AMENDMENT TO STOCK PURCHASE AGREEMENT AND CLOSING STATEMENT
AMENDMENT
TO STOCK PURCHASE AGREEMENT
AND
CLOSING STATEMENT
THIS
AMENDMENT TO STOCK PURCHASE AGREEEMNT (the
"Amendment") is made and entered into as of February 11, 2005, by and among
IFT
CORPORATION, a
Delaware corporation (the "Purchaser"), ▇▇▇▇▇▇▇
INDUSTRIES, INC., an
Arizona corporation (the "Company"), and BILLI
▇▇ ▇▇▇▇▇, AS TRUSTEE OF THE BILLI ▇▇ ▇▇▇▇▇ TRUST, DATED OCTOBER 6,
2003 (the
"Shareholder").
RECITALS
A. Purchaser,
the Company and Shareholder entered into a Stock Purchase Agreement, dated
January 25, 2005 (the "Agreement").
B. Section
13.6 of the Agreement requires the written consent of each party to amend the
Agreement.
C. Purchaser,
the Company and Shareholder desire to amend the Agreement subject to and in
accordance with the terms of this Amendment.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing Recitals, mutual agreements,
covenants and promises set forth in this Amendment and the Agreement and other
good and valuable consideration, the receipt, sufficiency and validity of which
is hereby acknowledged, Purchaser, the Company and Shareholder hereby agree as
follows:
1. Closing
Date. Section
2.1 of the Agreement is amended to provide that the Closing shall occur at the
offices of Bade & ▇▇▇▇▇▇, PLC, at 2:00 p.m. on February 11,
2005.
2. SEP
Contribution. The
Company's tax return for the fiscal year ended October 31, 2004 reflects a SEP
contribution of $131,724.32 (the "SEP Contribution"). The Company has not yet
funded such contribution. Notwithstanding any provision of the Agreement to the
contrary or any representations or warranties by the Company or Shareholder,
Purchaser agrees to fund the SEP Contribution for the Company after the
Closing.
|
3. |
Related
Transactions.
Section 2.2 of the Agreements is amended as
follows: |
In
addition to the purchase and sale of the Shares, the following transactions
shall take place at or as soon after Closing as possible:
(a) Shareholder
or Shareholder's nominee ("Landlord") and the Company shall each execute and
deliver to each other a Lease Agreement (the "Lease") to be dated as of the
Closing Date in substantially the form of Exhibit
A hereto;
and
(b) The
Company will transfer to Shareholder the assets set forth on Schedule
2.2(b) attached
hereto (the "Retained Assets"). All current and long term liabilities of the
Company with respect to the 2005 Volvo have been satisfied. All current and long
term liabilities of the Company to Bank One (the Bank One Note") reflected on
the Company's balance sheet with respect to the land, building and improvement
(the "Property") will be satisfied by the Company's distribution of the Property
to Shareholder or Shareholder's nominee in satisfaction of the note payable to
▇.▇. ▇▇▇▇▇/▇▇▇▇▇ reflected on the Company's balance sheet, as adjusted pursuant
to Section 2.2(c) hereof (the "▇▇▇▇▇ Loan Amount"), and Shareholder's subsequent
refinancing of the Property.
(c) The
remainder of the note payable to the officer reflected on the Company's balance
sheet (the "Remaining Officer Loan Amount") will be satisfied by Shareholder by
adding the Remaining Officer Loan Amount to the note payable to ▇.▇. ▇▇▇▇▇/▇▇▇▇▇
(i.e., a transaction deemed to consist of Shareholder's loan of the Remaining
Officer Loan Amount to the Company and the Company's repayment of the Remaining
Officer Loan Amount to the officer). The ▇▇▇▇▇ Loan Amount shall be satisfied by
the Company's distribution of the Property to Shareholder or Shareholder's
nominee.
(d) The
necessary paperwork to effectuate the transactions set forth in Sections 2.2(b)
and 2.2(c) hereof is estimated to be completed in approximately two weeks.
Following Closing, Purchaser and the Company agree to execute and deliver, at
the request of Shareholder and without further consideration, such additional
instruments of conveyance and transfer, and to take such other action as
Shareholder may reasonably require to convey, assign, transfer and deliver the
2005 Volvo and the Property to Shareholder or Shareholder's nominee and carry
out the other transactions contemplated hereunder.
4. Closing
Statement. As
required by Section 1.2(d) of the Agreement, Shareholder hereby delivers to
Purchaser the Closing Statement:
|
(a) |
Base
Balance Sheet Receivables: $1,384,326.35 |
|
(b) |
Base
Balance Sheet Payables: $832,516.58 |
|
(c) |
Base
Balance Sheet Receivables/Payables Difference:
$551,809.77 |
|
(d) |
Closing
Date Receivables: $1,570,986.52 (2/11/05 A/R Summary
attached) |
|
(e) |
Closing
Date Payables: $805,417.81 (2/11/05 A/P Summary
attached) |
|
(f) |
Closing
Date Receivables/Payable Difference:
$765,568.71 |
|
(g) |
Receivables/Payables
Adjustment: $213,758.94 |
5. UCC-1
Filings; Capital Indemnity.
Purchaser acknowledges that the Company is the debtor under certain UCC-1
filings, copies of which have been previously furnished to Purchaser and which
are attached hereto as Schedule
5(a) (the
"UCC-1 Filings"). Purchaser agrees, notwithstanding any provision of the
Agreement to contrary or any representations or warranties by the Company or
Shareholder, that the Company shall be solely responsible for the obligations
reflected in the UCC-1 Filings. Purchaser acknowledges that the Company is a
party to a General Indemnity Agreement by and among ABC Roofing Company, Inc.,
▇▇▇▇▇▇▇ Industries, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and
Capital Indemnity Corporation, a copy of which has been previously furnished to
Purchaser and which is attached hereto as Schedule
5(b) (the
"Indemnity Agreement"). Purchaser agrees, notwithstanding any provision of the
Agreement to contrary or any representations or warranties by the Company or
Shareholder, that the Company shall be solely responsible for the obligations
reflected in the Indemnity Agreement.
6. Agreement. Except
as modified by this Amendment, the remaining terms and provisions of the
Agreement are hereby ratified and shall continue in full force and
effect.
IN
WITNESS WHEREOF, Purchaser,
the Company and Shareholder have
executed this Amendment as of the day first written above.
|
THE
COMPANY: |
PURCHASER: |
||||
|
▇▇▇▇▇▇▇
INDUSTRIES, INC.,
an Arizona corporation |
IFT
CORPORATION, a
Delaware corporation |
||||
|
By: |
/s/
Billi ▇▇ ▇▇▇▇▇ |
By: |
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CEO |
||
|
Name: |
Billi
▇▇ ▇▇▇▇▇ |
Name: |
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇ |
||
|
Title: |
President |
Title: |
Chief
Executive Officer |
||
SHAREHOLDER:
BILLI
▇▇ ▇▇▇▇▇ TRUST, DATED OCTOBER 6, 2003
|
By: |
/s/
Billi ▇▇ ▇▇▇▇▇ |
||
|
Name:
|
Billi
▇▇ ▇▇▇▇▇ |
||
|
Title: |
Trustee |
▇▇▇▇▇▇▇
Industries Inc.
A/R
Aging Summary
As
of February 11, 2005
(The
information in this A/R Aging Summary has been omitted pursuant to a request for
Confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended. A copy of this A/R Aging Summary intact has been filed separately with
the Securities and Exchange Commission.)
(The
Total A/R that is reflected in this A/R Summary is included above in Section
4(d) of this Amendment)
▇▇▇▇▇▇▇
Industries Inc.
A/P
Aging Summary
As
of February 11, 2005
(The
information in this A/P Aging Summary has been omitted pursuant to a request for
Confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended. A copy of this A/P Aging Summary intact has been filed separately with
the Securities and Exchange Commission.)
(The
Total A/P that is reflected in this A/P Summary is included above in Section
4(e) of this Amendment)
EXHIBIT
A
Lease
LEASE
AGREEMENT
by and
between
WASHINGTON
PROPERTIES, LLC,
an
Arizona limited liability company
("Landlord")
and
▇▇▇▇▇▇▇
INDUSTRIES, INC.,
an
Arizona corporation
("Tenant")
for
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("Premises")
INDUSTRIAL
BUILDING LEASE
This
Lease Agreement is entered into as of February 11, 2005, by and between
Washington Properties, LLC, an Arizona limited liability company, having an
office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, referred to in this
Lease as "Landlord", and ▇▇▇▇▇▇▇ Industries, Inc., an Arizona corporation,
having an office at ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, referred to in this Lease as "Tenant."
1. Leased
Premises.
Landlord
leases to Tenant and Tenant lease from Landlord, in accordance with the
provisions of this Lease, the land, together with the building and improvements
thereon, located at ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, consisting of approximately 26,042 square feet of land, a
10,700 square foot building and the improvements associated with the foregoing
(the "Premises").
2. Term.
The term
of this Lease shall commence on February 12, 2005 (the "Commencement Date") and
end on August 31, 2005; provided, however that such term may be extended by
exercise of the option(s) to renew as set forth in Exhibit A.
3. Tenant's
Use of the Premises.
(a) Use
by Tenant and Certificate of Occupancy.
Tenant
shall use and occupy the Premises only for the manufacturing and sale of
coatings to the waterproofing, corrosion, roofing and construction industries.
In the event required, Tenant shall, at Tenant's own expense, apply for and
obtain a Certificate of Occupancy with respect to the Premises, based upon the
use set forth above, from the appropriate authority, prior to the commencement
date of the Lease.
(b) Prohibited
Use.
Tenant
shall not occupy nor use all or any part of the Premises nor permit or suffer
the Premises to be occupied or used for any purpose other than as provided for
in this Lease, nor for any unlawful or disreputable purpose, nor for any extra
hazardous purpose.
4. Rent,
Additional Rent and Other Sums to be Paid by Tenant.
(a) Rent.
During
the Lease term, Tenant shall pay Landlord rent in consecutive monthly
installments of Seven Thousand One Hundred Thirty-Three and 33/100 Dollars
($7,133.33) each, on the first day of each month, in advance, with the exception
that the first full monthly installment of rent shall be paid upon execution and
delivery of this Lease, the receipt of which is acknowledged by Landlord,
subject to collection. If the
Commencement Date falls on a day of the month other than the first day of such
month, then the rental for the first fractional month shall be prorated on the
basis of a thirty (30) day month, which shall be paid upon execution and
delivery of this Lease. All other payments required to be made under the terms
of this Lease which require proration on a time basis shall be prorated on the
same basis.
(b) Additional
Rent Based Upon Assessments for Public Improvements.
As
additional rent, upon demand, Tenant shall pay Landlord all assessments for
public improvements assessed and levied against the Premises. If any assessment
for public improvements shall be payable in installments, Landlord shall pay
such assessment in the maximum number of installments permitted by law, and
Tenant's obligation to pay additional rent shall be limited to each installment
or pro rated share thereof due and payable during the lease term.
(c) Additional
Rent Based Upon Other Sums.
Tenant
shall pay Landlord, as additional rent, all other sums of money on Tenant's part
to be paid pursuant to the terms, covenants and conditions of this
Lease.
(d) Additional
Rent Based Upon Reimbursement to Landlord.
If Tenant
shall fail to comply with or to perform any of the terms, conditions and
covenants of this Lease, Landlord may (but with no obligation to do so) carry
out and perform such terms, conditions and covenants, at the expense of Tenant,
which expense shall be payable by Tenant, as additional rent, upon the demand of
Landlord, together with interest at the prime rate plus two (2%) percent (the
"Prime Rate"), which interest shall accrue from the date of Landlord's
demand.
(e) Additional
Rent Based Upon Late Payment.
If Tenant
defaults, for more than five (5) days in the payment of any installment of rent,
additional rent or any of the sums required of Tenant under the Lease, or if
Tenant, within five (5) days after demand from Landlord, fails to reimburse
Landlord for any expenses incurred by Landlord pursuant to the Lease, together
with interest, then Tenant shall pay Landlord, as additional rent, a late charge
of five (5%) percent of the rent or expense.
(f) Additional
Rent Based Upon Landlord's Legal Expenses in Enforcing
Lease.
As
additional rent, Tenant shall pay Landlord, all reasonable attorneys' fees that
may be incurred by Landlord in enforcing Tenant's obligations under this Lease;
provided, however, that in the event Landlord commences a suit against Tenant to
enforce Tenant's obligations under this Lease, and such suit is tried to
conclusion and judgment is entered in favor of Tenant, then in that event Tenant
shall not be under any obligation to pay Landlord the attorneys' fees that
Landlord may have incurred.
(g) Additional
Rent Based Upon Taxes Based on Rent.
If at any
time during the term of this Lease a tax or charge shall be imposed by the state
of Arizona, Maricopa County or the city of Tempe, which tax or charge shall be
based upon the rent due or paid by Tenant to Landlord, then Tenant shall pay
Landlord, as additional rent, such tax or charge. The foregoing shall not
require payment by Tenant of any income taxes assessed against Landlord or of
any capital levy, franchise, estate, succession, inheritance or transfer tax due
from Landlord. The current county and city transaction privilege tax on
commercial rental income is 2.3%.
(h) Net
Lease, No Setoff and Application.
(i) Net
Lease.
It is the
intention of the parties that this Lease is a "triple net lease" and Landlord
shall receive the rent, additional rent and other sums required of Tenant under
the Lease, undiminished from all costs, expenses and obligations of every kind
relating to the Premises, which shall arise or become due during the Lease term,
all of which shall be paid by Tenant.
(ii) No
Setoff.
Tenant
shall pay Landlord all rent, additional rent, Real Estate Taxes, and other sums
required of Tenant under the Lease, without abatement, deduction or setoff, and
irrespective of any claim Tenant may have against Landlord; and this covenant
shall be deemed independent of any other terms, conditions or covenants of this
Lease.
(iii) Application.
No
payment by Tenant or receipt by Landlord of an amount less than the full rent,
additional rent, Real Estate Taxes, or other sums required of Tenant under the
Lease, shall be deemed anything other than a payment on account of the earliest
rent, additional rent, Real Estate Taxes, or other sum due from Tenant under the
Lease. No endorsements or statements on any check or any letter accompanying any
check or payment of rent, additional rent, Real Estate Taxes, or other sum due
from Tenant under the Lease, shall be deemed an accord and satisfaction of
Landlord. Landlord may accept any check for payment from Tenant without
prejudice to Landlord's right to recover the balance of rent, additional rent,
Real Estate Taxes, or other sum due from Tenant under the Lease, or to pursue
any other right or remedy provided under this Lease or by
Requirements.
(i) Place
of Payment of Rent.
The rent,
additional rent, Real Estate Taxes, and other sums required of Tenant under this
Lease, shall be paid by Tenant to Landlord at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ or to such other place as Landlord may notify Tenant.
5. Real
Estate Taxes.
Tenant
shall pay Landlord the annual real estate taxes and assessments ("Real Estate
Taxes") assessed and levied against the Premises, on the first (1st) day of each
month, in advance, in a sum equal to 1/12th of the annual real estate taxes and
assessments due and payable for the then calendar year. If at a time a payment
is required the amount of the Real Estate Taxes for the then calendar year shall
not be known, Tenant shall pay Landlord 1/12th of the Real Estate Taxes for the
preceding calendar year; and upon ascertaining the Real Estate Taxes for the
current calendar year, Tenant shall pay Landlord any difference upon demand, or
if Tenant shall be entitled to a credit, Landlord shall credit the excess
against the next monthly installment(s) of Real Estate Taxes falling due. Real
Estate Taxes payable for the first and last years of the lease term shall be
adjusted and pro rated, so that Landlord shall be responsible for Landlord's pro
rated share for the period prior to and subsequent to the lease term and Tenant
shall pay Landlord its pro rated share for the lease term. Provided this Lease
is not previously cancelled or terminated, and there shall be no Event of
Default, or an event that with the giving of notice or the lapse of time, or
both, would constitute an Event of Default, then Tenant shall have the right to
contest the amount or validity of any Real Estate Taxes assessed and levied
against the Premises, or to seek a reduction in the valuation of the building on
the Premises assessed for real estate tax purposes, by appropriate proceedings
diligently conducted in good faith (the "Tax Appeal"), but only after payment of
such taxes and assessments. Except as set forth below, Landlord shall not be
required to join in any Tax Appeal. If required by law, Landlord shall, upon
written request of Tenant, join in the Tax Appeal or permit the Tax Appeal to be
brought in Landlord's name, and Landlord shall reasonably cooperate with Tenant,
at the cost and expense of Tenant. Tenant shall pay any increase that may result
in Real Estate Taxes as a consequence of the Tax Appeal, which payment
obligations shall survive the expiration or earlier termination of this Lease.
Landlord estimates that Real Estate Taxes for the 2005 calendar year will be
Fifteen Thousand One Hundred and 00/100 Dollars ($15,100.00).
6. Condition,
Repair, Replacement and Maintenance of the Premises.
(a) Condition
of the Premises.
Tenant
acknowledges examining the Premises prior to the commencement of the Lease term,
that Tenant is fully familiar with the condition of the Premises and that Tenant
accepts the Premises "As-Is." Tenant enters into the Lease without any
representations or warranties on the part of Landlord, express or implied, as to
the condition of the Premises, including, but not limited to, the cost of
operations and the condition of its fixtures, improvements and
systems.
(b) Tenant's
Obligations.
(i) Tenant's
Maintenance.
Tenant
shall, at Tenant's own expense, maintain, keep in good condition, repair and
make replacements, foreseen and unforeseen, ordinary and extraordinary,
structural and non-structural, to the exterior of the building on the Premises
(including, but not limited to, the roof, roof system, windows and doors) and
interior of the building on the Premises (including, but not limited to, the
plumbing system, the sprinkler system, if any, the heating system, the air
conditioning system, if any, the electric system and any other system of the
building on the Premises), and the driveways, parking areas, shrubbery and lawn,
on the Premises, and at the expiration or other sooner termination of the Lease
term, deliver them up in good order and condition and broom clean.
(ii) Damage
Caused by Tenant.
Notwithstanding
any contrary provisions set forth in this Lease, any damage to the Premises,
including, but not limited to, the building or its systems, or the improvements,
caused by Tenant or a "Tenant Representative" (as defined below), shall be
promptly repaired or replaced to its former condition by Tenant, as required by
Landlord, at Tenant's own expense. The term "Tenant Representative" shall mean
any shareholder, officer, director, member, partner, employee, agent, licensee,
assignee, sublessee or invitee of Tenant, or any third party other than
Landlord.
(iii) Tenant
to Keep Premises Clean.
In
addition to the foregoing, and not in limitation of it, Tenant shall also, at
Tenant's own expense, undertake all replacement of all plate glass and light
bulbs, florescent tubes and ballasts, and decorating, redecorating and cleaning
of the interior of the Premises, and shall keep and maintain the Premises in a
clean condition, free from debris, trash and refuse.
(iv) Tenant's
Negative Covenants.
Tenant
shall not injure, deface, permit waste nor otherwise harm any part of the
Premises, permit any nuisance at the Premises, permit the emission of any
objectionable noise or odor from the Premises, place a load on the floor on the
Premises exceeding the floor load per square foot the floor was designed to
carry, or install, operate or maintain any electrical equipment in the Premises
that shall not bear an underwriters approval.
(v) Maintenance/Service
Contract.
Tenant
shall, at Tenant's own expense, enter into a maintenance/service contract with a
maintenance contractor, which shall provide for regularly scheduled servicing of
all hot water, heating, ventilation and air conditioning systems and equipment
in the Premises. The maintenance contractor and the maintenance/service contract
shall be subject to the approval of Landlord, which approval shall not be
unreasonably withheld. The maintenance/service contract shall include, without
limitation, all servicing suggested by the manufacturer, within the
operations/maintenance manual pertaining to such system and/or equipment, and
shall be effective (and a copy thereof delivered to Landlord) no later than
thirty (30) days after the commencement date of this Lease.
7. Insurance.
(a) Insurance
Coverage.
Tenant
shall, during the lease term, at Tenant's own expense, obtain and keep in force,
the following insurance:
(i) Fire
Insurance.
An
All-Risk Insurance policy covering the Premises and all improvements located
therein in an amount of one hundred (100%) percent of the replacement value of
the building and all improvements on the Premises other than foundations, and
with such deductible as Landlord considers appropriate in Landlord's sole
discretion. This insurance shall (A) name only Landlord and Landlord's
mortgagees, if any, as their respective interests may appear; (B) provide that
no act of Tenant shall impede the right of Landlord or Landlord's mortgagees, if
any, to receive and collect the insurance proceeds; and (C) provide that the
right of Landlord and Landlord's mortgagees, if any, to the insurance proceeds
shall not be diminished because of any insurance carried by Tenant for Tenant's
own account. Tenant acknowledges that it has no right to receive any proceeds
from such insurance policy. Landlord shall not have to carry insurance of any
kind on the Premises or on Tenant's furniture or furnishings, or on any of
Tenant's fixtures, equipment, improvements, or appurtenances under this Lease;
and Landlord shall not be obligated to repair any damage thereto or replace the
same.
(ii) Sprinkler
Insurance.
If
sprinklers are installed in the Premises, Tenant shall obtain sprinkler leakage
insurance in an amount equal to at least ten percent (10%) of the amount of
insurance required to be carried by Tenant pursuant to subparagraph (i) above.
This insurance may be included as a part of the All-Risk Insurance policy. This
insurance shall (A) name only Landlord and Landlord's mortgagees, if any, as
their respective interests may appear; (B) provide that no act of Tenant shall
impede the right of Landlord or Landlord's mortgagees, if any, to receive and
collect the insurance proceeds; and (C) provide that the right of Landlord and
Landlord's mortgagees, if any, to the insurance proceeds shall not be diminished
because of any insurance carried by Tenant for Tenant's own
account.
(iii) Liability
Insurance.
Comprehensive
general liability insurance coverage (either primary and/or umbrella policies),
which shall include personal injury, bodily injury, broad form property damage,
operations hazard, owner's protective coverage, contractual liability and
products and completed operations liability, in limits not less than One Million
Dollars ($1,000,000.00) inclusive. This insurance shall insure Landlord and
"Landlord's Indemnitees" (as defined below) and Tenant, and such other parties
as Landlord may designate, naming each as the insured. Notwithstanding any
contrary provisions contained in this paragraph, if any liability insurance
policy excludes coverage of any claim made by one insured against another, or
any action or suit filed by one insured against another, then Tenant shall
deliver to Landlord a separate liability insurance policy, which insures only
Landlord and Landlord's Indemnitees and such other parties as Landlord may
designate, in accordance with the provisions of this paragraph, and a
certificate of insurance evidencing a separate liability insurance policy
insuring Tenant in accordance with the provisions of this paragraph. The term
"Landlord's Indemnitees" shall mean Landlord's affiliates, mortgagees, if any,
and their respective officers, shareholders, directors, managers, members,
employees, agents and representatives, as well as the officers, shareholders,
directors, managers, members, employees, agents and representatives of
Landlord.
(iv) Worker's
Compensation and Employer's Liability Insurance.
Worker's
Compensation and Employer's Liability insurance, in a form and in an amount as
required to comply with state law and which shall contain a waiver of
subrogation against Landlord.
(v) Additional
Insurance.
Any other
form or forms of insurance as Landlord or Landlord's mortgagees may reasonably
require from time to time, in form and amounts, and for insurance risks against
which a prudent tenant of a comparable size and in a comparable business would
protect itself.
(b) Insurance
Requirements Generally.
All
policies shall be taken out with insurers that are acceptable to Landlord and in
form satisfactory to Landlord. Tenant agrees that certificates of insurance, or,
if required by Landlord or the mortgagees of Landlord, certified copies of each
such insurance policy, will be delivered to Landlord as soon as practicable
after the placing of the required insurance. Tenant shall, contemporaneously
with the execution of this Lease, provide Landlord with a certificate of
insurance as written evidence of the insurance in force, and renewals thereof
shall be delivered to Landlord at least thirty (30) days prior to the expiration
of the respective policy terms. All policies shall contain an undertaking by the
insurers to notify Landlord and the mortgagees of Landlord in writing not less
than thirty (30) days before any material change, reduction in coverage,
cancellation, or other termination thereof.
(c) Waiver
of Subrogation.
To the
extent that the parties may legally so agree, neither Landlord nor Tenant shall
be liable by way of subrogation or otherwise to the other party, or to any
insurance company insuring the other party for any loss or damage to any of the
property of Landlord or Tenant, as the case may be, which loss or damage is
covered by any insurance policies carried by the parties and in force at the
time of any such damage, even though such loss or damage might have been
occasioned by the negligence of Landlord or Tenant, and the party hereto
sustaining such loss or damage so protected by insurance waives its rights, if
any, of recovery against the other party hereto to the extent and amount that
such loss is covered by such insurance. This release shall be in effect only so
long as the applicable insurance policies shall contain a clause or endorsement
to the effect that the aforementioned waiver shall not affect the right of the
insured to recover under such policies; Tenant shall use its best efforts
(including payment of any additional premium) to have its insurance policies
contain the standard waiver of subrogation clause. In the event Tenant's
insurance carrier declines to include in such carrier's policy the standard
waiver of subrogation clause, Tenant shall promptly notify Landlord in
writing.
8. Compliance
with Laws and Insurance Requirements.
(a) General
Compliance with Laws and Requirements.
Tenant
shall, at Tenant's own expense, promptly comply with: (i) each and every
federal, State of Arizona, county and municipal statute, ordinance, code, rule,
regulation, order, directive or requirement, currently or hereafter existing,
including, but not limited to, the Americans with Disabilities Act of 1990 and
all environmental laws, together with all amending and successor federal, State
of Arizona, county and municipal statutes, ordinances, codes, rules,
regulations, orders, directives or requirements, and the common law, regardless
of whether such laws are foreseen or unforeseen, ordinary or extraordinary,
applicable to the Premises, Tenant, Tenant's use of or operations at the
Premises, or all of them, (the "Requirements"); (ii) the requirements of any
regulatory insurance body; or (iii) the requirements of any insurance carrier
insuring the Premises; regardless of whether compliance (X) results from any
condition, event or circumstance existing on or after the commencement of the
Lease term; (Y) interferes with Tenant's use or enjoyment of the Premises; or
(Z) requires structural or non-structural repairs or replacements. The failure
to mention any specific statute, ordinance, rule, code, regulation, order,
directive or requirement shall not be construed to mean that Tenant was not
intended to comply with such statute, ordinance, rule, code, regulation, order,
directive or requirement.
(b) Environmental
Law.
(i) Transaction
Triggered Environmental Law.
Tenant
shall, at Tenant's own expense, comply with any transaction triggered
environmental law (including, without limitation, a law whose applicability is
triggered upon sale of the Premises, a cessation of operations at the Premises,
a corporate reorganization, or other commercial transaction), the regulations
promulgated thereunder, and any amending and successor legislation and
regulations now or hereafter existing in the state (the "Cleanup Law"). Tenant
shall, at Tenant's own expense, make all submissions to, provide all information
to and comply with all requirements of, the applicable state environmental
protection or conservation agency enforcing the Cleanup Law. Tenant's
obligations under this subparagraph shall arise if any action or omission by
Landlord or Tenant triggers the applicability of the Cleanup Law.
(ii) Information
to Landlord.
At no
expense to Landlord, Tenant shall promptly provide all information and sign all
documents requested by Landlord with respect to compliance with Requirements;
however, this shall not in any way be deemed to impose upon Landlord any
obligation to comply with any Requirements.
(iii) Landlord
Audit.
Tenant
shall permit Landlord and its representatives access to the Premises, from time
to time, to conduct an environmental assessment, investigation and sampling of
the Premises, at Tenant's expense.
(iv)
Tenant
Audit.
Landlord
shall have the right, from time to time, during the Lease term, and upon the
expiration or sooner termination of the Lease term, to require that Tenant hire,
and in such event Tenant shall, at Tenant's own expense, hire an environmental
consultant satisfactory to Landlord to undertake sampling at the Premises
sufficient to determine whether "Contaminants" (as defined below) have been
"Discharged" (as defined below) during the Lease term.
(v) No
Installation of Tanks.
Tenant
shall not install any underground or above ground storage tanks ("Tanks") at the
Premises without the prior written consent of Landlord, and upon demand of
Landlord, shall, prior to the expiration or sooner termination of the Lease
term, remove, at Tenant's own expense, all Tanks installed at the Premises
during the Lease term, and in so doing, Tenant shall comply with all closure
requirements and other requirements of Requirements.
(vi) Tenant
Remediation.
Should
any assessment, investigation or sampling reveal the existence of any
Contaminants in, on, under, or about, or migrating from or onto the Premises as
a result of a Discharge during the Lease term, then, in addition to such event
constituting an Event of Default under this Lease, and Landlord having all
rights available to Landlord under this Lease and by law by reason of such Event
of Default, Tenant shall, at Tenant's own expense, in accordance with all
Requirements, undertake all action required by Landlord and any "Governmental
Authority" (as defined below), including, but not limited to, promptly obtaining
and delivering to Landlord an unconditional written determination by the
applicable environmental protection or conservation agency that there are no
Discharged Contaminants present at the Premises or at any other site to which a
Discharge originating at the Premises migrated, or that any Discharged
Contaminants present at the Premises or that have migrated from the Premises,
have been remediated in accordance with all applicable requirements ("No Further
Action Letter"). In no event shall any of Tenant's remedial action involve
engineering or institutional controls, a groundwater classification exception
area or well restriction area. Promptly upon completion of all required
investigatory and remedial activities, Tenant shall, at Tenant's own expense,
and to Landlord's satisfaction, restore the affected areas of the Premises from
any damage or condition caused by the investigatory or remedial
work.
(vii) Hold-Over
Tenancy.
If prior
to the expiration or earlier termination of the Lease term, Tenant fails to
remediate all Contaminants pursuant to subparagraph (vi) above, and deliver to
Landlord an unconditional No Further Action Letter (the "Environmental
Clearance"); then upon the expiration or earlier termination of the Lease term,
Landlord shall have the option either to consider the Lease as having ended or
treat Tenant as a hold-over tenant in possession of the Premises. If Landlord
considers the Lease as having ended, then Tenant shall nevertheless be obligated
to promptly obtain and deliver to Landlord the Environmental Clearance, and
otherwise fulfill all of the obligations of Tenant set forth in this paragraph
8. If Landlord treats Tenant as a hold-over tenant in possession of the
Premises, then Tenant shall pay, monthly to Landlord, on the first day of each
month, in advance, double the rent that Tenant would otherwise have paid under
the Lease, until such time as Tenant delivers to Landlord the Environmental
Clearance, and otherwise fulfills its obligations to Landlord under this
paragraph 8, and during the hold-over period, all other terms of this Lease
shall remain in full force and effect.
(viii) Permits.
Tenant
shall not commence or alter any operations at the Premises prior to: (A)
obtaining all permits, registrations, licenses, certificates and approvals from
all Governmental Authorities required pursuant to any Requirements; and (B)
delivering a copy of each permit, registration, license, certificate and
approval to Landlord, together with a copy of the application upon which such
permit, registration, license, certificate and approval is based.
(ix) Environmental
Documents.
The term
"Environmental Documents" shall mean all environmental documentation concerning
the Premises, or its environs, in the possession or under the control of Tenant,
including but not limited to, plans, reports, correspondence and submissions.
During the term of this Lease, and subsequently, promptly upon receipt by Tenant
or a Tenant Representative, Tenant shall deliver to Landlord all Environmental
Documents concerning or generated by or on behalf of Tenant with respect to the
Premises, whether during or after the Lease term, and whether currently or
hereafter existing. In addition, Tenant shall promptly notify Landlord of any
environmental condition of which Tenant has knowledge, which may exist in, on,
under or about, or may be migrating from or onto the Premises.
(x) Attendance
at Meetings.
Tenant
shall notify Landlord in advance of all meetings scheduled between Tenant or
Tenant's Representatives and any Governmental Authority pertaining to the
Premises, and Landlord and Landlord's agents, representatives and employees,
including, but not limited to, legal counsel and environmental consultants and
engineers, shall have the right, without the obligation, to attend and
participate in all such meetings.
(xi) Landlord's
Right to Perform Tenant's Obligations.
Notwithstanding
anything to the contrary set forth in this Lease, in the event, pursuant to this
Lease, Tenant is required to undertake any sampling, assessment, investigation
or remediation with respect to the Premises, then, at Landlord's discretion,
Landlord shall have the right (but without any obligation to do so), upon notice
to Tenant, from time to time, to perform such activities at Tenant's expense,
and all sums incurred by Landlord shall be paid by Tenant, as additional rent,
upon demand, together with interest at the Prime Rate, accruing from the date of
Landlord's demand.
(xii) Interpretation
and Definitions.
(A) Interpretation.
The
obligations imposed upon Tenant under this subparagraph (b) are in addition to
and are not intended to limit, but to expand upon, the obligations imposed upon
Tenant under subparagraph (a).
(B) Contaminants.
The term
"Contaminants" shall include, without limitation, any regulated substance, toxic
substance, hazardous substance, hazardous waste, pollution, pollutant or
contaminant, as defined or referred to in the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. Sec.6901 et
seq.; the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Sec.9601 et
seq.; the
Water Pollution and Control Act, 33 U.S.C. Sec.1251 et
seq.;
analogous state laws; together with any amendments thereto, regulations
promulgated thereunder and all substitutions thereof, as well as words of
similar purport or meaning referred to in any other federal, State of Arizona,
county or municipal environmental statute, ordinance, code, rule, regulation,
order, directive or requirement, including, without limitation, radon, asbestos,
polychlorinated biphenyls, urea formaldehyde and petroleum products and
petroleum based derivatives. Where a statute, ordinance, code, rule, regulation,
order, directive or requirement defines any of these terms more broadly than
another, the broader definition shall apply.
(C) Discharge.
The term
"Discharge" shall mean the releasing, spilling, leaking, leaching, disposing,
pumping, pouring, emitting, emptying or dumping of Contaminants at, into, onto
or migrating from or onto the Premises, regardless of whether the result of an
intentional or unintentional action or omission.
(D) Governmental
Authority/Governmental Authorities.
The term
"Governmental Authority" or "Governmental Authorities" shall mean the federal,
State of Arizona, county or municipal government, or any department, agency,
bureau or other similar type body obtaining authority therefrom, or created
pursuant to any Requirements.
(c) Survival.
This
paragraph 8 shall survive the expiration or earlier termination of this Lease.
Without limiting any other remedy available to Landlord under this Lease or by
Requirements, Tenant's failure to abide by the terms of this paragraph 8 shall
be restrainable or enforceable, as the case may be, by injunction.
9. Alterations,
Additions and Improvements.
No
alterations, additions or improvements shall be made by Tenant to the building
and improvements on the Premises, nor to any air conditioning system, heating
system, plumbing system, electrical system, nor shall antennas or fixtures be
installed in or on the building or improvements to the Premises, without the
prior written consent of Landlord, which consent may be granted or withheld by
Landlord, in Landlord's sole and absolute discretion. All alterations, additions
or improvements and systems installed in or attached to the Premises by Tenant
shall, at the option of Landlord, upon the expiration or earlier termination of
the Lease, belong to and become the property of Landlord without any payment
from Landlord and if such option is exercised, shall be surrendered by Tenant in
good order and condition as part of the Premises upon the expiration or sooner
termination of the Lease term. At Landlord's request, Tenant shall restore the
Premises to the condition it was in prior to Tenant's occupancy, such
restoration to be completed on or before the expiration of the Lease term, at
Tenant's own expense. Tenant shall not use or penetrate the roof of the building
on the Premises for any purpose whatsoever without the prior written consent of
Landlord, which consent may be granted or withheld by Landlord, in Landlord's
sole and absolute discretion. All alterations, additions or improvements
consented to by Landlord shall be performed by Tenant in a good and workmanlike
manner, in compliance with all Requirements.
10. Fire
and Other Casualty Affecting the Premises.
(a) Notice
of Casualty by Tenant.
If the
improvements situated upon the Premises shall be damaged or destroyed by any
peril, including, but not limited to, fire, wind storm or other casualty (each
such occurrence, a "Casualty"), at any time, whether covered by insurance to be
provided by Tenant under this Lease, or not, Tenant shall give prompt notice
thereof to Landlord and this Lease shall continue in full force and
effect.
(b) Restoration
by Tenant.
If at any
time any Casualty occurs, Tenant shall proceed in good faith and with due
diligence to restore, replace, rebuild and repair the improvements damaged or
destroyed by such Casualty to substantially the same condition such improvements
were in immediately prior to such damage or destruction, and Tenant's
obligations to pay the rent, additional rent and other sums required of Tenant
under the Lease shall not be abated or reduced, nor shall Tenant be entitled to
surrender possession of the Premises by reason thereof. Notwithstanding anything
to the contrary set forth in this Lease, the net insurance proceeds, if any,
collected by Landlord from any insurance policy, and not otherwise payable to a
mortgagee of Landlord, after deducting all costs of collection (including, but
not limited to, the fees of any adjuster employed by Landlord with respect to
the collection of any insurance proceeds), (the "Restoration Funds"), shall be
available to be used by Tenant for the restoration of the Premises. If the
Restoration Fund is Two Hundred Thousand ($200,000.00) Dollars or less, the
whole thereof shall be paid to Tenant and deposited in trust in a segregated
interest bearing account by Tenant, in a financial institution designated by
Landlord. If the Restoration Fund is in excess of Two Hundred Thousand
($200,000.00) Dollars, the Restoration Fund shall continue to be held by
Landlord, and provided Tenant complies with the provisions of this paragraph,
the Restoration Fund shall be made available to Tenant, from time to time, in
the manner and to the extent hereinafter provided, to pay for the costs of the
restoration of the Premises; provided, however, that Landlord, before paying
such monies over to Tenant, shall be entitled to reimburse itself from the
Restoration Fund to the extent, if any, of the expenses paid or incurred by
Landlord in the administration of the Restoration Fund and oversight of the
restoration, including, without limitation, fees for consultants, counsel and
engineers. Any funds left after the completion of and payment for all
restoration of the Premises shall be retained by Landlord.
(i) Requisitions
for Payment.
The
Restoration Fund shall be paid to Tenant, from time to time, in installments as
the restoration work progresses, upon requisitions to be submitted by Tenant to
Landlord showing the cost of labor and materials incorporated in the
restoration, or incorporated therein since the last previous requisition. If any
vendors, mechanics, laborers, or materialman's lien is filed against the
Premises, Tenant shall not be entitled to receive any further installment until
such lien is satisfied or otherwise discharged.
(ii) Amount
of Payment.
The
amount of any installment to be paid to Tenant shall be such proportion of the
total Restoration Fund received as the cost of labor and materials theretofore
incorporated by Tenant in the restoration bears to the total estimated cost of
the restoration by Tenant, less (A) all payments theretofore made to Tenant out
of the Restoration Fund and (B) ten (10%) percent of the amount so
determined.
(iii) Deficiency
and Completion.
In the
event the Restoration Fund is insufficient for the purpose of paying for the
restoration, or to the extent any mortgagee shall not permit the insurance
proceeds to be used for restoration, Tenant shall nevertheless be required to
make the restoration and pay any additional sums required for the restoration.
The restoration shall be deemed complete when the restoration has been completed
substantially in accordance with the plans and specifications therefore, as
determined by a joint inspection by Landlord and Tenant, and a certificate of
occupancy has been issued, allowing the improvements to be used and operated for
their intended purpose.
(iv) Conditions
to Payment.
In
addition to the foregoing, in no event shall any Restoration Funds be paid until
there has been submitted to Landlord:
(A) Architect
or Contractor Certificate.
A
certificate of Tenant's architect or Tenant's contractor stating that the sum
then requested to be withdrawn either has been paid by Tenant or is justly due
to contractors, subcontractors, materialmen, engineers, architects who have
rendered or furnished certain services and materials for the work and giving a
brief description of such services and materials and the principal subdivisions
or categories thereof and the several amounts so paid or due to each of said
persons in respect thereof, and stating in reasonable detail the progress of the
work up to the date of said certificate; the sum then requested does not exceed
the value of the services and materials described in the certificate; and the
balance of the Restoration Funds held by Landlord shall be sufficient upon
completion of the restoration to pay for the same in full, and stating in
reasonable detail the estimate of the cost of such completion;
(B) Title.
There
shall be furnished to Landlord an official search, or a certificate of title
insurance company reasonably satisfactory to Landlord, or other evidence
reasonably satisfactory to Landlord, showing that there has not been filed any
vendor's, mechanic's, laborer's or materialman's statutory or other similar lien
affecting the Premises, which has not been discharged of record, except as shall
be discharged upon payment of the amount then requested to be
withdrawn;
(C) No
Event of Default.
At the
time of making such payment, there shall not have been an Event of Default, or
an event that with the passage of time or the giving of notice, or both, shall
constitute an Event of Default;
(D) Final
Payment.
With
respect only to the final payment, at the time of making such payment, Tenant
shall have substantially completed the restoration as evidenced by a certificate
of occupancy or completion, issued by the appropriate Governmental
Authority.
(c) Failure
by Tenant to Commence Restoration.
If Tenant
shall fail to commence the necessary repairs, replacements or reconstruction
required for the restoration of the Premises within forty-five (45) days after
receipt by Landlord or Tenant, as the case may be, of the Restoration Funds, or
any part thereof, or if Tenant shall have commenced restoration, but shall fail
to continue restoration with reasonable diligence, then unless such delay shall
have been due to causes beyond the reasonable control of Tenant, Landlord shall
have the right, at Landlord's option, following thirty (30) days prior notice to
Tenant, to deem such an event as an Event of Default, and in addition to all
other rights provided to Landlord under this Lease and by Requirements, Tenant
shall promptly pay over to Landlord all Restoration Funds held by
Tenant.
11. Assignment
and Subletting.
(a) Landlord's
Consent Required.
Tenant
shall not voluntarily or by operation of law assign, sublet, mortgage or
otherwise transfer or encumber all or any part of Tenant's interest in this
Lease or in the Premises without Landlord's prior written consent, which consent
may be granted or withheld in Landlord's sole and absolute discretion. Any
attempted assignment, subletting, mortgage, transfer or encumbrance without such
consent shall be void as against Landlord, and shall constitute an Event of
Default by Tenant under this Lease. Any Change in Control of Tenant shall be
deemed an assignment in violation of this Lease. The term "Change in Control"
with respect to a corporation means any of the following: (A) the direct or
indirect sale or exchange by the stockholders of a corporation of all or
substantially all of the stock of the corporation if the stockholders of the
corporation before such sale or exchange do not retain, directly or indirectly,
at least a majority of the beneficial interest in the voting stock of the
corporation after such sale or exchange; (B) a merger or consolidation if the
stockholders of a corporation before such merger or consolidation do not retain,
directly or indirectly, at least a majority of the beneficial interest in the
voting stock of the corporation after such merger or consolidation (regardless
of whether the corporation is the surviving corporation); (C) the sale, exchange
or transfer of all or substantially all of the assets of a corporation; or (D) a
liquidation or dissolution of a corporation.
(b) No
Release of Tenant.
Regardless
of Landlord's consent or the need under subparagraph (a) to obtain Landlord's
consent, no assignment or subletting shall release Tenant from this Lease.
Acceptance of rent and additional rent from any other person shall not be deemed
a waiver by Landlord of any provision of this Lease. Consent to one assignment
or subletting shall not be deemed a consent to any subsequent assignment or
subletting. In the event of a consent by Landlord to an assignment or
subletting, Tenant shall deliver to Landlord a duplicate original of the
assignment by Tenant and assumption by Tenant's assignee of Tenant's obligations
under this Lease, or a duplicate original of the sublease, as the case may
be.
(c)
Participation
by Landlord.
In the
event of any assignment or sublease involving rent in excess of the rent or
additional rent required under this Lease ("Excess Rent"), Landlord shall
participate in the Excess Rent. Tenant shall promptly pay to Landlord, as
additional rent, fifty (50%) percent of all such Excess Rent collected from the
assignee or subtenant, and shall supply Landlord with a true copy of each
assignment or sublease, and in the case of the former, an originally executed
assumption by the assignee of all of Tenant's obligations under this
Lease.
12. Landlord's
Right to Inspect and Repair.
Landlord
or Landlord's agents, employees or representatives, shall have the right to
enter into and upon all or any part of the Premises during the Lease term at all
reasonable hours, for the purpose of: (a) examination; (b) determination whether
Tenant is in compliance with its obligations under this Lease; or (c) making
repairs, alterations, additions or improvements to the Premises, as may be
necessary by reason of Tenant's failure to make same after notice to Tenant to
do so, except in an emergency. This paragraph shall not be deemed nor construed
to create an obligation on the part of Landlord to make any inspection of the
Premises or to make any repairs, alterations, additions or improvements to the
Premises for its safety or preservation.
13. Landlord's
Right to Exhibit Premises.
Landlord
or Landlord's agents, employees or representatives shall have the right to show
the Premises during the Lease term to persons wishing to purchase or grant fee
mortgages on the Premises. Landlord or Landlord's agents, employees or other
representatives shall have the right within the last six (6) months of the Lease
term to place notices on any parts of the Premises, offering the Premises for
lease and at any time during the Lease term, offering the Premises for sale, and
Tenant shall permit the signs to remain without hindrance or
molestation.
14. Signs.
Tenant
shall not cause any signs to be placed at the Premises, except of a design and
structure and at such places as Landlord shall consent to in writing prior to
the installation. If Landlord or Landlord's agents, employees or other
representatives wish to remove any such signs in order to make any repairs,
alterations, additions or improvements to the Premises, such signs may be
removed, but shall be replaced, at Tenant's expense, when the repairs,
additions, alterations or improvements shall be completed; however, such
provision shall not create an obligation on the part of Landlord to make any
repairs, alterations, additions or improvements to the Premises. All signs of
Tenant at the Premises shall conform with all municipal ordinances or other laws
and regulations applicable to such signs.
15. Landlord
not Liable.
Landlord
shall not be liable for any damage or injury to any person or any property as a
consequence of the failure, breakage, leakage or obstruction of water, well,
plumbing, septic tank, sewer, waste or soil pipes, roof, drains, leaders,
gutters, down spouts or the like, or of the electrical system, gas system, air
conditioning system or other system, or by reason of the elements, or resulting
from any act or failure to act on the part of Landlord, or Landlord's agents,
employees, invitees or representatives, assignees or successors, or attributable
to any interference with, interruption of or failure beyond the control of
Landlord.
16. Force
Majeure.
Whenever
a period of time is herein prescribed for the taking of any action by Landlord,
Landlord shall not be liable or responsible for, and there shall be excluded
from the computation of such period of time, any delays due to strikes,
lockouts, riots, acts of God, shortages of labor or materials, war, civil
commotion, fire or other casualty, catastrophic weather conditions, a court
order that causes a delay, governmental laws, regulations, or restrictions, or
any other cause whatsoever beyond the control of Landlord (any of the foregoing
being referred to an "Unavoidable Delay"). Landlord shall use reasonable efforts
to notify Tenant not later than ten (10) business days after Landlord knows of
the occurrence of an Unavoidable Delay; provided, however, that Landlord's
failure to notify Tenant of the occurrence of an event constituting an
Unavoidable Delay shall not alter, detract from, or negate its character as an
Unavoidable Delay or otherwise result in the loss of any benefit or right
granted to Landlord under this Lease.
17. Indemnification
and Waiver of Liability.
Neither
Landlord nor Landlord's Indemnitees shall be liable for and Tenant shall
indemnify and save harmless Landlord and Landlord's Indemnitees from and against
any and all liabilities, damages, claims, suits, costs (including costs of suit,
attorneys' fees and costs of investigation) and actions of any kind, foreseen or
unforeseen, arising or alleged to arise by reason of injury to or death of any
person or damage to or loss of property, occurring on, in, or about the
Premises, or by reason of any other claim whatsoever of any person or party,
occasioned, directly or indirectly, wholly or partly: (a) by any act or omission
on the part of Tenant or any Tenant Representative; (b) by any breach, violation
or non-performance of any covenant of Tenant under this Lease; or (c) by a
Discharge of Contaminants during the Lease term; regardless of whether such
liability, claim, suit, cost, injury, death or damage arises from or is
attributable to the concurrent negligence, willful misconduct or gross
negligence of Landlord or any Landlord Indemnitee. If any action or proceeding
shall be brought by or against Landlord or any Landlord Indemnitee in connection
with any such liability, claim, suit, cost, injury, death or damage, Tenant, on
notice from Landlord or any Landlord Indemnitee, shall defend such action or
proceeding, at Tenant's expense, by or through attorneys reasonably satisfactory
to Landlord or the Landlord Indemnitee. The provisions of this paragraph shall
apply to all activities of Tenant or any Tenant Representative with respect to
the Premises, whether occurring before or after execution of this Lease.
Tenant's obligations under this paragraph shall not be limited to the coverage
of insurance maintained or required to be maintained by Tenant under this Lease.
Neither Landlord nor any Landlord Indemnitee shall be liable in any manner to
Tenant or any Tenant Representative for any injury to or death of persons or for
any loss of or damage to property, regardless of whether such loss or damage is
occasioned by casualty, theft or any other cause of whatsoever nature, including
loss or damage caused solely by the negligent, willful misconduct or gross
negligence of Landlord or any Landlord Indemnitee. In no event shall Landlord or
any Landlord Indemnitee be liable in any manner to Tenant or any Tenant
Representative as the result of the acts or omissions of Tenant or a Tenant
Representative and all liability therefore shall rest with Tenant. All personal
property upon the Premises shall be at the risk of Tenant only, and neither
Landlord nor any Landlord Indemnitee shall be liable for any damage thereto or
theft thereof, whether or not due in whole or in part to the negligence, willful
misconduct or gross negligence of Landlord or any Landlord
Indemnitee.
18. Subordination;
Attornment.
(a) Subordination.
This
Lease shall be subject and subordinate to any mortgage, deed of trust, trust
indenture, assignment of leases or rents or both, or other instrument evidencing
a security interest, which may now or hereafter affect any portion of the
Premises, or be created as security for the repayment of any loan or any advance
made pursuant to such an instrument or in connection with any sale-leaseback or
other form of financing transaction and all renewals, extensions, supplements,
consolidations, and other amendments, modifications, and replacements of any of
the foregoing instruments ("Mortgage"), and to any ground lease or underlying
lease of the Premises or any portion of the Premises whether presently or
hereafter existing and all renewals, extensions, supplements, amendments,
modifications, and replacements of any of such leases ("Superior Lease"). Tenant
shall, at the request of any successor-in-interest to Landlord claiming by,
through, or under any Mortgage or Superior Lease, attorn to such person or
entity as described below. The foregoing provisions of this subparagraph (a)
shall be self-operative and no further instrument of subordination shall be
required to make the interest of any lessor under a Superior Lease (a "Superior
Lessor") or any mortgagee, trustee or other holder of or beneficiary under a
Mortgage (a "Mortgagee") superior to the interest of Tenant hereunder; provided,
however, Tenant shall execute and deliver promptly any certificate or
instrument, in recordable form, that Landlord, any Superior Lessor or Mortgagee
may request in confirmation of such subordination.
(b) Rights
of Superior Lessor or Mortgagee.
Any
Superior Lessor or Mortgagee may elect that this Lease shall have priority over
the Superior Lease or Mortgage that it holds and, upon notification to Tenant by
such Superior Lessor or Mortgagee, this Lease shall be deemed to have priority
over such Superior Lease or Mortgage, whether this Lease is dated prior to or
subsequent to the date of such Superior Lease or Mortgage. If, in connection
with the financing of the Premises or with respect to any Superior Lease, any
Mortgagee or Superior Lessor shall request reasonable modifications of this
Lease that do not increase the monetary obligations of Tenant under this Lease,
materially increase Tenant's other obligations, or materially and adversely
affect the rights of Tenant under this Lease, then Tenant shall make such
modifications.
(c) Attornment.
If at any
time prior to the expiration of the term of this Lease, any Superior Lease shall
terminate or be terminated by reason of a default by Landlord as tenant
thereunder or any Mortgagee comes into possession of the Premises or the estate
created by any Superior Lease by receiver or otherwise, Tenant shall, at the
election and upon the demand of any owner of the Premises, or of the Superior
Lessor, or of any Mortgagee-in-possession of the Premises, attorn, from time to
time, to any such owner, Superior Lessor or Mortgagee, or any person or entity
acquiring the interest of Landlord as a result of any such termination, or as a
result of a foreclosure of the Mortgage or the granting of a deed in lieu of
foreclosure, upon the then-executory terms and conditions of this Lease, for the
remainder of the term. In addition, in no event shall any such owner, Superior
Lessor or Mortgagee, or any person or entity acquiring the interest of Landlord
be bound by (i) any payment of rent or additional rent for more than one (1)
month in advance, or (ii) any security deposit or the like not actually received
by such successor, or (iii) any amendment or modification in this Lease made
without the consent of the applicable Superior Lessor or Mortgagee, or (iv) any
construction obligation, free rent, or other concession or monetary allowance,
or (v) any set-off, counterclaim, or the like otherwise available against any
prior landlord (including Landlord), or (vi) any act or omission of any prior
landlord (including Landlord).
(d) Rights
Accruing Automatically.
The
provisions of this paragraph 18 shall inure to the benefit of any such
successor-in-interest to Landlord, shall apply notwithstanding that, as a matter
of law, this Lease may terminate upon the termination of any such Superior
Lease, and shall be self-operative upon any such demand, and no further
instrument shall be required to give effect to such provisions. Tenant, however,
upon demand of any such successor-in-interest to Landlord, shall execute, from
time to time, instruments in confirmation of the foregoing provisions of this
paragraph, reasonably satisfactory to any such successor-in-interest to
Landlord, acknowledging such attornment and setting forth the terms and
conditions of its tenancy.
(e) Limitation
on Rights of Tenant.
As long
as any Superior Lease or Mortgage shall exist, Tenant shall not seek to
terminate this Lease by reason of any act or omission of Landlord until Tenant
shall have given written notice of such act or omission to all Superior Lessors
and Mortgagees at such addresses as shall have been furnished to Tenant by such
Superior Lessors and Mortgagees and, if any such Superior Lessor or Mortgagee,
as the case may be, shall have notified Tenant within ten (10) business days
following receipt of such notice of its intention to remedy such act or
omission, until a reasonable period of time shall have elapsed following the
giving of such notice (but not to exceed sixty (60) days), during which period
such Superior Lessors and Mortgagees shall have the right, but not the
obligation, to remedy such act or omission. The foregoing shall not, however, be
deemed to impose upon Landlord any obligations not otherwise expressly set forth
in this Lease.
19. Condemnation.
(a) Permanent
Condemnation.
(i) Lease
Termination.
If all or
any portion of the Premises is taken under the power of eminent domain, or sold
under the threat of the exercise of the power (both called "Condemnation"), this
Lease shall terminate as to the part taken as of the first date the condemning
authority takes either title or possession. If more then twenty-five (25%)
percent of the leasable area of the Premises is taken or the balance of the
Premises is unfit for Tenant's use, Tenant has the option to terminate this
Lease as of the date the condemning authority takes possession. The option shall
be exercised in writing as follows: (A) within
thirty (30) days after Landlord or the condemning authority has given Tenant
written notice of the taking; or (B) absent notice, within ten (10) days after
the condemning authority has taken possession. If Tenant does not terminate,
this Lease shall remain in full force and effect as to the portion of the
Premises remaining. The rent, additional rent and Real Estate Taxes shall be
reduced in the same proportion as the area of the Premises taken bears to the
entire area leased hereunder.
(ii) Award.
Any award
for Condemnation is Landlord's, whether the award is made as compensation for
diminution in value of the leasehold or for the taking of the fee, or as
severance damages. If this Lease is not terminated, Landlord shall diligently
repair any damage to the Premises caused by such Condemnation, subject to delays
due to Force Majeure, as provided in paragraph 16.
(b) Temporary
Condemnation.
Upon
condemnation of all or any portion of the Premises for temporary use, this Lease
shall continue without change or abatement in Tenant's obligations, as between
Landlord and Tenant. Tenant is entitled to the award made for the use. If the
Condemnation extends beyond the term of the Lease, the award shall be prorated
between Landlord and Tenant as of the expiration date of the term. Tenant is
responsible, at its sole cost and expense, for performing any restoration work
required to place the Premises in the condition it was in prior to Condemnation,
unless the release of the Premises occurs after termination. In such case,
Tenant shall assign to Landlord any claim it may have against the condemning
authority for the cost of restoration, and if Tenant has received restoration
funds, it shall give the funds to Landlord within ten (10) days after
demand.
20. Bankruptcy
or Insolvency of Tenant.
(a) Landlord's
Right to Terminate Lease.
If Tenant
is the subject of an Order for Relief under the existing or any future Federal
Bankruptcy Code or law, as amended or modified ("the Bankruptcy Code"), or if
Tenant files a petition or if a petition is filed against Tenant, under the
Bankruptcy Code, then, in addition to any such event constituting an Event of
Default under this Lease, and Landlord having all rights as a result thereof,
Landlord shall have the option to either re-enter and re-possess the Premises
pursuant to the provisions of the Lease or to terminate the Lease, pursuant to
the provisions of the Lease, or both.
(b) Tenant's
Filing of Chapter 7 Proceedings.
If a
petition is filed by, or an order for relief is entered against, Tenant under
Chapter 7 of the Bankruptcy Code, and the Trustee of Tenant ("the Trustee")
elects to assume the Lease for the purpose of assigning it, the election or
assignment, or both, may be made only if all of the provisions of subparagraphs
(c) and (e) below are satisfied. Nothing in the preceding sentence shall be
deemed to grant the Trustee any right to assume the Lease if it has been
terminated theretofore. If the Trustee fails to elect to assume the Lease for
the purpose of assigning it within sixty (60) days after the Trustee's
appointment, the Lease shall be deemed to have been rejected by the Trustee.
Landlord shall then immediately become entitled to possession of the Premises,
without any further obligation to Tenant or the Trustee, and the Lease shall
automatically terminate at the end of the sixty (60) day period, but Landlord's
right to compensation for damages in the bankruptcy proceedings shall survive.
In such case, Landlord shall be entitled to recover from Tenant, as damages, an
amount equal to the rent and additional rent reserved under the Lease from the
date of the automatic termination to the expiration date of the Lease, and the
damages shall be due and payable to Landlord immediately.
(c) Tenant's
Filing of Chapter 11 or 13 Proceedings.
If Tenant
files a petition for reorganization under Chapters 11 or 13 of the Bankruptcy
Code, or a proceeding that is filed by or against Tenant under any other chapter
of the Bankruptcy Code is converted to a Chapter 11 or 13 proceeding and the
Trustee or Tenant as a debtor-in-possession ("Debtor-in-Possession") fails to
assume the Lease within sixty (60) days from the date of filing the petition or
the conversion, the Trustee or the Debtor-in-Possession shall be deemed to have
rejected the Lease and the Lease shall automatically terminate at the expiration
of the sixty (60) day period, but Landlord's right to compensation for damages
in the bankruptcy proceedings shall survive. Nothing in the preceding sentence
shall be deemed to grant the Trustee or the Debtor-in-Possession any right to
assume the Lease if it has been terminated theretofore. In such a case, Landlord
shall be entitled to recover from Tenant, as damages, an amount equal to the
fixed annual rent and additional rent reserved under the Lease from the date of
the automatic termination to the expiration date of the Lease, and the damages
shall be due and payable to Landlord immediately. In order to assume the Lease,
the Trustee or the Debtor-in-Possession shall notify Landlord of the election to
assume within the sixty (60) day period, but in such event all of the following
conditions, which Landlord and Tenant acknowledge are commercially reasonable,
must be satisfied by the Trustee or the Debtor-in-Possession to the extent
Landlord determines, in Landlord's sole discretion:
(i) Adequate
Assurances.
The
Trustee or the Debtor-in-Possession cures, or provides "Adequate Assurance" (as
defined below) to Landlord, that the Trustee or the Debtor-in-Possession can
cure all monetary Events of Default under the Lease by full and complete
payment, within ten (10) days from the date of the assumption, and that the
Trustee or the Debtor-in-Possession cures all non-monetary Events of Default
under the Lease within thirty (30) days from the date of the
assumption;
(ii) Landlord
Compensation.
The
Trustee or the Debtor-in-Possession compensates Landlord, or provides Adequate
Assurance to Landlord, that within ten (10) days from the date of the
assumption, Landlord shall be compensated by full and complete payment for any
pecuniary loss Landlord suffers as a result of any Event of Default of Tenant,
the Trustee or the Debtor-in-Possession, as set forth in Landlord's notice
(which contains a statement of Landlord's pecuniary loss), given to the Trustee
or the Debtor-in-Possession; and
(iii) Future
Performance.
The
Trustee or the Debtor-in-Possession provides Landlord with Adequate Assurance of
the future performance of Tenant's obligations under the Lease, including,
without limitation, depositing with Landlord, as security, in addition to that
previously established pursuant to the provisions of the Lease, an amount equal
to three (3) monthly installments of rent and additional rent then accruing
under the Lease.
For
purposes of this subparagraph (c), "Adequate Assurance" shall mean that (i)
Landlord determines that the Trustee or Debtor-in-Possession has, and shall
continue to have, sufficient unencumbered assets after the payment of all
secured obligations and administrative expenses to assure Landlord that the
Trustee or the Debtor-in- Possession has sufficient funds to fulfill Tenant's
obligations under the Lease; and (ii) an order was entered segregating
sufficient sums payable to Landlord, or a valid and perfected lien and security
interest are granted to Landlord in the property of Tenant, Trustee or the
Debtor-in-Possession, as may be acceptable to Landlord, to secure the
obligations of the Trustee or the Debtor-in-Possession to cure the monetary or
non-monetary defaults under the Lease within the time periods set forth
above.
(d) Landlord's
Right to Terminate Lease on Further Filing of Bankruptcy
Petition.
If the
lease is assumed by the Trustee or Debtor-in-Possession pursuant to subparagraph
(c) above, and thereafter Tenant is the subject of an Order for Relief under the
Bankruptcy Code, then Landlord has the option to terminate the Lease pursuant to
the provisions of the Lease.
(e) Condition
Upon Assignment.
If the
Trustee or Debtor-in-Possession pursuant to subparagraphs (b) and (c) above
desires or elects to assign Tenant's interest, or the estate created by the
interest under the Lease, to any other person, the interest or estate may be
assigned only if Landlord acknowledges in writing that the intended assignee has
provided to Landlord, Adequate Assurance (as defined above) of future
performance of all of the obligations of Tenant under the Lease. For the purpose
of this subparagraph (e), "Adequate Assurance" shall mean that Landlord
ascertains that the following conditions are satisfied:
(i) Financial
Information.
The
assignee has submitted to Landlord a current financial statement, audited by a
certified public accountant, that shows a net worth and working capital in
amounts determined by Landlord to be sufficient to assure the future performance
by the assignee of Tenant's obligations under the Lease; and
(ii) Guaranty.
If
requested by Landlord, the assignee has obtained guarantees, in form and
substance satisfactory to Landlord, from one or more persons who satisfy
Landlord's standards of credit-worthiness.
(f) State
Law Action.
Neither
Tenant's interest in the Lease nor any estate of Tenant created in the Lease
shall pass to any trustee, receiver, assignee for the benefit of creditors, or
any other person or entity, or otherwise by operation of law under the laws of
any State having jurisdiction of the person or property of Tenant ("State Law"),
unless Landlord consents in writing to this transfer. Landlord's acceptance of
rent or any other payments from any trustee, receiver, assignee, person, or
other entity shall not be deemed to have waived, or waive, the need to obtain
Landlord's consent or Landlord's right to terminate this Lease for any transfer
of Tenant's interest under this Lease without that consent, and any such event,
without Landlord's written consent, shall be deemed an Event of
Default.
(g) Charges
for Use and Occupancy.
When,
pursuant to the Bankruptcy Code, the Trustee or the Debtor-in-Possession is
obligated to pay reasonable use and occupancy charges for the use of the
Premises, the charges shall not be less than the rent and additional rent due
under the Lease.
21. Landlord's
Right to Re-Enter.
If Tenant
shall default in any of the terms, conditions or covenants of this Lease, then
it shall be lawful for Landlord to re-enter the Premises and to again possess
and enjoy the Premises.
22. Default
by Tenant and Landlord's Remedies.
(a) Event
of Default.
If any
one or more of the following events shall occur and be continuing beyond the
period set forth in any default notice provided to be given, an Event or Events
of Default shall have occurred under this Lease:
(i) Non-Payment.
If Tenant
shall fail to pay any installment of rent, additional rent or other sums due
from Tenant to Landlord under this Lease; or
(ii) Non-Performance.
If Tenant
shall fail to comply with any of the other terms, covenants, conditions or
obligations of this Lease and such failure in compliance shall continue for
thirty (30) days after delivery of notice from Landlord to Tenant specifying the
failure, or, if such failure cannot with due diligence be remedied within thirty
(30) days, Tenant shall not, in good faith have commenced within said thirty
(30) day period to remedy such failure and continued diligently and continuously
thereafter to prosecute the same to completion; or
(iii) Vacation
or Abandonment.
If Tenant
shall vacate or abandon the Premises.
(b) Right
to Terminate Lease and Re-Enter.
Landlord
may, in addition to any other remedy available to Landlord under this Lease or
available under Requirements, at Landlord's option, on 10 days' notice to
Tenant, declare this Lease terminated at the expiration of such 10 day period
and Tenant shall quit and surrender possession of the Premises, but Tenant shall
remain liable to Landlord as hereinafter provided, and upon Tenant's failure to
surrender of possession, Landlord may re-enter the Premises by summary
proceeding or otherwise free from any estate or interest of Tenant
therein.
(c) Landlord's
Right to Restore and Re-Let, and Tenant's Liability for
Expenses.
In the
event that Landlord shall obtain possession by re-entry, legal or equitable
actions or proceedings or other lawful means as a result of an Event of Default
by Tenant, Landlord shall have the right, without the obligation, to make
renovations, alterations and repairs to the Premises required to restore them to
the condition the same should be during the term of the Lease, and to re-let the
Premises or any part thereof for a term or terms that may be less or more than
the full term of the Lease had Landlord not re-entered and re-possessed or
terminated the Lease, and Landlord may grant reasonable concessions in the
re-renting to a new tenant, without affecting the liability of Tenant under the
Lease. Landlord shall in no way be responsible for any failure to re-let all or
any part of the Premises or for any failure to collect any rent due after any
re-letting, and in no event shall Tenant be entitled to any surplus rents
collected. Any of the foregoing action taken or not taken by Landlord shall be
without waiving any rights that Landlord may otherwise have under Requirements
or pursuant to the terms of this Lease. Tenant shall pay Landlord all legal and
other expenses incurred by Landlord in terminating this Lease by reason of an
Event of Default, in obtaining possession of the Premises, in making all
alterations, renovations and repairs and in paying the usual and ordinary
commissions for re-letting the same, together with interest thereof at the Prime
Rate, which interest shall accrue from the date of Landlord's
demand.
(d) Survival
Covenant - Liability of Tenant after Re-Entry and Possession or
Termination.
(i) Survival
of Obligations.
If any
Event of Default occurs (whether or not this Lease shall be terminated as a
result of an Event of Default), Tenant shall remain liable to Landlord for all
rent and additional rent herein reserved (including, but not limited to, the
expenses to be paid by Tenant pursuant to the provisions of this Lease); less
the net amount of rent, if any, that shall be collected and received by Landlord
from the Premises, for and during the remainder of the term of this Lease. In
addition, Landlord may, from time to time, without terminating this Lease, as
agent for Tenant, re-let the Premises or any part thereof for such term or
terms, at such rental or rentals, and upon such other terms and conditions as
Landlord may deem advisable, in accordance with the provisions of subparagraph
(c) above. The failure or refusal of Landlord to re-let the Premises or any part
thereof shall not release Tenant or affect Tenant's liability for damages.
Landlord shall have the right, without the obligation, following re-entry and
possession or termination, to apply any rentals received by Landlord in the
following order: (i) to the payment of indebtedness or costs other than rent or
damages; (ii) to the payment of any cost of re-letting; (iii) to the payment of
any cost of altering or repairing the Premises; (iv) to the payment of rent and
additional rent, or damages, as the case may be, due and unpaid hereunder; and
(v) the residue, if any, shall be held by landlord and applied for the payment
of future rent and additional rent, or damages, as the case may be, as the same
may become due and payable hereunder. Landlord may ▇▇▇ periodically for and
collect the amount that may be due pursuant to the provisions of this paragraph,
and Tenant expressly agrees that any such suit shall not bar or in any way
prejudice the rights of Landlord to enforce the collection or the amount due at
the end of any subsequent period by a like or similar proceeding. The words "re-
entry" and "re-enter," as used herein, shall not be construed as limited to
their strict legal meaning.
(ii) Rights
on Termination.
Should
Landlord terminate this Lease by reason of an Event of Default, then Landlord
shall thereupon have the right, without the obligation, as an alternative to
suing Tenant periodically pursuant to the provisions of subparagraph (i) above,
to recover from Tenant the difference, if any, at the time of such termination,
between the amount of rent and additional rent reserved herein for the remainder
of the term over the then reasonable rental value of the Premises for the same
period both discounted to present value at the discount rate of the Federal
Reserve Bank situated nearest to the location of the Premises plus one (1)
percentage point. Landlord shall not, by any re-entry or other act, be deemed to
have terminated this Lease, unless Landlord shall notify Tenant in writing, that
Landlord has elected to terminate the same.
(iii) Remedies
Cumulative.
The
remedies of Landlord specified herein shall be cumulative as to each other and
as to all such allowed by Requirements.
(e) Right
to Injunction.
In the
event of a breach or threatened breach by Tenant of any of the covenants or
provisions hereof, Landlord shall have the right of injunction and the right to
invoke any remedy allowed at law or in equity as if re-entry, summary
proceedings and other remedies were not herein provided for. Mention in this
Lease of any particular remedy shall not preclude Landlord from any other
remedy, in law or in equity. Tenant hereby expressly waives any and all rights
of redemption granted by or under any present or future laws in the event of
Tenant being evicted or dispossessed for any cause, or in the event of Landlord
obtaining possession of the Premises, by reason of the violation by Tenant of
any of the covenants and conditions of this Lease, or otherwise.
23. Tenant's
Trade Fixtures and Removal.
Any trade
equipment, trade fixtures, goods or other property of Tenant shall be removed by
Tenant on or before the expiration of the Lease term or sooner termination of
the Lease term. Any trade equipment, trade fixtures, goods or other property of
Tenant not removed by Tenant on the expiration of the Lease term or sooner
termination of the Lease term, or upon any deserting, vacating or abandonment of
the Premises by Tenant, or upon Tenant's eviction, shall, at Landlord's
discretion, be considered as abandoned and Landlord shall have the right
(without any obligation to do so), without notice to Tenant, to sell or
otherwise dispose of Tenant's property, at the expense of Tenant, and Landlord
shall not be accountable to Tenant for any proceeds of the sale, or for any
damage or loss to Tenant's property.
24. Holding
Over. If
Tenant shall hold over after the expiration of the original Lease term or any
applicable extension or renewal thereof, with the consent of Landlord, then
Tenant shall become a tenant on a month-to-month basis upon all the terms,
covenants and conditions herein specified, but exclusive of any further
extension or renewal options; provided, however, that during any such hold over
period, the rent payable on account thereof shall be equal to one hundred fifty
percent (150%) of the rent in effect upon the date of expiration of the original
Lease term or, as the case may be, of any applicable extension or renewal
thereof in effect immediately prior to such hold over period.
25. Estoppel
Certificate.
Within
ten (10) days of request from Landlord, Tenant shall execute, acknowledge and
deliver to Landlord, a written instrument certifying (i) that this Lease has not
been modified and is in full force and effect, or if there has been a
modification, that the Lease is in full force and effect as modified, stating
the modification; (ii) specifying the dates to which rent and other sums due
from Tenant under this Lease have been paid; (iii) stating whether or not to the
knowledge of Tenant, Landlord is in default, and if so, the reasons for the
default; and (iv) stating the commencement date of the Lease term.
26. Limitations
on Landlord's Liability.
Notwithstanding
any provision of this Lease to the contrary, Tenant agrees that it shall look
only to the Premises (which includes all of Landlord's equity or interest
therein, including proceeds of sale, insurance and condemnation) in seeking to
enforce any obligations or liabilities whatsoever of Landlord under this Lease
or to satisfy a judgment (or any other charge, directive or order) of any kind
against Landlord; and Tenant shall not look to the property or assets of any of
the any officers, directors, shareholders (or principal, partner, member or
manager of any non-corporate Landlord), employees, agents, or legal
representatives of Landlord in seeking to enforce any obligations or liabilities
whatsoever of Landlord under this Lease or to satisfy a judgment (or any other
charge, directive or order) of any kind against Landlord, and in no event shall
any deficiency judgment be sought or obtained against Landlord. No person who is
an officer, director, shareholder (or principal, partner, member or manager of
any non-corporate Landlord), employee, agent, or legal representative of
Landlord shall be personally liable for any obligations or liabilities of
Landlord under this Lease.
27. Services
and Utilities.
Tenant
shall, at Tenant's own expense, obtain all utility services supplying the
Premises, including, but not limited to, electricity, water, sewer, standby
water for sprinkler, gas, telephone and all other utilities and other
communication services, in its own name, effective as of the commencement of the
Lease, and shall pay the cost directly to the applicable utility, including any
fine, penalty, interest or cost that may be added thereto for non-payment
thereof.
28. Security.
Upon
execution and delivery of this Lease, Tenant shall deposit the sum of Eight
Thousand and 00/100 Dollars ($8,000.00) with Landlord, as security for the full
and faithful performance by Tenant of all of the terms, conditions and covenants
of this Lease on Tenant's part to be performed, which sum shall be returned to
Tenant following the expiration of the Lease term, provided there shall not then
be an Event of Default or an event that with the giving of notice or the lapse
of time, or both, shall constitute an Event of Default. Landlord shall have the
right (but not the obligation), to apply any part of the deposit to cure an
Event of Default of Tenant, and if Landlord does so, Tenant shall, upon demand,
deposit with Landlord the amount applied, so that Landlord shall have the full
deposit on hand at all times. If Landlord shall sell the Premises, Landlord
shall have the right to transfer the security to the new landlord, and upon so
doing Landlord shall be released by Tenant from all liability for the return of
the security and Tenant shall look solely to the new landlord for the return of
the security, and this shall apply to every transfer made of the security to a
new landlord. The security deposited by Tenant under this Lease shall not be
mortgaged, assigned or encumbered by Tenant.
29. Qualification
in Arizona.
Tenant
represents and warrants to Landlord that it has qualified with the Arizona
Corporation Commission to do business in the State of Arizona.
30. Notices.
All
notices, consents, demands, communications or approvals required or permitted by
this Lease shall be in writing and shall be delivered personally or delivered by
certified or registered mail, return receipt requested, addressed as
follows:
|
If
to Landlord: |
Washington
Properties, LLC |
|
Attn:
Billi ▇▇ ▇▇▇▇▇ |
|
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ |
|
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ |
|
With
copy to: |
▇▇▇▇▇▇
▇. ▇▇▇▇ |
|
▇▇▇▇
& ▇▇▇▇▇▇ PLC |
|
▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ |
|
▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ |
|
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇ |
|
If
to Tenant: |
▇▇▇▇▇▇▇
Industries, Inc. |
|
Attn:
President |
|
▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ |
|
▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ |
|
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇ |
|
With
a copy to: |
IFT
Corporation |
|
Attention:
Legal Department |
|
Quorum
Business Center |
|
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ |
|
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
|
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇ |
Landlord
and Tenant may, by notice given in the same manner set forth above, designate a
different address to which subsequent notices shall be sent. Notice shall be
deemed given when delivered, if delivered personally or by reputable overnight
delivery service that provides proof of delivery, or when mailed if sent by
certified or registered mail, return receipt requested.
31. Broker.
Each
party represents and warrants to the other no real estate broker was
instrumental in effecting this Lease. Tenant shall indemnify and defend Landlord
from the claim of any broker, that such broker was authorized on behalf of
Tenant to make an offer to Landlord with respect to this
transaction.
32. Tenant's
Right to Quiet Enjoyment.
Upon
paying the rents and other sums required of Tenant under the Lease and
faithfully and fully performing the terms, conditions and covenants of the Lease
on Tenant's part to be performed, Tenant shall peaceably and quietly have, hold
and enjoy the Premises for the Lease term.
33. Miscellaneous.
(a) Validity
of Lease.
The
provisions of this Lease are severable. If any provision of the Lease is
adjudged to be invalid or unenforceable by a court of competent jurisdiction, it
shall not affect the validity of any other provision of this Lease.
(b) Non-Waiver
by Landlord.
The
rights, remedies, options or elections of Landlord in this Lease are cumulative,
and the failure of Landlord to enforce performance by Tenant of any provision of
this Lease applicable to Tenant, or to exercise any right, remedy, option or
election, or the acceptance by Landlord of the annual fixed rent or additional
rent from Tenant after any default by Tenant, in any one or more instances,
shall not act as a waiver or a relinquishment at the time or in the future, of
Landlord of such provisions of this Lease, or of such rights, remedies, options
or elections, and they shall continue in full force and effect.
(c) Entire
Agreement.
This
Lease contains the entire agreement between the parties. No representative,
agent or employee of Landlord has been authorized to make any representations,
warranties or promises with respect to the letting, or to vary, alter or modify
the provisions of this Lease. No additions, changes, modifications, renewals or
extensions of this Lease, shall be binding unless reduced to writing and signed
by both parties.
(d) Effective
Law.
This
Lease shall be governed by, construed and enforced in accordance with the laws
of the State of Arizona without giving effect to its principles of conflicts of
law. Landlord and Tenant waive their right to trial by jury in any action,
proceeding or counterclaim brought by either of the parties against the other,
or with respect to any issue or defense raised therein, on any matters
whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, Tenant's use and occupancy of the Premises,
including summary proceedings and possession actions, and any emergency
statutory or other statutory remedy.
(e) Commercial
Lease.
This
Lease shall be construed as a commercial lease.
(f) Captions.
The
captions of the paragraphs in this Lease and the Table of Contents are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Lease.
(g) Obligations
Joint and Several.
If there
is more than one party tenant, their obligations under this Lease are joint and
several. If Tenant is a partnership, the obligations of Tenant under this Lease
are joint and several obligations of each of the partners and of the
partnership.
(h) Counterparts.
This
Lease may be executed in one or more counterparts, each of which shall be an
original, and all of which constitutes one and the same Lease.
(i) Landlord's
Performance of Tenant's Obligations.
The
performance by Landlord of any obligation required of Tenant under this Lease
shall not be construed to modify this Lease, nor shall it create any obligation
on the part of Landlord with respect to any performance required of Tenant under
this Lease, whether Landlord's performance was undertaken with the knowledge
that Tenant was obligated to perform, or whether Landlord's performance was
undertaken as a result of mistake or inadvertence.
(j) Remedies
and Rights Not Exclusive.
No right
or remedy conferred upon Landlord shall be considered exclusive of any other
right or remedy, but shall be in addition to every other right or remedy
available to Landlord under this Lease or by law. Any right or remedy of
Landlord, may be exercised from time to time, and as often as the occasion may
arise. The granting of any right, remedy, option or election to Landlord under
this Lease shall not impose any obligation on Landlord to exercise the right,
remedy, option or election.
(k) Signature
and Delivery by Landlord.
This
Lease is of no force and effect unless it is signed by Landlord and Tenant, and
a signed copy of this Lease delivered by Landlord to Tenant. The mailing,
delivery or negotiation of this Lease by Landlord or Tenant or any agent or
attorney of Landlord or Tenant prior to the execution and delivery of this Lease
as set forth in this subparagraph shall not be deemed an offer by Landlord or
Tenant to enter into this Lease, whether on the terms contained in this Lease or
on any other terms. Until the execution and delivery of this Lease as set forth
in this subparagraph, Landlord or Tenant may terminate all negotiations and
discussions of the subject matter of this Lease, without cause and for any
reason, without recourse or liability.
(l) Inspection,
Length of Time of Tenant's Default.
Nothing
in this Lease requires Landlord at any time, to inspect the Premises to
determine whether Tenant is in default of Tenant's obligations under this Lease.
Any default by Tenant of the provisions of this Lease for any length of time,
and whether Landlord has direct or indirect knowledge or notice of the default,
is not a waiver of Tenant's default by Landlord, and Landlord has the right to
declare Tenant in default, notwithstanding the length of time the default
exists.
(m) No
Offer.
The
submission of the Lease to Tenant shall not be deemed an offer by Landlord to
rent the Premises to Tenant, such an offer only being made by the delivery to
Tenant of a Lease signed by Landlord.
(n) Surrender.
Neither
the acceptance of keys to the Premises nor any other act or thing done by
Landlord or any agent, employee or representative of Landlord shall be deemed to
be an acceptance of a surrender of the Premises, excepting only an agreement in
writing, signed by Landlord, accepting or agreeing to accept a surrender of the
Premises.
(o) Drafting
Ambiguities; Interpretation.
In
interpreting any provision of this Lease, no weight shall be given to nor shall
any construction or interpretation by influenced by the fact that counsel for
one of the parties drafted this Lease, each party recognizing that it and it's
counsel have had an opportunity to review this Lease and have contributed to the
final form of this Lease. Unless otherwise specified, the words "include" and
"including" and words of similar import shall be deemed to be followed by the
words "but not limited to" and the word "or" shall be "and/or."
(p) References.
In all
references to any persons, entities or corporations, the use of any particular
gender or the plural or singular number is intended to include the appropriate
gender or number as the text of this Lease may require.
(q) Binding
Effect.
This
Lease is binding upon and shall inure to the benefit of the parties, their legal
representatives, successors and permitted assigns.
(r) Landlord
Defined.
The term
"Landlord" in this Lease means and includes only the owner at the time in
question of the Premises and, in the event of the sale or transfer of the
Premises, Landlord shall be released and discharged from the provisions of this
Lease thereafter accruing, but such provisions shall be binding upon each new
owner of the Premises while such party is an owner.
(s) Time
of the Essence.
Time is
of the essence of this Lease.
(t) No
Recordation.
Neither
this Lease, nor any memorandum, affidavit or other writing with respect to this
Lease, shall be recorded by Tenant or by anyone acting through, under or on
behalf of Tenant, and the recording thereof in violation of this provision shall
make this Lease voidable at Landlord's election.
|
TENANT: |
LANDLORD: | |||
|
▇▇▇▇▇▇▇
INDUSTRIES, INC., |
WASHINGTON
PROPERTIES, LLC, | |||
|
an
Arizona corporation |
an
Arizona limited liability company | |||
|
By: |
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Acting President |
By: |
/s/
Billi ▇▇ ▇▇▇▇▇ | |
|
Name: |
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇ |
Name: |
Billi
▇▇ ▇▇▇▇▇ | |
|
Its: |
Acting
President |
Its: |
Manager | |
EXHIBIT
"A"
OPTION
TO RENEW
The
Tenant shall have the right to exercise its sole option to extend the term of
this Lease under the terms and conditions as provided herein:
1. There
shall be two (2) renewal terms ("Renewal Terms" or, individually, the "Renewal
Term") of six (6) months. The Renewal Terms shall commence upon the day
immediately following the expiration of the previous lease term and shall expire
on the last day of the sixth month from the commencement of the Renewal
Term.
2. Tenant
shall not be entitled to exercise the option for any Renewal Term unless Tenant
has not been in default and has fully performed all of its terms and conditions
of the Lease during the lease term and unless this Lease is in full force and
effect both at the time the option for the Renewal Term is exercised and at the
commencement of such Renewal Term.
3. Tenant
may exercise its option to extend the lease term for the Renewal Term by giving
written notice to Landlord not more than one hundred twenty (120) days, nor less
than sixty (60) days prior to the expiration of the lease term.
4. The rent
payable during a Renewal Term shall equal rent payable for each Renewal term
shall be as follows:
|
Renewal
Term |
Rent |
|
First |
$7,240.33/month |
|
Second |
$7,348.93/month |
5. If the
option for the Renewal Term is not duly exercised in the manner set forth, such
Renewal Term shall be automatically canceled and of no further force or effect.
6. If the
Lease is terminated prior to the commencement of the Renewal Term, or if the
Lease has been assigned or the Premises or any part thereof has been sublet
without the prior written consent of Landlord, the option granted for the
Renewal Term shall be automatically canceled and terminated and of no further
force or effect.
7. All other
terms and conditions contained in this Lease, including schedules and exhibits,
shall prevail and control during the Renewal Term, except for this Option to
Renew, which option is limited to its exercise during the period specifically
described above and does not permit continuing or ongoing options to be
exercised.
Schedule
2.2(b)
Retained
Assets
(1) 2005
Volvo
(2) The real
property commonly known as ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, consisting of approximately 26,042 square feet of land, a
10,700 square foot building and the improvements associated with the foregoing
(the "Property")
Schedule
5(a)
UCC-1
Filings
UCC
FINANCING STATEMENT
FOLLOW
INSTRUCTION (FRONT AND BACK) carefully
|
A.
NAME AND PHONE OF CONTACT AT FILER [optional]
▇▇▇▇▇
▇▇▇▇▇▇▇ - (▇▇▇) ▇▇▇-▇▇▇▇ |
|
B.
SEND ACKNOWLEDGMENT TO: (Name and Address)
PLEASE
RETURN ACKNOWLEDGEMENT TO:
[logo]
CAPITOL GROUP OF COMPANIES
CAPITOL
LIEN RECORDS & RESEARCH, INC.,
▇▇▇▇ ▇. ▇▇▇▇ ▇▇. - ▇▇.
▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇)
▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ |
200312469666
SECRETARY
OF STATE
2002 MAY - 6 P 3: 00
FILED
THE
ABOVE SPACE IS FOR FILING OFFICE USE ONLY
|
1. |
DEBTOR'S
EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b) - do not
abbreviate or combine names |
|
1a.
ORGANAZATION'S NAME
▇▇▇▇▇▇▇
INDUSTRIES, INC. | ||||
|
1c.
MAILING ADDRESS
▇▇▇▇
▇. ▇▇▇
▇▇▇▇▇▇ |
▇▇▇▇
▇▇▇▇▇ |
▇▇▇▇▇
▇▇
|
POSTAL
CODE
85281 |
COUNTRY
USA
|
|
1d.
TAX ID #: SSN OR EIN
|
ADD'L
INFO REORGANIZAION DEBTOR |
1e.
TYPE OF ORGANIZATION
CORPORATION
|
1f.
JURISDICTION OFORGANIZATION
AZ |
1g.
ORGANIZATIONAL ID #, if any
0160232-6
|
|
3. |
SECURED
PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert only one
secured party name (3a or 3b) |
|
3a.
ORGANIZATION'S NAME
Foam
Enterprises, Inc. | ||||
|
3c.
MAILING ADDRESS
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ |
▇▇▇▇
▇▇▇▇▇▇▇▇ |
▇▇▇▇▇
▇▇ |
POSTAL
CODE
55441 |
COUNTRY
USA |
|
4. |
This
FINANCING STATEMENT covers the following
collateral: |
|
All
inventory of polyurethane foam products supplied by the secured party to
debtor, whether in drums or totes, including, without limitation, foam
products identified as Side A-isocyanate, and Side B-resin, now or
hereafter in the possession of debtor.
This
financing statement evidences a consignment transaction between Foam
Enterprises, Inc., as consignor, and ▇▇▇▇▇▇▇ INDUSTRIES, INC., as
consignee, for the shipment on consignment of collateral described
herein. |
|
5. |
ALTERNATE
DESIGNATION [if applicable] [ X ]
CONSIGNEE/CONSIGNOR |
|
8. |
OPTIONAL
FILER REFERENCE DATA |
6246-1
FILING
OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1) REV.
07/29/98)
FORM
SHOULD BE TYPEWRITTEN OR COMPUTER GENERATED
UCC
FINANCING STATEMENT
FOLLOW
INSTRUCTION (FRONT AND BACK) carefully
|
A.
NAME & PHONE OF CONTACT AT FILER (OPTIONAL) |
|
B.
SEND ACKNOWLEDGMENT TO: (Name and Address)
DIVERSIFIED FINANCIAL SERVICES, LLC
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
FILED
2002 MAY - 6 P 3: 00
SECRETARY
OF STATE
200212154324
THE
ABOVE SPACE IS FOR FILING OFFICE USE ONLY
|
2. |
DEBTOR'S
EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b) - do not
abbreviate or combine names |
|
1a.
ORGANAZATION'S NAME
▇▇▇▇▇▇▇
INDUSTRIES, INC. | ||||
|
1c.
MAILING ADDRESS
▇▇▇▇
▇ ▇▇▇
▇▇▇▇▇▇ |
▇▇▇▇
▇▇▇▇▇ |
▇▇▇▇▇
▇▇
|
POSTAL
CODE
85281 |
COUNTRY
USA
|
|
1d.
TAX ID #: SSN OR EIN
▇▇-▇▇▇▇▇▇▇ |
ADD'L
INFO REORGANIZAION DEBTOR |
1e.
TYPE OF ORGANIZATION
CORPORATION
|
1f.
JURISDICTION OFORGANIZATION
AZ |
1g.
ORGANIZATIONAL ID #, if any
0160232-6
|
|
5. |
SECURED
PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P) - insert only one
secured party name (3a or 3b) |
|
3a.
ORGANIZATION'S NAME
DIVERSIFIED
FINANANCIAL SERVICERS, LLC | ||||
|
3c.
MAILING ADDRESS
▇▇
▇▇▇ ▇▇▇▇▇ |
▇▇▇▇
▇▇.
▇▇▇▇▇ |
▇▇▇▇▇
MO |
POSTAL
CODE
63131 |
COUNTRY
USA |
|
6. |
This
FINANCING STATEMENT covers the following
collateral: |
|
1997
YALE GLP040AF FORKLIFT S/N A810N034590 |
FILING
OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1) REV.
07/29/98)
FORM
SHOULD BE TYPEWRITTEN OR COMPUTER GENERATED
Schedule
5(b)
Indemnity
Agreement
CAPITOL
INDEMNITY CORPORATION
MADISON,
WISCONSIN
[LOGO]
GENERAL
INDEMNITY AGREEMENT
This
Agreement, executed on April
11, 2002, by and
between ABC
ROOFING COMPANY, INC. (as
Principal (s)) and: ▇▇▇▇▇▇▇
INDUSTRIES, INC.; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ (each as
Individual and as Indemnitor(s), all hereinafter called the Undersigned), and
CAPITOL INDEMNITY CORPORATION, of Madison, Wisconsin, hereinafter called the
Surety,
WITNESSETH:
At the
request of the Undersigned and upon condition that this instrument be executed,
the Surety has executed, or produced the execution of, or is about to execute or
procure the execution of, or may hereafter execute or procure the execution of
one or more bond, undertakings or other writings obligatory in the nature
thereof (all hereinafter called bonds), on behalf of the Undersigned. The
Undersigned have a substantial, material and beneficial interest in the
obtaining of the bonds.
In
consideration of the premises and in further consideration of the execution by
the Surety of bonds to be given on behalf of the Undersigned, or any one or more
of the parties included in such designation, or of the Undersigned, in
consideration of the refraining by the Surety for a period of time, to be
determined by the Surety, but not less than ten days from proceeding to cause
the same to be canceled or terminated; and for other good and valuable
considerations, the Undersigned, and each of them, for themselves, their heirs,
executors, administrators, successors and assigns, do hereby jointly and
severally covenant and agree with the Surety, its successors and assign, as
follows:
Section
1- Prompt payment of premiums. The
Undersigned will pay to the Surety, at its home office in Madison, Wisconsin
premiums or charges at the rates and at the times specified in respect of each
such instrument in the Surety's manual of rates, which, with any additions or
amendments thereto, is by reference made a part hereof, and will continue to pay
the same where such premium or charge is annual until the Surety shall be
charged and released from any and all liability and responsibility upon and from
each such instrument or matters arising therefrom, and until the Undersigned
shall serve or cause to be served upon the Surety competent written legal
evidence of such discharge or release from each such instrument and all
liability by reason thereof.
Section
2 - Indemnification. The
"Undersigned" shall indemnity and keep the Surety indemnified against, and hold
harmless from, any and all liability for losses and expenses of whatsoever kind
or nature, including the fees and disbursements of counsel, and against all said
losses and expenses, which the Surety may sustain or incur (I) by reason of
having executed or procured the execution of any bond or bonds, presently or
hereafter applied for, (II) by reason of the failure of the Undersigned to
perform or comply with the covenants and conditions of the agreement, (III) in
enforcing any of the covenants and conditions of this agreement, or (IV) in
defending any action against the Surety arising out of the execution of any
bonds on behalf of the Principal or the Surety's exercise of any rights under
this agreement, and the Undersigned will pay over, reimburse and make good to
the Surety all sums and amounts of money which the Surety shall pay or cause to
be paid or become liable to pay under any such instruments, or as charges and
expenses of whatever nature or kind, including attorney fees, by reason of the
execution of the instruments or in connection with any litigation investigation
or other matters connected therewith, such payments to be made to the Surety as
soon as it shall have become liable therefore, whether it shall have paid out
any such sums or any part thereof or not.
Section
3 - Right of Surety to determine validity of claim and to make payment of claim
binding on Indemnitor. The
surety shall have the exclusive right for itself and for the Undersigned to
decide and determine whether any claim, demand suit or judgment upon any such
bonds shall, on the basis of liability, expediency or otherwise, be paid,
settled, defended or appealed, and its determination shall be final, conclusive
and binding upon the Undersigned.
Section
4 -Evidence of payment. The
vouchers or other evidence of any loss paid by the Surety under the bonds shall
be taken as prima facie evidence not only against the Undersigned jointly and
severally, but as well against their respective heirs, executors,
administrators, successors and assigns of the fact and extent of liability under
the obligation of the Surety.
Section
5 - Assignment of Indemnitor's property. For the
better protection of the Surety, if any bond is executed or issued by the
Surety, the Undersigned, and each of them agree to and by these presents, do
hereby assign, transfer and convey to the Surety all of their right, title,
interest and estate in and to all of their property, real, personal or mixed,
wherever situated or of whatever nature in which the Undersigned presently have
or may hereafter obtain, an interest including but not limited to the property
hereinafter described, such assignment to be effective as of the date hereof,
subject to being defeated in the event there is: no abandonment of, or breach,
delay, or default in the performance of any obligations contained in or covered
by any such bond; no abandonment of, or breach, delay or default in the
performance of any of the provisions of this agreement or any other agreement
between the surety and any one or more of the Undersigned; no failure or
inability on the part of the principal to promptly pay, satisfy or discharge any
and all of the obligations which might constitute a possible claim under such
bond; no declaration of default by any oblige named in any such bond or by any
supplier or subcontractor of said Principal:
(a) All their
right, title and interest in and to all equipment, machinery, tools, plant and
materials of every nature and description that may now or hereafter be upon the
work, or in, on, or about the site of any work embraced in any contract, covered
by any such bond, or elsewhere for the purposes thereof, including all materials
purchased, ordered or chargeable to any such contract which may be in progress
of manufacture or construction, or in transportation, or in storage
elsewhere.
(b) All their
right, title and interest in and to, or growing in any manner out of, any such
contract or any extensions, modification, changes or alterations or additions
thereto, and all their right, titles and interest in and to all rights, actions,
causes of action, claims and demands whatsoever which the Undersigned or any of
them have or acquired in any subcontract or purchase order in connection with
any such contract, or any and all actions. Causes of actions, claims and demands
whatsoever against any material supplier, laborer, or any person, firm or
corporation agreeing to furnish labor, material, supplies, machinery, tools or
other equipment in connection with or on account of any and all contracts
referred to in the bonds: and against any surety or sureties of any
subcontractor, laborer, or material supplier.
(c) All their
right, title and interest in and to all monies due or to become due to the
Undersigned under any such contracts covered by any such bonds herein or
hereinafter applied for including, but not limited to progress payments deferred
payments, retained percentages, compensation for extra work and proceeds of
damage claims said assignment to be effective as stated above or in the event
that the Surety, at its option, shall notify the obliges under any such bonds
that this assignment is in force. To implement the foregoing, the Undersigned
hereby authorize the Surety to endorse in the name of the payee and to collect
any checks, drafts, warrants or other instruments made or issued in payment of
any such sums and to disburse the proceeds thereof.
Section
6 -Schedule of property assigned under this agreement. The
Surety and its attorneys are hereby authorized, without any reason or cause and
without notice to the Undersigned to make schedules of all property assigned
under this agreement, and to attach the same hereto at any time, and the same
when attached, shall by this reference be incorporated herein and made a part of
this agreement, and when any such schedules have been made and attached the
Surety and its attorneys are authorized without any reason or cause and without
any notice to the Undersigned to file or record a copy of same under any
provision of law governing such lies there of, surety may perfect its interest
in such property at any time without any reason or cause and without notice to
the Undersigned by exercising its power of attorney under Sec. 17 and by
executing and recording a Quit Claim Deed or a Financing Statement, or any other
similar document in its favor.
Section
7 - Right of Surety to take over and complete the contract.
Whenever in the sole opinion of the Surety it should appear to be necessary or
advisable (and its decision in the regard shall be conclusive and binding on the
Undersigned), or in the event of any breach, delay or default or claim or
breach, delay or default asserted by the oblige in any such bond or bonds, or in
the event of the death, incompetency, insolvency or bankruptcy of the
Undersigned or any of them, or in the appointment of a receiver or trustee for
the Undersigned or the properly of the Undersigned, or under the Bankruptcy Laws
of the United States, the Surety shall have the absolute right at its option an
in its sold discretion, and is hereby authorized to, with or without exercising
any other right or option conferred up0on it by law or by the terms of this
agreement, enter upon and take possession of all equipment, machinery tool,
plant and materials described in paragraph (a) of Section 5 above, and enforce,
use and enjoy the possession by any such bond or bonds, and at the expense of
the Undersigned to complete or arrange for the completion of the same, and the
Undersigned shall promptly upon demand pay to the Surety all expense so
incurred, unless the Undersigned can prove the Surety acted in bad faith. Surety
in no case shall have any duty to exercise the rights herein conferred, and the
Undersigned agree that Surety shall not have any liability to the Undersigned
for exercising or not exercising the rights herein conferred.
Section
8 - Right of Surety to obtain information. That
any bank, depository, savings and loan association, finance company, material
supplier, supply house, or other person, firm or corporation having information
concerning the affairs and operation of the Undersigned is hereby authorized to
furnish any information, financial or otherwise, requested by the surety
concerning any transaction with the Undersigned.
Section
9 - Access to Undersigned's' books and records. At any
time and until such time as the liability of the Surety under any and all bonds
or undertakings executed for or on the application of the Undersigned is
terminated, the SUr3ety shall have the right to free access to all of the books,
records and accounts of the Undersigned.
Section
10 - Right of Surety to control the performance by the Principal while the
Principal is in control of the work. If it
becomes necessary or advisable in the judgment of the Surety to control,
administer, operate or manage any or all matters connected with the performance
of any contract within the purview of this agreement for the purpose of
attempting to minimize any ultimate loss to the Undersigned or the Surety, or
for the purpose of enabling Surety to discharge its obligation of suretyship,
the Undersigned expressly covenant and agree that such action on the part of the
Surety shall be entirely within its rights and remedies under the terms of this
agreement and as Surety.
Section
11 - Right of Surety to have Principal treated as trustee and contract funds
treated as trust funds. It is
understood, agreed and herby expressly declared that all monies due or to become
due or to become due under the contract or contracts covered by such bond or
bonds are trust funds, whether in the possession of the Principal or otherwise,
for the benefit of and for payment of all obligations for labor and material
furnished in connection with such contract or contracts for which the Surety
would be liable under said bond or bonds and which said trust also inures to the
benefit of the Surety such contract or contracts for which the Surety would be
liable under said bond or bonds; and which said trust also inures to the benefit
of the Surety for any liability and loss it may have or sustain under said bond
or bonds; and this agreement and declaration shall a also constitute notice of
such trust.
Section
12 - Immediate written notice of suit. If any
notice be given or served, or any suit, action other proceeding be commenced,
relating to or growing out of the execution of any such bonds, the Undersigned
will give or cause to be given immediate written notice thereof, by registered
mail, to the Surety, at its home office in Madison, Wisconsin.
Section
13 - Deposits of funds with Surety to cover any reserves. If for
any reason the Surety shall be required or at its option and in its sold
discretion shall deem it necessary to obtain additional collateral to cover
any:
|
(a) |
Judgment,
actual or contingent, with interest an costs, in any action instituted
against the principal and/or the Surety or, |
|
(b) |
Unadjusted
claim (s) under the bonds of which the surety has notice, whether in suit
or otherwise. |
|
(c) |
Loss,
costs, attorneys' fees, engineers' fees, investigative charges and other
disbursements and expenses in connection with the bonds or in anticipation
of loss thereunder, where or not the Surety paid such sums or any part
thereof, or |
|
(d) |
Any
default (s) of the principal or, |
|
(e) |
Abandonment
of any contracts, failure to comply with any material provision thereof or
cease to promptly perform any part of the work required to be performed
thereunder, or to pay claims of suppliers of labor, material or services
required under such contracts or, liens filed
or, |
|
(f) |
Liens
filed or, |
|
(g) |
Disputes
with the owner or oblige or, |
|
(h) |
For
any reason whatever and regardless of any proceedings contemplated or
taken by the Principal or the tendency of any appeal, the Undersigned,
within 10 calendar days after mailing by the Surety of written demand by
registered or certified mail shall deposit with the Surety cash or
collateral in the amount demanded to cover the foregoing to be held by the
Surety as collateral with the right to use any such funds for any part
thereof, at any time, without notice to the Undersigned in payment or
compromise of any judgment, claim, liability, loss, bonds or in
anticipation of loss thereunder. If Undersigned shall fail to deposit such
ash or collateral with the Surety upon such request, the such cash or
collateral and Undersigned shall be obligated to pay the Surety its
reasonable cost, charges and expenses including counsel fees, incident to
such litigation. |
The
Surety is hereby irrevocably authorized by Undersigned to release or return to
Undersigned any part of such cash or collateral at any time, without prejudice
to any of the Surety's present or future rights, remedies and defenses against
Undersigned.
Any
notice or demand hereunder shall be sufficient if sent by registered mail or
certified mail to Undersigned at eh address stated in this instrument or the
address last known to the Surety.
Section
14 - Waiver of Exemptions. Each of
the Undersigned does, jointly and severally, bind his or her property and does
hereby Release and abandon, as to the Surety all right to claim any property,
including their homesteads, as exempt form levy execution sale or other legal
process under the law of any stat, province or other government, as against the
rights of the Surety to proceed against the Undersigned for indemnity
hereunder.
Section
15 - Indemnity agreement not to limit rights of Surety. This
agreement shall not nor shall acceptance by the Surety of payment for its surety
ship, nor agreement to accept, nor acceptance by it at any time of other
security, nor assent by it to any act of the Undersigned, or of any person or
remedy which the Surety otherwise might or may have, acquire, exercise or
enforce, nor create any liability on the part of the Surety which would not
exist were this agreement not executed.
Section
16 - Amendment not to release Indemnitors. No act
or omission of the Surety in modifying, amending, limiting or extending any
obligations executed by the Surety shall in any wise affect the liability of the
Undersigned hereunder, not shall they be released from this obligation by reason
thereof, and the Undersigned agree that the Surety may alter, change of modify,
amend, limit or extend any obligation, and may execute renewal thereof, , or
other and new obligations in its place or in lieu thereof or otherwise and
without notice to the Undersigned, notice being expressly waived, and in any
such case the Undersigned shall be liable to the Surety as f fully and to the
same extent on account of any such altered, changed, modified, and as often as
made, as fully as if such and or obligation were described at length herein, and
such liability shall continue until termination by the written consent of the
Surety and by each of the Undersigned.
Section
- 17 Releasing Indemnitors. Written
request must be made to the Surety for release.
Section
18 - Appointment of Surety as attorney-in-fact of
Indemnitors. The
Surety shall have and may exercise, in the name of the Undersigned of otherwise,
any right or remedy or demand which the Undersigned may have for the recovery of
any sums paid by the Surety because of the bonds, and any renewals or
extensions, together with all other rights and remedies and demands which the
Undersigned may have. The Undersigned hereby assign these rights, remedies and
demands to the Surety with full power in the name of the Undersigned or
otherwise, to do anything which the Undersigned might do, if personally present
and if this instrument were not executed. The Undersigned hereby appoint Surety
their attorney for that purpose. The Undersigned also hereby irrevocably
nominate, appoint and designate the Surety, and its officers, agents and
employees, as their attorney-in-fact, with the right, but not the obligation, to
exercise all of the rights and interested in property of the Undersigned
assigned and transferred to subordination agreements, financing statements and
assignments) deemed necessary by the Surety in order to give full effect to the
intent and meaning of this assignment. The Undersigned herby ratify and confirm
all acts to be taken by the Surety as attorney-in-fact. The Surety shall also
have the right to fill in any blanks in this agreement, or otherwise complete in
on behalf of the undersigned. It is not intended by this assignment that the
Surety shall be obligated to perform or discharge, or that it undertake, assume
or become liable for performance or discharge of any of the terms, covenants or
conditions on the part of the Undersigned to be kept and performed in connection
with the matters and things assigned herein.
Section
19 - Waiver of notice. The
Undersigned agree that the Surety shall have no duty to notify them f any act,
fact or information concerning or affecting their rights and liabilities, either
because of bonds furnished to the Principal or for any other reason; and
further, the Undersigned, having full knowledge of all existing rights and
intending hereby to voluntarily relinquish them, hereby waives service of any
notice with respect to said rights and liabilities.
Section
20 - Rights of co-sureties or reinsurers. In the
event the Surety executes any bonds with co-sureties or reinsures any portion of
the bonds with Reinsuring Companies or procures the execution of said bonds, the
Undersigned agree that all the terms and conditions of this agreement shall
apply and operate for the benefit of the Surety, the co-sureties, the Reinsuring
Companies and the procured sureties.
Section
21 - Liability for loans to Principal. It is
agreed that the Surety may in its sole discretion loan or advance money to the
Principal to be used in the furtherance of any contract referred to or
guaranteed by any bond and each and all of the Undersigned shall be liable and
responsible to the Surety for all monies so loaned or advanced whether properly
used by the Principal or not, and all costs, attorneys' fees and expenses
incurred by the Surety in relation thereto, unless repaid by the Principal with
legal interest when due; and such monies, costs, fees and expenses shall be
deemed to constitute a "loss" under the terms of this agreement and not a
voluntary payment.
Section
22 - Settlement with one Indemnitor without releasing the
others. In the
event of any claim or demand made by the Surety against the Undersigned by
reason of the execution of any bonds, the Surety is expressly authorized to
settle with one or more of the Undersigned individually and without reference to
the others, and such settlement shall not affect the liability of any of the
other parties included in the designation "Undersigned". The Undersigned
expressly waive the right to be discharged and released by reason of the release
of one or more of the joint debtors, and consent to any settlement.
Section
23 - Acts with respect to security. If the
Surety shall at any time hold or have rights in or to security or indemnity,
whether or not the same is specified herein, the Surety may release it or act
otherwise or fail to act in relation thereto; without affecting the obligations
of the Undersigned.
Section
24 - Release of Surety. The
Surety may at any time hereafter take such steps as it may deem necessary or
proper to obtain its release from any and all liability under any bonds, and to
secure and further indemnify itself against loss, and all damages and expenses
which the Surety may sustain or incur, or be put to, in obtaining such release,
or in further securing itself against loss, shall be borne and paid by the
Undersigned. In addition, the Undersigned will, on request of the Surety,
procure the discharge of the Surety from any such bond, and from all liability
by reason thereof. Such request may be made and such discharge procured whether
or not the Principal is in default or any undertaking underwritten by the
Surety.
Section
25 - Execution of bonds. The
Surety may regard a written request signed by the Undersigned and addressed to
the Surety or any of its agents as authority for the Surety to execute the bond
specified in the request. Any bond executed upon such authority shall be
embraced in the indemnity hereby given, but the Surety does not guarantee the
prompt issuance of such bonds upon such request nor their acceptance by the
obligee(s) named therein and reserves the right to decline to execute any bond
of any kind. Such declination shall not diminish or alter the liability that may
arise by reason of having executed a bid or proposal bond.
Section
26 - Action by Surety. Suits
may be brought hereunder as causes of action may accrue, and the brining of one
or more suits or the recovery of judgments shall not prejudice or bar the
bringing of suits upon other causes of action.
Section
27 - Exercise of rights under agreement without liability. The
Surety, and its officers, directors, agents, servants, employees and attorneys,
shall not be liable to the Undersigned for any damages or injuries that may be
sustained by them, caused by or arising out of any action taken, or statements,
verbal, written or otherwise, made in good faith by the Surety in exercising or
attempting to exercise any of its rights or privileges under this agreement or
under any other agreement between the Surety and any one or more of the
Undersigned, or under law or in equity, or under or relating to any bonds
executed by the Surety.
Section
28 - Waiver of defects or invalidity. In case
the execution hereof by any of the Undersigned may be defective or invalid for
any reason, such defect or invalidity shall not in any manner affect the
validity of this obligation or the liability hereunder of any other of the
Undersigned. Invalidity of any provision of this agreement by reason of the laws
of any state or for any other reason shall not render the other provisions
invalid.
Section
29 - Liberal construction. This
obligation shall be liberally construed so as to fully protect and indemnify the
Surety.
Section
30 - Changes and modifications. This
instrument may not be changed or modified orally. No change or modification
shall be effective unless made by written endorsement issued to form a part
hereof.
Section
31 - Miscellaneous.
Execution of any application for any bond by Principal, or of any other
indemnity agreement by Principal or by any Indemnitor for Principal, shall in no
way be deemed to abrogate, waive or diminish any rights of Surety under this
agreement.
NOTE:
-Notarized signatures of any Principal, Individual and of any spouse of any of
the Undersigned are required.
Corporation/Partnership/Proprietorship/Limited
Liability Corporation
|
ABC
ROOFING COMPANY, INC. |
||||||
|
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ |
(SEAL) |
(SEAL)
| ||||
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, President |
||||||
|
|
(SEAL) |
(SEAL) | ||||
|
Indemnitors |
||||||
|
LAPOLLA
INDUSTRIES, INC. |
||||||
|
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ |
/s/
Billi ▇▇ ▇▇▇▇▇, President |
| ||||
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, Individually |
Billi
▇▇ ▇▇▇▇▇, President |
|||||
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||||||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Individually |
||||||
|
/s/
▇▇▇▇▇ ▇▇▇▇▇ |
||||||
|
▇▇▇▇▇
▇▇▇▇▇ |
||||||
|
Surety |
||||||
|
CAPITAL
INDEMNITY CORPORATION |
||||||
|
Attest: |
By:
|
|||||
Individual
Acknowledgement
|
State
of Arizona |
) |
|
|
)
ss. |
||
|
County
of Maricopa |
) |
On
April
18 2002,
before me personally appeared ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ known to
me to be the person(s) described in and who executed this instrument before
me.
|
8-15-04 |
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
|
My
Commission Expires |
Notary
Public |
|
NOTARY
PUBLIC
[SEAL]
STATE OF ARIZONA
Maricopa
County
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
My
Commission Expires August 15, 2004 | |
Corporation/Partnership/Proprietorship/Limited
Liability Corporation
|
State
of Arizona |
) |
|
|
)
ss. |
||
|
County
of Maricopa |
) |
On
April
18 2002,
before me personally appeared ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇ and did
state that he is the President
of
ABC
ROOFING COMPANY, INC. described
in and are known to me to be the person(s) who executed this
instrument.
|
8-15-04 |
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
|
My
Commission Expires |
Notary
Public |
|
NOTARY
PUBLIC
[SEAL]
STATE OF ARIZONA
Maricopa
County
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
My
Commission Expires August 15, 2004 | |
Corporation/Partnership/Proprietorship/Limited
Liability Corporation
|
State
of Arizona |
) |
|
|
)
ss. |
||
|
County
of Maricopa |
) |
On
April
18 2002,
before me personally appeared Billi
▇▇ ▇▇▇▇▇ and did
state that she is the President
of
LAPOLLA
INDUSTRIES, INC. described
in and are known to me to be the person(s) who executed this
instrument.
|
8-15-04 |
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
|
My
Commission Expires |
Notary
Public |
|
NOTARY
PUBLIC
[SEAL]
STATE OF ARIZONA
Maricopa
County
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
My
Commission Expires August 15, 2004 | |