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SUBLEASE AGREEMENT
This SUBLEASE AGREEMENT (this "Sublease") is made on August 11, 1997,
between AlliedSignal Inc., a Delaware corporation ("Lessor"), and EFTC
Corporation, a Colorado corporation ("Lessee"), with reference to the following
facts:
A. Lessor has entered into that certain Purchase and Sale
Agreement attached hereto and incorporated herein as Exhibit A (the "Master
Lease") with Aero Toy Store, Inc., a Florida corporation (the "Original Master
Lessor"), dated September 30, 1996 which provides for the lease by Lessor of
Building #1 located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the
"Building").
B. The Master Lease has been amended by that certain Amendment to
Purchase and Sale Agreement dated December 12, 1996, that certain Second
Amendment to Purchase and Sale Agreement dated December 23, 1996, and assigned
by that certain Assignment of Purchase and Sale Agreement dated September 30,
1996 which assigned the Original Master Lessor's obligations to Free Trade,
Ltd. (the "Master Lessor")
C. Lessee is acquiring from AlliedSignal Avionics, Inc. ("ASA")
certain assets of the business of manufacturing electronic assemblies for use
in aerospace applications formerly operated by ASA, such acquisition to be
effected pursuant to that certain Master Agreement Regarding Asset Purchase and
Related Transactions dated July 15, 1997 (the "Master Agreement"), between
AlliedSignal Inc., a Delaware corporation, operating through its Aerospace
Equipment Systems Business Unit, ASA and Lessee.
D. In connection with the transactions under the Master Agreement
Lessee desires to sublease from Lessor a certain portion of the Building for
the purpose of conducting Lessee's business together with rights in common to
the "common areas" of the Building.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Leased Premises. Lessor agrees to lease to Lessee and Lessee agrees
to lease from Lessor, as more specifically described on Exhibit B, attached
hereto and incorporated herein by this reference: (i) certain portions of the
Building; (ii) certain waste storage facilities; and (iii) a waste water
treatment facility (collectively, the "Premises"). The Premises shall not
include waste storage facility C as shown on Exhibit B. In addition to the use
of the Premises, Lessee shall have the use of certain common areas and
facilities under the control of Lessee as described on Exhibit B (the "Lessee
Controlled Area") and of the common areas and facilities under the control of
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Lessor as described on Exhibit B. Each party shall permit the other to have
access to the common areas under its control. Lessee takes the Premises in its
presently existing "as is" condition except as set forth in Sections 10 and 19.
Lessee shall be prohibited from using or occupying any premises other than
those designated in this Sublease as the Premises except as otherwise set forth
herein.
2. Shared Tenancy. Notwithstanding anything to the contrary in this
Sublease, Lessor shall have the right for a period of up to one hundred and
twenty (120) days after the commencement of the term, to occupy and use certain
portions of the Premises for its business operations as it may determine from
time to time; provided that such occupancy and use by Lessor shall not
interfere with Lessee's use of the Premises or the Lessee Controlled Area in
any material respect except in the case of emergency and as provided in Section
19.4.
3. Master Lease. This Sublease is subject to the provisions of the
Master Lease covering the Building. The covenants, agreements, terms,
provisions and conditions of the Master Lease insofar as they relate to the
Building and, insofar as they are not inconsistent with the terms of this
Sublease, are made a part of and incorporated into this Sublease as if recited
herein in full, with references therein to Purchaser and Seller thereunder
shall be deemed to refer to the Lessor and the Lessee, respectively. As
between the Lessor and the Lessee only, in the event of a conflict between the
terms of the Master Lease and the terms of this Sublease, the terms of this
Sublease shall control with respect to the relations between the Lessor and the
Lessee. As between the Lessor and the Master Lessor only, in the event of a
conflict between the terms of the Master Lease and the terms of this Sublease,
the terms of the Master Lease shall control with respect to the relations
between the Master Lessor and the Lessor. Lessee and this Sublease shall be
subject in all respects to the terms of, and the rights of the Master Lessor
under, the Master Lease. Lessee and this Sublease shall also be entitled to
all rights and benefits conferred by the Master Landlord with respect to the
Premises pursuant to the Master Lease.
4. Rights of Lessee Under the Master Lease.
4.1 No Greater Rights. Lessee shall have no greater rights to the
use and occupancy of the Building than Lessor has under Lessor's Master Lease.
Lessor hereby represents and warrants to Lessee that the uses of the Premises
and the Lessee Controlled Area described in Section 7.4 are within the rights
to use and occupy the Building conferred upon Lessor pursuant to the terms of
the Master Lease. As provided in Section 6, the term of this Sublease shall
not extend beyond the term of the Master Lease.
4.2 No Transfer of Title. Lessee agrees and acknowledges that
this Sublease shall not constitute a transfer of title to the Premises or the
Lessee Controlled Area.
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5. Master Lessor's Performance Under Master Lease; Performance of
Sublease. Notwithstanding anything to the contrary contained in this Sublease,
Lessee agrees that performance by Lessor of its obligations hereunder are
conditioned upon due performance by the Master Lessor of its corresponding
obligations under the Master Lease and Lessor shall not be liable to Lessee for
any default of the Master Lessor under the Master Lease. Lessor shall take all
actions necessary to perform Lessor's obligations under the Master Lease and
shall cooperate with Lessee as necessary or advisable from time to time to
cause the Master Lessor to perform its obligations under the Master Lease.
Lessee shall not have any claim against Lessor by reason of the Master Lessor's
failure or refusal to comply with any of the provisions of the Master Lease
unless such failure or refusal is a direct result of Lessor's act or failure to
act. This Sublease shall remain in full force and effect notwithstanding the
Master Lessor's failure or refusal to comply with any such provisions of the
Master Lease and Lessee shall pay the base rent and additional rent and all
other charges provided for herein without any abatement, deduction or setoff
whatsoever, unless Lessor shall be entitled to any such abatement, deduction or
setoff, in which case Lessor shall reduce the obligations of Lessee hereunder
by (or pay over to Lessee, if appropriate), Lessee's pro rata share of such
abatement deduction or setoff based on the proration amount. Lessee covenants
and warrants that it fully understands and agrees to be subject to and bound by
all of the covenants, agreements, terms, provisions and conditions of the
Master Lease, except as modified herein. Furthermore, Lessee and Lessor will
not take any action or do or perform any act or fail to perform any act which
would result in the failure or breach of any of the covenants, agreements,
terms, provisions or conditions of the Master Lease on the part of the Lessor
thereunder. Lessor will take all actions necessary to preserve the Master
Lease in full force and effect and will not amend or permit any modification to
the terms of the Master Lease that directly affects Lessee's use or occupancy
of the Premises without Lessee's prior written consent, which shall not be
unreasonably withheld or delayed. Lessor will not voluntarily terminate or
agree to the early termination of the Master Lease.
6. Sublease Term. The term of this Sublease shall commence on the
Avionics Closing (as defined in the Master Agreement) and shall expire on
December 31, 1999 unless terminated earlier pursuant to the terms hereof. On
or before the expiration date (on or before December 31, 1998 and, if
applicable, each December 31 thereafter), the parties shall inform each other
whether they desire to extend the term of this Sublease for an additional year.
Any such extension shall be made upon the mutual agreement of the parties in
writing and shall be subject to the terms of the Master Lease. Any provision
of this Sublease to the contrary notwithstanding, the term of this Sublease
shall not exceed the term of the Master Lease as the same may be extended from
time to time.
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7. Rent.
7.1 General Provisions. It is the intention of the parties that
this Sublease be a "pass through" of Lessor's obligation to pay rent under the
Master Lease. Therefore, Lessee agrees to pay Lessor as monthly rental for the
Premises a sum equal to Lessor's rental obligations under the Master Lease, as
it may change from time to time, multiplied by the Proration Amount. The
"Proration Amount" shall be the ratio of (i) the sum of Lessee square footage
(specified in Exhibit B as Lessee first floor and Lessee trailer) plus one half
of all common areas to (ii) the total square footage of the Building (specified
in Exhibit B as total rentable square footage). Rent shall be payable each and
every calendar month during the term hereof in advance on the first business
day of such month. The monthly rent for the period through December 31, 1997
shall be as specified in Exhibit D. Subject to Section 16, for each year
subsequent to 1997, the rent shall be adjusted effective as of January 1 of
such year based upon the actual expenses for the twelve months ended on the
immediately preceding November 30 and the allocation basis specified on Exhibit
D. If the term commences on a day other than the first day of a calendar
month, rent for the first month shall be prorated based on the portion of the
calendar month remaining.
7.2 Late Payments. Should Lessee not tender payment of any rent
within ten (10) business days of the due date for the applicable month, an
administrative charge shall be assessed such month, without prejudice to any
other remedies of Master Lessor, in an amount of five cents ($0.05) for each
dollar ($1.00) overdue for the purpose of defraying the expense incident to
handling such delinquent payment.
7.3 Use. Lessee shall use the Building solely for the manufacture
of electronic assemblies and other related operations and not for any other
purpose without the prior written consent of Lessor. Lessee shall not do or
permit anything to be done in or about the Premises which will in any way
unreasonably obstruct or interfere with the right of other occupants of the
Premises or the Building, or injure or annoy them, or use or allow the Premises
to be used for any improper, immoral or unlawful purpose. Lessee shall not
commit or suffer to be committed any waste in or upon the Premises. Lessee
shall keep the Premises free and clear of any and all liens and encumbrances
created by Lessee. Lessee shall remove any such lien or encumbrance within
twenty (20) business days after notice by Lessor and, if Lessee shall fail to
do so, Lessor may pay the amount necessary to remove such lien or encumbrance
without being responsible for investigating the validity thereof. Neither
Lessor nor Lessee shall do anything on the Premises which will conflict in any
material way with any law, statute, ordinance or other governmental rule,
regulation or requirement now in force or which may hereafter be enacted or
promulgated that is applicable to the use or occupancy of the Premises or the
operation of the Lessee's business in the Premises.
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8. Defaults and Remedies. Any of the following occurrences shall
constitute a material default by Lessee, if such occurrence shall continue for
the period specified below:
8.1 If Lessee fails to make any payment of rent, or any other
payment required to be made by Lessee hereunder, as and when due and such
failure continues for a period of ten (10) days after written notice thereof
from Lessor to Lessee;
8.2 If Lessee fails to observe or perform in any material respect
any of the provisions of this Sublease or any applicable provisions of the
Master Lease and such failure continues for a period of thirty (30) days after
written notice thereof from Lessor to Lessee; and
8.3 If Lessee abandons the Premises for a period of not less than
thirty (30) days.
If Lessee defaults under this Sublease, (i) Lessor may terminate this
Sublease, (ii) Lessor may recover, in addition to any rent and other charges
already due and payable, all rent for the entire unexpired balance of the
stated term of this Sublease (subject to Lessor's duty to take commercially
reasonable steps to mitigate damages) and all costs incurred by Lessor to
recover such sums from Lessee, including reasonable attorneys' fees, (iii)
Lessor may recover actual damages from Lessee and/or (iv) Lessor may
discontinue any and all services provided to Lessee hereunder. All rights and
remedies of Lessor under this Sublease shall be cumulative and in addition to
any other rights or remedies available at law or in equity. No failure by
Lessor to exercise any right or remedy or to insist upon strict performance
following a default by Lessee shall constitute a waiver of such default by
Lessor. Lessee hereby releases Lessor, it affiliates, subsidiaries, employees,
agents, principals and contractors from any liability for damages that Lessee
may suffer as a result or Lessor's suspension or services under this Section 8.
9. Subletting, Assignment. Lessee shall not assign this Sublease or
sublet the Premises or any part thereof for any period of time except that (i)
Lessee may assign this Sublease or sublet the Premises with Lessor's and Master
Lessor's prior written consent, and (ii) Lessee may assign this Sublease or
sublet the Premises without the prior written consent of Lessor (but subject to
any applicable consent or approval of Master Lessor under the Master Lease) (a)
to a purchaser of all or substantially all the assets of Lessee located at the
Premises, (b) to a corporation surviving Lessee in the event of a merger and
(c) to a subsidiary or affiliated entity. For any assignment, Lessee shall
remain obligated hereunder unless Lessor shall consent otherwise. Any
subletting or assignment of this Sublease in a manner inconsistent herewith
shall be void and shall, at the option of Lessor, terminate this Sublease. In
such event, Lessee
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shall be liable for any expenses Lessor may incur in regaining possession of
the Premises.
10. Representations and Warranties of Lessor
10.1 Lessor represents and warrants to Lessee as of the date hereof
that the copy of the Master Lease attached hereto as Exhibit A is true and
correct and contains all amendments or modifications thereto, the Master Lease
is in full force and effect and all material obligations of both Master Lessor
and Lessor thereunder that have accrued to date have been satisfied.
10.2 Lessor represents that this Sublease does not violate any
provision of the Master Lease, and that no provisions of this Sublease are in
conflict with any of the provisions of the Master Lease.
10.3 Lessor represents and warrants the following with respect to
environmental matters affecting the Premises:
(a) To Lessor's knowledge, Lessor holds and is in material
compliance with all permits, certificates, licenses, approvals, registrations
and authorizations ("Permits") required under all Environmental Laws applicable
to all equipment and operations being conducted by Lessor on the Premises,
Lessee Controlled Area, and common areas and facilities under the control of
Lessor that Lessee will be entitled to use, including those relating to any
Hazardous Substances, and all such Permits are in full force and effect and are
listed in Exhibit C. The Lessor has made timely applications for renewal of
all such Permits to maintain such permits in full force and effect.
(b) To Lessor's knowledge, as of the date hereof the Premises and
all equipment and operations being conducted by Lessor on the Premises, the
Lessee Controlled Area, and common areas and facilities under the control of
Lessor that Lessee will be entitled to use are in material compliance with
applicable Environmental Laws.
(c) To Lessor's knowledge, none of the Premises, the Lessee
Controlled Area, the common areas and facilities under the control of Lessor
and the Lessor in connection with any location at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ are
subject to any notice, enforcement, proceeding, investigation or action
relating to violations of, or that create liability under, Environmental Laws
by any governmental entity or third party, except as noted in the Phase I
Environmental Site Assessment dated November 1996 prepared for AlliedSignal,
Inc. by ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Inc. (the "Phase I Report").
(d) To Lessor's knowledge, Lessor has not caused, and ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ does not contain, any release or threatened release of
Hazardous
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Substances that requires response, removal, remedial, or corrective actions
under any Environmental Laws, and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ is not subject to
any notice, enforcement, proceeding, investigation or action relating to any
such releases or threatened releases, except as noted in the Phase I Report.
(e) To Lessor's knowledge, the Premises, the Lessee Controlled
Area, and common areas and facilities under the control of Lessor that Lessee
will be entitled to use have no polychlorinated biphenyls, except as noted in
the Phase I Report.
(f) To Lessor's knowledge, Lessor has received no notification
that it may be responsible or liable for any off-site treatment or disposal of
materials from the Premises at an off-site location, except for the ▇▇▇▇▇▇▇
Road Landfill Superfund Site.
(g) To Lessor's knowledge, there are no conditions or occurrences
at the Premises, Lessee Controlled Area, or common areas and facilities under
control of Lessor or elsewhere in the Building, or at any other location at
2100 Northwest 62 Street, including groundwater or soil, which could materially
adversely affect Lessee's operations, except as noted in the Phase I Report.
Nothing in this representation shall detract from Lessor's rights under Section
19.4.
(h) Lessor's environmental health and safety policies (as
applicable to the Building and the Premises) are not in conflict with
applicable Environmental Laws.
(i) The environmental controls, equipment and permits at the
Premises, including the wastewater treatment plant, are adequate to comply with
Environmental Laws based on the operating requirements and volumes currently
employed by Lessor.
For purposes of this Sublease, "Environmental Law" shall mean any
federal, state, or local statute, regulation, order, directive or other
requirement of a governmental authority, as well as common law, relating to
protection of public health, safety, and the indoor or outdoor environment or
to the management of Hazardous Substances, and includes by way of example and
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Section 9601 et seq.; The Clean Air Act, 42 U.S.C.
Section 7401 et seq.; The Solid Waste Disposal Act, 42 U.S.C. Section 6901 et
seq.; The Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.;
The Florida Environmental Control Statute, Fla. Stat. Section 403, and the
Florida Pollutant Discharge Prevention and Removal Statute, Fla. Stat. Section
376. For purposes of this Sublease, "Hazardous Substances" shall mean any
substance, chemical, compound, product, solid, gas, liquid, waste, byproduct,
pollutant, contaminant, or material which is regulated by, or creates liability
under, Environmental Law, or is hazardous or toxic and includes, without
limitation, petroleum (including crude oil or any fraction thereof).
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10.4 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
SUBLEASE, OR IN ANY OTHER COMMUNICATIONS BETWEEN THE PARTIES ORALLY OR IN
WRITING, IT IS THE EXPLICIT INTENT OF EACH PARTY HERETO THAT LESSOR MAKES NO
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, BEYOND THOSE
EXPRESSLY GIVEN IN THIS SUBLEASE OR THE MASTER AGREEMENT, INCLUDING BUT NOT
LIMITED TO ANY IMPLIED WARRANTY OR REPRESENTATION AS TO CONDITION,
MERCHANTABILITY OR SUITABILITY AS TO THE BUILDING, PREMISES, OR ANY OTHER
PROPERTIES OR ASSETS OF LESSOR. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN
THIS SUBLEASE OR THE MASTER AGREEMENT, THE BUILDING AND THE PREMISES ARE BEING
PROVIDED ON AN "AS IS" BASIS.
11. Representations and Warranties of Lessee and Lessor. Lessee and
Lessor each represents and warrants to the other that it has full right, power,
and authority, without the consent of any person, to execute and deliver this
Sublease. All actions required to be taken to authorize the execution,
delivery and performance of this Sublease have been duly and properly taken.
12. Notices. Notices provided under this Sublease shall be in writing and
sent by confirmed facsimile, personal delivery or overnight delivery service to
the addresses specified in or pursuant to the terms of the Master Agreement and
shall be effective as specified in the Master Agreement. Lessor shall
promptly, and in any event within 48 hours of Lessor's receipt thereof, forward
to Lessee any notice or communication received from the Master Lessor under or
relating to the Master Lease that is applicable to this Sublease.
13. Successors and Assigns. The provisions of this Sublease shall apply
to and bind the heirs, successors, executors, administrators and assigns of the
parties hereto, subject to the terms of Section 9.
14. Repairs. Lessee is obligated to pay for the repair of any damage to
the Premises, any personal property, fixtures or improvements located therein
caused by it or by any of its employees, agents, or invitees. Lessee shall
quit and surrender the Premises at the expiration or earlier termination of
this Sublease, without further notice, in as good condition as when received,
ordinary wear and tear only excepted, and shall not make any alterations,
additions or improvements to the Premises without the prior written consent of
Lessor and Master Lessor, which shall not be unreasonably withheld or delayed.
All alterations, additions and improvements which may be made by either of the
parties hereto upon the Premises shall be the property of Lessor and shall
remain upon and be surrendered with the Premises without cost to Lessor, or at
Lessor's election, shall be removed by Lessee and the Premises restored to its
condition as when received. Lessor shall restore to its original condition all
alterations,
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additions and improvements to the Lessee Controlled Area upon the request of
Lessee. Lessee may not deduct or offset any amount from rent due herein
because of any problem regarding construction, maintenance, repairs or lack
thereof to the Building or the Premises. Lessee is responsible for, and shall
indemnify and hold Lessor and Master Lessor harmless from and against, any
damage to persons or property caused by Lessee, or Lessee's employees, agents,
clients, guests or invitees. Lessor is responsible for and shall indemnify and
hold Lessee harmless from and against any damage to persons or property caused
by Lessor, Lessor's employees, agents, clients, guests or invitees (other than
Lessee or Lessee's employee, agents, clients, guests or invitees). Neither
party shall be liable to the other for consequential damages or lost profits.
15. Right of Entry. Lessor reserves the right at all reasonable times,
following notice given by Lessor to Lessee a reasonable time in advance, to
enter the Premises to: (i) inspect, alter, improve or repair the Premises or
permit Master Lessor to alter, improve or repair the Building or the Premises;
(ii) permit the performance of janitorial services and other services of Lessor
and Master Lessor; (iii) take possession due to any breach of this Sublease;
(iv) perform any covenants which Lessee fails to perform; and (v) act in the
case of an emergency. Notwithstanding the foregoing, prior notice shall not be
required for emergencies or for maintenance or other personnel requiring
regular access to the Premises, subject to reasonable mutually agreed upon
access procedures such as key cards or badges.
16. Utilities, Services, Maintenance and Construction. During the term of
this Sublease, Lessor shall be responsible for and shall provide to Lessee and
the Premises the shared services identified on Exhibit D. Lessee may terminate
the provision of any such shared service during the term of this Sublease upon
sixty (60) days prior written notice to Lessor. Lessor shall be compensated
for such shared services through the payment of rent as provided in Section
7.1. If Lessee terminates the provision of any shared service as specified
above, the rent payable under Section 7.1 shall be appropriately reduced for
the period after such service is no longer provided.
17. Other Shared Services. Lessee hereby agrees to provide during the
term of this Sublease receiving dock services for Lessor which services shall
include, but not be limited to, the following:
17.1 Receiving and labeling on behalf of Lessor any and all
incoming goods;
17.2 Entering all incoming goods into the tracking system provided
by Lessor; and
17.3 Identifying and segregating Lessor's incoming goods.
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Lessee agrees to utilize third party shipping services currently
contracted by Lessor and described on Exhibit E for all shipping requirements.
Lessor shall reimburse Lessee for Lessor's proportionate use (based on Lessee's
actual cost) of such receiving dock services and shipping services within
forty-five (45) business days of Lessor's receipt of Lessee's invoice for such
services.
18. Indemnity. The following indemnification provision shall not apply to
environmental and related matters; indemnity for all such matters is addressed
in Section 19: Lessee hereby agrees to indemnify, defend and hold harmless
Lessor and Master Lessor from and against any loss, cost, damage or expense,
net of any reimbursement or recovery of any such loss, cost, damage or expense
received by Lessor or Master Lessor from any source, and attorneys' fees, that
Lessor or Master Lessor may incur, directly or indirectly, as a result of or by
virtue of any breach of or inaccuracy in any representation or warranty,
covenant, or agreement of Lessee herein. Lessor hereby agrees to indemnify,
defend and hold harmless Lessee and Master Lessor from and against any loss,
cost, damage or expense, net of any reimbursement or recovery of any such loss,
cost, damage or expense received by Lessee or Master Lessor from any source,
and attorneys' fees, that Lessee or Master Lessor may incur, directly or
indirectly, as a result of or by virtue of any breach of or inaccuracy in any
representation or warranty, covenant, or agreement of Lessor herein. The
parties' obligations under this Section 18 shall survive any assignment,
transfer or termination of this Sublease.
19. Environmental Provisions.
19.1 General Compliance Obligation. Lessee shall, at its sole cost
and expense, materially comply with all federal, state and local Environmental
Laws applicable to the Lessee's equipment and operations at the Premises and in
Common Areas Controlled by Lessee. Lessee shall take all reasonable actions
necessary to timely respond to any violation of Environmental Laws caused by
Lessee, including, but not limited to, if applicable, notifying the appropriate
parties, obtaining proper permits or licenses, implementing actions to correct
a violation, remediating any contaminated areas required to be remediated by
Environmental Laws or Lessor's health, safety and environmental policies, and
defending itself against any type of enforcement action, lawsuit or claim by
any person or entity not a party to this Sublease.
19.2 Permits. Lessee shall obtain all necessary permits, licenses
or other approvals or concurrences from the proper permitting authorities
required under all applicable Environmental Laws for the conduct of any of
Lessee's operations at the Premises by the effective date of this Sublease. To
the extent allowed by law and with the consent of Lessor, Lessee may, at its
sole cost and expense, seek the transfer from Lessor of any existing permits
that will be required for Lessee to lawfully continue operations at the
Premises on the effective date of this lease.
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19.3 Indemnification. Lessee agrees to indemnify, protect, hold
harmless and defend Lessor and Master Lessor from and against all liabilities,
losses, claims, demands, costs and expenses (collectively, "Liability"),
including, but not limited to, fines, court costs, reasonable attorneys' fees,
and costs of remediation and repairs, that are caused by or arise out of
Lessee's (or Lessee's employees, agents, contractors or anyone acting on
Lessee's behalf) use, handling, generation, storage, spillage, release or
discharge of any Hazardous Substance at, on or under the Premises or the
Building, or any other action or operation by Lessee (or Lessee's employees,
agents, contractors or anyone acting on Lessee's behalf) that constitutes a
violation of Environment Law, except for Liability directly caused by Lessor's
or Master Lessor's instructions, directions, rules, regulations or policies or
by Lessor's or Master Lessor's failure to comply with its obligations under
this Sublease. Lessor agrees to indemnify, protect, and hold harmless, and
defend Lessee from and against all liabilities, losses, claims, demands, costs,
and expenses, including, but not limited to, fines, court costs, reasonable
attorneys' fees, and costs of investigation, remediation and repairs, relating
to: (i) breaches of the Lessor's representations or warranties in Section 10.3,
or (ii) actions, operations, violations, events, or conditions relating to
environmental matters, including, but not limited to, on-site or off-site
releases or threatened releases, or arrangements for off-site treatment or
disposal (including but not limited to all liability and responsibility for the
▇▇▇▇▇▇▇ Landfill): (a) which exist prior to the date hereof, whether caused
by on-site or off-site sources; (b) which arise subsequent to the date hereof
and are caused by Lessor or any person (whether on-site or off-site) other than
Lessee (or Lessee's employees, agents, contractors or other persons acting on
Lessee's behalf). This indemnification shall supersede any provisions of
permits to be obtained by Lessee to the effect that a transferee retains
liability for violations resulting from a transferors activities. Lessor and
Lessee acknowledge that liabilities for environmental matters could arise that
are jointly caused by Lessor and Lessee, in which case, the relative
responsibility for any indemnification hereunder shall be determined on the
basis of relative fault of the parties.
19.4 Right of Access. Lessor shall have an irrevocable right of
reasonable access to the Premises and Lessee Controlled Area, after reasonable
notice to Lessee, for the purpose of performing any necessary investigations,
tests or remedial actions related to confirmed or suspected violations of
Environmental Laws at, on or under the Premises or the Lessee Controlled Area.
In exercising its right of access under this paragraph, Lessor agrees to use
its best efforts not to interfere unreasonably with Lessee's operations and to
indemnify and hold harmless Lessee from damage to persons or property, not
including any consequential damages, caused by or arising from such access,
investigations, tests or remediation work.
19.5 Hazardous Waste Storage Area. As noted in Section 1, the
Premises shall not include the Storage Area C indicated on Exhibit B. Lessee
shall ensure that access to Storage Area C is not impeded by any of Lessee's
equipment or operations.
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Lessee and Lessor acknowledge that at Closing, the area intended to be used by
Lessee for the storage of hazardous substances (Storage Areas A and B on
Exhibit B) may not be ready for immediate use. Lessor hereby temporarily
grants Lessee a limited right to the use of Storage Area C under the following
conditions:
(a) Lessee shall comply with all federal, state and local
Environmental Laws, as well as with Lessor's procedures and policies,
applicable to the handling and storage of hazardous materials in Storage Area
C. Lessee shall, at its sole cost and expense, arrange for the proper disposal
of all of its hazardous wastes under its own United States Environmental
Protection Identification Number.
(b) the indemnification rights in Section 19.3 hereof shall apply to
Lessee's and Lessor's use of Storage Area C under this Section 19.5.
(c) Lessor shall have the right to inspect, review and audit Lessee's
practices and procedures regarding the handling and storage of hazardous
materials in Storage Area C.
(d) In the event Lessor or Lessee observes any violations or
potential violations by Lessee, or Lessee's agents, of federal, state or local
Environmental Laws, or of Lessor's procedures and policies, applicable to the
handling and storage of hazardous materials in Storage Area C, Lessee shall
take immediate steps to correct or to prevent such violations.
(e) Lessee shall diligently proceed with the preparation of Storage
Areas A and B for use as Lessee's own hazardous substance storage area. Upon
the request of the Lessor, shall inform Lessor of the status of such
preparations.
(f) Lessee' right to the use of Storage Area C shall terminate when
Storage Areas A and B are ready and approved for use by Lessee, or four (4)
months from Closing, whichever is earlier.
19.6 Waste Water Treatment Facility. As provided for in Section 1,
part of the Premises includes a waste water treatment facility, identified on
Exhibit B hereto (hereinafter referred to as the "Waste Water Treatment
Facility" or the "Facility"). As required by Sections 19.2 and 19.1, Lessee
shall obtain the necessary permits or transfer the existing permit to operate
the Facility and shall operate the Facility in material compliance with all
applicable Environmental and other laws. Lessee hereby acknowledges that
certain portions of the Building are connected to the sewer servicing the
property. In the event that Lessee's non-compliance with any Environmental
Laws results in Lessor being unable to use the sewer lines servicing the
property, Lessee shall immediately take all actions necessary to correct the
problem and to restore Lessor's ability to use the sewer lines and indemnify
and hold harmless Lessor as
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provided in Section 19.3. If the use of the sewer lines by Lessor or any other
occupant of the Building other than Lessee (or Lessee's employees, agents,
contractors or invitees) results in Lessee being unable to use the sewer lines
servicing the Premises, Lessor shall immediately take all actions necessary to
correct the problem and to restore Lessee's ability to use the sewer lines and
indemnify and hold harmless Lessee as provided in Section 19.3.
19.7 Asbestos. The parties acknowledge the presence on the
Premises of various asbestos-containing materials ("ACMs"). During the "Fitup
Period" provided for in Exhibit F, attached hereto and incorporated herein by
this reference, Lessor shall be responsible, at its sole cost and expense, for
managing, abating or controlling any ACMs affected by the work specified in
Exhibit F. Notwithstanding Section 19.3, after the work specified in Exhibit F
is completed, Lessee shall be responsible, at its sole cost and expense, for
managing, abating or controlling any ACMs remaining on the Premises if
necessary as a result of physical changes to the Premises made by Lessee and if
required by applicable Environmental Laws. Lessor shall indemnify Lessee and
hold Lessee harmless from any and all liability and expense resulting from any
injury or legal or regulatory action resulting from or arising in connection
with the presence of ACMs in the Premises or the Lessee Controlled Area, unless
Lessee has responsibility to manage, ▇▇▇▇▇, and control ACMs pursuant to the
previous sentence. Lessor shall indemnify Master Lessor and hold Master Lessor
harmless from any and all liability and expense resulting from any injury or
legal or regulatory action resulting from or arising in connection with the
presence of ACMs in the Premises or the Lessee Controlled Area, unless Master
Lessor has such responsibility under the Master Lease.
19.8 Permits on Termination. Upon termination of this Sublease,
and if requested by Lessor, Lessee shall take all necessary steps to ensure the
timely transfer to Lessor of any then-existing permits, licenses or approvals
under Environmental Laws, that are in Lessee's name and relate to the Premises.
19.9 Survival. The parties' obligations under this Section 19
shall survive any assignment, transfer or termination of this Sublease.
19.10 Cooperation. Lessor shall reasonably cooperate in providing
to Lessee all documents and information regarding environmental compliance or
liabilities relating to the Premises, Lessee Controlled Area, or common areas
and facilities under the control of Lessor, the Building, and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ reasonably requested by Lessee that could materially and adversely
affect Lessee's operations of the Business (as defined in the Master Agreement)
or could result in a claim against Lessee.
20. Health and Safety. Lessee and Lessor shall at all times comply with
all health and/or safety laws, regulations and policies applicable to the
Premises and Lessee Controlled Area. To further ensure a safe and healthy work
environment, Lessee shall
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comply in all material respects with the requirements of AlliedSignal's health,
safety and environmental policies and practices, to the extent applicable to
the Premises and Common Areas. Lessor shall have the right to review and/or
audit Lessee's health, safety and environmental procedures and policies,
including the right to inspect permits, reports, manuals, equipment, work areas
and storage areas (including the chemical and hazardous waste storage areas) to
determine Lessee's compliance with all applicable health, safety and
environmental laws. Lessee shall reasonably cooperate with any such reviews or
audits and shall work with Lessor to correct any deficiencies.
21. Entire Agreement, Merger and Waiver. This Agreement supersedes and
cancels any and all previous negotiations, arrangements, offers, agreements or
understandings, if any, between the parties hereto with respect to the lease of
Lessor's facilities in Florida except for those contained in the Master
Agreement and the Transition Services Agreement. This Agreement together with
the Exhibits, which are incorporated herein, expresses and contains the entire
agreement of the parties hereto and there are no express or implied
representations, warranties or agreements between them, except as herein
contained. This Agreement may not be modified, amended or supplemented except
by a writing signed by both Lessor and Lessee. No consent given or waiver made
by Lessor of any breach by Lessee of any provision of this Agreement shall
operate or be construed in any manner as a waiver of any subsequent breach of
the same or of any other provision.
22. Master Lessor Consent. The validity of this Sublease shall be subject
to the Master Lessor's prior written consent and approval of the Lessee and of
the terms of this Sublease pursuant to the terms of the Master Lease; such
consent is a condition precedent to the effectiveness of this Sublease. If
Master Lessor rejects the Lessee this Sublease shall be deemed to be canceled
and shall be of no force or effect. Lessee agrees to cooperate with Lessor and
promptly provide to Lessor all materials and information required by Master
Lessor in connection with its determination of whether to consent to this
Sublease.
23. Arbitration. Except for any controversy, claim or dispute arising
under Section 19, any controversy, claim or dispute arising out of or relating
to this Agreement or the transactions contemplated hereby or the breach,
termination, enforcement, interpretation or validity hereof, including the
determination of the scope or applicability of this agreement to arbitrate
(collectively "Dispute"), shall be determined by arbitration in Phoenix,
Arizona before a sole arbitrator. The following shall apply to any such
arbitration:
23.1 The arbitration shall be administered by the American
Arbitration Association ("AAA") pursuant to its Commercial Rules and
Supplementary Procedures for Large, Complex Disputes.
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23.2 The arbitrator shall not be an officer, employee, director or
affiliate of any party hereto or of its affiliates. If the parties are unable
to agree on an arbitrator within 30 days of the filing of the Demand for
Arbitration, an arbitrator shall be selected pursuant to the rules and
procedures of the AAA.
23.3 Any party may seek from any court interim or provisional
relief that is necessary to protect the rights or property of that party,
pending the appointment of the arbitrator or pending the arbitrator's
determination of the merits of the controversy.
23.4 The parties shall bear their own costs and expenses, including
attorneys' fees, but the arbitrator may, in the award, allocate all of the
administrative costs of the arbitration, including the fees of the arbitrator
and mediator, against the party who did not prevail.
23.5 The arbitration award shall be in writing and shall specify
the factual and legal bases for the award. Judgment on the award may be
entered in any court having jurisdiction.
24. Governing Law. The validity, interpretation and construction of this
Agreement, and all other matters related to the Agreement, shall be interpreted
and governed by the laws of the State of Florida.
25. Headings. The headings herein used are for convenience purposes only
and shall not be used to construe the meaning of this Agreement in any respect.
26. Severability. If any term or provision of this Agreement, or the
application thereof to any person or circumstance, shall to any extent be found
to be invalid, void, or unenforceable, the remaining provisions of this
Agreement and any application thereof shall, nevertheless, continue in full
force and effect without being impaired or invalidated in any way.
27. No Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be or be construed as a further or continuing waiver of any such
term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
28. Counterparts. This Sublease may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
29. Option to Terminate. Neither Lessor nor Lessee shall exercise the
option to terminate the Master Lease contained in Paragraph C-21.1 of Exhibit C
of the Master Lease with the prior written consent of the other party.
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30. Insurance.
30.1 Employer. Lessee shall maintain at all times during the Term
(i) workers' compensation insurance that shall fully comply with the statutory
requirements of all applicable state and federal laws covering all personnel
employed by Lessee at the Premises; (ii) employers' liability insurance
coverage on all personnel employed by Lessee at the Premises in the following
minimum amounts: at least one million dollars ($1,000,000) per accident for
bodily injury and one million dollars ($1,000,000) per employee/aggregate for
disease; and (iii) unemployment insurance for all personnel employed by Lessee
at the Premises in full compliance with state and federal law.
30.2 General Liability Insurance. Lessor represents and warrants
that it has in effect, and agrees to maintain in effect during the Term,
comprehensive general liability insurance to protect it and Lessee and the
Lessee's directors, officers, employees and affiliates in connection with
matters for which Lessor is responsible hereunder. Lessee represents and
warrants that it has in effect, and agrees to maintain in effect during the
Term, comprehensive general liability insurance to protect it and Lessor and
Lessor's directors, officers, employees and affiliates in connection with
matters for which Lessee is responsible hereunder. Limits for such general
liability insurance shall in no event be less than one million dollars
($1,000,000) per occurrence and five million dollars ($5,000,000) in aggregate
for bodily injury and property damage, combined single limit coverage.
30.3 Endorsements. Other than the worker's compensation policy,
each insurance policy shall name Lessor (and Master Lessor) or Lessee, as the
case may be, as an additional insured, and all policies shall contain a
provision whereby the insurer agrees not to alter or cancel the coverage
without at least thirty (30) days' prior written notice to Lessor or Lessee, as
the case may be. Neither Lessor nor Lessee shall be liable for the payment of
any premiums associated with the insurance to be required of the other
hereunder.
30.4 Certificates of Insurance. Lessor and Lessee shall each
provide to the other certificates, in duplicate, evidencing the above-required
insurance promptly upon execution of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
as of the date first above written, by their duly authorized representatives.
"LESSOR" ALLIEDSIGNAL INC.,
a Delaware corporation,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Director, Real Estate
"LESSEE" EFTC CORPORATION,
a Colorado corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title:Chief Financial Officer
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EXHIBIT A
MASTER LEASE
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EXHIBIT B
PREMISES
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EXHIBIT C
ENVIRONMENTAL PERMITS
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EXHIBIT D
EXPENSE SHARING
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EXHIBIT E
SHIPPING SERVICES CONTRACTS
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EXHIBIT F
FIT UP PROVISIONS
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