (i) and (ii) shall be eliminated. Each such policy, except the workers compensation policy, shall name Landlord as an additional insured and shall be endorsed to provide by the insurer that the policy shall not be cancelled or materially changed without at least thirty (30) days' prior notice to all insureds, and that the act or omission of Tenant shall not invalidate the policy as to Landlord. To the extent permitted by law and applicable insurance policies, Tenant hereby releases Landlord with respect to any claim (including a claim for negligence) which it might otherwise have against Landlord for loss, damage or destruction to the extent to which Tenant is required to be insured under a policy or policies containing a waiver of subrogation or naming Landlord as an additional insured, as provided in this Article 10, whether or not the loss, damage or destruction is due to the carelessness or negligence of Landlord, its servants, agents or employees. 10.05. Any insurance provided for in this Article may be effected by a policy or policies of blanket insurance. -14- ARTICLE 11 DAMAGE BY FIRE OR OTHER CAUSE 11.01. If the Building shall be totally damaged or destroyed by fire or other cause, then whether or not the damage or destruction shall have resulted from the fault or neglect of Tenant or its employees, agents or visitors, and provided Tenant has maintained the insurance coverages required under this Lease, Tenant shall have the sole right, upon ninety (90) days prior written notice to Landlord, to elect to (i) repair the damage and restore and rebuild the Building at Tenant's sole cost and expense, and Landlord shall make any proceeds from Tenant's insurance (other than insurance proceeds that relate to Tenant's business interruption) available therefor, or (ii) terminate this Lease by notice to Landlord, in which event Tenant shall remit all of the insurance proceeds received by Tenant, other than insurance proceeds that relate to Tenant's business interruption as a result of such event to Landlord, and upon delivery of all such insurance proceeds, this Lease shall be deemed terminated and of no further force and effect. In the event Tenant terminates this Lease in accordance with the provisions of this Section 11.01, Tenant shall restore the Land to substantially the same condition as existed on the Commencement Date, at its sole cost and expense, and Tenant shall not be entitled to utilize any of the insurance proceeds payable in connection with such damage or destruction for such restoration. For the purposes of this Section 11.01, the Premises shall be deemed totally damaged or destroyed if the replacement costs for such damaged or destroyed portions of the Building would exceed eighty percent (80 %) of the replacement cost of the Building immediately preceding such damage or destruction. 11.02. If the Building shall be partially damaged or destroyed by fire or other cause, Tenant shall repair the damage and restore and rebuild the Building at Tenant's sole cost and expense, and Landlord shall make any proceeds from Tenant's insurance available therefor. 11.03. In no event shall Tenant be entitled to any abatement, allowance, reduction or suspension of Fixed Rent or Additional Rent because part or all of the Building shall be untenable owing to the partial or total destruction thereof, because of action or inaction by Tenant or Tenant's agents and unless terminated in accordance with Section 11.0 1, this Lease shall remain in full force and effect and no such damage or destruction shall affect in any way the obligations of Tenant under this Lease. -15- ARTICLE 12 QUIET ENJOYMENT Landlord covenants and agrees that, subject to the terms and provisions of this Lease, if and for such period of time as Tenant keeps and performs, in all material respects, each and every covenant, agreement, term, provision and condition herein contained on the part or on behalf of Tenant to be kept or performed, Tenant shall be entitled to quietly and peacefully hold, occupy and enjoy the Premises and Tenant's rights under this Lease during the Term. ARTICLE 13 UTILITIES 13.01. Tenant shall contract directly with the applicable public utility or other company for the installation and furnishing of any services or utilities needed for the Premises including, without limitation, heat, ventilation, air conditioning, water, gas, electricity, steam, telephone, elevator, cleaning or trash removal (the "Utilities "), and Tenant shall be solely responsible for paying for any and all of the foregoing, and shall obtain and cause to be installed separate meters for all Utilities. 13.02. In no event shall Landlord be responsible or liable for the failure to supply Tenant or the failure of Tenant to receive any Utilities, nor shall Tenant be entitled to any cessation, abatement, reduction or other offset of Fixed Rent, Revenue Rent or Additional Rent in the event of any failure to receive any Utilities, unless such failure results solely from the willful misconduct or gross negligence of Landlord or its agents. ARTICLE 14 LANDLORD'S REIPRESENTATIONS WARRANTIES AND COVENANTS 14.01. Landlord is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas. Landlord has all requisite corporate power and authority to carry on its business as presently conducted and to enter into this Lease and to consummate the transactions contemplated hereby. All corporate acts and other proceedings required to be taken by Landlord to authorize the execution, delivery and performance of this Lease and Landlord's obligations hereunder have been duly and properly taken. This Lease has been duly executed and delivered by Landlord and constitutes a valid and binding obligation of Landlord, enforceable against Landlord in accordance with its terms. 14.02. The execution and delivery of this Lease does not, and the consummation of the transaction contemplated hereby and compliance with the terms hereof will not, conflict with or result in any violation of (i) any provision of the Articles of Incorporation of Landlord, (ii) any -16- note, bond, mortgage, indenture, deed of trust, license, lease, contract, commitment, agreement or arrangement to which Landlord is a party, or (iii) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Landlord or to. the Land. 14.03. During the term of this Lease as the owner of the Land and Building, Landlord shall keep the Land and the Building free and clear of any liens or encumbrances caused solely by Landlord which may affect Tenant's use and development of the Land in accordance with the provisions of this Lease. 14.04. (i) As a material inducement to Tenant to enter into this Lease and to bear the significant expenses of obtaining Tenant's Approvals and constructing the Building, Landlord hereby expressly covenants and agrees that, except with the written permission of Tenant, during the Term Landlord shall not, directly or indirectly, through any corporation, partnership, limited liability company, joint venture, or other entity or otherwise (a) be, own, manage, operate, control or have any financial interest in any corporation, partnership, limited liability company, joint venture or other entity which leases, conveys, sells, assigns, transfers or otherwise provides any third party with the use of any land located within Dallas County, Texas, for use as a funeral home, crematory, funeral chapel, flower shop or seller of monuments, grave- markers or outer interment receptacles, or any other related business (the "Business "), or (b) in any capacity enter into or engage in the Business, including without limitation enter into any agreement for the sale of vaults . Tenant shall not sell monuments or markers. Notwithstanding the foregoing, nothing in this Section 14.04(1) shall prevent Landlord from selling all those commodities (other than vaults) and services currently offered by the Cemetery in accordance with its current business practices. (ii) The parties agree that if any court of competent jurisdiction determines that any part of Section 14.04(1) is invalid or unenforceable, the remainder of Section 14.04(i)shall not be affected thereby and shall be given full effect without regard to the invalid part. Furthermore, if the application of any part of Section 14.04(1) to any person or circumstance shall be held invalid or unenforceable by any court of competent jurisdiction, the application of such part of 14.04(1) to persons or circumstances other than those as to which it has been held invalid or unenforceable shall not be affected thereby. In either of the foregoing cases, the parties agree that they shall amend Section 14.04(1) or the part thereof so determined to be invalid or unenforceable but only in the most minimal manner necessary to make Section 1404(1) comply with the determination of the court. 14.05. So long as this Lease remains in full force and effect, Tenant may use and include the name "Rolling Oaks" in any fictitious or other name that Tenant may adopt in conformity with and subject to the laws of the State of Texas in connection with the use and operation of the Premises. -17- 14.06. Landlord shall not make any public release or announcement concerning the transaction contemplated hereby without the prior written consent of Tenant, except to the extent any such release or announcement may be required by applicable law. ARTICLE 15 TENANTS REPRESENTATIONS, WARRANTIES AND COVENANTS 15.01. Tenant is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas. Tenant has all requisite corporate power and authority to carry on its business as presently conducted and to enter into this Lease and to consummate the transaction contemplated hereby. All corporate acts and other proceedings required to be taken by Tenant to authorize the execution, delivery and performance of this Lease and Tenant's obligations hereunder have been duly and properly taken. This Lease has been duly executed and delivered by Tenant and constitutes a valid and binding obligation of Tenant enforceable against Tenant in accordance with its terms. 15.02. The execution and delivery of this Lease does not, and the consummation of the transaction contemplated hereby and compliance with the terms hereof will not, conflict with or result in any violation of (i) any provision of the Articles of Incorporation or Bylaws of Tenant, (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, contract, commitment, agreement or arrangement to which Tenant is a party, or (iii) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Tenant or to the Premises. 15.03. (i) As a material inducement to Landlord to enter into this Lease, Tenant hereby covenants and agrees that it shall not enter into funeral home and/or funeral home /chapel and/or crematory and/or funeral home /crematory land leases with any cemetery within the limits of Coppell, Texas. (ii) The parties agree that if any court of competent jurisdiction determines that any part of Section 15.03(1) is invalid or unenforceable, the remainder of Section 15.03(1) shall not be affected thereby and shall be given full effect without regard to the invalid part. Furthermore, if the application of any part of Section 15.03(1) to any person or circumstance shall be held invalid or unenforceable by any court of competent jurisdiction, the application of such part of Section 1.5.03(1) to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby. In either of the foregoing cases, the parties agree that they shall amend Section 15.03(1) or the part thereof so determined to be invalid or unenforceable but only in the most minimal manner necessary to make Section 15.03(1) comply with the determination of the court. 15.04. Tenant shall not make any public release or announcement concerning the transaction contemplated hereby without the prior written consent of Landlord, except to the extent any such release or announcement may be required by applicable law. 15.05 SecuritDeposit. Tenant agrees to deliver to Landlord the sum of $40,000 (the "Security Deposit ") as a security deposit to be held and applied in accordance with the following provisions. A. Landlord will hold the Security Deposit until this Lease is terminated, and will return the Security Deposit to Tenant, without interest, within 60 days following Tenant's surrender of the Premises to Landlord, after deducting those charges permitted under the law and this Lease. B. If Tenant fails to timely pay in full any rental installment or other sum required under this Lease, Landlord will have the right, but not the obligation, to off -set and deduct from the Security Deposit amounts necessary to make such payments. In such event, Tenant will promptly deliver to Landlord additional funds to restore the Security Deposit to its original amount. C. Tenant. will not withhold payment of any rental installment, or any portion thereof, on grounds that the Security Deposit serves as security for unpaid rentals. 15.06 Payment Bond. Before commencing any work on the Land, Tenant will furnish to Landlord a statutory payrnent bond pursuant to § §53.201 et M. of the Texas Property Code. The bond will be in a form and amount, and underwritten by a surety, satisfactory to Landlord. 15.07 Attorney's Fees and Enforcement Costs. Tenant and Landlord shall pay their own expenses incurred in connection with the negotiation and execution of this Lease. In any mediation or legal proceeding to enforce the terms of this Lease, the successful party shall be entitled to recover it's reasonable attorney's fees and other costs from the party that refused or failed to perform its obligations under this Lease. 15.08 Mediation: All. disputes arising out of this lease shall be negotiated for (60) sixty days by both parties before any action is taken. If the parties do not resolve the issues within (60) sixty days, the parties shall attend mediation with a mediator agreed upon by both parties. ARTICLE 16 BROKERAGE Each party covenants., represents and warrants to the other that it has had no dealings or communications with any broker or agent relating to the Premises or this Lease. Each party covenants and agrees to pay and to hold harmless and indemnify the other party from and against any and all claims for commissions, fees or other compensation by any broker who shall claim to have dealt with the indemnifying party in connection with the Premises or this Lease, and to pay for any and all costs, expenses (including, without limitation, reasonable attorneys' fees and -19- disbursements and court costs), liabilities and penalties incurred in connection with any such claims. The provisions of this; Article 16 shall survive the expiration or earlier termination of this Lease. ARTICLE 17 PROHIBITIONS ON MORTGAGES; LIENS Tenant shall not mortgage, pledge or encumber this Lease or the Premises or any part thereof in any manner. Notwithstanding the foregoing, if any mechanic's or other lien or any notice of intention to file a lien is filed against the Premises for any work, labor, service or material claimed to have been performed or furnished for or on behalf of Tenant or anyone holding through or under Tenant, Tenant shall cause the same to be cancelled and discharged of record by payment, bond, order of a court of competent jurisdiction or otherwise within thirty (30) days after Tenant's receipt of notice of the filing of such lien or notice. ARTICLE 18 NOTICES All notices provided for hereunder shall be in writing and shall be deemed to be given (i) when delivered to the party, or to an officer of the party, to which the notice is directed, or (ii) three (3) days after the same has been deposited in the United States mail, sent certified or registered with return receipt requested, postage prepaid and addressed as provided in this Article 18, or (iii) when delivered by an overnight delivery service (including United States Express Mail) with receipt acknowledged and with all charges prepaid by the sender, addressed as provided in this Article 18, or to such other person or address as either party shall furnish the other party in writing. Any such notice shall be directed as follows: If to Tenant to: (j . 14, , 4 s rs F 7)-10 cJ /s7`y,� With a copy to: //E ,k,r and to: 'r� �,��,'i�✓ -20- If to Landlord, to: C, L a) a r With a copy to: 4 �1� � ✓ << frn �� L -L l' ARTICLE 19 EMINENT DOMAIN 19.01. If the whole of the Premises shall be acquired or condemned for any public or quasi - public use or purpose, this Lease and the Term shall end as of the date of the vesting of title. If only a part of the Premises shall be so acquired or condemned Tenant shall have the sole and absolute option to elect, upon ninety (90) days prior written notice, (i) to maintain this Lease in full force and effect with a pro rata reduction in Fixed Rent, or (ii) to terminate this Lease. 19.02. In the event of any such acquisition or condemnation of all or part of the Premises, Tenant shall be entitled to seek an award based on the value of Tenant's business on the Premises for the remainder of the Term, including Tenant's relocation expenses. Tenant shall have no right to any portion of any award which is based on the value of the Land or of the leasehold estate created by this Lease, all of which shall belong to Landlord. That portion of any award which is based on the value of the Building, however, shall be prorated between Landlord and Tenant based on when the date of taking occurs during the Lease Term. Landlord shall receive that percentage of the Building award equal to the ratio which the expired portion of the Lease Term bears to the entire Lease Term, and Tenant shall receive that percentage of the Building award equal to the ratio which the unexpired portion of the Lease Term bears to the entire Lease Term. ARTICLE 20 INDEMNITY To the fullest extent permitted by law, Tenant shall indemnify, defend and hold harmless Landlord, its partners, shareholders, officers, directors, employees and agents from and against (i) any and all claims, actions, damages, liabilities, losses, liens, proceedings, and demands (a) arising from the conduct of Tenant's business in or management of the Premises or any work or thing whatsoever done or any condition created in or about the Premises during the Term, (b) arising from any wrongful act or omission or negligence of Tenant or any of its permitted subtenants (other than Landlord) -21- or licensees or its or their guests, invitees, patrons, employees, visitors, agents or contractors, or (c) arising from any accident, injury or damage occurring outside the Premises where such accident, injury or damage resulted or is claimed to have resulted from an act, omission or negligence of Tenant or any of its permitted subtenants (other than Landlord) or licensees or its or their guests, invitees, patrons, employees, visitors, agents or contractors, and (ii) all costs, expenses (including reasonable legal fees and expenses incurred by Landlord in any action or proceeding between Landlord and Tenant or between Landlord and any third party or otherwise) and liabilities incurred in or in connection with each such Claim or action or proceeding brought thereon. In case any action or proceeding is brought against Landlord by reason of any such Claim, or demand, Tenant, upon notice from Landlord, shall resist and defend such action or proceeding by counsel chosen by Tenant who shall be reasonably satisfactory to Landlord. Tenant or its counsel shall keep Landlord fully apprised at all times of the status of such defense. To the fullest extent permitted by law, Landlord shall indemnify, defend and hold harmless Tenant, its partners, shareholders, officers, directors, employees and agents from and against (i) any and all claims, actions, damages, liabilities, losses, liens, proceedings, and demands (a) arising from the conduct of Landlord's business in or management of the Premises or any work or thing whatsoever done or any condition created in or about the Premises during the Term, (b) arising from any wrongful act or omission or negligence of Landlord or any of its permitted subtenants (other than Landlord) or licensees or its or their guests, invitees, patrons, employees, visitors, agents or contractors, or (c) arising from any accident, injury or damage occurring outside the Premises where such accident, injury or damage resulted or is claimed to have resulted from an act, omission or negligence of Landlord or any of its permitted subtenants (other than Landlord) or licensees or its or their guests, invitees, patrons, employees, visitors, agents or contractors, and (ii) all costs, expenses (including reasonable legal fees and expenses incurred by Tenant in any action or proceeding between Landlord and Tenant or between Tenant and any third party or otherwise) and liabilities incurred in or in connection with each such Claim or action or proceeding brought thereon. In case any action or proceeding is brought against Tenant by reason of any such Claim, or demand, Landlord, upon notice from Tenant, shall resist and defend such action or proceeding by counsel chosen by Landlord who shall be reasonably satisfactory to Tenant. Landlord or its counsel shall keep Tenant fully apprised at all times of the status of such defense. ARTICLE 21 ASSIGNMENT, SUBLETTING, ETC. 21.01. Tenant shall riot assign, mortgage, pledge, encumber or in any manner transfer this Lease or any part thereof, or sublease the Premises or any part thereof, or suffer or permit the Premises or any part thereof to be used by others, or sell, transfer, mortgage, pledge, lease, -22- license or encumber the Premises or any part thereof without the prior written consent of Landlord, which consent shall not be unreasonably withheld. Any attempt to do any of such acts without such consent shall be null and void and of no effect. For purposes of this Section 21.01, any agreement whereby the management or operation of any portion of the Premises shall be entrusted or otherwise transferred to a third party shall be deemed to be a lease or license of such portion and shall require the prior written consent of Landlord. Notwithstanding the foregoing, Tenant shall have the right to assign this Lease or sublease the Premises, or any part thereof to an entity that is a wholly owned subsidiary or affiliated entity of Tenant without Landlord's prior written consent. 21.02. If this Lease is assigned, or if the Premises or any part thereof is subleased or occupied by any person other than Tenant, whether or not in violation of the provisions of this Lease, Landlord may and is hereby empowered to collect the Fixed Rent, Revenue Rent and Additional Rent from the assignee, subtenant or occupant, as the case may be, and to enforce the obligations of Tenant hereunder against such assignee, subtenant or occupant. Landlord may apply the net amount received by it from any such assignee, subtenant or occupant to the Fixed Rent, Revenue Rent or Additional Rent, and no such collection nor any action to enforce the provisions of this Lease against any such assignee, subtenant or occupant shall be deemed (i) a waiver of the covenant herein against assignment, mortgage, encumbrance, pledge or subletting, (ii) an acceptance of the assignee, subtenant or occupant as a tenant under this Lease, or (iii) a release of Tenant from the further performance of its obligations hereunder. 21.03. The making of any assignment, mortgage, pledge, encumbrance or subletting in whole or in part, whether or not with the consent of Landlord, shall not operate to relieve Tenant from its obligations under this Lease, and, notwithstanding any such assignment, mortgage, pledge, encumbrance or subletting, Tenant shall remain liable for the payment of all Fixed Rent, Revenue Rent and Additional Rent and for the due performance of all of Tenant's obligations under this Lease until the ]Expiration Date whether or not there shall have been any prior termination of this Lease by summary proceedings or otherwise. 21.04. Each and every assignee shall be approved by Landlord and, whether as assignee or as successor in interest of any assignee of Tenant, shall immediately be and become and remain liable for the payment of the Fixed Rent, Revenue Rent and Additional Rent and for the due performance of all of Tenant's obligations under this Lease until the Expiration Date, and each and every provision of this Lease applicable to Tenant shall also apply to and bind every such assignee with the same force and effect as if such assignee were the original Tenant hereunder, and no such assignment shall be binding on Landlord unless such assignee shall deliver to Landlord a recordable instrument which contains a covenant of assumption by said assignee to such effect, of the failure or refusal of such assignee to deliver such instrument shall not release or discharge such assignee from its obligations as above set forth. 21.05. Any consent by Landlord hereafter given to any act of assignment, subletting, mortgage, pledge or encumbrance shall be held to apply only to the specific transaction thereby -23- approved. Such consent shall not be construed as a waiver of the duty of Tenant or its successors or assignees to obtain from Landlord a consent to any other or subsequent assignment, subletting, mortgage, pledge or encumbrance, or as a modification or limitation of the right of Landlord with respect to the covenants by Tenant in this Article 21. 21.06. If the controlling interest in Tenant is transferred, sold or otherwise disposed of without the prior written approval of Landlord, Landlord shall have the right at anytime thereafter to terminate this Lease by giving written notice of such termination to Tenant specifying a day not less than twenty (20) days and not more than forty (40) days thereafter and, upon the giving of such notice, this Lease and the Term and the estate hereby granted shall expire and terminate upon the day so specified in the notice as fully and completely and with the same force and effect as if the day so specified were the Expiration Date. Notwithstanding the foregoing, the provisions of this section shall not apply if the controlling interest is transferred, sold or otherwise disposed of to an entity which is controlled by Stewart Enterprises, Inc. ARTICLE 22 EVENTS OF DEFAULT The term "Event of Default" shall mean the occurrence or happening, from time to time, of any one or more of the following: (1) If Tenant shall fail to pay any Fixed Rent, Revenue Rent or Additional Rent when due and such nonpayment continues for ten (10) days after notice; or (ii) If Tenant fails to observe or perform any non - monetary covenant or obligation of this Lease and such failure continues for thirty (30) days after notice specifying same; or, if the condition cannot be remedied within thirty (30) days, if Tenant has not commenced remedial action and/or is not diligently pursuing same; or (iii) Whenever an involuntary petition shall be filed against Tenant under any bankruptcy or insolvency law or under the reorganization provisions of any law of like import, or a receiver of Tenant or of or for any Tenant's Property shall be appointed without the acquiescence of Tenant, or whenever this Lease or the estate hereby granted or the unexpired balance of the Term would, by operation of law otherwise, except for this provision, devolve upon or pass to any person, firm, corporation or entity other than Tenant, or upon or to any corporation or other entity in which Tenant may be duly merged, converted or consolidated under statutory procedure, and such situation under this subsection (iii) shall continue and shall remain undischarged or unstayed for an aggregate period of sixty (60) days (whether or not consecutive) or shall not be remedied by Tenant within sixty (60) days; or -24- (iv) Whenever Tenant shall make an assignment of any of Tenant's Property for the benefit of creditors or shall file a voluntary petition under any bankruptcy or insolvency law, or whenever any court of competent jurisdiction shall approve a petition filed by Tenant under the reorganization provisions of the United States Bankruptcy Act or under the provisions of any law of like import, or whenever a petition shall be filed by Tenant under the arrangement provisions of the United States Bankruptcy Act or under the provisions of any :law of like import, or whenever Tenant shall desert or abandon the Premises; or (v) If any representation or warranty made by Tenant herein shall be false, misleading or incorrect in any material respect when made. ARTICLE 23 LANDLORD'S RIGHTS UPON TENANT'S DEFAULT 23.01 Upon the occurrence of any event of default specified in paragraph 23.01, Landlord will have the option to pursue one of the following remedies: A. Landlord may enter upon and take possession of the Premises and expel or remove Tenant and arty other person who may be occupying the Premises without being liable, according to landlord tenant law in the State of Texas for prosecution of any claim for damages for such entrance and expulsion or removal, relet the Premises at then - market rates, and receive the rent for reletting. Tenant agrees to pay Landlord on demand any deficiency that may arise by reason of such reletting. B. Landlord may enter the Premises and do, at Tenant's expense, whatever Tenant is obligated to do under this agreement to correct the default. Tenant agrees that Landlord will not be liable for any damages resulting to Tenant from such entry. The remedies set out in this paragraph 23.01 shall be in addition to and cumulative of all remedies, legal or equitable, otherwise available to Landlord under Texas law. ARTICLE 24 MEMORANDUM OF LEASE If requested by Landlord or Tenant, Landlord and Tenant shall execute and deliver a mutually acceptable memorandum of this Lease for the purpose of recording, but said memorandum of Lease shall not in any circumstance be deemed to modify or to change any of the provisions of this Lease. Upon the Expiration Date or any sooner termination of this Lease, Tenant shall execute and deliver to Landlord, in recordable form, a quitclaim deed of the Premises. -25- ARTICLE 25 IMIPAIRMENT OF LANDLORD'S TITLE Nothing in this Lease nor any action or inaction by Landlord shall be deemed or construed to mean that Landlord has granted to Tenant any right, power or permission to do any act or make any agreement which may create, give rise to or be the foundation for any right, title, interest, lien, charge or other encumbrance upon the estate of Landlord in the Premises. In amplification and not in limitation of the foregoing, Tenant shall not permit any portion of the Premises to be used by any person or by the public at any time during the Term in such manner as might reasonably make possible a claim of adverse use, adverse possession, prescription, dedication or other similar claim of, in, to or with respect to the Premises or any part thereof. Landlord may from time to Mime, but without affecting in any manner its rights or remedies in respect hereof should it elect or fail or refuse to do so, impose upon Tenant such rules or regulations as to the use or possession by any person or by the public as may reasonably be consistent with Landlord's protection against any such possible claim, all of which rules or regulations shall be fully and promptly performed and enforced by Tenant at Tenant's own cost and expense. ARTICLE 26 ESTOPPEL CERTIFICATE The parties mutually agree that at any time and from time to time, upon written request of the other party and at no cost or expense to the party complying with the request, Landlord or Tenant, as the case may be, shall execute, acknowledge and deliver to the requesting party a certificate evidencing: (1) That this Lease is in full force and effect; (ii) The amounts of the Fixed Rent and Revenue Rent most recently paid, and the dates to which such Rents have been paid; (iii) Whether there is any Additional Rent due, and if so the amount thereof, (iv) Whether this Lease has been modified or amended in any respect, and identifying such modification or amendment, if any; and (v) Whether there is any existing default hereunder to the knowledge of the party executing the certificate, and specifying the nature of such default, if any. -26- ARTICLE 27 SIGNS Tenant shall not provide, install or maintain any exterior sign in the windows of the Building, or on the roof, facade or walls of the Building or on any grounds adjacent thereto or surrounding the Land, unless: (i) Each such sign shall have been reasonably approved by Landlord in writing before installation; and (ii) Each such sign shall at all times conform to all applicable rules, regulations, codes and ordinances of any governmental agency having jurisdiction thereover. All such signs shall be provided, installed, maintained and removed at the termination of the Lease at Tenant's sole cost and expense. Tenant further agrees that it shall not place any advertisements or other type of structure or obstruction on the roof, facade or wails of the Building without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed, and that it shall not operate any loudspeaker or other device which can be heard outside the Building. ARTICLE 28 ENVIRONMENTAL COMPLIANCE 28.01. Tenant shall riot generate, make, store, use, treat, or dispose of any "hazardous substance" (as that term is defined in the Comprehensive Environmental Response, Compensation and Liability Act, 42, U.S.C. Section 9601 et. seq. under all federal, state and local laws and ordinances, and all rules and regulations promulgated thereunder, as from time to time amended ( "Hazardous Substance Laws ")), pollutant or other contaminant on or about the Premises except as are usual and customary in Tenant's business and in compliance with all applicable laws. Tenant shall promptly notify Landlord of (i) any violation of the hazardous substance covenant contained in this Section 28.01 and/or (ii) any environmental concern raised by a private party or governmental agency. In the event that Tenant violates the hazardous substance covenant contained in this Section 28.01, Tenant, at its sole cost and expense, shall promptly take any cleanup action that is required by any governmental authority having jurisdiction. In the event that Tenant does not undertake and perform appropriate cleanup action, Landlord shall have the right, but not the obligation, to perform any such necessary cleanup action and Tenant shall be liable to Landlord for all costs and expenses therefor, of whatsoever nature or kind, including without limitation reasonable attorneys' fees and disbursements, which costs and expenses shall be due and payable to Landlord on demand. Landlord shall have the unrestricted right at all tines upon reasonable prior notice to Tenant to conduct any environmental tests necessary to discover a purported violation of the hazardous substance covenant contained in this Section 28.01. -27- Landlord and Tenant shall comply with all applicable local, state or federal governmental obligations to remove or remediate any hazardous substances that were brought to or created on or about the Premises on or after the Commencement Date. Tenant agrees to indemnify and hold Landlord, its officers, directors, members, affiliates, employees, agents and representatives harmless from, and to defend Landlord, with counsel reasonably acceptable to Landlord, against any and all environmental claims, environmental clean -up liability, environmental compliance costs, the effect of any environmental laws and any and all other actions, causes of action, suits, proceedings, administrative orders, costs, charges, damages, losses, liabilities and claims (including reasonable attorneys' fees and costs) of any nature whatsoever, assessed, levied or asserted against the Premises, the Cemetery (so long as said claim in no way relates to the actions of Landlord) or Landlord resulting from a violation or an alleged violation of any environmental law and arising from or connected in any way with (1) the physical or environmental condition of the Premises which first occurred on or after the Commencement Date, or (ii) the existence of any hazardous substances, or the release or threatened release of hazardous substances of any kind whatsoever, in, on, under, above or about the Premises, occurring at any time if caused by conditions which first occurred on or after the Commencement Date. In addition, Landlord agrees to indemnify and hold Tenant, its officers, directors, members, affiliates, employees, agents and representatives harmless from, and to defend Tenant, with counsel reasonably acceptable to Tenant, against any and all environmental claims, environmental clean -up liability, environmental compliance costs, the effect of any environmental laws and any and all other actions, causes of action, suits, proceedings, administrative orders, costs, charges, damages, losses, liabilities and claims (including reasonable attorneys' fees and costs) of any nature whatsoever, assessed, levied or asserted against the Premises, the Cemetery (so long as said claim in no way relates to the actions of Tenant) or Tenant resulting from a violation or an alleged violation by Landlord of any environmental law and arising from or connected in any way with (i) the physical or environmental condition of the Premises which first occurred on or after the Commencement Date, or (ii) the existence of any hazardous substances, or the release or threatened release of hazardous substances of any kind whatsoever, in, on, under, above or about the Premises, occurring at any time if caused by conditions which first occurred on or after the Commencement Date. ARTICLE 29 TERMINATION BY TENANT This Lease may be terminated at any time before Tenant shall have obtained the License, but in no event more than eighteen months after the Commencement Date, this date may be extended if requested in writing by Dec. 31, 2008 by Tenant giving written notice to Landlord that Tenant has elected to tenninate this Lease; provided, however, that if Tenant terminates this Lease for any reason other than Tenant's inability to obtain all needed approvals as set forth in Section 2.09, Tenant shall pay liquidated damages to Landlord in the sum of forty thousand dollars ($40,000) as provided in Section 3.01 upon delivery of such notice, which sum Tenant agrees is a fair and reasonable termination fee and is not a penalty. ARTICLE 30 MUTUAL COOPERATION During the Term, Landlord and Tenant shall cooperate with each other to the greatest extent possible in order to provide more complete and convenient funeral home, crematory and cemetery services. This will include scheduling and coordinating open houses, memorial services (e.g., on Memorial Day and Easter) and similar events to honor the dead, to observe religious days and to acquaint the public with and to promote the Cemetery and the Building; including in advertisements, listings and promotional and informational materials the fact that the Cemetery and the Building are adjacent to each other and the benefits which such proximity provides to the users of either or both facilities; exchanging both pre -need and at -need existing and future customer and contract information in order that the receiving party may utilize such information to prevent multiple contact of customers. The retail installment agreements and other printed material as mutually agreed to by Landlord and Tenant, utilized by Tenant in the operation of the mortuary, shall indicate that ownership and operation of the Cemetery and mortuary is separate and distinct. Landlord agrees, not to hire any employees from tenant without authorization from tenant. ARTICLE 31 MISCELLANEOUS 31.01. This Lease shall be governed by and shall be construed and interpreted in accordance with the laws of the State of Texas. 31.02. This Lease shall be construed and interpreted without regard to any presumption or other rule requiring interpretation against the party which drafted this Lease. 31.03. All terms and words used in this Lease, regardless of the number or gender in which they are used, shall be deemed to include any other number and any other gender as the context may require. 31.04. This Lease shall not be binding upon either party unless and until it is signed by such party and a signed copy thereof is delivered to the other party. 31.05. If any term, covenant, condition or provision of this Lease or the application thereof to any circumstance or to any person, firm or corporation shall be invalid or unenforceable to any extent, the remaining terms, covenants, conditions and provisions of this -29- Lease, or the application thereof to any circumstance or to any person, firm or corporation other than those as to which such term, covenant, condition or provision or application thereof is held invalid or unenforceable, shall not be affected thereby and each remaining term, covenant, condition and provision of this Lease shah be valid and shall be enforceable to the fullest extent permitted by law. 31.06. The captions of the Articles hereof are inserted only as a matter of convenience and for reference, and in no way define, limit or describe the scope of this Lease, nor the intent of any provision thereof. 31.07. The parties acknowledge that this Lease, the Sublease attached hereto as Exhibit C, and the method of operation on the Premises do not constitute or create an agency, joint venture or partnership between the parties. The relationship remains that of Landlord, Tenant, Sublessor and Subtenant. No commissions or other fees shall be paid or payable by either party to the other or to their respective employees, agents or personnel for any information exchanged hereunder or as a result of sales made utilizing such information. 31.08. Notwithstanding any provision contained in this Agreement, Landlord preserves the right to protect its status as an entity exempt from certain requirements of Texas law in the operation of the Cemetery. Any actions that may jeopardize such status are hereby deemed unreasonable. 31.09. This Lease may be amended or modified only by written agreement executed by the parties. IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed and delivered by their proper officers respectively thereunto duly authorized as of the day and year first above written. Landlord: C11 By: Tenant: S. E. FUNERAL HOME OF COPPELL, TEXAS, INC. d/b /a/ Restland Funeral Home - Coppell Chapel -30- EXHIBI T "A " LEASE AREA DESCRIPTION (continued) THENCE S 31'45'49° E, 32.43 feet to the beginning of a curve to the left, said curve heving a radius of 29.33 feet, a central angle of 58'14'11 ", a tangent length of 16.34 feet and o chcrd which bears S 60'52'55' E, 28.55 feet; THENCE, with said curve to the left, on arc distance of 29.81 feet; THENCE EAST, 268.79 feet to the beginning of a non — tongent curve to the left, said non — tongent curve having a radius of 187.33 feet, a central angle of 51'29'41 ", o tangent length f o e et f 90 ; .35 feet and a chord which bears S 35'41'39" E, 162.76 THENCE, with said non — tangent curve to the left, on arc distance of 168.37 feet; THENCE SOUTH, 170.62 feet to the beginning at o curve to the Left, said curve having o radius of 29.33 feet, a central angle of 37'39'24 ", a tangent length of 10.00 feet and a chord which bears S 18'49'42' E, 18.93 feet; THENCE, with said curve to the left, an erc distance of 19.28 feet to the POINT OF BEGINNING and containing 3.9661 acres (172,763 square feet) of land, more or less. FOR NATHAN D. MAIER, CONSULTING ENGINEERS, INC. c, 2 ND\A- NATHAN D. MAIER CONSULTING ENGINEERS, INC. NOM JCE �'O C'— C� —C20 Two Northpork / 8080 Park Lane / Suite 600 ?C,;C;_X�� ��� Dollcs, Texas 75231 / Ph (214) 739 -4741 i i i % /'( ' John L. Mel ton," R.P.L.S. No 4268 Reg s t e r e d Pr0tessicnoI Land Survey _�IffJ4[ M�Ll0N c, 2 ND\A- NATHAN D. MAIER CONSULTING ENGINEERS, INC. NOM JCE �'O C'— C� —C20 Two Northpork / 8080 Park Lane / Suite 600 ?C,;C;_X�� ��� Dollcs, Texas 75231 / Ph (214) 739 -4741 i i i % /'( W Z o�- �J U J _ Z 'J v N Z bV1 kOW J Z Z a 4 a U 6 7 � � U vo o� J U V WIZ O 4. V v _ LJ ' U j CXHIBI T "B " JAMES STANLEY STEWART & WIFE, ANN FRA!vGS STEWART ALFORD MEDIA ADDITION VOLUME 68244, PACE 7747 LOT!, BLOCK 1 CALLED 2 500 ACRES I VOLUME 98078. PAGE 76 <i8 -- ,RF STATE ROAD EDiCA TtD '✓4,4' ilviDiH FC. W) ,I I, ,6 A , U �.1V�JW U U�tl SCALE: I—= 200' POW T OF- COMA4ENCING ]/2" lRF (y BASE OF WOOD FENCc" POST S TA TE ROAD (FREEPOR T PARK WA Y W N 89'38'25" w SE D , ' ✓ W G' D/ A 'r VOLUME clrr of coPPELL 2000242, PAGE 6802 W/ FPEEPORT PARKWAY REMAINDER OF CALLED 36 339 ACRES /1/ IRF PEPLAT 51'06'08' LDTS 3R,3k -XT 3R -X2. BLOCK A R =39 50' T= 78.88' wl L= 35.23' U ry CB =5 6426'56° E d= 58'14'11'" CL= 34.07' P=29. 33' T= 16.34' of z S 31'45'49" E L= 29.87' 32.43' CB=S 60'52'55 "" E d= 5129'41 EAST CL= 28.55' R= 187.3.3' 710.00' T=90.35' � EAST 68 79" L= 168.37" CB =S 35'41'39" E IF) CL = 162. 76' d= 373924 " W LEASE AREA R= 29.33' 3.9561 ACRES T= 10.00' (772,76J SO. FT) L = .19.28' o v v CB =S 78'49'42" E CL= 18.93' N 33'01'42" W N 89'38'25" w 22,31' S "' E'9'5 4'48 728 39' W/ FPEEPORT PARKWAY r a'5 R ; v "r i LOT 3R -x7, BLOCK A PEPLAT DUKE- FREEPORT ADDITION LDTS 3R,3k -XT 3R -X2. BLOCK A ✓OLU✓f 2063046, PAGE 33 _ N 89'38'25" w 557.65' 413. 16 " PO/N T OF E BEGINNING 0 �2' R T 0 0 c� cN J4i2 •' U U W rn of 'a ao�n Q) O N' � W J Q 0 a W W� -vv � CL a N 2000, � N � Q J ,sf�E UB Y ROAD RUBY ROAD RChS D O Iv (v7, P_ �v'D TN R o w ) LOT 3R, BLOCK A REPL A T DUKE- FREEPORT ADDITION LOTS .3P,3R- X7,3R -X2, BLOCK A VOLUME 2003046, PAGE 33 NATHAN D. MAIER CONSULTING ENGINEERS, INC. TIDM J05 1'v0 07 -02 -020 Two Northpo,k / 8080 Pork Lone / Suite 600 7020E/0' c - NDM Dollos, Texos 75231 / Ph (214) 739 -4741 EXHIBIT C Form of Office Sublease -33- OFFICE SUBLEASE This Office Sublease ( "Sublease "), dated , is between [entity to be formed], a corporation ( "Sublessor "), and CITY OF COPPELL, a Texas city ( "Sublessee "). RECITALS Sublessee, as Landlord, and Sublessor, as Tenant, executed an Agreement of Lease on . The Agreement of Lease is hereinafter referred to as the "Master Lease." By the terms of the Master Lease, certain land in the City of Coppell, State of Texas was leased to Sublessor for a term of approximately 30 years. The Master Lease, by this reference, is hereby incorporated as though set forth in full herein. Sublessor desires to sublease to Sublessee a portion of the Building (as such term is defined in the Master Lease) to be constructed by Sublessor under the terms of the Master Lease, and Sublessee desires to sublease those premises from Sublessor. NOW, THEREFORE, Sublessor and Sublessee agree as follows: 1. Leasing and Description of Property. Subject to the terms, conditions and covenants set forth in this Sublease, Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor, approximately (i square feet within the Building in an area reasonably agreed upon by the parties (the "Subleased Premises "). 2. Term. This Sublease shall commence on the date on which construction of the Building is substantially complete and occupancy of the Subleased Premises is available to Sublessee ( "Commencement Date ") and ending at noon local time on December 31 of the year in which the thirtieth anniversary of the Commencement Date occurs (hereinafter referred to as the "Sublease Term ") or until the Sublease Term shall sooner terminate as hereinafter provided. A "Sublease Year" under this Lease shall be any 12 consecutive month period commencing January 1 and ending December 31, except that the term "Sublease Year" for the first year shall apply to the period from the Commencement Date through the following December 31. 3. Rent. Sublessee shall pay to Sublessor the sum of $1 per year as rent for the Subleased Premises. 4. Use of Premises. Sublessee shall use and occupy the Subleased Premises for cemetery administrative offices, sales and marketing activities, and related purposes, but for no unrelated purpose. -34- 5. Applicability of Master Lease. This Sublease is subject and subordinate to the terms and conditions of the Master Lease. Except as herein provided to the contrary, Sublessee shall not commit any act which violates any obligations required to be kept or performed by the Tenant under the provisions of the Master Lease. Sublessor may enforce all terms of the Master Lease against Sublessee to the extent applicable to Sublessee. 6. Quiet Enjoyment. Sublessor covenants that Sublessee shall be entitled to quiet enjoyment of the Subleased Premises provided that Sublessee complies with the terms of this Sublease. 7. Utilities. Sublessee shall pay, directly to the appropriate supplier, all charges relating to its telephone service. All charges with respect to other utilities (including gas, electricity, water, steam, garbage removal, sewer, general plumbing, heating, ventilating and air conditioning and other mechanical systems supplied to the Building shall be paid by Sublessor. 8. Improvements to Premises. Sublessor shall build out the Subleased Premises as reasonably agreed between Sublessor and Sublessee in accordance with the specifications attached hereto as Exhibit "A." Landlord shall provide Tenant with interior finishes of a quality comparable to the interior finishes in the administrative areas of the Building. All improvements, of whatever nature, placed b;y Tenant on the Subleased Premises, except movable trade fixtures, shall at once become the property of Sublessor and shall so remain at the termination of this Sublease. 9. Insurance. At all times during the Sublease Term, Sublessee shall provide and maintain, at Sublessee's expense, General Public Liability Insurance, in an amount applicable to bodily injury and property damage of $1 million combined single limit, with not more than $5,000 deductible, which insurance shall cover Sublessee's occupancy of the Subleased Premises and Sublessee's obligations under this Sublease. Sublessor shall have the right from time to time of requiring Sublessee to increase the amount of such coverage upon the reasonable advice of Sublessor's Risk Manager. Sublessor shall be named as an additional insured on any such policy. Sublessee shall provide, upon request, an appropriate certificate of insurance and shall permit Sublessor to review Sublessee's policy(ies) upon reasonable request during regular office hours. Sublessee shall maintain fire and extended coverage insurance on Sublessee's property located in the Subleased Premises as Sublessee shall deem appropriate. No such coverage will be provided by Sublessor. 10. Sublease is a Gross Lease. Except for its own telephone charges as provided in paragraph 7 above, and its premiums for insurance as provided in paragraph 9 above, Sublessee's only cost for the occupancy of the Subleased Premises during the Sublease Term shall be the Annual Rent. Sublessor shall be responsible for all other costs and expenses, including capital and replacement costs, relative to the Building, the Subleased Premises and Sublessee's occupancy of the Subleased Premises, specifically including the costs and expenses of all -35- janitorial, painting, utilities, maintenance, repairs, replacements, property taxes, fire and other casualty insurance, and all other costs and expenses which except for this paragraph 10 would or could be attributable to the Subleased Premises or to Sublessee's occupancy thereof either pursuant to the Master Lease or otherwise. 11. Termination of Master Lease. If the Master Lease is terminated, this Sublease shall terminate simultaneously and the Sublessor and Sublessee shall thereafter be released from all obligations under this Sublease, and Sublessor shall refund to Sublessee any unearned rent paid in advance. This Sublease grants Sublessee no rights beyond termination of the original term of the Master Lease. 12. Assignment. Sublessee may assign or encumber its interest in the Sublease or the Subleased Premise with the written consent of Sublessor, which consent will not be unreasonably withheld. EXECUTED at Coppell, Texas, on the date specified in the first paragraph of this Sublease. SUBLESSEE: C a S SUBLESSOR: S. E. Funeral Home of Coppell, Texas, Inc. d/b /a Restland Funeral Home - Coppell Chapel a Texas corporation By: -36-