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Exhibit 99.1
ASSIGNMENT AND ASSUMPTION AGREEMENT
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THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"),
made as of the
15th day of April, 2005 by and between 141 ALBANY AVENUE, LLC, a
New York
limited liability company, having an office at 2-4 Bloomingdale
Road,
Hicksville, New York 11801 (hereinafter referred to as
"Assignee"), and
ELECTROGRAPH SYSTEMS, INC., a New York corporation, having an
office at 160 Oser
Avenue, Hauppauge, New York 11788 (hereinafter referred to as
"Assignor").
W I T N E S S E T H:
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WHEREAS, Assignee, as landlord (successor-in-interest to General
Electric
Capital Business Asset Funding Corporation), and Assignor, as
tenant, are
parties to that certain Lease Agreement dated as of March 14,
2003 (the
"Lease"), pursuant to which Assignee leased to Assignor the real
property known
as 40 Marcus Boulevard, Hauppauge, New York (as more
particularly described in
the Lease, the "Premises");
WHEREAS, Assignor, as sublandlord, and Water Boy, Inc.
("Subtenant"), as
subtenant, are parties to that certain Sub-Lease dated August
20, 2004, as
amended by that certain Amendment to Sub-Lease dated September
15, 2004 (such
Sub-Lease, as so amended, is hereinafter referred to as the
"Sublease"),
pursuant to which Assignor subleased to Subtenant the
Premises;
WHEREAS, upon the terms and conditions set forth in this
Agreement, (i)
Assignor desires to assign to Assignee, effective as of the date
of this
Agreement (the "Effective Date"), all of Assignor's right, title
and interest in
and to the Lease, and (ii) Assignee desires to accept such
assignment and assume
all of the terms, covenants, conditions, obligations and
liabilities of Assignor
(as tenant) arising under the Lease from and after the Effective
Date; and
WHEREAS, upon the terms and conditions set forth in this
Agreement, (i)
Assignor desires to assign to Assignee, effective as of the
Effective Date, all
of Assignor's right, title and interest in and to the Sublease,
and (ii)
Assignee desires to accept such assignment and assume all of the
terms,
covenants, conditions, obligations and liabilities of Assignor
(as sublandlord)
arising under the Sublease from and after the Effective
Date.
NOW, THEREFORE, for good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged and confirmed,
Assignor and
Assignee hereby covenant and agree as follows:
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ARTICLE 1
ASSIGNMENT AND ASSUMPTION OF LEASE
Section 1.1. Assignment. Assignor hereby assigns to Assignee,
effective as
of the Effective Date, all of Assignor's right, title and
interest in and to the
Lease, to have and hold the same unto Assignee for all of the
rest, residue and
remainder of the term thereof.
Section 1.2. Assumption. Assignee hereby consents to and accepts
the
foregoing assignment of the Lease and assumes, undertakes and
covenants to pay,
discharge, perform and be liable for all of the terms,
covenants, conditions,
obligations and liabilities of Assignor arising under the Lease
from and after
the Effective Date.
Section 1.3. "As Is" Condition. Assignee acknowledges and agrees
that
Assignee is accepting the Premises and the leasehold estate
created by the Lease
in their "as is" "where is" condition as of the Effective Date,
without
representation or warranty of any kind (other than any
representation and
warranty expressly set forth in this Agreement).
Section 1.4. Assignment Payment. Simultaneously with its
execution of this
Agreement, Assignor has paid to Escrow Agent (as hereinafter
defined) the sum of
$550,000.00 (the "Assignment Payment"), as consideration for the
transactions
contemplated by this Agreement, which Assignment Payment shall
be held and
applied pursuant to a separate escrow agreement between
Assignor, Assignee and
Escrow Agent substantially in the form of Exhibit A annexed
hereto (the
"Assignment Payment Escrow Agreement").
Section 1.5. Guaranty. Effective as of the Effective Date, the
Guaranty (as
hereinafter defined) shall be deemed automatically terminated
and of no further
force and effect. Assignee (in its capacity as the landlord
under the Lease)
hereby unconditionally and irrevocably waives, releases and
discharges
Manchester Technologies, Inc. (the "Guarantor"), the guarantor
under the
Guaranty, and its partners, members, principals, officers,
directors, agents,
employees, affiliates, successors and assigns (collectively, the
"Guarantor
Parties") from and against all Claims (as hereinafter defined)
which Assignee
(in its capacity as the landlord under the Lease) or the other
Assignee Parties
(as hereinafter defined) or any of them ever had, now has, or
hereafter can,
shall or may in the future have, against Guarantor and the other
Guarantor
Parties or any of them arising out of or in any way relating to
the Guaranty,
whether arising prior to, on or after the Effective Date. The
term "Guaranty"
shall mean that certain Lease Guaranty Agreement dated as of
March 14, 2003
given by Guarantor in favor of General Electric Capital Business
Asset Funding
Corporation (predecessor-in-interest to Assignee) in connection
with the Lease,
as the same may have been modified, amended or supplemented.
Simultaneously with
its execution of this Agreement, Assignee has returned to
Assignor all originals
of the Guaranty in its possession or control.
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ARTICLE 2
ASSIGNMENT AND ASSUMPTION OF SUBLEASE
Section 2.1. Assignment. Assignor hereby assigns to Assignee,
effective as
of the Effective Date, all of Assignor's right, title and
interest in and to the
Sublease and the Subtenant Security and Rent Deposit (as defined
below), to have
and hold the same unto Assignee for all of the rest, residue and
remainder of
the term thereof.
Section 2.2. Assumption. Assignee hereby accepts the foregoing
assignment
of the Sublease and assumes, undertakes and covenants to pay,
discharge, perform
and be liable for all of the terms, covenants, conditions,
obligations and
liabilities of Assignor arising under the Sublease from and
after the Effective
Date. Without limiting the generality of the foregoing, the
obligations and
liabilities assumed by Assignee hereunder include (without
limitation) the
obligation to properly apply the Subtenant Security and Rent
Deposit in
accordance with the terms of the Sublease.
Section 2.3. Subtenant Security and Rent Deposit. Simultaneously
with its
execution of this Agreement, Assignor (in addition to the
Assignment Payment)
has paid to Assignee the sum of $45,900.00, which represents,
and which payment
is being made to effectuate the transfer of, (x) the security
deposit and (y)
the base rental due August 1, 2005, in each case, deposited by
Subtenant under
Section 3 of the Sublease (such security deposit and base rental
being referred
to herein as the "Subtenant Security and Rent Deposit").
Assignor represents to
Assignee that the Subtenant Security and Rent Deposit has not
heretofore been
held in an interest-bearing account (and, accordingly, Assignor
is not in
possession of any interest on the Subtenant Security and Rent
Deposit).
Section 2.4. Letter to Subtenant. Simultaneously with its
execution of this
Agreement, Assignor shall deliver to Assignee a letter from
Assignor to
Subtenant pursuant to which (a) Subtenant is directed to pay all
future rent
under the Sublease to Assignee, (b) Subtenant is directed to
name Assignee as an
additional insured on certain insurance policies pertaining to
the Premises, and
(c) Subtenant is advised that the Subtenant Security and Rent
Deposit has been
transferred to Assignee.
Section 2.5. Apportionments. All fixed rent and additional rent
or charges
payable by Subtenant under the Sublease have been apportioned as
of the
Effective Date; it being the intent that (i) Assignor is
entitled to all rent
payable under the Sublease through the day preceding the
Effective Date and (ii)
Assignee is entitled to all rent payable under the Sublease from
and after the
Effective Date.
ARTICLE 3
RELEASES
Section 3.1. Release by Assignor. Effective as of the Effective
Date,
Assignor (in its capacity as the tenant under the Lease) hereby
unconditionally
and irrevocably waives, releases and discharges Assignee and its
partners,
members, principals, officers, directors, agents,
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employees, affiliates, successors and assigns (collectively, the
"Assignee
Parties") from and against all actions, causes of action, suits,
debts, dues,
assessments, late fees, sums of money, expenses, accounts,
reckonings, bonds,
bills, specialties, covenants, contracts, controversies,
agreements, promises,
variances, trespasses, damages, judgments, executions,
obligations, duties,
claims, matters, liabilities, violations of law, fines,
penalties,
responsibilities, attorneys' fees and disbursements, charges and
demands
whatsoever, in law, admiralty or equity (collectively, "Claims")
which Assignor
or its partners, members, principals, officers, directors,
agents, employees,
affiliates, successors and assigns (collectively, the "Assignor
Parties") or any
of them ever had, now has, or hereafter can, shall or may in the
future have,
against the Assignee Parties or any of them arising out of or in
any way
relating to the Lease, whether arising prior to, on or after the
Effective Date.
Section 3.2. Release by Assignee. Notwithstanding anything
contained in
Section 4.06 of the Lease, effective as of the Effective Date,
Assignee (in its
capacity as the landlord under the Lease) hereby unconditionally
and irrevocably
waives, releases and discharges Assignor and the other Assignor
Parties from and
against all Claims which Assignee or the other Assignee Parties
or any of them
ever had, now has, or hereafter can, shall or may in the future
have, against
the Assignor Parties or any of them arising out of or in any way
relating to the
Lease, whether arising prior to, on or after the Effective
Date.
Section 3.3. Exceptions. The foregoing releases shall not apply
to any
breach of this Agreement, including, without limitation, any
inaccuracy in any
of the representations and warranties made by the parties, which
representations
and warranties shall survive the Effective Date.
ARTICLE 4
CERTAIN REPRESENTATIONS AND WARRANTIES
Section 4.1. Assignor's Representations and Warranties. Assignor
hereby
represents and warrants to Assignee that, as of the date
hereof:
(a) Assignor is the sole holder of the tenant's interest under
the
Lease; Assignor has not assigned or otherwise conveyed its
interest in the
Lease; Assignor has not mortgaged or pledged its interest in the
Lease as
collateral; and, except for the Sublease, there are no subleases
by
Assignee that are currently in effect and that demise the whole
or any
portion of the Premises;
(b) Assignor is the sole holder of the sublandlord's interest
under
the Sublease; the Sublease is in full force and effect; a true
and correct
copy of the Sublease is attached hereto as Exhibit B; Assignor
has not
received any written notice from Subtenant asserting that
Assignor is in
material default under the Sublease which remains uncured;
Assignor has not
given any written notice to Subtenant asserting that Subtenant
is in
material default under the Sublease which remains uncured; no
rent payable
under the Sublease has been prepaid more than thirty (30) days
in advance
other than any prepaid rent that constitutes a portion of the
Subtenant
Security and Rent Deposit;
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(c) Assignor has the full corporate power and authority to
execute and
deliver this Agreement (which shall be enf
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