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 sha
