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EXHIBIT 10.21

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of June 9, 2022 (the “Effective Date”), is made by and between MATRIX SERVICE INC., an Oklahoma corporation (“Seller”), and PISCES LOGISTICS ACQUISITION LLC, a Delaware limited liability company (“Purchaser”).  
RECITALS:
A.        Seller is the owner of certain real property and the improvements thereon located in Orange County, California; and
B.        Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the Property (as defined in Section 1) upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, of the covenants, promises, and undertakings set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Seller and Purchaser agree as follows: 
1.Sale.  Subject to the terms and conditions of this Agreement, Seller shall sell, and Purchaser shall purchase the following:
1.1    that certain real property located in Orange County, California, which is more particularly described on Exhibit A, together with all improvements and rights thereto (the “Land”); 
1.2    all right, title and interest of Seller in and to all streets, alleys easements and rights of way in, on, across, in front of, abutting or adjoining the Land and any other appurtenances belonging thereto, including without limitation all oil, gas and other minerals located in, on or under the Land, if any (collectively the “Appurtenances”); 
1.3    all right, title and interest of Seller in and to all buildings, canopies, fixtures, structures, sidewalks, access ways, landscaping and other improvements including mechanical, electrical, and plumbing systems located on the Land (the “Improvements”); and
1.4    all of Seller’s right, title and interest, if any, in all (a) warranties and guaranties relating to the Land or the Improvements, (b) all licenses, permits and approvals relating to the Land or the Improvements (but not any licenses, permits or approvals relating to Seller’s operations on the Land), and (c) all plans and specifications relating to the Land and the, Improvements, in each case to the extent that Seller may legally transfer the same (the “Intangible Property”).
The Land, Appurtenances, Improvements, and Intangible Property are hereinafter collectively called the “Property.”  For purposes of clarification, Seller and Purchaser acknowledge and agree that all personal property including bridge cranes and other trade fixtures located on the Property is being retained by Seller. Seller shall have the right to keep the personal property on the Property after Closing, provided that, as a covenant that survives the Closing, the same shall be removed prior to the expiration of the term of the Lease.

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2.Price and Payment.
2.1    Purchase Price. The purchase price for the Property is THIRTY-SEVEN MILLION, SIX HUNDRED SEVENTY-FOUR THOUSAND, TWO HUNDRED SEVENTY-ONE AND 53/100 DOLLARS ($37,674,271.53) (the “Purchase Price”).  
2.2    Payment.  Subject to the terms of this Agreement, payment of the Purchase Price shall be made as follows:
2.2.1    Within three (3) business days of the Effective Date, an earnest money deposit of $1,500,000.00 (the “Deposit”), by wire transfer of immediately available funds to the Title Company (as defined in Section 2.3); and 
2.2.2    Upon Closing (as defined in Section 2.3), an amount equal to the Purchase Price less the sum of the Deposit, subject to adjustment for the prorations as provided herein, by wire transfer of immediately available funds to a bank account or accounts designated by the Title Company for further disbursement to Seller in connection with the Closing.
2.3    Closing.  The closing of the purchase and sale hereunder (the “Closing”) shall take place on or before June 22, 2022 (the “Closing Date”), through the exchange of documents and funds at the offices of Chicago Title Company at 725 South Figueroa Street, Suite 200, Los Angeles, California 90017, Attention: Michael Slinger (the “Title Company”), or at such other time and place as may be agreed upon in writing by Seller and Purchaser. 
2.4    Title Company.  The Title Company hereby agrees to accept and hold the Deposit in escrow and dispose of the Deposit in accordance with the following provisions:
2.4.1    The Title Company shall place the Deposit in a bank account in the continental United States.  Except as otherwise provided in this Agreement, the Deposit shall be applied to the Purchase Price at Closing. The Title Company is not required to place the Deposit into an interest-bearing account.
2.4.2    The Title Company shall deliver the Deposit to Seller or to Purchaser, as the case may be, under the following conditions:
(a)    To Seller on the date of and upon the consummation of the Closing.
(b)    To Seller upon receipt of written demand therefor (“Seller’s Demand for Deposit”) stating that Purchaser has defaulted in the performance of Purchaser’s obligation to close under this Agreement and the facts and circumstances underlying such default; provided, however, that the Title Company shall not honor such demand until more than five (5) business days after the Title Company shall have sent a copy of such demand to Purchaser in accordance with the provisions of Section 2.4.3 or thereafter if the Title Company shall have received a “Notice of Objection” (as defined in Section 2.4.3) from Purchaser within such five (5) business day period.
(c)    To Purchaser upon receipt of written demand therefor (“Purchaser’s Demand for Deposit”) stating that this Agreement has been terminated in accordance with the provisions hereof, or that Seller has defaulted in the performance of any of Seller’s obligations under this Agreement, and the facts and circumstances underlying the same; provided, however, that the Title 
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Company shall not honor such demand until more than five (5) business days after the Title Company shall have sent a copy of such demand to Seller in accordance with the provisions of Section 2.4.3 or thereafter if the Title Company shall have received a Notice of Objection from Seller within such five (5) business day period.
(d)    Notwithstanding anything in this Agreement to the contrary, the Title Company shall immediately return the Deposit to Purchaser, without further instruction from either party in the event that the Title Company receives written notice from Purchaser on or before 5:00 p.m. PT on the Inspection Expiration Date (as defined in Section 3.1.2) of Purchaser’s election to terminate this Agreement, without any requirement that the Title Company retain the Deposit pending receipt of a Notice of Objection from Seller.  The foregoing sentence shall only be in effect until 5:00 p.m. PT on the Inspection Expiration Date, and thereafter shall no longer govern the handling of the Deposit by the Title Company.
2.4.3    Subject to Section 2.4.2(d), within one business day of the receipt by the Title Company of a Seller’s Demand for Deposit or a Purchaser’s Demand for Deposit, the Title Company shall send a copy thereof to the other party by email transmission (with telephonic confirmation of receipt) and otherwise as provided in Section 14.  The other party shall have the right to object to the delivery of the Deposit by sending written notice (a “Notice of Objection”) of such objection to the Title Company by email transmission (with telephonic confirmation of receipt) and otherwise as provided in Section 14, which Notice of Objection shall be deemed null and void and ineffective if such Notice of Objection is not received by the Title Company within the time periods prescribed in Section 2.4.2.  Such notice shall set forth the basis for objecting to the delivery of the Deposit.  Upon receipt of a Notice of Objection, the Title Company shall promptly send a copy thereof to the party who sent the written demand for deposit.
2.4.4    Subject to Section 2.4.2(d), in the event the Title Company shall have received the Notice of Objection within the time periods prescribed in Section 2.4.2, the Title Company shall continue to hold the Deposit until (a) the Title Company receives joint written direction from Seller and Purchaser directing the disbursement of the Deposit, in which case the Title Company shall then disburse the Deposit in accordance with such direction, (b) in the event of litigation between Seller and Purchaser, the Title Company shall deliver the Deposit to the clerk of the court in which the litigation is pending, or (c) the Title Company takes such affirmative steps as the Title Company may, at the Title Company’s option, elect in order to terminate the Title Company’s duties including, but not limited to, depositing the Deposit in any court which the Title Company shall select in the State of California in an action for interpleader, with the costs thereof to be borne by whichever of Seller or Purchaser is the losing party.
2.4.5    The Title Company may act upon any instrument or other writing believed by the Title Company in good faith to be genuine and to be signed and presented by the proper person, and shall not be liable in connection with the performance of any duties imposed upon the Title Company by the provisions of this Agreement, except for the Title Company’s willful misconduct or gross negligence.  The Title Company shall have no duties or responsibilities except those set forth in this Agreement.  The Title Company shall not be bound by any modification of this Agreement, unless (a) the same is in 
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writing and signed by Purchaser and Seller, and delivered to the Title Company and, (b) if the Title Company’s duties hereunder are affected, the Title Company shall have given prior written consent thereto.  In the event that the Title Company shall be uncertain as to the Title Company’s duties or rights hereunder, or shall receive instructions from Purchaser or Seller which, in the Title Company’s opinion, are in conflict with any of the provisions hereof, the Title Company shall be entitled to hold and apply the Deposit pursuant to Section 2.4.4 and may decline to take any other action.
2.4.6    It is agreed that the escrow made herein is for the accommodation of Purchaser and Seller. Purchaser and Seller jointly and severally agree to indemnify and hold harmless the Title Company from the payment of any expenses or disbursements incurred by reason hereof, including, without limitation, reasonable attorneys’ fees and costs, including all such fees and costs incurred in any trial or appellate proceedings except in the event of a direct action by the Parties against the Title Company for the Title Company’s own breach of contract, negligence or willful or intentional misconduct, in which situation the Parties would have no such duties to indemnify and/or hold the Title Company harmless.
3.Review Documents; Inspections; Title and Survey.
3.1    Inspections.
3.1.1    Purchaser or Purchaser’s agents or representatives shall have access to the Property from time to time upon not less than one (1) full business day prior to the intended date of entry (which notice may be done via email (with read receipt confirmation) or telephone to Justin Sheets at, jsheets@matrixservicecompany.com or mobile telephone number: (484) 201-5828. Each such request shall specify the intended date of entry and shall provide a detailed description of the proposed investigations, including, without limitation, a list of contractors who will be performing the proposed investigation, a copy, if applicable, of the Purchaser’s testing plan as described in Section 3.1.2 and such other information as Seller reasonably requires in connection with such proposed inspection.  Neither Purchaser nor any of Purchaser’s agents or representatives shall enter the Property until Seller has given written approval of both the request and any testing plan. Purchaser acknowledges that prior to the Effective Date, Purchaser received a Phase I Environmental Site Assessment (the “ESA”).  Prior to the Effective Date and no later than within three (3) Business Days from the Effective Date, Seller shall, and shall direct its agents and employees to, promptly cooperate with the reasonable requests of the Purchaser to obtain information concerning the Property, including any material documentation concerning the Property to the extent in Seller’s or its agents and employees possession or control.
3.1.2    During the term of this Agreement and subject to Purchaser’s compliance with Section 3.1.1, Purchaser shall have the right to conduct such due diligence, review such information and conduct such inspections with respect to the Property, including, without limitation, appraisals, engineering studies, soil tests, environmental studies, inquiry of governmental officials, and underwriting analyses as Purchaser shall deem necessary or desirable to evaluate the Property including, without limitation, the physical condition thereof; provided, that without the prior written consent of Seller as to the timing and scope (which may be withheld in Seller’s sole discretion), Purchaser shall not be entitled to conduct any invasive physical or environmental inspection of the Property, including 
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without limitation, any core sampling and any environmental testing other than a Phase I Environmental Site Assessment.  If Purchaser wishes to obtain Seller’s consent to conduct tests or inspections at the Property, Purchaser shall deliver a written request to Seller setting forth in reasonable detail the nature and scope of the proposed work and the party who is to conduct the work.  A representative of Seller shall have the right, but not the obligation, to be present during any such test or inspection; provided that if Seller is not present at the agreed upon time for such investigation, Seller’s absence shall not prohibit Purchaser from conducting such Investigation.  
3.1.3    Purchaser shall not make any contact with anyone at the Property without the prior written consent of Seller, which may be given or withheld in Seller’s sole discretion; provided, that Purchaser shall have the right to coordinate with Seller’s employees with respect to any inspection or investigations.
3.1.4    If at any time on or before 5:00 p.m. PT on June 15, 2022 (the “Inspection Expiration Date”) Purchaser is not satisfied with any matter relating to the Property in its sole and absolute discretion and desires to terminate this Agreement, Purchaser may terminate this Agreement by giving Seller and the Title Company written notice on or before the Inspection Expiration Date of Purchaser’s election to terminate this Agreement (a “Termination Notice”), whereupon the Deposit shall be returned to Purchaser, and neither party shall have any further obligation or liability hereunder, except those expressly stated to survive termination of this Agreement.  Upon receipt of a Termination Notice prior to the Inspection Expiration Date, the Title Company shall immediately deliver the Deposit to Purchaser, and the parties agree that no mutual written consent or approval from Seller shall be required to authorize the return of the Deposit. If Purchaser has not given Seller a Termination Notice on or before the Inspection Expiration Date, this Agreement shall continue in full force and effect and be binding upon the parties, and the Deposit shall immediately become non-refundable and payable to Seller upon Closing or upon default by Purchaser as provided herein, except as otherwise expressly provided in this Agreement. 
3.1.5    Purchaser agrees that, in making any inspections of, or conducting any testing of, on, or under the Property, Purchaser or Purchaser’s agents will not unreasonably interfere with the operation of the Property, and will restore promptly any physical damage caused by such inspections or tests to substantially the same condition as existed prior to such inspections or tests (excluding any preexisting adverse conditions).  Seller reserves the right to have a representative present at any such physical inspections or tests at the Property, but Seller’s failure to have such a representative present shall not in and of itself prevent such inspections and tests from going forward.  Any such inspections and testing shall be at Purchaser’s sole cost and expense.
3.1.6    Purchaser agrees that, in making any inspections of, or conducting any testing of, on or under the Property, Purchaser or Purchaser’s agents will carry not less than $2,000,000.00 commercial general liability insurance and auto insurance, and upon request of Seller, will provide Seller with written evidence of such insurance.  Purchaser will also carry Workers Compensation insurance at statutory levels with Employers Liability with at least $1,000,000.00 in limits.
3.1.7    Purchaser shall not reveal to any third party not approved by Seller (other than as required by any governmental authority or court order or law, and/or to Purchaser’s 
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inspectors, advisors, contractors, employees, attorneys, counsel, consultants and other professionals, lenders, investors and prospective lenders and investors that need to know such information in order for Purchaser to consummate the transaction contemplated in this Agreement, provided that Purchaser advises such persons of the confidential nature of such material and uses reasonable efforts to cause such person to comply with the nondisclosure provisions of this Section) the results of its inspections or tests, provided such obligation of confidentiality will terminate as of the Closing.  Purchaser agrees to provide Seller, without any representations or warranties, with a copy of any inspection or test report upon Seller’s written request, except any third party report which by its terms prohibits such dissemination.
3.1.8    Purchaser shall indemnify, defend, and hold Seller free and harmless from any loss, injury, damage, claim, lien, cost or expense, including attorneys’ fees and costs, arising out of Purchaser’s inspection and testing of the Property, or otherwise from the exercise by Purchaser or its agents or representatives of the right of access under Section 3.1; provided; however, that such indemnity shall not include any costs or damages caused by (x) the gross negligence or willful misconduct of Seller or its agents, (y) any claims of diminution in the value of the Property as a consequence of the results revealed by such tests and inspections or (z) any pre-existing condition of the Property, which indemnity shall survive the Closing or termination of this Agreement.
3.2    Title and Survey.
3.2.1    Purchaser acknowledges that prior to the Effective Date, Purchaser received that certain (a) Preliminary Report (Order No. 00177683-984-LT2-JC) prepared by the Title Company and issued by Chicago Title Insurance Company (the “Title Report”) and (b) survey of the Property prepared by Richtig Inc. and dated May 8, 2022 (the “Survey”). [Purchaser represents that Purchaser has reviewed the Title Report and Survey, and with the exception of that certain Deed of Trust, dated March 7, 2003 (as amended and restated) identified in Item No. 3 of the “Exceptions” of the Title Report (the “Deed of Trust”), which Seller shall cause to be released in connection with the Closing, Purchaser agrees that any encumbrance or defect shown in the Title Report or Survey as affecting the Property is acceptable and shall be deemed “Permitted Exceptions.”  For the avoidance of doubt, in no event shall Permitted Exceptions include, and Seller shall have the obligation to remove or cure on or before the Closing Date, (a) any exceptions to title which would be removed upon Seller’s delivery of its Title Affidavit (as defined below) to the Title Company, (b) any exceptions to title which are mortgages or liens evidencing monetary encumbrances, including without limitation the Deed of Trust, granted by, through or under Seller, (c) the lien of ad valorem real or personal property taxes, assessments and governmental charges affecting all or any portion of the Property that are delinquent or that will be delinquent on the Closing Date, (d) title matters disclosed on or after the Inspection Expiration Date, except for New Title Matters approved by Purchaser pursuant to Section 3.2.3 below, or (e) any exception to title that Seller has specifically agreed in writing to remove pursuant to this Agreement (collectively, the “Mandatory Cure Items”).
3.2.2    At the Closing, Seller shall convey or cause to be conveyed to Purchaser, and Purchaser agrees to accept, title to the Property, subject only to the Permitted Exceptions.
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3.2.3    Pursuant to Section 13.3, Purchaser may, prior to the Closing Date, notify Seller in writing of any objection to title or survey (excluding objections to title or survey which have been waived by Purchaser as hereinabove provided or that are or are deemed to be Permitted Exceptions) arising after the Inspection Expiration Date (“New Title Matters”). 
3.3    Natural Hazards Disclosures.  As used herein, the term “Natural Hazard Area” shall mean those areas identified as natural hazard areas or natural hazards in the Natural Hazard Disclosure Act, California Government Code Sections 8589.3, 8589.4, 8589.5 8875.6, 8875.9, 8893.2, 8893.3, and 51183.5, and California Public Resources Code Sections 2621, et. seq., 2621.9, 2694, and 4125, 4136, California Civil Code section 1103 et. seq. and 2079.9, Business and Professions Code section 10147 and any successor statutes or laws (the “Natural Hazard Disclosure Act”). Seller shall have the Title Company prepare and provide to Purchaser a Natural Hazard Disclosure Statement (the “Natural Hazard Disclosure Statement”) in a form required by the Natural Hazard Disclosure Act prior to the Inspection Expiration Date. Purchaser acknowledges that Seller shall retain the services of the Title Company to examine the maps and other information made available to the public by government agencies for the purpose of enabling Seller to fulfill its disclosure obligations with respect to the Natural Hazard Disclosure Act and to prepare the written report of the result of its examination (the “Natural Hazard Report”). Purchaser acknowledges that Purchaser’s receipt of the Natural Hazard Disclosure Statement and the Natural Hazard Report fully and completely discharges Seller from its disclosure obligations under the Natural Hazard Disclosure Act, and, for the purposes of this Agreement, the provisions of California Civil Code Section 1102.4,  1103.4, and 1103, et. seq. and 42 U.S.C. section 5154a regarding the non-liability of Seller for errors and/or omissions not within its personal knowledge shall be deemed to apply with respect to the Natural Hazard Disclosure Act, and the preparer of such Natural Hazard Report shall be deemed to be an expert dealing with matters within the scope of its expertise with respect to the examination and written report regarding the natural hazards referred to above. Purchaser acknowledges and agrees that the matters set forth in the Natural Hazard Disclosure Statement may change on or prior to the Closing and that Seller has no obligation to update, modify, or supplement the Natural Hazard Disclosure Statement. 
3.4    California Health & Safety Code Section 25359.7 and 25400.28 Disclosure. Section 25359.7 of the California Health & Safety Code requires owners of nonresidential real property who know, or have reasonable cause to believe, that any release of hazardous substance has come to be located on or beneath the real property to provide written notice of such to a purchaser of the real property. Likewise, section 25400.28 requires a disclosure of any release of controlled substance clean-up orders. Not in limitation of any express representations or warranties of Seller under this Agreement, Purchaser acknowledges and agrees that the sole inquiry and investigation Seller has conducted in connection with the environmental condition of the Property is to obtain and/or review those certain environmental reports, assessments, and studies of the Property delivered to Purchaser pursuant to this Agreement. Not in limitation of any express representations or warranties of Seller under this Agreement or any obligation of Seller to deliver the Property materials in accordance with Section 3.1.1, Purchaser: (a) acknowledges Purchaser’s receipt of the foregoing notice given pursuant to Sections 25359.7 and 25400.28 of the California Health and Safety Code; and (b) after receiving advice of Purchaser’s legal counsel, waives any and all rights Purchaser may have to assert that Seller has not complied with the requirements of Section 25359.7 and/or 25400.28 of the California Health and Safety Code. This Section 3.4 shall survive the Closing. 
3.5    Appraisal Discrimination Disclosure. Pursuant to California Civil code section 1102.6g, the following Appraisal Discrimination is made: “Any appraisal of the property is required to be 
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unbiased, objective, and not influenced by improper or illegal considerations, including, but not limited to, any of the following: race, color, religion (including religious dress, grooming practices, or both), gender (including, but not limited to, pregnancy, childbirth, breastfeeding, and related conditions, and gender identity and gender expression), sexual orientation, marital status, medical condition, military or veteran status, national origin (including language use and possession of a driver's license issued to persons unable to provide their presence in the United States is authorized under federal law), source of income, ancestry, disability (mental and physical, including, but not limited to, HIV/AIDS status, cancer diagnosis, and genetic characteristics), genetic information, or age. If a buyer or seller believes that the appraisal has been influenced by any of the above factors, the seller or buyer can report this information to the lender or mortgage broker that retained the appraiser and may also file a complaint with the Bureau of Real Estate Appraisers at https://www2.brea.ca.gov/complaint/ or call (916) 552-9000 for further information on how to file a complaint.”
3.6    Death Disclosure. There has been no death on the Property in the three years preceding the Effective Date that is known by Seller that would be otherwise required to be disclosed pursuant to California Civil Code section 1710.2.
3.7    Discriminatory Covenants. There are no known Discriminatory Covenants associated with the Property that would otherwise be required to be disclosed by the Seller pursuant to California Government Code section 12956.2.
3.8    Memorandum of Purchase Agreement.  
3.8.1    Concurrently with the execution of this Agreement, Purchaser and Seller shall execute, acknowledge and deliver to Escrow a recordable Memorandum of Agreement (the “Memorandum”) in the form attached hereto as Exhibit G-1 together with a Termination and Release of Memorandum of Agreement (the “Termination Agreement”) in the form attached hereto as Exhibit G-2. 
3.8.2    Escrow is irrevocably instructed to immediately (i) insert the date in the preamble of the Memorandum and (ii) record the Memorandum in the Official Records of Orange County (the “Official Records”) and provide Purchaser and Seller with a recorded copy thereof.
3.8.3    If the Close of Escrow does not occur by the scheduled Closing Date (defined below), as same may be extended, for any reason other than Seller’s default, then Escrow shall record the Termination Agreement in the Official Records upon the earlier of (a) Purchaser’s election to terminate this Agreement pursuant to a provision in this Agreement permitting Purchaser to terminate; or (b) Seller’s termination of this Agreement pursuant to Section 13.1.
4.Lease; Adjacent Property. In connection with and upon the Closing, Seller and Purchaser shall enter into a lease in the form of Exhibit B (the “Lease”), pursuant to which Purchaser will lease to Seller, and Seller will lease from Purchaser, the Property after Closing for a period of fifteen (15) months subject to renewal options.  Purchaser and Seller acknowledge that Purchaser intends to acquire that certain real property located in Orange County, California that is adjacent to the Property and which is more particularly described on Exhibit C (the “Adjacent Property”) . In the event Purchaser or any of its affiliates acquires the Adjacent Property, Purchaser and Seller shall include the Adjacent Property as part of the property leased by Seller pursuant to the Lease, and if the Adjacent Property is acquired subsequent to the Closing, Purchaser and Seller shall enter into 
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any amendment to the Lease necessary to include the Adjacent Property as part of the property leased pursuant to the Lease. This Section 4 shall survive the Closing. 
5.Representations, Warranties and Covenants of Seller.  Seller represents, warrants and covenants to Purchaser as follows: 
5.1    Authority.  Seller is a duly organized and validly existing corporation in good standing under the laws of the state of its formation.  Seller has full capacity, right, power and authority to execute and deliver this Agreement and all required action and approvals therefor have been duly taken and obtained.  The individual signing this Agreement on behalf of Seller is duly authorized to sign the same on Seller’s behalf and to bind Seller hereto. On or before the Closing Date, the individuals signing all other documents executed or to be executed pursuant hereto shall be duly authorized to sign the same on Seller’s behalf and to bind Seller thereto.  This Agreement shall be binding upon and enforceable against Seller in accordance with its terms. No authorization, consent, or approval of any third party or governmental authority (including courts) is required for the execution and delivery by Seller of this Agreement or the performance of its obligations hereunder. On the Closing Date, all documents to be executed pursuant hereto shall be binding upon and enforceable against Seller in accordance with their respective terms.  Neither the execution, delivery or performance of this Agreement by Seller, nor the consummation of the transactions contemplated hereby will (a) violate or conflict with any provision of the organizational documents of Seller or contracts to which it is a party, or (b) violate any order, judgment, injunction, award or decree of any court or arbitration body, by or to which Seller or the Property are or may be bound or subject.
5.2    Actions.  There are no actions, suits or proceedings pending or, to the knowledge of Seller, threatened, against or affecting Seller which, if determined adversely to Seller, would adversely affect its ability to perform its obligations hereunder.  Seller has not (a) made a general assignment for the benefit of creditors, (b) filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition of Seller’s creditors, (c) suffered the appointment of a receiver to take possession of all, or substantially all, of Seller’s assets, (d) suffered the attachment or other judicial seizure of all, or substantially all, of Seller’s assets, (e) admitted in writing it inability to pay its debts as they come due, or (f) made an offer of settlement, extension or composition to its creditors generally.
5.3    Foreign Person.  Seller is not a “foreign person” or “disregarded” entity” as defined in Section 1445 of the Code; Seller’s taxpayer identification number is 73-1213383. 
5.4    Anti-Terrorism.  Neither Seller nor, to Seller’s actual knowledge, any of its affiliates, is in violation of the Anti-Money Laundering and Anti-Terrorism Laws.  Neither Seller nor, to Seller’s actual knowledge, any of its affiliates, is acting, directly or indirectly, on behalf of terrorists, terrorist organizations or narcotics traffickers, including those persons or entities that appear on the Annex to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (the “Executive Order”), or are included on any relevant lists maintained by the Office of Foreign Assets Control of U.S. Department of Treasury, U.S. Department of State, or other U.S. government agencies, all as may be amended from time to time (each, a “Government List”).  Neither Seller nor, to Seller’s actual knowledge, any of its affiliates, or, without inquiry, any of its brokers or other agents, in any capacity in connection with the sale of the Property (A) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any person included in a Government List, (B) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive 
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Order, or (C) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Money Laundering and Anti-Terrorism Laws.  Neither Seller, nor any person controlling or controlled by Seller, is a country, territory, individual or entity named on a Government List, and the monies used by Seller in connection with this Agreement and amounts committed with respect hereto, were not and are not derived from any activities that contravene any applicable anti-money laundering, anti-terrorism or anti-bribery laws, rules, guidelines and regulations, including, without limitation, (i) the U.S. Foreign Corrupt Practices Act of 1977, (ii) the Bank Secrecy Act of 1970, as amended, (iii) applicable provisions of the USA PATRIOT Act of 2001, including all amendments thereto and regulations promulgated thereunder, (iv) the Executive Order, (v) the Money Laundering Control Act of 1986 and (v) Title 18 of the United States Code, Section 1956(c)(7)) (collectively, the “Anti-Money Laundering and Anti-Terrorism Laws”).
5.5    Anti-Bribery.  Seller (a) has not offered, promised, given or agreed to give to any person or entity any bribe on behalf of Purchaser or its affiliates or otherwise with the object of obtaining a business advantage for Purchaser or its affiliates or otherwise; and (b) has not engaged in any activity or practice which would constitute an offense under any applicable anti-bribery and/or anti-corruption laws, including but not limited to the United States Foreign Corrupt Practices Act of 1977 with respect to the transactions contemplated by this Agreement.
5.6    No Leases.  The Property is not subject to any leases or other occupancy Agreements (other than the Lease to be entered into as of Closing). 
5.7    Legal Requirements. To Seller’s Knowledge, Seller has not received any written notice of violation of any applicable law or regulation.
5.8    Takings. To Seller’s Knowledge, Seller has not received any written notice of any condemnation or eminent domain proceedings.
5.9    Litigation. There are no pending, or to Seller’s Knowledge, threatened, judicial or administrative proceedings or investigations affecting or relating to the development, construction, use, operation or ownership of the Property.
5.10    Hazardous Materials.  Except as disclosed in writing to Purchaser before the date hereof, to Seller’s Knowledge,  (a) Seller has not received any written notice that (i) the Property is in violation of any Environmental Law or (ii) there has occurred any release of Hazardous Materials on, in, beneath the surface of or about the Property in violation of any Environmental Law and (b) Seller has not been required by any governmental agency to undertake any remediation activity with respect to Hazardous Materials on, in, beneath the surface of or about the Property. Except as disclosed in writing to Purchaser before the date hereof, to the Seller’s Knowledge, there are no storage tanks or wells (whether existing or abandoned) located on, under or about the Property.
5.11    Accuracy of Representations and Warranties.  All representations and warranties of Seller contained in this Agreement are true and correct as of the Effective Date of this Agreement and shall be true and correct as of the Closing Date. All representations and warranties of Seller set forth herein shall survive the Closing for a period of nine (9) months. If, prior to Closing, upon Seller’s notice or otherwise, Purchaser becomes actually aware (as opposed to constructively aware) of the untruth or inaccuracy of, or facts or circumstances that would change materially, any representation or warranty of Seller in this Agreement, then Purchaser shall have the option of:  (i) waiving such breach of representation or warranty and completing its purchase of the Real 
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Property pursuant to this Agreement;  or (ii) terminating this Agreement and proceeding in accordance with Section 13.2.
For purposes of this Agreement, (a) “Hazardous Materials” shall mean any substance or material which is or contains:  (i) any substance, waste or material now or hereafter defined in and/or regulated under any Environmental Law; (ii) gasoline, diesel fuel or other petroleum hydrocarbons; (iii) asbestos and asbestos containing materials, in any form, whether friable or nonfriable; (iv) polychlorinated biphenyls; (v) radon gas; or (vi) mold, mildew or other biological agents, (b) “Environmental Law” shall mean any federal, state, local or administrative agency ordinance, law, rule, regulation, order or requirement relating to environmental conditions, human health or Hazardous Material, and the regulations promulgated pursuant to such laws, all as amended from time to time, and (c) “Seller’s Knowledge” shall mean the actual knowledge of Justin Sheets.
6.Representations and Warranties of Purchaser.  Purchaser represents and warrants to Seller as follows:
6.1    Authority.  Purchaser is a duly organized and validly existing limited liability company in good standing under the laws of the state of its organization.  Purchaser has full capacity, right, power and authority to execute, deliver and perform this Agreement and all documents to be executed by Purchaser pursuant hereto, and all required action and approvals therefor have been duly taken and obtained.  The individuals signing this Agreement and all other documents executed or to be executed pursuant hereto on behalf of Purchaser are and shall be duly authorized to sign the same on Purchaser’s behalf and to bind Purchaser thereto.  This Agreement and all documents to be executed pursuant hereto by Purchaser are and shall be binding upon and enforceable against Purchaser in accordance with their respective terms. Neither the execution, delivery or performance of this Agreement by Purchaser, nor the consummation of the transactions contemplated hereby will (a) violate or conflict with any provision of the organizational documents of Purchaser, or (b) violate any order, judgment, injunction, award or decree of any court or arbitration body, by or to which Purchaser is or may be bound or subject.
6.2    Accuracy of Representations and Warranties. All representations and warranties of Purchaser contained in this Agreement are true and correct as of the Effective Date of this Agreement and shall be true and correct as of the Closing Date. All representations and warranties of Purchaser set forth herein shall survive the Closing for a period of nine (9) months.
6.3    As-Is. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE PROPERTY OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY CONCERNING THE PHYSICAL CONDITION OF THE PROPERTY (INCLUDING THE CONDITION OF THE SOIL), THE ENVIRONMENTAL CONDITION OF THE REAL PROPERTY (INCLUDING THE PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES ON OR AFFECTING THE REAL PROPERTY), THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAW OR ANY OTHER REPRESENTATION OR WARRANTY RESPECTING ANY INCOME, EXPENSES, CHARGES, LIENS OR ENCUMBRANCES, RIGHT OR CLAIMS ON, AFFECTING OR PERTAINING TO THE 
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PROPERTY OR ANY PART THEREOF. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY DOCUMENTS OR  INFORMATION PROVIDED BY SELLER TO PURCHASER ARE BEING MADE AVAILABLE TO PURCHASER FOR INFORMATIONAL PURPOSES ONLY, AND SELLER IS MAKING NO REPRESENTATIONS OR WARRANTIES REGARDING SUCH DOCUMENTS OR OTHER INFORMATION, INCLUDING THE ACCURACY OR COMPLETENESS OF ANY INFORMATION CONTAINED THEREIN. PURCHASER ACKNOWLEDGES THAT EFFECTIVE AS OF CLOSING, PURCHASER SHALL BE DEEMED TO HAVE EXAMINED, REVIEWED AND INSPECTED ALL MATTERS WHICH IN PURCHASER’S JUDGMENT BEAR UPON THE PROPERTY AND ITS VALUE AND SUITABILITY FOR PURCHASER’S PURPOSES.  EXCEPT AS TO THE REPRESENTATIONS, WARRANTIES, AGREEMENTS AND OTHER MATTERS SPECIFICALLY SET FORTH IN THIS AGREEMENT, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN “AS IS/WHERE IS,” “WITH ALL FAULTS” CONDITION AND BASIS.
SELLER’S INITIALS:                                PURCHASER’S INITIALS:                        
6.4    Release.  Except for the Excluded Matters (as defined below), Purchaser, on Purchaser’s own behalf and on behalf of Purchaser’s agents, members, partners, shareholders, employees, representatives, related and affiliated entities, successors and assigns (collectively, the “Purchaser Parties”) hereby, as of the Closing, releases, waives, discharges, and covenants not to sue Seller, and its shareholder(s), partners, members, managers, directors, officers, employees, representatives, property managers, asset managers, agents, attorneys, affiliated and related entities, heirs, successors and assigns (collectively, the “Released Parties”), and each of them, from and against any and all Losses (as defined in Section 12 below) arising from, related to the Property, including, without limitation, with respect to (a) any and all statements or opinions heretofore or hereafter made, or information furnished, by Seller to Purchaser or any of the Purchaser Parties; and (b) any and all losses, costs, claims, liabilities, expenses, demands or obligations of any kind or nature whatsoever attributable to the Property, whether arising or accruing before, on or after the date hereof and whether attributable to events or circumstances which have heretofore or may hereafter occur, including, without limitation, (i) all Losses with respect to the structural, physical, or environmental condition of the Property; and (ii) all Losses relating to the release of or the presence, discovery or removal of any Hazardous Materials in, at, about or under the Property, or for, connected with or arising out of any and all claims or causes of action based upon CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§9601 et seq., as amended by SARA (Superfund Amendment and Reauthorization Act of 1986) and as may be further amended from time to time), the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§6901 et seq., or any related claims or causes of action or any other federal, state or municipal based statutory or regulatory causes of action for environmental contamination at, in, about or under the Property.  Purchaser agrees that the above waiver and release extends to all Losses of any nature and kind whatsoever, known or unknown, suspected or unsuspected, and Purchaser, for itself and for the Purchaser Parties, waives the benefits of California Civil Code Section 1542, which provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
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and all similar provisions or rules of law.  Excluding the Excluded Matters, from and after the Closing, Purchaser elects to and does assume all risk for such Losses against the Released Parties which may be brought by Purchaser or Purchaser Parties heretofore and hereafter arising, whether now known or unknown by Purchaser.  In connection therewith and to the greatest extent permitted by law, excluding the Excluded Matters, from and after the Closing, Purchaser hereby agrees, represents and warrants that Purchaser realizes and acknowledges that factual matters now unknown to Purchaser may have given or may hereafter give rise to Losses which are presently unknown, unanticipated and unsuspected, and Purchaser further agrees, represents and warrants that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that Purchaser nevertheless hereby intends to release Seller from any such unknown Losses which might in any way be included as a material portion of the consideration given to Seller by Purchaser in exchange for Seller’s performance hereunder.  
Notwithstanding anything in this Agreement, including without limitation, this Section 6.4 to the contrary, the releases contained in this Section 6.4 are not intended to and do not include (i) any claims arising from a breach of Seller’s express representations or warranties in Sections 5 and 7 (subject to the limitations, disclaimers and other provisions of this Agreement), (ii) any obligation or other covenant of Seller under this Agreement which by its express terms survives the Closing or any document delivered by Seller to Purchaser at Closing, (iii) any tort claims for personal injury or property damage arising from events that occurred prior to the Closing, expressly including without limitation any such claims arising in connection with the Adjacent Property to the extent of Seller’s liability therefor as tenant under the lease agreement with the owner of the Adjacent Property, as landlord, or (iv) any claims arising in connection with the Lease (the matters in the foregoing clauses (i) through (iv), the “Excluded Matters”).  
Seller has given Purchaser material concessions regarding this transaction in exchange for Purchaser agreeing to the provisions of this Section 6.4.  Seller and Purchaser have each initialed this Section 6.4 to further indicate their awareness and acceptance of each and every provision hereof.  The provisions of this Section 6.4 shall survive the Closing.
SELLER’S INITIALS:                                PURCHASER’S INITIALS:                        
7.Brokers.  Each party hereby represents and warrants to the other that such party has not dealt with any broker or finder in respect to the transaction contemplated hereby other than Cushman & Wakefield (“Seller’s Broker”). The parties agree that the brokerage commission of Seller’s Broker shall be paid by the Seller at the Closing. In the event of any claim for a broker’s or finder’s fee or commission in connection with the transactions contemplated by this Agreement, (a) Seller shall indemnify and defend Purchaser from the claim, if such claim is based upon any agreement alleged to have been made by Seller and (b) Purchaser shall indemnify and defend Seller from the claim, if such claim is based upon any agreement alleged to have been made by Purchaser. The provisions of this Section 7 shall survive the Closing or termination of this Agreement. 
8.Costs; Prorations.
8.1    Purchaser’s Costs.  Purchaser shall pay the following costs of closing the transactions contemplated by this Agreement:
8.1.1    Any title insurance charges and premiums incurred in connection with the issuance of the ALTA extended coverage portion of any title insurance policy (and endorsements thereto) to Purchaser;
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8.1.2    One-half (1/2) of the closing costs or fees of the Title Company;
8.1.3    Any recording fees incurred in connection with the recording of any of the conveyance instruments required to be delivered by Seller under this Agreement; and 
8.1.4    Any other expense(s) incurred by Purchaser or its representative(s) in inspecting or evaluating the Property, including, without limitation, Purchaser’s inspecting architect and engineer.
8.2    Seller’s Costs.  Seller shall pay the following costs of closing the transaction contemplated by this Agreement:
8.2.1    Any deed, documentary stamp and/or transfer taxes related to the sale of the Property;
8.2.2    Any title insurance charges and premiums incurred in connection with issuance of any title insurance policy (and endorsements thereto) to Purchaser;
8.2.3    Any charges incurred in connection with issuance of the Title Report;
8.2.4    All costs incurred in connection with obtaining the Survey;
8.2.5    All costs incurred in connection with obtaining the ESA; and 
8.2.6    any costs related to the releases or satisfaction of the Deed of Trust.
all of which may be funded out of the Purchase Price.
8.3    Prorations.  All ad valorem taxes assessed against Seller and the Property for any year prior to the year in which the Closing occurs, and any matured and unmatured installments of special assessments with respect to the Property due as of the Closing Date, shall be paid by Seller.  Seller shall be solely responsible for any delinquent taxes.  The real property taxes for the year in which the Closing occurs shall be prorated on a calendar year and per diem basis as of the Closing Date (based on actual prior year ad valorem taxes), and Purchaser agrees to accept as a credit against the Purchase Price the portion attributable to the period prior to the Closing Date.  Purchaser agrees to pay (i) any supplemental assessments resulting from the sale of the Property to Purchaser, and (ii) all real and personal property taxes for all years subsequent to the Closing.     
9.Condemnation.
9.1    Condemnation Event.  If, prior to Closing, any portion thereof is taken under power of eminent domain, such that, in Purchaser’s reasonable determination the Property is rendered unsuitable for Purchaser’s intended purposes, then Purchaser may elect to terminate this Agreement by giving written notice of its election to Seller within ten (10) days after receiving notice of such taking.  If Purchaser does not give such written notice to terminate this Agreement within such ten (10) day period, the transactions contemplated by this Agreement shall be consummated on the date and at the Purchase Price provided for in Section 2, and Seller will assign to Purchaser the physical damage proceeds of any insurance policy(ies) payable to Seller, or Seller’s portion of any condemnation award. 
9.2    Termination and Return of Deposit.  If Purchaser elects to terminate this Agreement pursuant to this Section 9, Seller shall promptly direct the Title Company to return the Deposit to Purchaser.
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10.Conditions Precedent.
10.1    Conditions Precedent to Purchaser’s Obligations. In addition to any other conditions precedent in favor of Purchaser set forth elsewhere in this Agreement, the obligations of Purchaser to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver by Purchaser (if permitted by Applicable Law) at or prior to the Closing of each of the following conditions:
10.1.1    The representations and warranties of Seller set forth in this Agreement must be true and correct in all material respects as of the Closing Date as though made on and as of the Closing Date;
10.1.2    Seller must have performed and complied in all material respects with all material covenants and obligations required to be performed or complied with by it under this Agreement at or prior to the Closing; and
10.1.3    Seller must have delivered or caused to be delivered to Seller the items required by Section 11.1.
10.1.4    On the Closing Date, title to the Property shall be conveyed to Purchaser subject only to the Permitted Exceptions and the Title Company shall be irrevocably committed to issue to Purchaser an ALTA extended coverage owner’s title insurance policy (on the current ALTA Form), in the form approved by Purchaser pursuant to Section 3.2.1, in the amount of the Purchase Price, together with the endorsements for Purchaser’s owner’s title insurance policy, insuring good and indefeasible fee simple title to the Property in Purchaser, subject only to the Permitted Exceptions.

10.2    Conditions Precedent to Seller’s Obligations. The obligations of Seller to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver by Seller (if permitted by Applicable Law) at or prior to the Closing of each of the following conditions:
10.2.1    The representations and warranties of Purchaser set forth in this Agreement must be true and correct in all material respects as of the Closing Date as though made on and as of the Closing Date;
10.2.2    Purchaser must have performed and complied in all material respects with all covenants and obligations required to be performed or complied with by it under this Agreement at or prior to the Closing; and
10.2.3    Purchaser must have delivered or caused to be delivered to Seller the items required by Section 11.2.
10.3    Satisfaction of Conditions.
10.3.1    Non-Performance by Purchaser.  If the conditions precedent to Purchaser’s obligations set forth in Section 10.1 have been satisfied and Purchaser fails to consummate the transactions contemplated by this Agreement, such failure shall constitute a default (unless Purchaser has otherwise terminated this Agreement for another reason in accordance with the terms of this Agreement)  and Seller shall be entitled to exercise the remedies set forth in Section 13.1.  If the sale of the Property is not consummated because of the failure of any condition precedent to Purchaser’s 
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obligations expressly set forth in this Agreement or for any other reason except a default by Purchaser in its obligation to purchase the Property in accordance with the provisions of this Agreement (which shall be governed by Section 13.1) or any default by Seller of its obligations under this Agreement (which shall be governed by Section 13.2), the Deposit shall promptly be returned to Purchaser and neither party shall have any further obligations hereunder.
10.3.2    Non-Performance by Seller.  If the conditions precedent to Seller’s obligations set forth in Section 10.2 have been satisfied and Seller fails to consummate the transactions contemplated by this Agreement, such failure shall constitute a default and Purchaser shall be entitled to exercise the remedies set forth in Section 13.2.
11.Closing:
11.1    Seller’s Deliveries.  Seller shall deliver, or cause to be delivered, at the Closing the following original documents, each executed and, if required, acknowledged:
11.1.1    A grant deed in the form attached hereto as Exhibit D, subject to the Permitted Exceptions (the “Deed”).
11.1.2    A certificate from Seller pursuant to the Foreign Investment and Real Property Tax Act stating that Seller is not a “Foreign Person” within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended (the “Code”).
11.1.3    a California Form 593.
11.1.4    A counterpart of a closing statement reflecting all credits, prorations, apportionments, and adjustments contemplated hereunder (the “Closing Statement”).
11.1.5    A counterpart of the Lease.
11.1.6    A counterpart of the Bill of Sale, Blanket Conveyance and Assignment (“Bill of Sale”) in the form attached hereto as Exhibit E.
11.1.7    Such other agreements, certificates, and instruments as may be reasonably required by the Title Company to effectuate the intent and purpose of this Agreement, including any affidavits or other documents required by the Title Company (including, without limitation a title affidavit in the form attached hereto as Exhibit F (the “Title Affidavit”), executed by Seller relating to: (i) mechanics’ or materialmen’s liens; (ii) parties in possession; (iii) the status and capacity of Seller and the authority of the person or persons who are executing the various documents on behalf of Seller in connection with the sale of the Property, and all other entities in such executing entity’s chain of authority; and (iv) gap indemnity coverage.
11.2    Purchaser’s Deliveries.  At the Closing, Purchaser shall deliver, or cause to be delivered, the following original documents, as applicable, each executed and, if required, acknowledged:
11.2.1    The Purchase Price.
11.2.2    A duly executed Preliminary Change of Ownership Report.
11.2.3    A counterpart of the Closing Statement.
11.2.4    A counterpart of the Lease.
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11.2.5    A counterpart of the Bill of Sale.
11.2.6    Such other agreements, certificates, and instruments as may be reasonably required by the Title Company to effectuate the intent and purpose of this Agreement.
11.3    At Closing, Seller shall deliver to Purchaser possession of the Property subject only to the Lease.
12.Casualty; Condemnation. 
12.1    Casualty.  Unless and until the Closing is completed, the risk of loss to the Property from casualty or condemnation shall be borne by Seller.  If all or a portion of the Property is damaged or destroyed by fire or other casualty prior to Closing such that: (1) Purchaser’s reasonable estimate of the cost to repair or restore the same exceeds an amount equal to two percent (2%) of the Purchase Price; or (2) access to or egress from the Property (or any Improvement located thereon) is materially impaired (any such fire or other casualty, a “Material Casualty”), Purchaser may, at Purchaser’s sole option, elect to either:
12.1.1    terminate this Agreement, upon which neither Purchaser nor Seller shall have any further obligation under this Agreement, except for the obligations which expressly survive the termination of this Agreement, and the Purchaser shall immediately receive the Deposit from the Title Company; or
12.1.2    purchase the Property subject to and in accordance with the terms of this Agreement.
Purchaser shall be deemed to have elected not to terminate this Agreement under Section 12.1.1 unless, within fifteen (15) Business Days from reasonably detailed written notice to Purchaser of such casualty, Purchaser provides Seller with written notice that Purchaser elects to terminate this Agreement pursuant to Section 12.1.1. If the Closing Date would otherwise occur sooner, it shall automatically be extended to the date that is twenty (20) Business Days after written notice to Purchaser of the casualty.
In the event of a fire or other casualty that is not a Material Casualty, and in connection with any Material Casualty as to which Purchaser elects to proceed pursuant to Section 12.1.2, Purchaser shall purchase the Property in accordance with the terms hereof and Purchaser shall receive a credit against the Purchase Price in an amount equal to the amount of (A) insurance proceeds actually paid or payable to Seller on account of such damage (including any rental or business interruption insurance payable with respect to the period following Closing) and (B) any applicable deductible that will reduce the insurance proceeds paid or payable to Seller; provided, however, in the event that Seller fails to maintain insurance as required by Section 15.2 and Purchaser does not elect to exercise its right to terminate the Agreement as a result of such default, in lieu of the credit described in provisions (A) and (B) above, Purchaser shall receive a credit against the Purchase Price in an amount equal to the amount of  the cost to repair the damage caused by such fire or other casualty as estimated by a third party consultant selected by Purchaser and reasonably approved by Seller. Notwithstanding the foregoing, to the extent that there is a fire or other casualty for which Purchaser is to proceed pursuant to Section 12.1.2 and (i) Seller satisfies its obligation to maintain insurance as required herein, and (ii) Seller, with commercially reasonable cooperation from Purchaser, is able to effectuate a binding assignment of the insurance proceeds paid or payable on account of such damage prior to Closing (including any rental or business interruption insurance payable with respect to the period following 
17

Closing), Purchaser shall purchase the Property in accordance with the terms hereof without reduction in the Purchase Price (except for any applicable deductible that will reduce the insurance proceeds assigned to Purchaser at Closing, which Seller shall credit Purchaser for at Closing). For the avoidance of doubt, in the event that Seller does not effectuate a binding assignment of the insurance proceeds paid or payable on account of such damage prior to Closing, Seller shall retain all rights to receipt of such insurance proceeds from and after Closing. 
12.2    Condemnation.  If, at any time before completion of the Closing, a taking or condemnation (or proceeding in lieu thereof) is commenced or threatened in writing: (i) of all or substantially all of the Property; or (ii) of less than all or substantially all of the Property that: (1) Purchaser’s reasonable estimate of the cost to restore the value of the Property to the value prior to such condemnation exceeds an amount equal to two percent (2%) of the Purchase Price; or (2) access to or egress from the Property (or any Improvement located thereon)  is materially impaired (any of the foregoing, a “Material Taking”), Purchaser may, at Purchaser’s sole option, elect either to:
12.2.1    terminate this Agreement, upon which neither Purchaser nor Seller shall have any further obligation under this Agreement, except for the obligations which expressly survive the termination of this Agreement, and the Purchaser shall immediately receive the Deposit from the Title Company; or
12.2.2    purchase the Property subject to and in accordance with this Agreement.
Purchaser shall be deemed to have elected not to terminate this Agreement under Section 12.2.1 unless, within fifteen (15) Business Days from written notice to Purchaser of the condemnation, Purchaser provides Seller with written notice that Purchaser elects to terminate this Agreement pursuant to Section 12.2.1.  If the Closing Date would otherwise occur sooner, it shall automatically be extended to the date that is twenty (20) Business Days after written notice to Purchaser of the Material Taking.
In the event of condemnation or taking that does not constitute a Material Taking, or if there is a Material Taking but Purchaser elects to proceed under Section 12.2.2, (1) Purchaser shall purchase the Property in accordance with the terms hereof (without reduction in the Purchase Price), (2) Seller shall assign to Purchaser at Closing all condemnation proceeds and rental interruption insurance paid or payable from and after the Closing as a result of such condemnation and, in the event Seller fails to effectuate such assignment, Seller shall be obligated to provide Purchaser a credit at Closing in the amount of such condemnation and insurance proceeds, (3) Purchaser shall have the right to be present with Seller at any hearings or negotiations with respect thereto, and (4) Seller shall not settle or compromise and such matter without Purchaser’s prior written consent.
13.Default; Failure of Condition.
13.1    Purchaser Default.  If the Closing fails to occur due to a default of Purchaser under this Agreement and Seller has satisfied all of Purchaser’s conditions precedent to Closing and is not otherwise in default hereunder, then Seller may terminate the Agreement and receive the Deposit as liquidated damages as Seller’s sole and exclusive remedy. SELLER AND PURCHASER AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES WHICH SELLER MAY SUFFER UPON A PURCHASER DEFAULT AND THAT THE DEPOSIT AND ANY INTEREST EARNED THEREON, AS THE CASE MAY BE, REPRESENTS A REASONABLE ESTIMATE OF THE TOTAL 
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NET DETRIMENT THAT SELLER WOULD SUFFER UPON A PURCHASER DEFAULT. SUCH LIQUIDATED AND AGREED DAMAGES ARE NOT INTENDED AS A FORFEITURE OR A PENALTY WITHIN THE MEANING OF APPLICABLE LAW, BUT ARE INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671 through 1681. BY PLACING ITS INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY LEGAL COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE MEANING, THE EFFECT, AND THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. PURCHASER AND SELLER AGREE THAT SELLER’S RIGHT TO RETAIN THE DEPOSIT SHALL BE SELLER’S SOLE AND EXCLUSIVE REMEDY, AT LAW AND IN EQUITY, FOR PURCHASER’S FAILURE TO PURCHASE THE PROPERTY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.  ACCORDINGLY, SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389 AND ANY RIGHT TO AN ACTION FOR SPECIFIC PERFORMANCE OF ANY PROVISIONS OF THIS AGREEMENT.  NOTWITHSTANDING ANYTHING HEREIN THE CONTRARY, NOTHING IN THIS SECTION 13.1 SHALL LIMIT PURCHASER’S INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS AGREEMENT.
SELLER’S INITIALS:                                PURCHASER’S INITIALS:                        
13.2    Seller Default.  If the Closing fails to occur due to a default of Seller under this Agreement, then Purchaser shall elect as its sole remedy hereunder either: (a) terminate this Agreement by giving written notice thereof to Seller, in which event the Deposit will promptly be returned to Purchaser, Seller promptly shall reimburse Purchaser for the actual out-of-pocket third party costs that Purchaser has incurred in connection with this Agreement and the transaction contemplated hereby in an amount not to exceed $150,000; (b) waive such default and consummate the transactions contemplated hereby in accordance with the terms of this Agreement; or (c) specifically enforce this Agreement to take the actions and to execute and deliver the documents required to convey the Property to the Purchaser in accordance with this Agreement pursuant to California Civil Code Section 1680 and Sections 3384 through 3395. Purchaser hereby irrevocably waives any other right or remedy for such default; provided, however, that if, in breach of this Agreement, Seller intentionally or willfully by selling or entering into a binding agreement to otherwise convey the Property (or any portion thereof) to someone other than Purchaser which renders the remedy of specific performance impossible or impractical to obtain, Seller shall be liable for any damages suffered by Purchaser as a result of such breach, and Purchaser may seek any additional remedies from Seller in law or in equity.  If Purchaser brings an action for specific performance, the Deposit shall be returned to Purchaser pending the outcome of such action.  Nothing in this Section 13.2 shall limit Purchaser’s rights under Sections 7 or 16.7. 
13.3    Subsequent Title Matters. If prior to Closing Seller discloses to Purchaser or Purchaser discovers any New Title Matter, then Purchaser shall promptly give Seller written notice of its objection thereto (a “Purchaser’s Notice”). In such event, Seller shall deliver a written notice (a “Seller’s Notice”) to Purchaser within ten (10) days following delivery of such Purchaser’s Notice notifying Purchaser as to whether Seller shall attempt to cure such objection. In addition, Seller may, pursuant to the Seller’s Notice, elect to postpone the Closing for the time reasonably necessary, but in no case longer than fifteen (15) days following delivery of the Seller’s Notice, to cure such objection in order to attempt to remove such objection or cure such objection by 
19

sufficient means such that the Title Company will provide affirmative title insurance coverage for such objection.  If Seller fails to timely deliver a Seller’s Notice or timely cure the objection, Seller shall be deemed to have elected not to attempt to cure such objection.  If Purchaser fails to waive any objection within ten (10) days after (a) notice from Seller that Seller will not cure the objection or (b) a deemed election by Seller not to cure the objection, Purchaser may elect to terminate this Agreement by written notice to Seller, and, if Purchaser makes such election, Seller shall promptly return the Deposit to Purchaser, and this Agreement shall be deemed null and void, and neither party shall have any further obligation or liability hereunder, except those expressly stated to survive termination of this Agreement.  Notwithstanding anything in this Agreement to the contrary, Purchaser shall have no obligation to object to any New Title Matter which constitutes a Mandatory Cure Item.  
14.Notices.  Any notice, request, instruction, or other communication to be given hereunder by either party to the other shall be given by hand delivery, certified or registered mail (return receipt requested), email transmission, or by nationally recognized overnight courier service, addressed to the respective party or parties at the following addresses:

If to Seller:                  

Matrix Service Inc.                      
5100 E. Skelly Drive, Suite 100
Tulsa, Oklahoma 74135
Attention:        Justin Sheets
Email:             jsheets@matrixservicecompany.com 
with copy to (which shall not constitute notice):

McAfee & Taft A Professional Corporation
Two W. Second Street, Suite 1100
Tulsa, Oklahoma 74103
Attention:       Stephen M. Hetrick
Email:             stephen.hetrick@mcafeetaft.com 

If to Purchaser:           

Pisces Logistics Acquisition LLC 
c/o Brookfield Property Group
Brookfield Place
 250 Vesey Street
New York, New York 10281-1023
Attn:           Andy Smith
Email:         andy.smith@brookfield.com

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with a copy to (which shall not constitute notice):

Pisces Logistics Acquisition LLC 
c/o Brookfield Property Group
Brookfield Place
250 Vesey Street
New York, New York 10281-1023
Attn:         Legal Department
Email:       realestatenotices@brookfield.com 
with a copy to (which shall not constitute notice):

Brookfield Properties
1180 Peachtree Street NE, Suite 3380
Atlanta, Georgia 30309
Attn:         Gautam Huded
Email:       Gautam.huded@brookfieldproperties.com

with a copy to (which shall not constitute notice):

Cox, Castle & Nicholson LLP
2029 Century Park East, Suite 2100
Los Angeles, California
Attn:          David P. Lari
Email:        dlari@coxcastle.com

If to Title Company:       
Chicago Title Company
725 South Figueroa Street, Suite 200
Los Angeles, California  90017
Attention:     Michael Slinger 
Email:           Mike.Slinger@CTT.com 

or to such other address or addresses as any party may designate to the others by like notice.  Any notice given hereunder shall be deemed given and received on the date of hand delivery, three (3) business days after deposit with the United States Postal Service, on the date on which confirmation of email transmission is received if such receipt occurs during regular business hours and on the next business day if it does not occur during regular business hours, or one (1) business day after delivery to a nationally recognized overnight courier service for next day delivery, as the case may be. The inability to deliver notice because of a changed address of which no notice was given as provided above, or because of rejection or other refusal to accept any notice, shall be deemed to be the receipt of the notice as of the date of such inability to deliver or rejection or refusal to accept.  Any notice to be given by any party hereto may be given by the counsel for such party.
15.Covenants of Seller.  Seller hereby covenants from and after the Effective Date and through the Closing Date as follows
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15.1    Operations. To operate the Property from and after the date hereof in substantially the same manner as prior thereto.
15.2    Maintenance. To perform all normal maintenance (if any) from and after the Effective Date in the same fashion as prior to the Effective Date.
15.3    Obligations. To fully and timely comply with all obligations to be performed by it under all of the licenses, approvals and laws, regulations and orders applicable to the Property.
15.4    Agreements. To not, without Buyer’s written approval, enter into any agreement affecting the Property that would survive the Closing except for such agreements that may be cancelled or terminated by Seller, without penalty, by notice of thirty (30) days or less.
15.5    Seller Insurance. To cause to be in force insurance on the Property in at least such amounts, and with the same deductibles, as are maintained by Seller on the date hereof.
15.6    Liens. To not sell, assign, or convey any right, title, or interest whatsoever in or to the Property, or create or permit to attach any lien, security interest, easement, encumbrance, charge, or condition affecting the Property (other than the Permitted Exceptions).
16.Miscellaneous.
16.1    Severability.  If any provision of this Agreement or application to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstances, other than those as to which it is so determined invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be valid and shall be enforced to the fullest extent permitted by law.
16.2    Applicable Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of California.  By the execution and delivery of this Agreement, each of the parties hereto hereby irrevocably and unconditionally agrees for itself that any legal action, suit, or proceeding against it with respect to any matter arising under or out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit, or proceeding may be brought in either a state or federal court of competent jurisdiction in Orange County, California.  By the execution and delivery of this Agreement, each of the parties hereto hereby irrevocably accepts and submits itself to the exclusive jurisdiction of each such court, generally and unconditionally, with respect to any such action, suit, or proceeding.  By executing and delivering this Agreement, each of the parties hereto irrevocably and unconditionally submits to the personal jurisdiction of each such court described in this Section 16.2, solely for purposes of any action, suit, or proceeding arising out of or relating to this Agreement or for the recognition or enforcement of any judgment rendered or order entered in any such action, suit, or proceeding.  EACH PARTY HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING REFERRED TO ABOVE.  Each party (a) certifies that no representative, agent, or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 16.2.
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16.3    Assignability.   Purchaser shall not, by operation of law or otherwise, directly or indirectly, assign, sell or otherwise transfer this Agreement (collectively, a “Transfer”), to any party, without first obtaining Seller’s written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, Purchaser may Transfer this Agreement to any person or entity that controls, is controlled by, or under common control with Purchaser.  No Transfer shall release Purchaser from any obligation or liability under this Agreement.  Any Transfer in contravention of this provision shall be void.  
16.4    Successors Bound.  This Agreement shall be binding upon and inure to the benefit of Purchaser and Seller and their successors and permitted assigns.
16.5    No Public Disclosure.  Purchaser and Seller each agrees that it shall not issue (or cause to be issued on its behalf) any press release, advertisement, or other public communication regarding this Agreement, the Property, or the transactions contemplated by this Agreement prior to Closing, without the prior approval of the other party, which approval may be withheld in such other party’s sole and reasonable discretion, except where a legal requirement to do so exists.
16.6    Captions.  The captions in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope of this Agreement or the scope or content of any of it provisions.  
16.7    Attorneys’ Fees.  In the event either party shall default in the performance of any of the terms and conditions of this Agreement, the prevailing party shall be entitled to recover all costs, charges, and expenses of enforcement, including reasonable attorneys’ fees and costs, including all such fees and costs incurred in any trial or appellate proceedings.  This Section 16.7 shall survive the Closing or earlier termination of this Agreement. 
16.8    No Partnership.  Nothing contained in this Agreement shall be construed to create a partnership or joint venture between the parties or their successors or permitted assigns.
16.9    Counterparts.  This Agreement may be executed and delivered in any number of counterparts, each of which so executed and delivered shall be deemed to be an original and all of which shall constitute one and the same instrument.  The exchange of executed counterparts of this Agreement or of signature pages by facsimile or other electronic transmission shall constitute effective execution and delivery of this Agreement and may be used in lieu of the original for all purposes.
16.10    Time of the Essence.  Time is of the essence of this Agreement.
16.11    Proper Execution.  The submission by Purchaser to Seller of this Agreement in unsigned form shall be deemed to be a submission solely for Seller’s consideration and not for acceptance and execution.  Such submission shall have no binding force and effect, shall not constitute an option, and shall not confer any rights upon Purchaser or impose any obligations upon Seller irrespective of any reliance thereon, change of position or partial performance.  This Agreement shall not be binding and effective until fully executed by Seller and Purchaser.
16.12    Like Kind Exchange.  Seller and Purchaser acknowledge that one or both of them may elect to include the Property in a tax deferred exchange transaction pursuant to Section 1031 of the Code (a “1031 Exchange”).  Each party (the “Cooperating Party”) agrees, at the request of the other party (the “Requesting Party”), to cooperate with the Requesting Party and third parties in achieving a 1031 Exchange, including consenting to the assignment of this Agreement in connection with a 1031 Exchange.  The Requesting Party shall not be relieved from any 
23

obligations hereunder due to a 1031 Exchange and shall indemnify and hold the Cooperating Party harmless from any additional closing expenses which may result from participation in a 1031 Exchange.  The Cooperating Party shall not be required to hold title to any property (other than the Property) in connection with a 1031 Exchange, nor shall the Requesting Party be entitled to delay the Closing in order to accommodate a 1031 Exchange.
16.13    Construction.  In the construction and interpretation of the terms of this Agreement, the rule of construction that a document is to be construed most strictly against the party who prepared it shall not be applied because both parties have participated in the preparation of this Agreement.  If the last day of any time period stated herein shall fall on a Saturday, Sunday, or legal holiday in Orange County, California, such time period shall be extended so that it shall end on the next succeeding day that is not a Saturday, Sunday or legal holiday in Orange County, California.  
16.14    Entire Agreement.  This Agreement, together with the Exhibits attached hereto, all of which are incorporated by reference, is the fully integrated entire agreement between the parties with respect to the subject matter hereof.   Any oral terms by the Parties discussed either before execution of this Agreement or thereafter, as well as any prior writings not incorporated into this Agreement shall not be considered to be a part of this agreement.  No alteration, modification, or interpretation hereof shall be binding unless in writing and signed by both parties.
16.15    Independent Consideration.  Contemporaneously with the execution and delivery of this Agreement, Purchaser has paid to the Seller as further consideration for this Agreement, the amount of ONE HUNDRED DOLLARS ($100) (“Independent Consideration”) in addition to the Deposit and independent of any other consideration provided for hereunder, which Independent Consideration is fully earned by Seller and is not refundable under any circumstances.
[Signature Page Follows]

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IN WITNESS WHEREOF, Purchaser and Seller have executed this Agreement as of the day and year first above written.

SELLER:
MATRIX SERVICE INC.

By:    /s/ Kevin S. Cavanah                                             
Name:    Kevin S. Cavanah                                             
Title:      Vice President and Chief Financial Officer      

PURCHASER:
PISCES LOGISTICS ACQUISITION LLC

By:      /s/ Andrew Smith                                                 
Name:      Andrew Smith                                                 
Title:   Global Head of Investments                                 
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The undersigned hereby acknowledges receipt of the Deposit and agrees to hold and dispose of the Deposit in accordance with the provisions of the foregoing Agreement.

TITLE COMPANY:

CHICAGO TITLE COMPANY

By:       /s/ Michael Slinger                                                  
Name:       Michael Slinger                                                     
Title:         Senior Vice President                                         

1

EXHIBIT A

Legal Description

THE FOLLOWING DESCRIBED REAL PROPERTY IN THE CITY OF ORANGE, COUNTY OF ORANGE, STATE OF CALIFORNIA:

PARCEL 1 OF PARCEL MAP NO. 2007-130, IN THE CITY OF ORANGE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 363, PAGES 6 AND 7 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN: 386-581-18

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EXHIBIT B
Lease

[Attached]

1

EXHIBIT C
Adjacent Property

THE FOLLOWING DESCRIBED REAL PROPERTY IN THE CITY OF ORANGE, COUNTY OF ORANGE, STATE OF CALIFORNIA:

PARCEL 2 OF PARCEL MAP NO. 2007-130, IN THE CITY OF ORANGE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 363, PAGES 6 AND 7 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN: 386-561-02

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EXHIBIT D

Form of Grant Deed

RECORDING REQUESTED BY AND

WHEN RECORDED RETURN TO:

AND MAIL TAX STATEMENTS TO:

APN:                                                   

DOCUMENTARY TRANSFER TAX $________________

__        Computed on the consideration or value of property conveyed;

OR

__        Computed on the consideration or value less liens or encumbrances remaining at time of sale.

                        The tax has been determined by the undersigned grantor

GRANT DEED

FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,  _________, a Delaware _________, does hereby GRANT to ____________________________, a ____________________ , all of Grantor’s right, title and interest in and to that certain real property in the City of _______________, County of _____________, State of California, as more particularly described in Exhibit “A” attached hereto and made a part hereof, excepting any matters set forth in said Title Report prepared by _______________________ on ____________________ identified as report no. ___.

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IN WITNESS WHEREOF, Grantor has caused this instrument to be executed on this ____ day of ____________, 20__.

“GRANTOR”

MATRIX SERVICE INC.

By:                                                                              
Name:                                                                         
Title:                                                                           

State of            )

)  ss:

County of        )

On ___________________, before me, _______________________, a Notary Public, personally appeared ____________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

                        (Seal)

2

Exhibit A
(to Grant Deed)

LEGAL DESCRIPTION

3

EXHIBIT E
Form of Bill of Sale

BILL OF SALE, BLANKET CONVEYANCE

AND ASSIGNMENT

This Bill of Sale, Blanket Conveyance and Assignment (this “Assignment”) is executed by MATRIX SERVICE INC., an Oklahoma corporation (“Assignor”) to and for the benefit of _______________, a __________________ (“Assignee”).

RECITALS

WHEREAS, concurrently herewith Assignor is conveying to Assignee that certain real property (the “Property”) more particularly described on Exhibit A attached hereto and incorporated herein for all purposes pursuant to that certain Purchase and Sale Agreement dated June ___, 2022 (the “Purchase Agreement”); and

WHEREAS, in connection with the conveyance of the Property pursuant to the Purchase Agreement, Assignor intends to sell, assign and convey unto Assignee the Assigned Properties (defined below).

NOW, THEREFORE, in consideration of the foregoing and Ten and No/100 Dollars ($10.00) and other good and valuable consideration in hand paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged and confessed by Assignor, Assignor and Assignee hereby act and agree as follows:

1.         Conveyance.  Assignor does hereby ASSIGN, TRANSFER, CONVEY, SET OVER and DELIVER to Assignee, its successors and assigns, the following properties (collectively, the “Assigned Properties”):  all of Seller’s right, title and interest, if any, in all (a) warranties and guaranties relating to the Land or the Improvements, (b) all licenses, permits and approvals relating to the Land or the Improvements (but not any licenses, permits or approvals relating to Seller’s operations on the Land), and (c) all plans and specifications relating to the Land and the, Improvements, in each case to the extent that Seller may legally transfer the same.

TO HAVE AND TO HOLD the Assigned Properties unto Assignee, and Assignee’s successors and assigns forever, and Assignor does hereby bind Assignor, and Assignor’s successors and assigns, to WARRANT and FOREVER DEFEND, all and singular the Assigned Properties unto Assignee, and Assignee’s successors and assigns, against every person whomsoever lawfully claiming or to claim the same, or any part thereof by, through and under Assignor but not otherwise.

2.         Counterparts; Governing Law; Successors and Assigns; Authority.  This Assignment may be executed in any number of counterparts (including PDF and facsimile signatures), and each counterpart hereof shall be deemed to be an original instrument, but all such counterparts shall constitute but one instrument.  This Assignment shall be construed and enforced in accordance with and governed by the internal laws of the State of California.  This 
1

Assignment shall bind and inure to the benefit of Assignor and Assignee and their respective successors and assigns.

3.         Further Assurances.  The parties agree to take all such further actions and execute, acknowledge and deliver all such further documents that are reasonably necessary or useful in carrying out the purposes of this Assignment.

[The balance of this page is intentionally left blank]
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IN WITNESS WHEREOF, this Assignment is executed as of this ____ day of _______________, 2022.

ASSIGNOR:

MATRIX SERVICE INC.

By:                                                                              
Name:                                                                         
Title:                                                                           

ASSIGNEE:

By:                                                                              
Name:                                                                         
Title:                                                                           

3

EXHIBIT A

(to Bill of Sale)

Property Description

4

EXHIBIT F

Form of Title Affidavit

1

EXHIBIT G-1
Form of Memorandum of Purchase Agreement 

RECORDING REQUESTED BY AND 
WHEN RECORDED RETURN TO:

Pisces Logistics Acquisition LLC 
c/o Brookfield Property Group
Brookfield Place
250 Vesey Street
New York, New York 10281-1023
Attn:                Legal Department

 (Above Space for Recorder’s Use Only)

APN:  386-581-18

MEMORANDUM OF PURCHASE AGREEMENT

This MEMORANDUM OF PURCHASE AGREEMENT (this “Memorandum”) is made as of _____, 2022, by and between MATRIX SERVICE INC., an Oklahoma corporation (“Seller”), and PISCES LOGISTICS ACQUISITION LLC, a Delaware limited liability company (“Purchaser”)
RECITALS

A.        Seller is the owner of certain real property located at 500 West Collins in the City of Orange, County of Orange (“County”), State of California, more particularly described on Exhibit A attached hereto (the “Property”). 

B.        Seller and Purchaser have entered into that certain unrecorded Purchase and Sale Agreement dated as of June __, 2022 (as may be amended, modified or supplemented from time to time, the “Purchase Agreement”) pursuant to which Seller has agreed to sell the Property to Purchaser upon the terms and conditions set forth therein. 

C.        Seller and Purchaser desire to execute this Memorandum and cause the same to be recorded in the Official Records of the County for the purpose of memorializing the Purchase Agreement and to provide third parties with notice of the Purchase Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby acknowledge and agree as follows:

1

AGREEMENT

1.         Pursuant to the Purchase Agreement and this Memorandum, while the Purchase Agreement is in force and effect, Purchaser has the right to purchase the Property from Seller upon the terms and conditions set forth in the Purchase Agreement.

2.         The sole purpose of this Memorandum is to give notice of the Purchase Agreement and all of its terms, covenants and conditions to the same extent as if the Purchase Agreement were fully set forth herein, and this Memorandum is subject to all of the terms, conditions and provisions of the Purchase Agreement.

3.         This Memorandum may be executed in counterparts, each of which will be deemed to be an original, but all of which together will constitute one instrument.

4.         In the event of any conflict between this Memorandum and the Purchase Agreement, the provisions and conditions of the Purchase Agreement shall prevail.

[Remainder of page intentionally blank]
2

Signature Page to
Memorandum of Purchase Agreement

IN WITNESS WHEREOF, the parties have executed this Memorandum as of the date first above written.

SELLER:
MATRIX SERVICE INC.
By:                                                                              
Name:                                                                         
Title:                                                                           

PURCHASER:
PISCES LOGISTICS ACQUISITION LLC
By:                                                                              
Name:                                                                         
                                                                        Title:                                                                           
3

Form of Termination and Release of Memorandum of Purchase Agreement 

						
	RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

Pisces Logistics Acquisition LLC
c/o Brookfield Investment Group
Brookfield Place
250 Vesey Street
New York, NY 10281-1023
Attn: Legal Department
	

APN:  386-581-18

TERMINATION AND RELEASE OF MEMORANDUM OF AGREEMENT

THIS TERMINATION AND RELEASE OF MEMORANDUM OF AGREEMENT (this “Termination”) is entered into as of the ___ day of April, 2022, by and between MATRIX SERVICE INC., an Oklahoma corporation (“Seller”), and PISCES LOGISTICS ACQUISITION LLC, a Delaware limited liability company (“Purchaser”).

RECITALS

A.Seller and Purchaser entered into that certain Purchase and Sale Agreement, dated as of June __, 2022 (as may be amended from time to time, the “Purchase Agreement”) concerning the real property described on Exhibit A attached hereto and made a part of hereof, and all improvements located thereon (collectively, the “Property”).

A.To give notice of the existence of the Purchase Agreement and the rights and agreements described therein, Seller and Purchaser entered into that certain Memorandum of Agreement dated as of ______, 2022 (the “Memorandum”), and recorded on ______, 2022, as Document #_________, in the Official Records of Orange County, California.

A.The parties now desire to terminate and release the Memorandum.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree that the Memorandum is hereby terminated and released as an encumbrance on title for the Property; provided, however, this Termination does not release, waive, excuse, obviate or otherwise affect any of the rights or obligations of Seller and Purchaser under the Purchase Agreement.

[Signatures appear on the following page]

4

Signature Page to
Termination of Memorandum of Agreement

IN WITNESS WHEREOF, the undersigned has executed this instrument as of the date first above written.
SELLER:

MATRIX SERVICE INC.,
an Oklahoma corporation 

By:                                                                   
Name:                                                                         
Title:                                                                           

PURCHASER:

PISCES LOGISTICS ACQUISITION LLC,
a Delaware limited liability company 

By:                                                                   
Name:                                                                         
Title:                                                                           

5

LEASE AGREEMENT

THIS LEASE AGREEMENT (this “Lease”) is made and effective as of June __ 2022, by and between PISCES 500 W COLLINS AVE LLC, a Delaware limited liability company (“Landlord”), and MATRIX SERVICE INC., an Oklahoma corporation (“Tenant”), with respect to the following circumstances:
A.Landlord owns a tract of real property located in Orange County, California, which is more particularly described on Exhibit A (together with the improvements thereon and appurtenances thereto, the “Leased Premises”).
B.Landlord desires to lease to Tenant, and Tenant desires to lease from Landlord, the Leased Premises on the terms provided in this Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Landlord hereby leases the Leased Premises to Tenant on the following terms and conditions: 
ARTICLE I.
Definitions
The following terms when used in this Lease shall have the meanings indicated:
1.1    “Additional Rent” – shall have the meaning set forth in Section 3.3.
1.2    “Affiliates” - shall mean (a) with respect to any Person, any Person directly or indirectly controlling, controlled by or under direct or indirect common control with such other Person and (b) with respect to any Person who is an individual, any Person who is a sibling, lineal descendent or spouse of such individual and of any other Person who is otherwise an Affiliate (as defined in subsection (a)) of such individual or sibling, lineal descendent or spouse of such individual.
1.3     “Applicable Law” - shall mean with respect to any event, circumstance or activity, any federal, state or local statute, law, ordinance, rule, regulation, order, writ, injunction, legally binding directive, judgment, decree or other legally binding requirement of any Governmental Authority and the common law applicable to such event, circumstance or activity.
1.4    “Commencement Date” - shall mean the date of this Lease.
1.5    “Condemnation” - shall mean any partial or complete taking of the Leased Premises as a result of a Condemnation Proceeding.
1.6    “Condemnation Proceeding” - shall mean any proceeding instituted by a Governmental Authority to take all, or any portion, of the Leased Premises for public use or purpose under a power of eminent domain.
1.7    “Disassembly Option” – shall have the meaning set forth in Section 2.6.1.
1.8    “Environmental Claim” - shall mean any claim, action, cause of action, investigation or notice by any Person alleging potential liability (including potential liability for investigatory tests, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries or penalties) arising out of, based on or resulting from (a) the presence, or release into the environment, of any Hazardous Materials at any location, (b) any Environmental 
1

Condition or (c) any other circumstance forming the basis of any violation, or alleged violation, of any Environmental Law.
1.9    “Environmental Condition” - shall mean a condition of the soil, surface waters, groundwater, stream sediments, air and/or similar environmental media including any release or threatened release of Hazardous Materials, either on or off a property resulting from any activity, inactivity or operations occurring on such property, that (a) by virtue of Environmental Laws, (i) requires investigatory, corrective or remedial measures, (ii) comprises a basis for claims against, demands of and/or liabilities of Landlord or Tenant or in respect of the Leased Premises, or (iii) requires reporting to a Governmental Authority; or (b) involves the presence of any Hazardous Materials in concentrations or quantities exceeding applicable Environmental Laws.
1.10    “Environmental Laws” - shall mean any and all federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, guidelines, policies or requirements of any Governmental Authority regulating or imposing standards of liability or of conduct (including common law) concerning air, water, solid waste, Hazardous Materials, worker and community right-to-know, hazard communication, noise, resource protection, subdivision, inland wetlands and watercourses, health protection or other environmental, health, safety, building and land use concerns as might now or at any time hereafter be in effect.
1.11    “Event of Default” – shall have the meaning set forth in Section 11.1.
1.12    “Event of Destruction” - shall mean any event that damages or destroys the Leased Premises, including without limitation, fires, earthquakes, the elements, riots, acts of God or the public enemy, or other casualties.
1.13    “Fabrication Building” – shall mean the metal building on the Leased Premises where Tenant’s fabrication shop is located.
1.14    “Governmental Authority” - shall mean any federal, territorial, state or local governmental authority, quasi-governmental authority, instrumentality, court, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing.
1.15    “Hazardous Materials” - shall mean any petroleum, petroleum products, fuel oil, derivatives of petroleum products or fuel oil, explosives, reactive materials, ignitable materials, corrosive materials, pollutants, contaminants, hazardous chemicals, hazardous wastes, hazardous substances, extremely hazardous substances, toxic substances, toxic chemicals, radioactive materials, asbestos-containing materials, black mold stachybotrys chartarum (toxic mold)-containing materials, urea formaldehyde foam insulation, transformers or other equipment that contain polychlorinated biphenyls or radon gas, medical waste, biomedical waste, infectious materials and any other element, compound, mixture, solution or substance that might pose a present or potential hazard to human health or safety or to the environment, including any material regulated by or subject to regulation under any Environmental Law.
1.16    “Landlord Indemnified Persons” - shall have the meaning set forth in Section 9.1.
1.17    “Late Charge” – shall have the meaning set forth in Section 3.3.
1.18    “Lease Term” - shall mean the entire term of this Lease, including the Primary Term, any Renewal Terms exercised in accordance with this Lease, and any extensions thereof, whether caused holding over on the Leased Premises or otherwise.
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1.19    “Leased Premises” - shall have the meaning set forth in Recital A of this Lease.
1.20    “Liability Insurance” - shall mean (a) a public liability insurance policy, with comprehensive liability insurance, including a contractual liability endorsement against bodily injury liability and (b) a property damage liability insurance policy, with a combined single limit of not less than $1,000,000 per accident or occurrence insuring against any and all liability of the insured with respect to the Leased Premises or arising out of the maintenance, use or occupancy thereof.
1.21    “Liens” - shall mean, with respect to any asset, any mortgage, deed of trust, title defect, lien, pledge, security interest, hypothecation, lease, restriction, encumbrance or charge of any kind in respect of such asset.
1.22    “Losses” - shall mean all injuries, losses, expenses, fees, penalties, demands, claims, actions, causes of action, judgments, assessments, damages, obligations, liabilities and reasonable costs, including all costs incurred in connection with any claim for indemnification hereunder (e.g., reasonable legal fees, accounting fees, and all other costs of investigation), of every nature and description.
1.23    “Major Repair” - shall mean (a) any needed repair or replacement to the roof, foundation or structural integrity of any of the buildings or improvements to the Leased Premises necessary to maintain such buildings and improvements in a safe condition fit for occupancy or prohibit excess moisture from entering the buildings, (b) any needed repair or replacement of the HVAC system, septic system, electrical systems and wiring and sewer system which service the Leased Premises, and (c) any necessary repairs or replacements to the Leased Premises occasioned by, or attributable to, a single incident or occurrence, or series of incidents which are part of a single occurrence, in which the cost of the necessary repairs or replacements are in excess of $100,000.  
1.24    “Permitted Liens” - shall mean (a) Liens for taxes or governmental assessments, charges or claims the payment of which is not yet due; (b) Liens of carriers, warehousemen, mechanics, materialmen and other similar Persons and other Liens imposed by applicable law incurred in the ordinary course of business for sums not yet delinquent; and (c) Liens relating to deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security or to secure the performance of trade contracts or other similar agreements.
1.25    “Permitted Exceptions” – shall have the meaning set forth in Section 2.1.
1.26    “Permitted Use” - shall have the meaning set forth in Section 5.1.
1.27    “Person” - shall mean any individual, corporation, partnership, association, limited liability company, joint venture, trust or other entity, including a Governmental Authority.
1.28    “Personal Property and Trade Fixtures” - shall mean any personal property, trade fixtures, and equipment, (i) belonging to Tenant and located on the Leased Premises prior to the commencement of the Primary Term, or (ii) brought onto or installed on or in the Leased Premises by Tenant, whether as part of a Tenant Addition or otherwise.
1.29    “Primary Term” – shall mean a period beginning on the Commencement Date and ending at 11:59 p.m. on the day prior to the fifteen (15) month anniversary of the Commencement Date.
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1.30    “Property Insurance” - shall mean a policy insuring the building(s) and other improvements located on the Leased Premises against loss or damage by fire, with an extended all-risk coverage endorsement in the amount of $3,000,000. 
1.31    “Renewal Term” - shall mean the three (3) three (3) month periods beginning at the end of the Primary Term or the then current Renewal Term, as applicable, and ending at 11:59 p.m. on the date that is three (3) months after the end of the Primary Term or the then current Renewal Term, as applicable.
1.32    “Rent” - shall mean all sums payable by Tenant to Landlord pursuant to ARTICLE III of this Lease, if any, as well as all other amounts as are required to be paid pursuant to the terms of this Lease.
1.33    “Required Major Repair” – shall have the meaning set forth in Section 12.2.2.
1.34    “Routine Maintenance” - shall mean normal repair and maintenance of the Leased Premises, including without limitation, repair and maintenance of: (a) lighting and plumbing; (b) electrical, mechanical, and electromotive equipment and fixtures; (c) signs, placards, decorations, and advertising media of any type; (d) interior walls and ceilings (including painting or other treatments) and floors (including floor coverings); and (e) utility ducts, conduits, pipes and wiring.  Provided, the term “Routine Maintenance” shall not include any necessary repair or maintenance to the extent such repair or maintenance constitutes a Major Repair.
1.35    “Signage” – shall have the meaning set forth in Section 14.11.
1.36    “Taxes” – shall have the meaning set forth in Section 12.3. 
1.37    “Tenant Additions” - shall mean any structural additions, improvements, alterations, or changes made by Tenant in or to the building or real estate, of which the Leased Premises form a part.
ARTICLE II. 
Lease of Premises; Lease Term
2.1    Grant of Lease.  In consideration of the rents and covenants herein stipulated to be paid and performed, Landlord hereby demises and lets to Tenant, and Tenant hereby lets from Landlord, for the term herein described, the Leased Premises. The Leased Premises are demised and let subject to (a) the rights of any parties in possession and the existing state of the title as of the commencement of the Term of this Lease (the “Permitted Exceptions”), (b) any state of facts which an accurate survey or physical inspection thereof might show, (c) all zoning regulations, restrictions, rules and ordinances, building restrictions and other laws and regulations now in effect or hereafter adopted by any governmental authority having jurisdiction, and (d) the condition of any buildings, structures and other improvements located thereon, as of the commencement of the Term of this Lease, without representation or warranty by Landlord, express or implied.  Without limiting the foregoing, Tenant accepts the Leased Premises in “AS IS” condition, with all faults.  Tenant represents that it has been in possession of the Leased Premises prior to the commencement of the Term of this Lease, has thoroughly familiarized itself with the Leased Premises in all respects, and has examined the title to, zoning and other restrictions applicable to and the condition of the Leased Premises and has found the same to be satisfactory to it.  To the maximum extent permitted by law, Tenant waives (i) any implied warranty of suitability OF the Leased Premises, and (ii) any implied warranty of 
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fitness for a particular purpose or merchantability or design or quality of the Leased Premises.

2.2    Lease Term.  This Lease shall commence on the Commencement Date and shall continue for the Primary Term, unless sooner terminated pursuant to the terms of this Lease.
2.3    Option to Renew.  Tenant shall have the right, at its option, to extend the Lease Term for the Renewal Terms, on the same conditions and terms as this Lease.  The Base Rent for the Renewal Term shall be the same monthly rate as the Base Rent of the expiring Lease Term.  To exercise its option to renew, Tenant shall give Landlord notice of such election at least thirty (30) days before the expiration of the Primary Term or the then current Renewal Term, as applicable.
2.4    Surrender of Leased Premises.  Upon the expiration or other termination of the Lease Term, Tenant shall quit and surrender the Leased Premises to Landlord in good condition, ordinary wear and tear, damage by casualty and permitted Tenant Additions excepted.  Prior to or at the end of the Lease Term, Tenant shall remove any of its Personal Property and Trade Fixtures.  Tenant shall be responsible for and repair any damage caused by the removal of such Personal Property and Trade Fixtures.  Any such Personal Property or Trade Fixtures not so removed shall, at Landlord's election, be deemed abandoned by Tenant and may be disposed of by Landlord in accordance with California Civil Code Sections 1980 through 1991 and California Code of Civil Procedure Section 1174, or in accordance with any laws or judicial decisions which may supplement or supplant those provisions from time to time.
2.5    Holding Over.  If Tenant shall fail to vacate and surrender the Leased Premises in accordance with the terms of this Lease upon the expiration or earlier termination of this Lease, then until such time as Tenant so vacates and surrenders the Leased Premises, Tenant shall pay Base Rent at a rate of one hundred seventy-five percent (175%) of the Base Rent for the last year of the Lease Term.  Nothing in the previous sentence shall be construed or operate as a waiver of Landlord's right of re-entry or any other right of Landlord resulting from such holding over.
2.6    Option to Acquire Fabrication Building.
2.6.1    Subject to the terms of this Section 2.6, Landlord hereby grants Tenant the option to disassemble the Fabrication Building and acquire the building materials used to construct the Fabrication Building (the “Disassembly Option”).
2.6.2    Tenant may exercise the Disassembly Option by providing notice to Landlord at least three (3) months prior to the expiration of the Lease Term.  If Tenant exercises the Disassembly Option, Tenant shall be responsible for all cost and expense associated with disassembling the Fabrication Building and transporting the building materials used to constructed the Fabrication Building from the Leased Premises.
2.6.3    Upon completion of such disassembly and removal, Landlord shall be deemed to have quitclaimed the building materials used to construct the Fabrication Building in as-is, where-is condition, without representation or warranty, but in any event free of any of Landlord’s financing liens secured by the Premises.
2.6.4    If Tenant exercises the Disassembly Option, Tenant shall complete the disassembly of the Fabrication Building and the removal of the building materials used in 
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construction of the Fabrication Building from the Leased Premises by the expiration of the Lease Term.
ARTICLE III.
Obligation to Pay Rent
3.1    Obligation and Time of Payment.  The monthly Rent for the Lease Term shall be $118,283.00 (the “Base Rent”).  The Base Rent shall increase by three percent (3%) on the thirteenth month of the Lease Term.  Tenant shall pay the Base Rent in advance on the first day of each calendar month during the Lease Term.  Landlord directs Tenant to make all Rent and other payments due Landlord under this Lease to Landlord at the address for Landlord set forth in Section 14.12.    The monthly installment of Rent payable with respect to the first month of this Lease shall be paid on the Commencement Date.
3.2    Fractional Month.  If the Lease Term commences or ends on a day other than the first day of a calendar month, the Rent payable for such calendar month shall be the amount payable for a full month times a fraction the numerator of which is the number of days of the Lease Term during such month and the denominator of which is the total number of days in such month.
3.3    Additional Rent; Late Charges.  Tenant covenants that all other amounts, liabilities and obligations which Tenant assumes or agrees to pay or discharge pursuant to this Lease, together with every fine, penalty, interest and cost which may be added for nonpayment or late payment thereof or of Base Rent, shall constitute additional rent hereunder (herein called “Additional Rent”).  The Base Rent and Additional Rent shall constitute “Rent” within the meaning of California Civil Code Section 1951(a).  In the event of any failure by Tenant to pay or discharge any Additional Rent, Landlord shall have all rights, powers and remedies provided herein or by law in the case of nonpayment of Base Rent.  Tenant also covenants to pay to Landlord on demand an amount (the “Late Charge”) equal to five percent (5%) of the payment amount then due on all installments of Base Rent or Additional Rent which are more than ten (10) days overdue, to cover Landlord's administrative expenses.  The actual amount of Landlord's administrative expenses arising by reason of a late payment will be difficult to ascertain, and the parties agree that the Late Charge as calculated above is a reasonable estimate thereof.

ARTICLE IV.
Representations and Warranties; Covenants
4.1    Landlord’s Representations and Warranties.  To induce Tenant to enter into this Lease, Landlord represents and warrants to Tenant as follows:
4.1.1    Due Organization; Power and Authority.  Landlord is a limited liability company duly organized, validly existing and in good standing under the laws its organization, and has full and requisite limited liability company power and authority to execute and deliver this Lease and to carry out its obligations hereunder.  
4.1.2    Authority Relative to this Lease.  The execution, delivery, and performance of this Lease by Landlord have been duly and effectively authorized by all necessary action on behalf of Landlord.
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4.1.3    Enforceability of this Lease.  This Lease is, and all instruments and documents executed in connection herewith will be, valid, binding, and enforceable against Landlord in accordance with their respective terms, subject to applicable bankruptcy, reorganization, insolvency, or other similar laws affecting the enforcement of creditors’ rights generally.
4.1.4    No Conflicts.  The execution, delivery, and performance of this Lease by Landlord does not (a) violate any judicial or governmental decree, order, or judgment; (b) violate any Applicable Law; (c) conflict with the organizational documents of Landlord; or (d) result in a breach of, or constitute a default under, any agreement or instrument to which Landlord is a party or by which it or the Leased Premises is bound.
4.2    Tenant’s Representations and Warranties.  To induce Landlord to enter into this Lease, Tenant represents and warrants to Landlord as follows:
4.2.1    Due Organization; Power and Authority.  Tenant is a corporation duly organized, validly existing and in good standing under the laws of the State of Oklahoma and has full and requisite corporate power and authority to execute and deliver this Lease and to carry out its obligations hereunder.
4.2.2    Authority Relative to this Lease.  The execution, delivery, and performance of this Lease by Tenant have been duly and effectively authorized by all necessary corporate action.
4.2.3    Enforceability of this Lease.  This Lease is, and all instruments and documents executed in connection herewith will be, valid, binding, and enforceable against Tenant in accordance with their respective terms, subject to applicable bankruptcy, reorganization, insolvency, or other similar laws affecting the enforcement of creditors’ rights generally.
4.2.4    No Conflicts.  The execution, delivery, and performance of this Lease by Tenant does not (a) violate any judicial or governmental decree, order, or judgment; (b) violate any Applicable Law; (c) conflict with the organizational documents of Tenant; or (d) result in a breach of, or constitute a default under, any agreement or instrument to which Tenant is a party or by which it is bound.
ARTICLE V. 
Use and Occupancy of Leased Premises
5.1    Permitted Use of Leased Premises.  Tenant may use the Leased Premises for general office uses, fabrication, manufacturing, storage and other purposes incident thereto (“Permitted Use”), and for no other purpose.
5.2    Compliance With Laws and Regulations; Permits.  Tenant’s use of the Leased Premises shall comply with all Applicable Laws. 
5.3    Certified Access Specialist. Pursuant to California Civil Code Section 1938, Landlord hereby advises Tenant that as of the date of this Lease neither the Leased Premises nor the Facility has undergone inspection by a Certified Access Specialist (CASp).  Further, pursuant to California Civil Code Section 1938, Landlord notifies Tenant of the following:  “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state 
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law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”

5.4    Energy Disclosure.  Tenant agrees to reasonably cooperate, at Landlord’s cost and expense, with Landlord to the extent necessary to comply with California Public Resources Code Section 25402.10 including, without limitation, providing or consenting to any utility company providing Tenant’s energy consumption information for the Leased Premises to Landlord.

5.5    Tenant Indemnity Obligation.  Tenant agrees to pay, and to protect, defend (with counsel reasonably acceptable to Landlord), indemnify and hold harmless Landlord and the other Landlord Indemnified Persons from and against any and all Losses whatsoever arising from (a) any use, condition or event occurring on or at the Leased Premises during the Term, (b) any injury to, or the death of, any person or damage to property on or at the Leased Premises during the Term, (c) any injury to, or the death of, any person or damage to property upon adjoining sidewalks, streets or rights of way or in any manner growing out of or connected with the use, non‐use, condition or occupation or operation of the Leased Premises, adjoining sidewalks, streets or rights of way during the Term, (d) any violation by Tenant of any agreement or condition of this Lease, or any contract or agreement to which Tenant is a party or which pertains to the Leased Premises or any part thereof or the ownership, occupancy or use thereof, (e) any violation by Tenant of any Applicable Law, or (e) any negligence or willful misconduct of Tenant or Tenant’s employees, agents, representatives, contractors, invitees or licensees in, on or about the Leased Premises; provided, however, the foregoing indemnity shall not apply as to any Landlord Indemnified Persons with respect to claims arising solely from the gross negligence or willful misconduct of such Landlord Indemnified Persons.

ARTICLE VI.
Destruction Of Leased Premises
6.1    Notice of Occurrence.  Tenant shall give Landlord notice within ten (10) days of the occurrence of an Event of Destruction that damages or destroys, in whole or in part, the Leased Premises.
6.2    Restoration of Premises.  Upon an Event of Destruction, Landlord shall, subject to Section 6.3, with reasonable dispatch and continuity, perform all work necessary to repair, restore, replace and rebuild the Leased Premises or the damaged portion thereof.  Landlord shall keep and hold the Leased Premises free, clear and harmless of and from all Liens (other than Permitted Liens) that could arise by reason of Landlord’s restoration.  Landlord’s restoration shall be sufficient (a) to return the Leased Premises to substantially the condition immediately prior to the occurrence of the Event of Destruction and (b) to meet all applicable building codes and regulations.
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6.3    Termination Option.  If an Event of Destruction occurs such that the Leased Premises cannot reasonably be restored or repaired, such that Tenant may resume operation of its business substantially in the ordinary course, within ninety (90) days of such damage or destruction as determined by Landlord in its reasonable discretion, then Landlord or Tenant may, at its option, terminate this Lease by giving written notice to the other party within forty-five (45) days after the date of such Event of Destruction.  Landlord may also terminate this Lease if the Event of Destruction occurs during the last six (6) months of the Term. 
6.4    Notice of Restoration Time.  Landlord shall use commercially reasonable efforts to notify Tenant within thirty (30) days of receiving notice of the Event of Destruction with respect to whether such restoration can be completed within ninety (90) days.
ARTICLE VII. 
Improvements to Leased Premises
7.1    Right to Make Tenant Additions.  Tenant shall not make Tenant Additions to the Leased Premises without Landlord’s prior written consent, which consent may not be unreasonably withheld, conditioned or delayed by Landlord, except that prior consent shall not be required for  Tenant Additions costing $50,000.00 or less that do not affect the roof or structure of the improvements.  Tenant shall maintain Tenant Additions in good order and repair.  With the exception of Personal Property and Trade Fixtures installed by Tenant as part of any Tenant Additions, Tenant Additions shall become part of the Leased Premises and shall be surrendered to the Landlord with the Leased Premises at the end of the Lease Term.  Tenant shall promptly pay for all labor costs incurred and materials purchased in connection with any Tenant Additions and shall keep and hold the Leased Premises free, clear, and harmless of and from all Liens (other than Permitted Liens) that could arise by reason of the Tenant Additions.
7.2    Notice of Non-Responsibility. Without limiting the foregoing, upon Landlord’s obtaining knowledge of the commencement of any Tenant Additions, Landlord shall be permitted to post a timely Notice of Non-Responsibility at the Leased Premises, which shall also be recorded in the office of the Recorder of the County in which the Leased Premises is located, all in accordance with the terms of California Civil Code Sections 8444 and 8060.  Upon the completion of any Tenant Additions, Tenant shall cause a timely Notice of Completion to be recorded in the office of the Recorder of the County in which the Leased Premises is located in accordance with the terms of California Civil Code Section 8182, and Tenant shall deliver to Landlord a conformed copy of such Notice of Completion.
ARTICLE VIII.
Condemnation
8.1    Complete Taking.  If substantially all the Leased Premises is taken in a Condemnation Proceeding, this Lease shall terminate on the earlier of (a) the date the Condemnation becomes final or (b) the date the condemning authority takes possession of the Leased Premises.  “Substantially all” of the Leased Premises shall be deemed taken if Tenant is unable to conduct any significant aspect of its business operations after the Condemnation.
8.2    Partial Taking.  If any portion of the Leased Premises is taken in a Condemnation Proceeding, and such taking materially interferes with any aspect of Tenant’s business operations thereon, Tenant may elect to either (a) surrender the Leased Premises and immediately terminate 
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the Lease or (b) continue in possession of the remainder of the Leased Premises under the terms of the Lease.
8.3    Notice.  Tenant shall give Landlord notice of its election within thirty (30) days after the Condemnation becomes final.
8.4    Condemnation Award.  In the event of a Condemnation, any Condemnation award shall be allocated between the Landlord and the Tenant as follows:
8.4.1    Landlord shall be entitled to that portion of the Condemnation award representing compensation for the value of the portion of the Leased Premises taken, except to the extent it is attributable to the items described in Section 8.4.2; and
8.4.2    Tenant shall be entitled to receive any portion of the Condemnation award, attributable to any damages to the Tenant’s Personal Property and Trade Fixtures and any Tenant Additions.
8.5    Waiver of Other Rights.  Tenant hereby waives any and all provisions of applicable law that provide alternative rights for the parties in the event of Event of Destruction or Condemnation (including, without limitation, California Civil Code Section 1932(2), California Civil Code Section 1933(4), California Code of Civil Procedure Section 1265.130, and any successor statute or laws of a similar nature) and agrees that the provisions hereof shall govern the parties’ rights in the event of any Event of Destruction or Condemnation.

ARTICLE IX.
Environmental Provisions 
9.1    Tenant.  Tenant shall indemnify and hold harmless Landlord, its Affiliates and their respective officers, directors, stockholders, managers, members, partners, employees, agents and representatives (“Landlord Indemnified Persons”) from and against any and all Losses incurred or suffered by Landlord Indemnified Persons and shall pay or reimburse, on demand, each Landlord Indemnified Person for the full amount of any such Losses relating to, arising out of or resulting from any Environmental Condition or Environmental Claim relating to the Leased Premises to the extent caused by Tenant or its invitees during the Lease Term. Tenant’s obligations under this section shall survive termination of this Lease. 
9.2    Landlord.  Landlord shall indemnify and hold harmless Tenant, its affiliates and their respective officers, directors, stockholders, partners, members, managers, employees, agents and representatives (“Tenant Indemnified Persons”) from and against any and all Losses incurred or suffered by Tenant Indemnified Persons and shall pay or reimburse, on demand, each Tenant Indemnified Person for the full amount of such Losses relating to, arising out of or resulting from any Environmental Condition or Environmental Claim relating to the Leased Premises to the extent caused by Landlord during the Lease Term.   Notwithstanding the foregoing to the contrary, nothing in this Lease (a) obligates Landlord to indemnify Tenant or the Tenant Indemnified Persons  with respect to any Environmental Conditions or Environmental Claims arising before the Lease Term or caused by third-parties, or (b) releases Tenant from any liability or obligations related to Environmental Conditions or Environmental Claims that may be expressly provided for in the purchase agreement pursuant to which Landlord acquired the Premises from Tenant.  The provisions of this Section shall survive termination of this Lease.  
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9.3    Restriction on Hazardous Materials and Compliance with Environmental Laws.  Except for Hazardous Materials used, stored or maintained by Tenant in the normal course of the conduct of the Permitted Use of the Leased Premises, and which Tenant handles and disposes in accordance with all Environmental Laws, Tenant shall not use, generate, manufacture, store, transport, release, or dispose of Hazardous Materials in, on, or about the Leased Premises or transport Hazardous Materials from the Leased Premises.  Tenant shall not cause or permit the release or disposal of Hazardous Materials from the Leased Premises except in compliance with applicable Environmental Laws.
9.4    Tenant Obligations.  If the presence of any Hazardous Materials on, under or about the Leased Premises caused or permitted by Tenant or its agents, officers, directors, shareholders, members, managers, partners, employees, subtenants, assignees, licensees, contractors or invitees (collectively, “Tenant’s Parties”) during the Lease Term results in (a) injury to any person, (b) injury to or contamination of the Leased Premises, or (c) injury to or contamination of any real or personal property wherever situated, Tenant, at its sole cost and expense, shall promptly take all actions necessary to return the Leased Premises to the condition existing prior to the introduction of such Hazardous Materials to the Leased Premises and to remedy or repair any such injury or contamination.  Without limiting any other rights or remedies of Landlord under this Lease, Tenant shall pay the cost of any cleanup work performed on, under or about the Leased Premises as required by this Lease or any Environmental Laws in connection with the removal, disposal, neutralization or other treatment of such Hazardous Materials caused or permitted by Tenant or Tenant’s Parties.

9.5    Inspection; Compliance. Landlord shall have the right, but not the obligation, to inspect, investigate, sample and/or monitor the Leased Premises, including any air, soil, water, groundwater or other sampling, and any other testing, digging, drilling or analyses, at any time to determine whether Tenant is complying with the terms of this Section 9, and in connection therewith, Tenant shall provide Landlord with access to all relevant facilities, records and personnel.  If Tenant is not in compliance with any of the provisions of this Section 9, or in the event of a release of any Hazardous Materials on, under, from or about the Leased Premises, Landlord shall have the right, but not the obligation, without limitation on any of Landlord’s other rights and remedies under this Lease, to immediately enter upon the Leased Premises and to discharge Tenant’s obligations under this Section 9 at Tenant’s expense, including without limitation the taking of emergency or long term remedial action.  Landlord and Landlord Parties shall not interference with Tenant’s business in exercising such right.  In addition, Landlord, at Tenant’s sole cost and expense, shall have the right, but not the obligation, to join and participate in any legal proceedings or actions initiated in connection with any claims or causes of action arising out of the storage, generation, use or disposal by Tenant or Tenant’s Parties of Hazardous Materials on, under, from or about the Leased Premises.  All sums reasonably disbursed, deposited or incurred by Landlord in connection herewith, including, but not limited to, all costs, expenses and actual attorneys’ fees, shall be due and payable by Tenant to Landlord, as an item of Additional Rent, on demand by Landlord, together with interest thereon at the Interest Rate from the date of such demand until paid by Tenant.
9.6    Environmental Questionnaire.  To the extent requested by any of Tenant’s lenders that have, or will have, loans secured by a mortgage on the Leased Premises, but in no event more 
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than once in any 12-month period, Tenant shall complete, execute and deliver to Landlord an Environmental Questionnaire and Disclosure Statement (the “Environmental Questionnaire”) in the form of Exhibit “C”, and Tenant shall certify to Landlord all information contained in the Environmental Questionnaire as true and correct to the best of Tenant’s knowledge and belief.   

ARTICLE X. 
Liability and Property Insurance
10.1    Insurance.  During the Lease Term, (a) Tenant shall maintain Liability Insurance and property insurance on its Personal Property and Trade Fixtures, and (b) Landlord shall maintain Property Insurance.  The Liability Insurance policy of Tenant shall name Landlord and any persons, firms, lenders, associations, corporations or other legal entities at any time designated by Landlord as additional named insureds, as their interests may appear.  In the event of an insured loss, proceeds from the Property Insurance shall be paid to Landlord.  Tenant shall reimburse Landlord upon demand for all Property Insurance premiums and costs paid by Landlord up to an amount not to exceed $1,500. 
10.2    Certificates Of Insurance.  Tenant shall deliver to Landlord certificates evidencing the existence of the insurance required by this Lease and evidence of premium payments within ten (10) days after the Commencement Date.  Tenant shall notify Landlord thirty (30) days prior to the expiration or cancellation of such insurance policies and shall procure and maintain renewal or additional policies.
10.3    Waiver Of Rights To Extent Of Insurance.  Each of Tenant and Landlord waives its rights of recovery or subrogation against the other, or its agents or representatives, for Losses to such party, its property, or the property of others under its control, to the extent that such Losses are covered under any insurance policy in force at the time of such Losses or which should have been in force in accordance with the terms of this Lease.  Landlord and Tenant shall each notify their respective insurance carriers that this mutual waiver of subrogation is in this Lease.
ARTICLE XI. 
Default and Remedies
11.1    Events of Default.  Each of the following shall be considered for all purposes to be an event of default by Tenant under this Lease (an “Event of Default”): (a) any failure of Tenant to pay any Rent or other amount when due hereunder and the continuance of such failure for five (5) days after notice from Landlord; (b) any failure by Tenant to perform or observe any other of the terms, provisions, conditions and covenants of this Lease for more than thirty (30) days after written notice of such failure is given by Landlord, or, in the event the act required to cure the non-performance cannot be accomplished within 30 days, to preclude a default, Tenant must commence the accomplishment of the necessary act within said period and thereafter proceed with diligence and good faith to accomplish the same; (c) the bankruptcy or insolvency of Tenant or the filing by or against Tenant of a petition in bankruptcy or for reorganization or arrangement or for the appointment of a receiver or trustee of all or a portion of Tenant’s property, or Tenant makes an assignment for the benefit of creditors; or (d) this Lease or Tenant’s interest herein or in the Leased Premises or any improvements thereon or any property of Tenant located at the Leased Premises are executed upon or attached.  Any notice given by Landlord above shall be in 
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lieu of, and not in addition to, any notice required under Section 1161 of the Code of Civil Procedure of California or any similar, superseding statute.
11.2    Remedies. In the event of an Event of Default by Tenant, Landlord shall have, in its sole discretion, and in addition to any other remedies available to Landlord under this Lease, at law or in equity, the following rights: 
11.2.1    To cure any breach or perform any obligations of Tenant under this Lease and Tenant shall pay Landlord the cost thereof upon demand.
11.2.2    To (a) re‐enter and repossess the Leased Premises or any part thereof by due process, summary proceedings, ejections or otherwise and (b) remove all persons and property therefrom, whether or not the Lease has been terminated, Tenant hereby expressly waiving any and all notices to quit, cure or vacate provided by current or any future law.  Landlord shall have no liability by reason of any such re‐entry, repossession or removal, provided that any property shall be removed, stored and/or disposed of by Landlord in accordance with applicable law.  No such re‐entry or taking of possession of the Leased Premises by Landlord shall be construed as an election on Landlord's part to terminate the Lease Term unless a written notice of such intention be given to Tenant.  No notice from Landlord or notice given under a forcible entry and detainer statute or similar laws will constitute an election by Landlord to terminate the Lease Term unless such notice specifically so states.  
11.2.3    To terminate this Lease by reason of the occurrence of an Event of Default and Landlord shall be entitled to recover from Tenant, (a) the worth at the time of award of the unpaid rent which has been earned at the time of such termination; plus (b) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus (c) the worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus (d) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom; plus (e) at Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable law.  The term "rent" as used in this Section shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others.  As used in Sections 11.2.3(a) and (b), above, the "worth at the time of award" shall be computed by allowing interest at the Default Rate, but in no case greater than the maximum amount of such interest permitted by law.  As used in Section 11.2.3(c) above, the "worth at the time of award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).
11.2.4    To assert the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations).

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No termination of this Lease pursuant to Sections 11.2.3, by operation of law or otherwise, and no repossession of the Leased Premises or any part thereof, and no reletting of the Leased Premises or any part thereof, and no payment of any amounts by Tenant under Sections 11.2 or the exercise by Landlord of any of its other rights under Sections 11.2  shall relieve Tenant of either (i) its liabilities and obligations hereunder, all of which shall survive such expiration, termination, repossession, or reletting or (ii) any liabilities under this Lease which by express provision of this Lease survive such expiration, termination, repossession, or reletting.

11.3    Default By Landlord.  If Landlord defaults in the performance of any term, covenant or condition required to be performed by Landlord under this Lease, Landlord shall have thirty (30) days following written notice from Tenant specifying such default in which to cure such default, or, in the event the act required to cure the non-performance cannot be accomplished within 30 days, to preclude a default, Landlord must commence the accomplishment of the necessary act within said period and thereafter proceed with diligence and good faith to accomplish the same.  Tenant shall be entitled to all rights and remedies available at law or in equity upon Landlord’s failure to cure such default.  
11.4    Attorneys’ Fees.  Should either party commence any legal action or proceeding against the other based upon this Lease, the prevailing party shall be entitled to an award of reasonable attorneys’ fees and other costs of litigation.
11.5    Tenant Waivers.  Tenant hereby waives and surrenders for itself and all those claiming under it, including creditors of all kinds, (a) any right or privilege which it or any of them may have under any present or future constitution, statute or rule of law, including, without limitation, any rights under California Code of Civil Procedure Section 1174, California Code of Civil Procedure Section 1179, and California Civil Code Section 1950.7, to redeem the Leased Premises or to have a continuance of this Lease for the Term hereby demised or for a lesser period after termination of Tenant's right of occupancy by order or judgment of any court or by any legal process or writ, or under the terms of this Lease or after the termination of the Term of this Lease as herein provided, and (b) the benefits of any present or future constitution, statute or rule of law which exempts property from liability for debt or for distress for rent.
11.6    Exculpatory Clause.  Notwithstanding any provision of this Lease to the contrary, the liability of Landlord under and with respect to this Lease shall be limited to the interest of Landlord in the Leased Premises, and any judgment in favor of Tenant or any party claiming by, through or under Tenant against Landlord shall be collectible only out of Landlord's interest in the Leased Premises, and in no event shall any judgment for damages be entered against Landlord which is in excess of the value of such interest.  Neither Landlord nor Tenant shall in any event be liable to the other party or any other person or entity for any consequential, special, or punitive damages or loss of business, revenue, income or profits and each party hereby waives any and all claims for any such damages.  No individual who is Landlord or any member or partner of any joint venture, tenancy in common, firm, partnership or other form of joint ownership that is Landlord, or their heirs, personal representatives, executors, successors and assigns, shall have any personal liability to Tenant, or to any person claiming under or through Tenant, for any amount or in any capacity.

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ARTICLE XII. 
Utilities; Repairs and Maintenance; Taxes
12.1    Utilities.  Tenant shall pay all costs incurred for water, gas, electricity, telephone, and similar utilities and services provided to the Leased Premises during the Lease Term, provided that such utility costs and services incurred during the last month of the Lease Term shall be prorated between Landlord and Tenant based on the number of days during such month that each party was in possession of the Leased Premises.  
12.2    Repairs and Maintenance.  
12.2.1    During the Lease Term, Tenant, at Tenant’s sole expense, shall be responsible for Routine Maintenance of the Leased Premises and landscaping, lawn services and all other grounds or similar maintenance of the grounds on the Leased Premises.  If, during the Lease Term, Tenant’s failure to perform its obligations under this Section 12.2.1 is reasonably likely to result in criminal or civil liability to Landlord or additional damage to the Leased Premises, then Landlord may make any repairs and alterations required to limit such liability or damage, and in such case, Tenant shall promptly reimburse Landlord for any costs and expenses that Landlord may incur in making such repairs and alterations in and to the Leased Premises.  
12.2.2    Except as specifically set forth in this Section 12.2.2, neither Landlord nor Tenant shall be responsible for any Major Repairs during the Lease Term.  However, if any Major Repairs are required to remedy any condition posing an imminent threat to human health or safety or otherwise reasonably likely to result in criminal or civil liability to Landlord (a “Required Major Repair”), Tenant may elect to perform such Required Major Repair within ten (10) days after receipt of notice from Landlord of the need for such Required Major Repair.  If Tenant promptly commences and diligently pursues the Required Major Repair within such ten (10) day period, Landlord shall reimburse Tenant for fifty percent (50%) of the cost of such Required Major Repair, which reimbursement shall be made within thirty (30) days after the completion of such work and delivery of lien waivers reasonably satisfactory to Landlord.  If Tenant does not promptly commence and diligently pursue such Required Major Repair within such ten (10) day period, this Lease shall automatically terminate upon the expiration of such ten (10) day period.  As of the date of this Lease, Landlord and Tenant acknowledge that no condition requiring a Required Major Repair exists.  Tenant shall give Landlord prompt notice of any condition requiring a Required Major Repair.  For the avoidance of doubt, Tenant (at Tenant’s sole cost and expense) shall be responsible for remedying any condition posing an imminent threat to human health or safety or otherwise reasonably likely to result in criminal or civil liability to Landlord, in which the cost of the necessary repairs or replacements are less than $100,000.
12.3    Tenant shall pay all real estate ad valorem taxes, assessments, license fees and public charges (“Taxes”) levied, assessed or imposed with respect to the Lease Term on the Leased Premises.  Any such Taxes attributable to part of a fiscal year of a taxing authority which is included within the Lease Term and a part of which is included within a period of time or after the end of the Lease Term shall be adjusted by Landlord and Tenant as of the commencement or end of the Lease Term so that Tenant shall only pay that portion of Taxes accruing with respect to the Lease Term and Landlord shall pay the remainder.  Tenant shall also pay all personal property 
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ad valorem taxes, assessments, license fees imposed, charges levied, assessed or imposed during the Lease Term on Tenant’s Personal Property and Fixtures.  
12.4    Other Taxes.  Tenant shall pay all sales, excise, use or other similar taxes imposed during the Lease Term arising out of Tenant’s use of the Leased Premises.
ARTICLE XIII.
Subordination; Estoppel Certificates; Landlord’s Lien
13.1    Subordination.   Tenant accepts this Lease subject and subordinate to any mortgage, deed of trust, ground lease or other lien presently existing or hereafter arising upon the Leased Premises (each, a “Superior Lien”), and to any renewals and extensions thereof. Landlord shall use good faith efforts to request the holder of such Superior Lien to execute and deliver to Tenant such holder’s written nondisturbance agreement (in form and substance reasonably acceptable to Tenant) that (a) provided there is no uncured default hereunder, in the event of a foreclosure, or if Landlord conveys the Leased Premises in lieu of a foreclosure, the Lease will continue between Tenant and Landlord’s successors, who shall assume Landlord’s obligations under this Lease, and (b) Tenant will not be made a party to any foreclosure action except as may be necessary by law, and Tenant’s possession of the Premises will not be disturbed.  
13.2    Estoppel Certificates.  Each party shall, from time to time, within ten (10) days after request from the other party, or from any mortgagee of Landlord, execute, acknowledge and deliver in recordable form a certificate certifying, to the extent true, that this Lease is in full force and effect and unmodified (or, if there have been modifications, that the same is in full force and effect as modified and stating the modifications); that the Lease Term has commenced and setting forth the full amount of the Rent then accruing hereunder; the dates to which the Rent has been paid; that Tenant has accepted possession of the Leased Premises; that the address for notices to be sent to Tenant is as set forth in this Lease (or has been changed by notice duly given and is as set forth in the certificate); that Tenant, as of the date of such certificate, has no charge, lien, or claim of offset under this Lease or otherwise against Rent or other charges due or to become due hereunder; that, to the knowledge of the party issuing the certificate, that the other party is not then in default under this Lease; and such other matters as may be reasonably requested by Tenant, Landlord or any mortgagee of Landlord. Any such certificate may be relied upon by Landlord or any mortgagee of Landlord.
13.3    Landlord’s Lien. Landlord waives any liens or security interests, whether created by statute or otherwise, on Tenant’s Personal Property and Trade Fixtures.  Upon Tenant’s request, Landlord agrees to promptly execute and deliver from time to time a landlord consent and waiver, in favor of Tenant’s lender, in a form acceptable to Tenant.  The current form of Tenant’s required landlord consent and waiver is attached hereto as Exhibit B, which Landlord shall execute and deliver to Tenant on the date hereof.
ARTICLE IV.
Miscellaneous Provisions
14.1    Controlling Law; Venue; Waiver of Jury Trial.  The terms and provisions of this Lease shall be construed in accordance with the internal laws of the State of California. By the execution and delivery of this Lease, each of the parties hereto hereby irrevocably and unconditionally agrees for itself that any legal action, suit, or proceeding against it with respect to any matter arising under or out of or in connection with this Lease or for recognition or 
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enforcement of any judgment rendered in any such action, suit, or proceeding may be brought in either a state or federal court of competent jurisdiction in the Orange County, California.  By the execution and delivery of this Agreement, each of the parties hereto hereby irrevocably accepts and submits itself to the exclusive jurisdiction of each such court, generally and unconditionally, with respect to any such action, suit, or proceeding.  By executing and delivering this Lease, each of the parties hereto irrevocably and unconditionally submits to the personal jurisdiction of each such court described in this Section 14.1, solely for purposes of any action, suit, or proceeding arising out of or relating to this Lease or for the recognition or enforcement of any judgment rendered or order entered in any such action, suit, or proceeding.  TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH PARTY HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING REFERRED TO ABOVE.  Each party (a) certifies that no representative, agent, or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties have been induced to enter into this Lease by, among other things, the mutual waivers and certifications in this Section 14.1.
14.2    No Memorandum.  No memorandum of this Lease shall be recorded.
14.3    Cumulative Remedies.  Except as specifically otherwise provided in this Lease, no remedy or election in this Lease shall be deemed exclusive, but shall, wherever possible, be cumulative with all other remedies in law or equity.
14.4    Partial Invalidity.  If any term, covenant, condition, or provision of this Lease is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
14.5    Entire Agreement.  This Lease and the Purchase and Sale Agreement between Landlord and Tenant, dated June 9, 2022 constitute the entire agreement between the parties, and there are no other agreements or understandings regarding the Leased Premises. This is a fully integrated Agreement and any oral terms discussed by the parties either before execution of this Lease or thereafter, as well as any prior writings not expressly incorporated into this Lease shall not be considered to be a part of this agreement. 
14.6    Amendment and Waiver.  This Lease may be amended at any time, but only by an instrument in writing executed by Landlord and Tenant.  Either party to the Lease may, by giving notice, waive any requirement to be performed by the other under this Lease.
14.7    Time Of Essence.  Time is of the essence of this Lease and every provision hereof.
14.8    Successors and Assigns.  Each and all of the covenants, conditions, and restrictions in this Lease shall inure to the benefit of, and shall be binding upon, the successors in interest and permitted assigns.  Tenant may assign this Lease or sublease any portion of the Leased Premises to its Affiliates without Landlord’s consent, but may not otherwise assign (by operation of law or otherwise) this Lease or sublease any portion of the Leased Premises without the written consent of Landlord, which consent shall not be unreasonably withheld or delayed.  Any attempted assignment of this Lease or sublease of any portion of the Leased Premises in violation of this Section 14.8 shall be void and constitute an Event of Default by Tenant.  Tenant hereby waives (for itself and all persons claiming under Tenant) the provisions of California Civil Code Section 1995.310.
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14.9    Relationship Of Parties.  Nothing contained in this Lease shall be deemed or construed by the parties or any third person, to create a relationship of principal and agent, or a partnership, joint venture, or association between Landlord and Tenant.
14.10    Captions; Construction.  The captions in this Lease are for convenience only, and shall not limit or amplify or otherwise constitute a part of the provisions of the Lease.  In the construction and interpretation of this Lease, the rule of construction in that documents can be construed most strictly against the party who prepared it shall not be applied because both parties have participated in the preparation of this Lease.  Accordingly, the parties waive the effect of California Civil Code Section 1654 which interprets uncertainties in a contract against the party who drafted the contract.
14.11    Signage.  Tenant is entitled to maintain the signage, placards, pictures, names, notices, letterings, door signs, window coverings, awnings, or other projections (“Signage”) on the Leased Premises as exist as of the Commencement Date. The installation of any additional signage will be subject to Landlord’s reasonable prior approval.  Tenant shall remove all Signage at the termination of this Lease. The cost and installation of all Signage shall be at the sole expense of Tenant.
14.12    Counterparts.  This Lease 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.  The exchange of copies of this Lease and of signature pages by electronic means, including PDF e-mail shall constitute effective execution and delivery of this Lease as to the parties and may be used in lieu of the original Lease for all purposes.  Signatures of the parties transmitted by electronic means, including PDF, shall be deemed to be their original signatures for all purposes.
14.13    Notices.  All notices or other communications required or contemplated by this Lease shall be in writing and shall be deemed to have been given when (a) personally delivered in return for a receipt, (b) mailed by registered or certified mail, return receipt requested, (c) sent by a recognized overnight courier service, or (d) sent by electronic means as follows:

To Tenant:                  Matrix Service Inc.  
                                    5100 E. Skelly Drive, Suite 100
                                    Tulsa, Oklahoma 74135
                                    Attention: Justin Sheets
          Email: jsheets@matrixservicecompany.com

To Landlord:               PISCES 500 W COLLINS AVE LLC 
                                    c/o Brookfield Property Group
                                    Brookfield Place
                                    250 Vesey Street
                                    New York, New York 10281-1023
                                    Attention:                                           
                                    Email:                                                 

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or to such other person or address as either party shall hereafter designate from time to time by similar notice.  Such notices or communications shall be deemed given on personal delivery in return for a receipt, on the third (3rd) business day after depositing with the U.S. mail, on the next business day after being deposited with the recognized overnight courier service, or on the date sent by electronic transmission during normal business hours (otherwise on the next business day).
[Signature Page to Follow]

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IN WITNESS WHEREOF, the parties have executed this Lease to be delivered and effective as of the date and year first above written.
TENANT:
MATRIX SERVICE INC.,
an Oklahoma corporation

By:                                                                                          
Kevin S. Cavanah, CFO

LANDLORD:
PISCES 500 W COLLINS AVE LLC,
a Delaware limited liability company

By:                                                                                           
Name:                                                                                      
                                                                            Title:                                                                                        

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Exhibit “A”
DESCRIPTION OF LEASED PREMISES

THE FOLLOWING DESCRIBED REAL PROPERTY IN THE CITY OF ORANGE, COUNTY OF ORANGE, STATE OF CALIFORNIA:
PARCEL 1 OF PARCEL MAP NO. 2007-130, IN THE CITY OF ORANGE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 363, PAGES 6 AND 7 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN: 386-581-18
PARCEL 2 OF PARCEL MAP NO. 2007-130, IN THE CITY OF ORANGE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 363, PAGES 6 AND 7 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
APN: 386-561-02

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Exhibit “B”

LANDLORD CONSENT AND WAIVER

This Landlord Waiver (this “Waiver”) is entered into as of ___________, 2022 between PISCES LOGISTICS ACQUISTION LLC, a Delaware limited liability company (together with its successors and assigns, “Landlord”), MATRIX SERVICE INC., an Oklahoma corporation (together with its successors and assigns, “Company”), and BANK OF MONTREAL, as agent for itself and certain other lenders party to the Loan Documents (as defined below) (together with its successors and assigns, in such capacity, the “Agent”).
Landlord is the owner of the real property known by APN 386-581-18, in the City of Orange, County of Orange, State of California, as more particularly described in the Lease (the “Leased Premises”).
Landlord has entered into that certain Lease Agreement dated substantially concurrently herewith (together with any renewals, extensions, amendments, modifications, substitutions or replacements thereof, the “Lease”) with the Company, with respect to the Leased Premises.
The Company and certain of its affiliates have entered, and may from time to time enter, into a loan agreement and other documents (collectively, the “Loan Documents”) evidencing a financing arrangement with Agent.  The Company has also agreed to secure its obligations and liabilities under the Loan Documents (the “Obligations”) by granting a security interest to Agent, for the benefit of the lenders, in all of the Company’s property and all products and proceeds of the foregoing, as more fully described in the Loan Documents (collectively, the “Collateral”). 
As an inducement to enter into the Loan Documents, Agent has required that the Company obtain this Waiver from Landlord in connection with its lease of the Leased Premises, and Landlord and Company hereby agree and covenant with Agent as follows:
1.Company and Landlord acknowledge that the Lease is in full force and effect and is not aware of any existing material default under the Lease.
2.Landlord acknowledges the validity of Agent’s lien on the Collateral and, subject to the terms of this Waiver, subordinates to Agent any interest (statutory, common law or otherwise) in the Collateral and agrees not to levy or distrain upon any Collateral or to claim or assert any lien, right or other claim against any Collateral for any reason at any time.  Notwithstanding the preceding sentence,  Landlord does not hereby disclaim any interest in fixtures and tenant improvements which are necessary for the operation of the Leased Premises as opposed to the operation of the Company’s business. 
3.Landlord agrees to give notice to Agent of the occurrence of any default by the Company under the Lease resulting in termination of the Lease (a “Default Notice”) and agrees to permit Agent to cure any such default within fifteen (15) days of Agent’s receipt of such Default Notice, but Agent shall not be under any obligation to cure any default by the Company under the Lease.  No action by Agent pursuant to this Waiver shall be deemed to be an assumption by Agent of any obligation under the Lease, except as expressly provided herein.

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4.Subject to the provisions of this Waiver, Landlord agrees that the Collateral may be inspected and evaluated by Agent or its designee, without necessity of court order, at any time during normal business hours without payment of any fee.
5. In the event of default by the Company in the payment or performance of the Obligations or if Landlord takes possession of the Leased Premises for any reason, including because of termination of the Company’s lease (each a “Disposition Event”), Landlord agrees that, at Agent’s option, the Collateral may remain upon the Leased Premises for a period not to exceed one hundred twenty (120) days (the “Disposition Period”) after (a) the occurrence of a Disposition Event or (b) receipt by Agent of a Default Notice; provided that Agent pays rent on a per diem basis for the period of time Agent remains on the Premises, based upon the amount of rent set forth in the Lease.  If any injunction or stay is issued (including an automatic stay due to a bankruptcy proceeding) that prohibits Agent from removing the Collateral, commencement of the Disposition Period shall be deferred until such injunction or stay is lifted or removed.
6.During any Disposition Period, Agent (a) or its designee may, without necessity of court order, enter upon the Premises at any time to inspect or remove all or any Collateral from the Premises without interference by Landlord, and Agent or its designee may sell, transfer, or otherwise dispose of that Collateral free of all liens, claims, demands, rights and interests that Landlord may have in that Collateral by law or agreement, and (b) shall make the Leased Premises available for inspection by Landlord and prospective tenants and shall cooperate in Landlord’s reasonable efforts to re-lease the Leased Premises.  Notwithstanding anything to the contrary contained in this Waiver, all rights of Agent to enter upon the Leased Premises and remove the Collateral shall be expressly subject to and conditioned upon the following:
a.Agent shall provide Landlord with reasonable notice prior to any entry upon the Leased Premises;
b.Agent shall repair any and all damage to the Leased Premises caused by the entry upon the Leased Premises by Agent (or any agent of Agent) and/or the removal of any Collateral from the Leased Premises by Agent (or any agent of Agent) and shall restore the Leased Premises to the condition existing prior to such removal;
c.Neither Agent nor any agent of Agent shall conduct a public or private sale of any of the Collateral at the Leased Premises without first obtaining Landlord’s written consent, which may be given or withheld in Landlord’s sole discretion, and without Landlord being present at the time of sale, if any; and
d.Agent agrees to indemnify, defend, protect and hold Landlord and the Leased Premises free and harmless from any claims, damages, liabilities, losses, costs, and expenses (including, without limitation, reasonable attorneys’ fees) arising out of the exercise by Agent of any of its rights under this Waiver.
7.Agent shall not (a) be liable to Landlord for any diminution in value caused by the absence of any removed Collateral or for any other matter except as specifically set forth herein or (b) have any duty or obligation to remove or dispose of any Collateral or other property left on the Leased Premises by the Company.
8.Without affecting the validity of this Waiver, any of the Obligations under the Loan Documents may be extended, amended, or otherwise modified without the consent of Landlord and without giving notice thereof to Landlord.  This Waiver shall inure to the benefit of the successors and 
23

assigns of Agent, Landlord, and Company and shall be binding upon the heirs, personal representatives, successors and assigns of Agent, Landlord, and Company.  The person signing this Waiver on behalf of each party represents that he/she has the authority to do so on behalf of the respective party.
9.All notices hereunder shall be in writing and sent by certified mail (return receipt requested), overnight mail or facsimile (with a copy to be sent by certified or overnight mail), to the other party at the address set forth on the signature page hereto or at such other address as such other party shall otherwise designate in accordance with this paragraph.
10.This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.  Delivery of an executed counterpart of this Waiver by facsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Waiver.  Any party delivering an executed counterpart of this Waiver by facsimile or other electronic method of transmission shall also deliver an original executed counterpart of this Waiver, but the failure to do so shall not affect the validity, enforceability or binding effect of this Waiver.
11.This Waiver is governed by the laws of the State of Oklahoma.  Agent, Landlord, and Company agree that any legal action or proceeding with respect to any of its obligations under this Waiver may be brought in any state or federal court located in the State of Oklahoma.  By its execution and delivery of this Waiver, the parties each submit to and accept, for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of those courts.
12.WAIVER OF SPECIAL DAMAGES. AGENT, LANDLORD, AND COMPANY EACH WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT SUCH PARTY MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.
13.JURY WAIVER. TO THE MAXIMUM EXTENT PERMITED BY LAW, AGENT, LANDLORD, AND COMPANY EACH HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE IN ANY WAY RELATED TO THIS WAIVER.
14.This Waiver shall continue in full force and affect until the earlier to occur of (a) the expiration of the Disposition Period or (b) indefeasible payment in full of all Obligations and termination of the Loan Documents.
15.If any party hereto should bring suit against another party with respect to this agreement, then all costs and expenses, including without limitation, actual professional fees and costs such as appraisers’, accountants’ and attorneys’ fees and costs, incurred by the party which prevails in such action, whether by final judgment or out of court settlement, shall be paid by the other parties, which obligation on the part of the other parties shall be deemed to have accrued on the date of the commencement of such action and shall be enforceable whether or not the action is prosecuted to judgment.  As used herein, attorneys’ fees and costs shall include, without limitation, attorneys’ fees, costs and expenses incurred in connection with any (i) post-judgment motions; (ii) contempt proceedings; (iii) garnishment, levy, and debtor and third party examination; (iv) discovery; and (v) bankruptcy litigation.
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[Signature Page Follows]

25

This Waiver is executed and delivered by Landlord as of the date first written above.

LANDLORD:
PISCES 500 W COLLINS AVE LLC, 
a Delaware limited liability company

By:                                                                                     
Name:                                                                                
                                                               Title:                                                                                                                                                        
c/o Brookfield Property Group

                                                    Brookfield Place
                                                    250 Vesey Street
                                                    New York, New York 10281-1023

COMPANY:

MATRIX SERVICE INC.,
an Oklahoma corporation

By:                                                                                 
Name:                                                                            
Title:                                                                              

                                                               5100 E. Skelly Drive, Suite 100
Tulsa, Oklahoma 74135

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BANK OF MONTREAL

By:                                                                              
Name:                                                                         
Title:                                                                           

27

EXHIBIT “C”
ENVIRONMENTAL QUESTIONNAIRE AND DISCLOSURE STATEMENT  
The purpose of this form is to obtain information regarding the use or proposed use of hazardous materials at the premises.  Prospective tenants should answer the questions in light of their proposed operations at the premises.  Existing tenants should answer the questions as they relate to ongoing operations at the premises and should update any information previously submitted.  If additional space is needed to answer the questions, you may attach separate sheets of paper to this form.
Your cooperation in this matter is appreciated.
1.         GENERAL INFORMATION
Name of Responding Company:                                                                           
Check the Applicable Status: Prospective Tenant _____      Existing Tenant _____
Mailing Address:                                                                                                   
Contact Person and Title:                                                                                      
Telephone Number:  (_____) ________________________
Address of Leased Premises:                                                                                
Length of Term:                                                                                                    
Describe the proposed operations to take place on the premises, including principal products manufactured or services to be conducted.  Existing tenants should describe any proposed changes to ongoing operations.

2.         STORAGE OF HAZARDOUS MATERIALS
2.1       Will any hazardous materials be used or stored on-site?
Wastes                        Yes _____       No _____
Chemical Products     Yes _____       No _____
2.2       Attach a list of any hazardous materials to be used or stored, the quantities that will be on-site at any given time, and the location and method of storage (e.g., 55-gallon drums on concrete pad).
3.         STORAGE TANKS AND SUMPS
3.1       Is any above or below ground storage of gasoline, diesel or other hazardous substances in tanks or sumps proposed or currently conducted at the premises?
Yes ______     No _____
If yes, describe the materials to be stored, and the type, size and construction of the sump or tank.  Attach copies of any permits obtained for the storage of such substances.

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3.2       Have any of the tanks or sumps been inspected or tested for leakage?  
Yes ______     No _____
If so, attach the results.
3.3       Have any spills or leaks occurred from such tanks or sumps?
Yes ______     No _____
If so, describe.

3.4       Were any regulatory agencies notified of the spill or leak?
Yes ______     No _____
If so, attach copies of any spill reports filed, any clearance letters or other correspondence from regulatory agencies relating to the spill or leak.
3.5       Have any underground storage tanks or sumps been taken out of service or removed?
Yes ______     No _____
If yes, attach copies of any closure permits and clearance obtained from regulatory agencies relating to closure and removal of such tanks.
4.         SPILLS
4.1       During the past year, have any spills occurred at the premises?
Yes ______     No _____
If yes, please describe the location of the spill.

4.2       Were any agencies notified in connection with such spills?
Yes ______     No _____
If yes, attach copies of any spill reports or other correspondence with regulatory agencies.
4.3       Were any clean-up actions undertaken in connection with the spills?
Yes ______     No _____
Attach copies of any clearance letters obtained from any regulatory agencies involved and the results of any final soil or groundwater sampling done upon completion of the clean-up work.
5.         WASTE MANAGEMENT
5.1       Has your company been issued an EPA Hazardous Waste Generator I.D. Number?
Yes ______     No _____
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5.2       Has your company filed a biennial report as a hazardous waste generator?
Yes ______     No _____
If so, attach a copy of the most recent report filed.
5.3       Attach a list of the hazardous wastes, if any, generated or to be generated at the premises, its hazard class and the quantity generated on a monthly basis.
5.4       Describe the method(s) of disposal for each waste.  Indicate where and how often disposal will take place.
_____  On-site treatment or recovery                                                        
_____  Discharged to sewer                                                                      
_____  Transported and disposed of off-site                                             
_____  Incinerator                                                                                     
5.5       Indicate the name of the person(s) responsible for maintaining copies of hazardous waste manifests completed for off-site shipments of hazardous waste.

5.6       Is any treatment of processing of hazardous wastes currently conducted or proposed to be conducted at the premises:
Yes ______     No _____
If yes, please describe any existing or proposed treatment methods.                                                                                                                           
5.7       Attach copies of any hazardous waste permits or licenses issued to your company with respect to its operations at the premises.
6.         WASTEWATER TREATMENT/DISCHARGE
6.1       Do you discharge wastewater to:
_____  storm drain?    _____  sewer?
_____  surface water? _____  no industrial discharge
6.2       Is your wastewater treated before discharge?
Yes ______     No _____
If yes, describe the type of treatment conducted.

6.3       Attach copies of any wastewater discharge permits issued to your company with respect to its operations at the premises.
7.         AIR DISCHARGES
7.1       Do you have any filtration systems or stacks that discharge into the air?
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Yes ______     No _____
7.2       Do you operate any of the following types of equipment or any other equipment requiring an air emissions permit?
_____  Spray booth
_____  Dip tank
_____  Drying oven
_____  Incinerator
_____  Other (please describe)                                                                  
_____  No equipment requiring air permits
7.3       Are air emissions from your operations monitored?
Yes ______     No _____
If so, indicate the frequency of monitoring and a description of the monitoring results.
7.4       Attach copies of any air emissions permits pertaining to your operations at the premises.
8.         HAZARDOUS MATERIALS DISCLOSURES
8.1       Does your company handle hazardous materials in a quantity equal to or exceeding an aggregate of 500 pounds, 55 gallons, or 200 cubic feet per month?
Yes ______     No _____
8.2       Has your company prepared a hazardous materials management plan pursuant to any applicable requirements of a local fire department or governmental agency?
Yes ______     No _____
If so, attach a copy of the business plan.
8.3       Has your company adopted any voluntary environmental, health or safety program?
Yes _____       No _____
If so, attach a copy of the program.
9.         ENFORCEMENT ACTIONS, COMPLAINTS
9.1       Has your company ever been subject to any agency enforcement actions, administrative orders, or consent decrees?
Yes ______     No _____
If so, describe the actions and any continuing compliance obligations imposed as a result of these actions.

31

9.2       Has your company ever received requests for information, notice or demand letters, or any other inquiries regarding its operations?
Yes ______     No _____
9.3       Have there ever been, or are there now pending, any lawsuits against the company regarding any environmental or health and safety concerns?
Yes ______     No _____
9.4       Has an environmental audit ever been conducted at your company’s current facility?
Yes ______     No _____
If so, identify who conducted the audit and when it was conducted.

Tenant:                                                                         
By:                                                                               
Its:                                                                               

32ex_430362.htm

 

Exhibit 10.1

 

CONSTRUCTION LOAN AGREEMENT

 

 

 

THIS CONSTRUCTION LOAN AGREEMENT (“Loan Agreement” or “Agreement”) is executed to be effective as of the 4th day of October, 2022, by and between Greater Nevada Credit Union (“GNCU”), a domestic nonprofit cooperative corporation organized under the laws of the State of Nevada, for itself and as agent/nominee for other lending institutions having an interest, direct or indirect, in the Loan (as defined herein below) from time to time (together with its successors and assigns, the “Lender”); Aemetis Biogas 1 LLC, a limited liability company organized under the laws of the State of Delaware (the “Borrower”) and Aemetis Biogas Holdings LLC, a limited liability company organized under the laws of the State of Delaware, as guarantor (“Guarantor”). Borrower and Guarantor are referred to each as an “Obligor” and collectively as the “Obligors”, and Lender and Obligors are referred to each individually as a “Party” and collectively as the “Parties”.

 

TABLE OF CONTENTS

	
			1.

				
			Definitions.

				2
	
			2.

				
			The Loan and Disbursements.

				9
	
			3.

				
			Representations and Warranties.

				19
	
			4.

				
			Covenants of Parties.

				23
	
			5.

				
			Security Agreement and Collateral for the Loan.

				34
	
			6.

				
			Events of Default.

				35
	
			7.

				
			Lender’s Remedies

				37
	
			8.

				
			Miscellaneous.

				40

 

PRELIMINARY STATEMENT

 

WHEREAS, Borrower is a limited liability company formed solely for the purpose of developing, designing, permitting, constructing, financing, owning, operating and maintaining anaerobic digesters on six dairy farms located throughout central valley California for the collection of methane gas, processing and converting the gas to renewable natural gas (RNG) and selling the RNG to one or more buyers;

 

WHEREAS, Borrower desires financing in the sum of $25,000,000 (the “Loan”) for the purpose of completing the construction and equipping of the Project (as defined herein), for the deposit of funds in an interest reserve and for other purposes;

 

WHEREAS, subject to compliance with all of the terms and conditions set forth in this Loan Agreement, the Lender will lend to Borrower by making advances in the aggregate principal amount not to exceed $25,000,000, evidenced by that certain Construction Promissory Note of even date herewith;

 

WHEREAS, to date Borrower has spent at least $11,559,000 of its own funds for the construction of the Project;

 

1

 

 

WHEREAS, the USDA Rural Development has issued a USDA Conditional Commitment (as defined herein) for the issuance of one or more USDA Loan Note Guarantees (as defined herein) under the Renewable Energy for American Program administered by the U.S. Department of Agriculture (REAP), guaranteeing 80% of the Loan (as defined herein) in the principal sum of up to $25,000,000.00;

 

WHEREAS, upon completion of construction of the Project, Lender intends to provide permanent financing to Borrower for the Project of up to $25,000,000, such loan to be guaranteed by the USDA Loan Note Guarantees referenced above; and

 

WHEREAS, upon and subject to the terms and conditions set forth in this Loan Agreement and in the other Loan Documents (as defined herein), Lender is willing to make the Loan to Borrower as provided herein;

 

STATEMENT OF AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing premises, which are hereby affirmed by each Obligor to be true and correct, the mutual agreements of the Parties set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties do covenant and agree as follows:

 

1.       Definitions. For the purposes of this Loan Agreement, capitalized terms used but not otherwise defined in this Loan Agreement shall have the meaning as follows:

 

1.1   “Accounts” shall have the meaning assigned thereto in the Code.

 

1.2   “ Account Debtor” shall have the meaning assigned thereto in the Code.

 

1.3   “Affiliate” means, with respect to the subject Person: (a) any Person directly or indirectly owning fifty-one percent (51%) or more of the partnership interests or rights in the subject Person or of which the subject Person owns fifty-one percent (51%) or more of such voting stock or rights; (b) any Person controlling or controlled by or under common control with the subject Person; (c) any officer, director or managing employee or agent of the subject Person; (d) any immediate family member of the subject Person; or (e) any Affiliate of such subject Person.

 

1.4   “Assignment of Construction Contract” means that certain Assignment of Construction Contract by and between Borrower and Lender and dated of even date herewith, as may be supplemented from time to time.

 

1.5   “Assignment of Material Contracts and Licenses” means the Assignment of Material Contracts and Licenses from Borrower to Lender whereby all construction agreements (other than the Construction Contract, which is subject to a separate Assignment of Construction Contract), supply agreements, off-take agreements, marketing agreements, management agreements, technology licenses, patent licenses and other agreements and licenses relating to the construction and operation of the Project are collaterally assigned to Lender, together with all consents of contracting and licensing parties to the assignment.

 

1.6   “Borrower” means any such party so identified in the caption of this Agreement.

 

2

 

 

1.7   “Borrower Contributions” means payments by Borrower of Project construction costs acceptable to Lender.

 

1.8   “Business Day” means any day on which Lender is open for business.

 

1.9   “Certificate of Title” shall have the meaning assigned thereto in the Code.

 

1.10  “Chattel Paper” shall have the meaning assigned thereto in the Code. 

 

1.11  “Closing” or “Closing Date” means the date upon which all conditions to the closing of the Loan have been satisfied as determined by Lender in its reasonable discretion.

 

1.12  “Code” means the Uniform Commercial Code as in effect under the laws of the State of California from time to time, as the same may be amended.

 

1.13  “Collateral” means the Personal Property Collateral, the Real Property Collateral and such other security interests described in Section 5.1 hereof, together with any other personal or real Property otherwise pledged, transferred or assigned to Lender as security for the repayment and performance of the Obligations, or any portion thereof, whether occurring in the past, concurrently herewith or in the future.

 

1.14  “Collateral Documents” means the Deeds of Trust, the Security Agreement, the Assignment of Material Contracts and Licenses, the Assignment of Construction Contracts, the UCC Financing Statements and all other documents and agreements intended to pledge any of the Collateral as security for the Loan, together with all amendments and supplements to any of the forgoing agreements that have been entered into in accordance with the terms thereof.

 

1.15  “Collections Account” shall have the meaning as provided in Section 4.1(p)(iv).

 

1.16  “Construction Account” means the account established with that name pursuant to Section 2.7 hereof.

 

1.17  “Construction Contract” means that certain Construction Agreement dated as of September 1, 2022 by and between Borrower and General Contractor, together with all exhibits, addenda, schedules, supplements, amendments and modifications thereto from time to time for the construction of the Project.

 

1.18  “Construction Financing Rider” means that certain Construction Financing Rider between Borrower and Lender dated the date hereof, attached hereto as Exhibit 1 and made a part hereof, setting forth additional terms and conditions of the disbursement of proceeds of the Loan.

 

1.19  “Construction Plans” means as defined in the Construction Financing Rider.

 

1.20  “Corporate Guaranty” means that certain Unlimited Continuing Guaranty on Lender’s form, executed by Guarantor and dated as of the effective date of this Agreement, together with any amendments, modifications or replacements thereof.

 

1.21  “Covenant Compliance Certificate” means the Covenant Compliance Certificate as more particularly described on Schedule 4.1(b) hereof.

 

3

 

 

1.22  “Dairies” means those six commercial dairies located in Stanislaus County, California and commonly known as the “Double D Dairy”, the “Ahlem Farms Jerseys Dairy”, the “K & R Blount Dairy”, the “Albert Menes Dairy”, the “Trinkler Dairy, and the “Alamo Dairy #1”.

 

1.23  “Deposit Accounts” shall have the meaning assigned thereto in the Code.

 

1.24  “Documents” when used singularly shall have the meaning assigned thereto in the Code.

 

1.26  “Environmental Laws” shall mean applicable state, federal or local environmental laws or regulations, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. § 9601 et seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 1101 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Hazardous Materials Transportation Act of 1974, 49 U.S.C. § 1801 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Endangered Species Act, 16 U.S.C. 1531 et seq.; any laws regulating the use of biological agents or substances including medical or infectious wastes, each as amended or supplemented, and any applicable and analogous future or present local, state, and federal statutes, regulations, and ordinances promulgated pursuant thereto.

 

1.26  “Equipment” shall have the meaning assigned thereto in the Code.

 

1.27    [Reserved.].

 

1.28  “Event of Default” shall have the meaning set forth in Section 6.

 

1.29  “Financial Covenants” shall have the meaning set forth in Section 4.4

 

1.30  “Financial Statements” means an income statement, balance sheet, profit and loss statement, and statement of cash flows, and any other such statement relating the financial condition, present, past, or future, of such Person; all of the foregoing shall be accompanied by any supporting schedules, prepared in accordance with GAAP, and in a form and of substance satisfactory to Lender.

 

1.31  “Fixtures” shall have the meaning assigned thereto in the Code.

 

1.32  “GAAP” means generally accepted accounting principles and practices as in effect from time to time and recognized as such by the American Institute of Certified Public Accountants, consistently applied.

 

1.33  “General Contractor” shall mean Aemetis Biogas Services LLC, a Delaware limited liability company.

 

1.34  “General Intangibles” shall have the meaning assigned thereto in the Code.

 

4

 

 

1.35  “Goods” shall have the meaning assigned thereto in the Code.

 

1.36  “Governmental Authority” shall mean any federal, state, municipal, national, local or other governmental department, court, commission, board, bureau, agency or instrumentality of political subdivision thereof, or any entity or officer exercising executive, legislative or judicial, regulatory or administrative functions of or pertaining to any government of any court, whether of the United States or a state, territory or possession thereof, a foreign sovereign entity or country or jurisdiction of the District of Columbia.

 

1.37  “Guarantor” means such party so identified in the opening paragraph of this Agreement, together with its successors and assigns.

 

1.38  “Indebtedness” means, collectively, all liabilities (including, without limitation, capital lease obligations) of the subject Person, whether owing by such Person alone or with one or more others in a joint, several, or joint and several capacity, whether now owing or hereafter arising, whether owing absolutely or contingently, whether created by loan, overdraft, guaranty of payment, or other contract or by quasi-contract or tort, statute or other operation of law or otherwise.

 

1.39  “Instrument” shall have the meaning assigned thereto in Article 9 of the Code.

 

1.40  “Intercompany Transaction” means any Account, Chattel Paper, General Intangible, Instrument, Document or other Indebtedness or obligation arising from business done with or for, or Indebtedness owed between or among, the subject Person and any Subsidiary or Affiliate of such Person.

 

1.41  “Inventory” shall have the meaning assigned thereto in the Code.

 

1.42  “Investment Property” shall have the meaning assigned thereto in the Code.

 

1.43  “Leases” means those leases identified on Schedule 1.43 hereto between Borrower, as “Lessee”, and the respective owners of the Dairies, each as “Lessor”, together with all amendments, supplements and substitutions thereof.

 

1.44  “Lender” means such party so identified in the opening paragraph of this Agreement, together with its successor and assigns.

 

1.45  “Letter of Credit Rights” shall have the meaning assigned thereto in the Code.

 

1.46  “Lien” includes: (i) any interest in property (real property, personal property or mixed, and tangible or intangible) securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on law, statute, or contract, and including, but not limited to, the security interest, security title or lien arising from a security agreement, mortgage, mortgage, deed to secure debt, encumbrance, pledge, conditional sale or trust receipt or a lease, consignment or bailment for security purposes; and (ii) any covenants, conditions, restrictions, leases and other encumbrances affecting any property.

 

5

 

 

1.47  “Loan Documents” means this Loan Agreement, the Note, the Collateral Documents, the Corporate Guaranties, any financing statements, collateral documents, consents and all other documents, instruments, certificates and agreements executed and/or delivered by any Obligor or any third party in favor of Lender in connection with the Loan or any Collateral, whether executed and/or delivered prior to the Closing Date, concurrently herewith or at any time hereafter; all of the foregoing together with any modifications, extensions, renewals, amendments or replacements thereof.

 

1.48  “Loan” means the loan from Lender to Borrower in the aggregate principal amount of up to $25,000,000.00 as evidenced by the Note and made pursuant to the terms of this Loan Agreement and other Loan Documents, together with any other loan made by Lender, whether now existing or in the future, stating that it is governed by or subject to this Loan Agreement; all of the foregoing together with any modifications, extensions, renewals, amendments or replacements thereof.

 

1.49  “Lock Box” shall have the meaning as provided in Section 4.1(p)(iv).

 

1.50  “Material Adverse Change” means for the subject Person, the occurrence of events or circumstances which, if unchanged, would materially and adversely impair such Person’s: (i) financial condition, or (ii) ability to meet its financial obligations as they become due, or (iii) ability to conduct its business as conducted immediately prior to the occurrence of such events or circumstances.

 

1.51  “Maturity Date” means March 4, 2023.

 

1.52  “Mortgage” means that certain Construction Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture filing executed by Borrower in favor of Lender of even date herewith pursuant to Section 5.1 hereof in form satisfactory to Lender, and granting to Lender a first priority lien and security interest Borrower’s leasehold interest on the Real Property Collateral.

 

1.53  “Note” means the Construction Promissory Note of Borrower in favor of Lender for advances of up to the aggregate principal amount of $25,000,000.00 and evidencing the obligation of Borrower to repay the Loan, as well as any promissory note or notes issued by Borrower in substitution, replacement, extension, amendment or renewal of any such Construction Promissory Note.

 

1.54  “Obligations” means: (a) any and all principal and interest outstanding under the Notes, together with any and all other Indebtedness, obligations, performance and liabilities of Borrower to Lender, or any affiliate of Lender, from time to time, including, without limitation, any and all Indebtedness, liabilities and obligations of Borrower which may at any time become due under this Loan Agreement and under any other Loan Document; all of the foregoing whether now existing or hereafter arising, whether advanced, now or in the future, paid down and re-advanced, whether related or unrelated to the Notes, whether voluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute or contingent, liquidated or unliquidated, whether Borrower may be liable individually or jointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, whether recovery upon such amounts may be or hereafter may become barred by any statute of limitations, whether the obligation to repay such amounts may be or hereafter may become otherwise unenforceable, and irrespective of the effect of any bankruptcy or insolvency action; (b) all renewals, extensions and modifications of any of the foregoing or any part thereof; and (c) any of the foregoing that arise after the filing of a petition by or against Borrower under the United States Bankruptcy Code, even if the obligations do not accrue because of the automatic stay under United States Bankruptcy Code Section 362 or otherwise.

 

6

 

 

1.55  “Obligor” and “Obligors” means as defined in the opening paragraph of this Agreement.

 

1.56  “Parties” means any such party identified in the caption of this Agreement

 

1.57  “Permitted Indebtedness” means as specified in Section 4.3(f) hereof.

 

1.58  “Permitted Liens” means those Liens specified in Section 4.3(g) hereof.

 

1.59  “Person” means an individual person, corporation, limited liability company, trust, joint venture, limited or general partnership, any government or agency or political subdivision of any government, or any other entity or organization.

 

1.60  “Personal Property Collateral” shall have the meaning as set forth in Section 5.1(a).

 

1.61 “Project” means the development, design, permitting, financing, construction and operation of six anaerobic digester systems located on the Dairies under the terms of the Leases, to be utilized for the collection of methane gas from dairy and other cow manure and the processing of such gas into Renewable Natural Gas (“RNG”).

 

1.62  “Project Inspector” and “Voucher Control Company” shall mean Tetra Tech, Inc., and any other Party retained by Lender to inspect the construction of the Project or to administer and verify draw requests on Lender’s behalf.

 

1.63  “Project Revenues” means, for any period, all cash receipts or other revenue of Borrower relating to the Project, including, but not limited to, revenues from: (i) the collective, production and sale of renewable natural gas (RNG), methane, biogas, biofuel, renewable hydrogen and other products and by-products from the Project, (ii) proceeds from business interruption insurance policies, and (iii) delay liquidated damages payable under any Construction Contract; provided, however, that Project Revenues shall not include proceeds from casualty insurance to the extent such proceeds are used to replace or rebuild the structure or item for which the proceeds are associated or that are the proceeds of the Loan or any other Permitted Indebtedness incurred by Borrower.

 

1.64  “Real Property Collateral” means Borrower’s leasehold interests and rights arising from and under the Leases for each of the Dairies and other rights arising from or incidental thereto, as more particularly provided in the Mortgage or as otherwise pledged or assigned to Lender as security for the Obligations, or any portion thereof, whether occurring in the past, concurrently herewith or in the future, including, but not limited to the Project; all of the foregoing together with other interests arising from or related thereto, all improvements, buildings and Fixtures now or hereafter located thereon, all mineral and water rights, and any and all proceeds arising from any of the foregoing, and any appurtenances and other rights, rents, royalties, claims or benefits arising from or pertaining thereto.

 

7

 

 

1.65  “Receivables” means each and every Account of Borrower.

 

1.66  “Required Equity Contributions” means Borrower Contributions equal to at least $11,559,000.00.

 

1.67  “Security Agreement” means the Security Agreement executed by Borrower in favor of Lender pursuant to Section 5.1 hereof, in form satisfactory to Lender, and granting to Lender a first priority lien in and on the Personal Property Collateral.

 

1.68  “Servicer” means as defined in Section 2.12 hereof.

 

1.69  “Solvent” or “Solvency” mean, with respect to the subject Person, where such Person: (i) owns property (real property, personal property, or a combination thereof) whose aggregate fair saleable value is greater than the amount required to pay all of such Person’s Indebtedness (including contingent debt (it being understood that the amount of contingent liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability)); (ii) is able to pay all of its Indebtedness as such Indebtedness comes due or matures; and (iii) has capital sufficient to carry on its business and transactions and all business and transactions in which it is about to engage.

 

1.70  “Subsidiary” means any corporation, limited liability company, general or limited partnership or other entity or business enterprise in which subject Person, directly or indirectly, owns more than fifty percent (50%) of the stock, equity, capital or other interests (legal or beneficial) which is effectively controlled, directly or indirectly, by such Person.

 

1.71  “Substances” means any hazardous or toxic substance or wastes as defined by or under any Environmental Laws, including, but not limited to, friable asbestos, PCBs in regulated concentrations, petroleum products, fertilizers, pesticides and any animal, agricultural or agricultural waste or byproducts, but excluding substances used in minimal amounts in the ordinary course of business to produce the Inventory in material compliance with applicable Environmental Laws.

 

1.72  “Tangible Net Worth” means total assets (excluding goodwill, patents, trademarks, trade names, organization expense, treasury stock, unamortized debt discount and expense, deferred research and development costs, deferred marketing expenses, and other like intangibles) less Total Liabilities.

 

1.73  “Total Liabilities” means all of the subject Person’s liabilities, including accrued and deferred income taxes and any reserves against assets, determined in accordance with GAAP, consistently applied.

 

1.74  “USDA” means the United States Department of Agriculture and any successor federal agency.

 

8

 

 

1.75  “USDA Conditional Commitment” means the Conditional Commitment expected to be issued by the USDA, Rural Business Cooperative Services for the issuance of the USDA Guarantee under the USDA’s Rural Energy for American Program (“REAP”), together with any amendments or supplements thereto, whether now existing or hereafter arising, together with any modifications or amendments thereto, all such requirements, terms and conditions being incorporated by reference herein.

 

1.76  “USDA Guarantee” means each of, and “USDA Guarantees” mean all of, the Loan Note Guarantee(s) (Form RD 5001-4) to be executed and delivered by the USDA to Lender pursuant to the USDA Conditional Commitment and guaranteeing 80% of the principal of a term loan of $25,000,000 in principal amount.

 

2.       The Loan and Disbursements. Lender hereby agrees to make or continue to make the Loan, as applicable, to Borrower on the terms and conditions set forth herein. The obligation of the Borrower to repay the Loan and the terms for repayment shall be evidenced by, and set forth in, the Notes.

 

2.1    Loan. Subject to the terms and conditions of this Loan Agreement and the other Loan Documents and provided no Event of Default exists, Lender hereby agrees to make available to Borrower a Loan of up to Twenty-Five Million and No/100 Dollars ($25,000,000.00). funds may be drawn under the Loan periodically to pay construction costs, subject in each case to the satisfactory completion of all conditions to funding of the draw as set in Sections 2.2 and 2.3 below and as otherwise set forth herein, and to pay interest on the Loan as and when due as provided below. The obligation to repay the Loan and the interest rates and terms of payment, are set forth in the Loan Promissory Note. The Loan shall mature on the Maturity Date. The Loan is expected to be repaid from the proceeds of a term loan in the principal amount of $25,000,000, to be guaranteed by one or more USDA Guarantees issued by the USDA pursuant to a USDA Conditional Commitment.

 

2.2    Funds for Release of Collateral Construction Costs, Interest Payments and Working Capital. At closing, funds under the Loan will be available for draw as follows: (i) up to $12,000,000.00 will be available to pay Third Eye Capital Corporation, as Administrative Agent for MBI/TEC Private Debt Opportunities Fund II, L.P., for release of its security interest in certain personal property of Borrower that will be included as part of the Personal Property Collateral, (ii) $6,838,821.00will be available to pay construction draws (the “Construction Portion”), and (iii) up to $838,457.93 will be available to pay for Borrower’s working capital needs as provided in Section 2.7 below. Borrower does hereby authorize Lender to withdraw funds from the Loan and under the Note (a) from the Construction Portion to pay construction draws, and (b) from the Interest Portion to pay interest on the Note when due and (c) to provide working capital as permitted hereunder, so long as Lender provides Borrower prior to written notification of said withdrawal. Upon Borrower’s request, Lender shall provide an accounting of the amounts withdrawn from the Construction Portion.

 

2.3    Disbursement of Construction Draws and Working Capital. (a)Construction draws of Loan funds will be completed in accordance with the Construction Financing Rider. Draws will only be allowed after Borrower provides evidence to Lender that the full amount of the Required Equity Contribution has been fully expended for approved construction related costs and other acceptable construction soft costs and loan origination costs, all as acceptable to Lender.

 

9

 

 

All disbursements of the Construction Portion of Loan funds will be subject to the following:

 

(i)        Requests for disbursements shall be made to the Voucher Control Company or as otherwise directed by Lender, and must be made by no later than 4:00 p.m., central standard time, at least five (5) Business Days prior to the date the requested disbursement is to be made. Such requests for disbursement shall be accompanied by and subject to all information and documentation described under Section 4 of the Construction Financing Rider, and also accompanied by approvals of the General Contractor and the Borrower prior to submittal for approval by the Voucher Control Company and funding by the Lender. If all information referenced above is not provided with any draw request, the disbursement requested may be delayed by Lender for up to fifteen (15) days from the date that all required information is provided. The Lender will be copied on all payment requests at the time each is submitted by the General Contractor to the Voucher Control Company. Payment requests may be submitted by pdf copies via email or other means acceptable to Lender and the Voucher Control Company in accordance with the form provided by the Voucher Control Company (or by Lender).

 

(ii)         In addition to what is required under the Funds Control & Inspection Services Agreement between Tetra Tech, Inc., Aemetis Biogas 1, LLC, Aemetis Biogas Services and Greater Commercial Lending, dated August 18, 2022, the following certifications are required for each request for disbursement:

 

A.         Certification by the applicable Contractor to the Lender that the work referred to in the draw has been successfully completed or milestones met or eligible equipment has been or will be ordered;

 

B.         Certification from the Borrower to Lender that all debts, including but not limited to, all amounts then due and payable under the Construction Contract, have been paid or will be paid and all mechanics’ liens have been or will be released;

 

C.         Confirmation from Borrower that it is complying with all requirements of the Loan Agreement and other Loan Documents;

 

D.         Certification by the Borrower that to its knowledge no Loan funds have been improperly disbursed to the Borrower or its Affiliates; and

 

E.         Certification by the Voucher Control Company to Lender as required under the Construction Financing Rider.

 

2.4    Loan Payments. All proceeds of the Loan and interest thereon shall be paid by Borrower as set forth in the Construction Note.

 

2.5    Purpose of Loan. The proceeds of the Loan may only be used to refinance debt, pay for costs of constructing the Project, to pay interest on the Loan, working capital and closing costs, in each case as approved by Lender and in accordance with the provisions of the Borrower’s application submitted to the USDA for issuance of the USDA Guarantee and Loan funds cannot be used for payment to an owner, partner or beneficiary of the Borrower, their close relatives, or other Affiliates.

 

10

 

 

2.6    Set-Off. Lender may, upon the occurrence and continuation of an Event of Default that is not cured within any applicable cure period, charge against any Deposit Account of Borrower held by or under the control of Lender, or advance to Borrower and charge to the Loan, all or any part of any of the Obligations due from Borrower, including, without limitation: (i) interest, principal, fees and expenses due under the Notes or as otherwise provided in this Agreement or the other Loan Documents; (ii) any overdraft amounts in any of Borrower’s Deposit Accounts; and (iii) any reasonable and customary costs incurred by Lender to protect or inspect the Collateral as provided in the Loan Documents.

 

2.7    Establishment of Accounts and Deposits of Funds.

 

(a)     Establishment of Accounts. The following Deposit Accounts are to be established with Lender at Closing (collectively, the “Project Accounts”):

 

(i)         “Interest Service Reserve Account” (Acct. #886482307, into which $1,302784.00 of the proceeds of the Loan will be deposited at closing;

 

(ii)        “Payment Service Reserve Account” (Acct. #886482290) into which $1,085,388 of the proceeds of the Loan will be deposited at Closing;

 

(iii)         “Project Contingency Account” (Acct #886784807), into which $875,000 of the proceeds of the Loan will be deposited at Closing;

 

(iv)         “Working Capital Reserve Account” (Acct.#886784920) into which $838,457.93of the proceeds of the Loan will be deposited at Closing;

 

(v)         “Guaranty Fee Reserve Account” (Acct. #886784282) into which $250,000 from proceeds of the Loan will be deposited at Closing; and

 

(vi)         “Construction Account” if required by Lender for the disbursement of Loan funds for the construction of the Project.

 

(b)     Disbursements from Project Accounts; Use of Loan Funds for Working Capital. Funds in the Project Accounts will be disbursed as follows:

 

(i)         Disbursement from Interest Service Reserve Account. Funds in the Interest Reserve Account will be withdrawn by Lender on each Payment Date under the Note.

 

(ii)         Working Capital Reserve Account. Funds deposited into the Working Capital Reserve Account may be used by Borrower to pay for working capital expenses as requested to Lender periodically. All requests by Borrower for the disbursement of funds from the Working Capital Reserve Account for working capital purposes must be accompanied by a written request for funds and a detailed breakdown of the business expenses to be paid from funds to be drawn. All draws will be subject to the prior approval of Lender.

 

11

 

 

(iii)         Disbursements from Guaranty Fee Reserve Account. Funds deposited into the Guaranty Fee Reserve Account will be dispersed as follows: (i) upon the closing of a term loan with Lender or its assigns for the financing of the Project (or any portion thereof) which is to be guaranteed by one or more USDA Guarantees, (a) up to $200,000.00 shall be withdrawn and applied to pay the guarantee fee to the USDA for the issuance of the USDA Guarantee(s) and (b) $50,000.00 will be withdrawn and placed in a reserve with Lender to pay the annual renewal fee to the USDA for the USDA Guarantee(s), and (ii) any remaining funds will be available to pay closing related costs of the term loan.

 

(iv)         Disbursements from Payment Service Reserve Account. The Payment Service Reserve Account shall remain in place for the term of the Loan. Upon the occurrence of any Event of Default under Section 6.1 or 6.2 hereof, Lender may withdraw any amount of such funds as are available in the Payment Service Reserve Account and apply the same to pay interest and/or principal on the Loan. If for any reason the balance in the Payment Service Reserve Account should ever fall below the sum of $100,000.00 (the “Payment Service Reserve Requirement”), the Borrower must deposit funds from additional equity or funds from operating cash flow within one (1) month to bring the balance therein to at least the Payment Service Reserve Requirement. All funds in the Payment Service Reserve Account upon the closing of a term loan with Lender (to be guaranteed by the USDA Guarantee(s)) for the Project will be transferred to a payment service reserve account with Lender to be established in connection with such term loan, and will be held and applied as set forth in the loan agreement for said term loan for a period of at least three years from the closing thereof or until the Project has reached stabilization (to be defined in the loan agreement for the term loan, whichever occurs later. The use of funds in the Payment Service Reserve Account by Lender upon the occurrence of an Event of Default shall be in addition to all other rights and remedies available to Lender.

 

(v)         Disbursements from Project Contingency Account. Funds in the Project Contingency Account may be withdrawn by Borrower pursuant to Section 2.3(c), but only with the prior consent of the Lender, to pay for construction costs in order to complete the Project after all Loan funds available for construction have been disbursed or all funds in the Construction Account, if any, have been disbursed. Upon Substantial Completion (as defined in the Construction Financing Rider) of the Project and payment in full of the Loan, any funds remaining in the Project Contingency Account may be released to Borrower upon request.

 

(vi)         Notwithstanding the foregoing, and in addition to all other rights and remedies hereunder, Lender may restrict or deny the payment of any funds from the Project Accounts (or any of them) for any purpose if Borrower has breached any financial or other covenant under the Loan Documents or will be in breach of any financial or other covenant if such payment is made, or if an Event of Default has occurred and is continuing.

 

2.8    Lender’s Right to Apply Funds in Project Accounts. Notwithstanding any provision herein to the contrary, if an Event of Default has occurred and is continuing, Borrower irrevocably waives the right to direct the application of any and all funds in the Project Accounts at any time or times hereafter, and Borrower does hereby irrevocably agrees that, in addition to all of the rights and remedies available to Lender, Lender shall have the continuing right to apply any or all of such funds against the Obligations.

 

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2.9    Conditions Precedent to Closing of Loan. Lender will disburse the proceeds of the Loan to Borrower in accordance with the terms and conditions of this Loan Agreement and the Construction Financing Rider if all matters, documents, papers and certificates required under this Loan Agreement and the other Loan Documents have been furnished to Lender’s reasonable satisfaction, including, without limitation, the following documents and matters, each in form and of substance satisfactory to Lender, due on or before the Closing Date, unless otherwise provided, PROVIDED, HOWEVER, that Lender shall have no obligation to advance any sum to Borrower if Borrower is not in full compliance with all covenants hereunder or if an Event of Default has occurred and is not cured within any applicable cure period expressly set forth herein:

 

(a)    Execution and Delivery of All Loan Documents. All Loan Documents are in form and substance acceptable to Lender and have been duly executed and delivered by the parties thereto, the Mortgage has been fully executed and is in sufficient form for recording in Stanislaus County, California and any other such matters as set forth herein shall have been completed and delivered to the satisfaction of Lender.

 

(b)    Authority and Compliance Documents. Any documents Lender may require: (i) to establish the authority of any Obligor to enter into this Agreement and the other Loan Documents including, but not limited to, governing instruments, certificates of incumbency and resolutions of the appropriate governing body; and (ii) to establish the good standing of any Obligor with any relevant governing, taxing, or regulatory body, including, but not limited to, certificates of existence and tax compliance certificates; all of the foregoing in a form and of substance satisfactory to Lender and certified as to completeness and accuracy by the appropriate officer of such Obligor.

 

(c)    Title Insurance and Surveys. In connection with the Real Property Collateral, Borrower shall cause to be delivered to Lender, at or prior to Closing, (i) a pro forma ALTA title insurance policy or policies in Lender’s favor insuring the lien of the Mortgage on the Real Property Collateral, together with any endorsements required by Lender, containing no exceptions which are unacceptable to Lender, endorsed as of the Closing Date and in amounts satisfactory to Lender; and (ii) ALTA/NSPS Land Title Surveys of all Real Property Collateral, certified to Lender and the Title Insurance Company and dated within 30 days prior to Closing, each in form and content satisfactory to Lender.

 

(d)    Assurance of Lien Position. Assurances, to the reasonable satisfaction of Lender, of Lender’s requisite lien position with respect to the Collateral, including, but not limited to, Lender’s receipt of landlord consents and waivers from third parties claiming rights in the Collateral under statute, contract or otherwise.

 

(e)    Third-Party Lenders. Lender shall have reasonable assurances that Borrower does not have any other loans outstanding from any third-party lenders or other Persons.

 

(f)    Financial Statements and Other Periodic Reports. Borrower’s interim Financial Statements and all other periodic reports described on Schedule 4.1(b) for the most recently ended reporting period closest to the Closing Date, and any other financial information with respect to any Borrower as Lender may reasonably require, including, but not limited to, the most recent annual Financial Statements of each Obligor.

 

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(g)    Payment of Fees and Closing Costs. Payment of all fees and closing costs required hereunder and under the other Loan Documents.

 

(h)    Membership Account. Borrower shall qualify to transact business in the State of Nevada and create the Membership Account with Lender as required under Section 2.7 hereunder.

 

(i)    [Reserved]

 

(j)    Opinion of Counsel. An opinion letter, or letters, from an attorney acceptable to Lender, which shall opine, among other things requested by Lender, that: (i) each Obligor is duly organized, validly existing and in good standing under the laws of the state of such Obligor’s charter and any other state or jurisdiction where such Obligor regularly does business; (ii) each Obligor has the full power and authority to undertake the activities contemplated by the Loan Documents; (iii) all Loan Documents have been duly authorized, executed and delivered by each Obligor; (iv) the Collateral Documents create a lien on or security interest in the Collateral except when otherwise specified in such opinion letter; (v) the Loan Documents and their terms do not violate any laws including, without limitation, any usury laws or similar laws of the jurisdictions where any Obligor or any Collateral is located; (vi) each Loan Document constitutes the valid and legally binding obligation of Borrower and its enforceable in accordance with its terms under the laws of the State of California; and (vii)  such other matters are Lender and its legal counsel may request.

 

(k)    Control Agreements. Upon request of Lender, Borrower shall also execute and deliver deposit account control agreements in favor of Lender on all deposit accounts on forms provided by Lender.

 

(l)    Guarantor. The Guarantor has signed and delivered the Lender form corporate guaranty, each guaranteeing the timely payment of all principal and interest on the Loan as and when due, and in form and substance satisfactory to Lender (collectively, the “Individual Guarantees”).

 

(m)    Required Equity Contribution. Borrower shall have provided evidence satisfactory to Lender that it has made the Required Equity Contribution.

 

(n)    Permits and Pathways. Borrower has acquired, or has the ability to acquire without undue delay, all required permits, pathways and registrations from the appropriate Governmental Authorities for the development and operation of the Project.

 

(o)    Signed Construction Contract. The signed Construction Contract for the complete construction of the Project has been finalized and delivered, which includes scope, initial budget and schedule for the Project, in each case as acceptable to the Lender and the Voucher Control Company.

 

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(p)    Master Operations and Management Agreement. Borrower has entered into a Master Operations and Management Agreement with Aemetis Biogas Services LLC, a Delaware limited liability company (“Aemetis Services”) dated August 1, 2022 (the “O&M Agreement”) for the ongoing management of the Project. Under the O&M Agreement, Aemetis Services will provide scheduled equipment maintenance, preventative maintenance, remote and on-site diagnoses of problems and programming, and media replacement, and other maintenance-related services as needed. Aemetis Services will maintain 24-hour remote connectivity with the Project and on-site operations personnel as needed. Aemetis Services will track inventory, order replacement parts, and assist in orders for consumables. The term of the O&M Agreement is for a period of twenty-five (25) years with right to renew every five years thereafter.

 

(q)    RNG Sale and Purchase Agreement. Borrower agrees to produce and deliver through pipeline renewable natural gas (“RNG”) to Aemetis Services based on the following terms:

 

(i)         Borrower Product: Renewable natural gas (“RNG”) supplied from Borrower after impurities removed from the digester gas clean up skid or main gas clean up HUB located at Aemetis Advanced Fuels Keyes (“AAFK”).

 

(ii)        Quantity: Borrower has no minimum volume requirement to deliver to Purchaser. Purchaser will buy quantity needed for operations.

 

(iii)       Delivery: Borrower Product shall be delivered by pipeline to Aemetis Services’s (agreed Delivery Point at AAFK). Borrower shall pay for conveyance of RNG to Aemetis Services through pipeline.

 

(iv)       Price: Each month Aemetis Services shall have earned a commission of thirty percent (30%) of the sales revenue derived directly from prior month actual Borrower gas molecules delivered via pipeline to Aemetis Services and withhold thirty percent (30%) of actual prior month value from RINs and LCFS Credits generated by Borrower RNG.

 

(v)        Payments:         invoices issued monthly and paid within 30 days of delivery of RNG based on actual Aemetis Services volume from prior month.

 

(vi)       Term: 25 years from the Effective Date

 

(r)    [Reserved]

 

(s)    Other Filings. Borrower shall have made such filings with the Nevada Secretary of State as needed to qualify to transact business in the State of Nevada.

 

(t)    Other Matters. All other matters as Lender may reasonably require have been completed to its satisfaction.

 

2.10    Fees and Deposits. In addition to any other payment or reimbursement obligations of any Obligor set forth in this Agreement and the other Loan Documents, Borrower shall pay the following fees and make the following deposits:

 

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(a)    Closing Fee. Borrower shall pay or cause to be paid to Lender and other parties at Closing the following: (i) the loan origination fee to Lender in the amount of $375,000.00; and (ii) the fees and costs listed on the settlement statement executed by the Parties for Closing.

 

2.11    Construction of the Project. The Borrower will ensure that the construction of the Project will be diligently pursued and that substantial completion will occur by no later than March 4, 2023]. In connection therewith, and in addition to the Construction Financing Rider, the Borrower hereby represents, warrants and covenants as follows:

 

(a)     The development of the Project will be pursuant to signed Construction Contract which includes the initial equipment budget, schedule for the equipment purchases and signed purchase orders (fully executed by Borrower and vendor) for all equipment. The Construction Contract must be acceptable to the Lender.

 

(b)    The Construction Contract includes, at a minimum, a requirement that the General Contractor shall cause the Project to be substantially complete by March 4, 2023.

 

(c)    The Construction Contract specifies that the General Contractor shall be responsible for procuring or furnishing the design for the scope of work outlined in the Construction Contract and for Substantial Completion of the Project consistent with the Construction Plans.

 

(d)    The warranties for all individual mechanical components from third party subcontractors or parties shall adhere to the scope of the Project and their intended use and utility. The General Contractor, or the equipment supplier or manufacturer as a pass-through warranty, will, for a period of at least one year following the later of (i) Substantial Completion, (ii) the time the defective work is actually performed and (iii) initial start-up and acceptance by the Borrower, warrant all products to be free of defects in material and workmanship when properly installed and operated.

 

(e)    The terms of the Construction Contract, including but not limited to, the definition of “Substantial Completion”, shall be subject to the mutual agreement of the Lender, the Borrower, and the General Contractor. All disbursements for payments under the Construction Contract shall be subject to Borrowers and Lender’s prior approval (including Lender’s Project Inspector), which will include verification that all associated milestones have been met and/or verification of the relevant performed activities, and other Lender standard policies and conditions for approval of construction draws for commercial facilities and as detailed in the exhibits made part of the Construction Financing Rider in both form and amount as shown therein.

 

(f)    The Construction Contract, as accepted by the Lender, contains provisions that define when the Construction Contract will be completed, expire and be terminated.

 

(g)    All Project facilities to be designed utilizing accepted architectural and engineering practices and conform to applicable federal, state, and local codes and requirements. For all construction contracts in excess of $10,000, the Borrower shall require contractors to comply with Federal Equal Employment Opportunity regulations. The Borrower will also provide assurances to the Lender that the Project will be completed using the available funds, that the amount of available funds are sufficient to complete the Project as planned, and once completed, will be used for its intended purpose and following completion of construction and performance testing, the Project will produce product that meets or exceeds the production quantities and qualities specified in the feasibility study provided to Lender by Borrower in connection with the application for the Loan and the USDA Conditional Commitment.

 

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(h)    All project development will conform to applicable federal, state, and local code requirements.

 

(i)    All Borrower pre-date of Substantial Completion equity and Loan proceeds shall be used in accordance with the approved plans, specifications, and contract documents, and all Loan funds shall be used only for eligible costs (as described in the applicable USDA regulations).

 

(j)    The General Contractor will provide Lender with all plan sets as completed and as detailed in the Construction Contract.

 

(k)    Change orders will only be made in accordance with the Construction Financing Rider and Exhibits thereto.

 

(l)    The General Contractor has sufficient insurance in full force and effect to protect against monetary loss while the Project is under construction and in start-up stage, including, but not limited to:

 

 (i)    Commercial General liability insurance,

 

 (ii)    Umbrella/excess liability insurance, and

 

 (iii)    Contractor’s Pollution Liability insurance.

 

(m)    All funds for construction of the Project will be disbursed under the Loan pursuant to approved draws, and if required by Lender maintained in the Construction Account pending disbursement.

 

(n)    Final contracts for construction will be provided for Lender and USDA review and approval. Only overhead costs that are related to the Project can be paid from Loan funds. In the event that any development work is performed at least in part by an Affiliate of the Borrower, Loan funds will not be used to pay profit, however designated, for any of the principals or their affiliates. The General Contractor is not an Affiliate of Borrower.

 

(o)    Once construction begins, the Lender will:

 

(i)    Only advance Loan funds as needed to pay construction and equipment procurement costs, exclusive of any down payment included in Construction Contract.

 

(ii)    Require Borrower to provide the Lender with monthly reports documenting the use of the Loan proceeds until construction, commissioning and startup are completed. The reports shall include the following:

 

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•        List of construction draws;

 

•        List of equipment draws:

 

•        Details of equity and Loan funds paid to date;

 

•        Status of construction and equipment acquisition and installation;          and

 

•        Concerns, potential problems, delays, cost overruns, etc.

 

(p)    Notwithstanding anything herein to the contrary, Lender may, at its reasonable option and with the concurrence of its Project Inspector (as defined in the Construction Financing Rider), at any time prior to Final Project Completion (as defined in the Construction Financing Rider), establish reserves from the undisbursed portion of the Loan in such amounts which are necessary (i) to pay, in whole or in part, any lien or claim prejudicial to the liens or security interests of Lender in the Project or the Collateral,  (ii) to fund any expenditures or allocations of funds necessary to complete the Project in accordance with the Construction Plans in the event it is determined by Lender or its Project Inspector that the Project is not being completed in accordance with the Construction Plans approved by Lender (subject to permitted or approved change orders in compliance with this Construction Financing Rider) or (iii) to pay any of the General Contractor, subcontractors or material suppliers on the Project in the event it is determined by Lender that any draw or draws of Loan funds have not been paid by the General Contractor or the Borrower for their intended purpose(s) submitted in the draw request for such funds or in the manner approved by the Lender in accordance with the construction budget, construction cost breakdown and draw schedule for the Project. The aggregate amount of any such reserves shall be deducted from the then-undisbursed Loan proceeds. Additionally, upon the occurrence of any Event of Default not cured within any applicable cure period, Lender may cease disbursements of Loan proceeds.

 

(q)    If Lender determines at any time, in its reasonable discretion and with the concurrence of its Project Inspector and the General Contractor (which will be deemed given unless objection is received within ten (10) days of the request for concurrence), that the Loan funds available for disbursement or in the Construction Account remaining undisbursed are insufficient to complete the Project in accordance with the Project Development Plan, Project budget or the Construction Contract, Lender may require Borrower to deposit funds from a source other than from Loan proceeds into the Construction Account or a reserve account in an amount equal to such shortfall. Such funds shall be advanced in accordance with draw request procedures set forth herein as development of the Project progresses, before any additional Loan proceeds are distributed.

 

2.12    Servicing the Loan and the Servicer. Lender is granted the right to appoint a Person to assist Lender in servicing the Loan (the “Servicer”) and has appointed Greater Commercial Lending (“GCL”) to be the initial Servicer. Lender may substitute any Servicer at any time and will provide written notice thereof to Borrower and Guarantor. Upon such appointment, the Servicer shall have full authority to act on Lender’s behalf on all matters applicable to the Loan, the Borrower, the Guarantor, the Collateral and the Project, including, without limitation, the following:

 

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(a)    The Servicer shall have full authority to service the Loan and to take any and all actions on behalf of the Lender under this Loan Agreement and under all other Loan Documents with respect to the Loan, the Borrower, Guarantor, and the Project including, without limitation, administering the Loan, dispersing loan proceeds, approving payment requests, holding required reserves and deposits, receiving and administering loan and other payments under the Loan, communicating with Borrower and Guarantor, requesting and receiving reports and information, administering inspections, providing notices to Borrower, Guarantor and any Persons, providing demands for payment under the Notes and Guarantees, approving or declining the taking of actions, providing consents and approvals (or declinations) for waivers, amendments or other approvals, enforcing of all rights and remedies under the Loan Documents on Lender’s behalf, and any other activities relating to the Loan.

 

(b)    All reports, documents, notices, schedules, financial statements and other materials that are to be delivered to Lender under this Loan Agreement and the other Loan Documents are to be delivered to, and addressed to, Servicer in addition to Lender.

 

(c)    All payments under the Note, and payments of other Obligations due Lender, are to be made to Servicer, which, upon receipt in full by Servicer, shall be deemed made to and received by Lender.

 

3.       Representations and Warranties. To induce Lender to make and/or continue to make Loan, each Obligor, as noted, makes the following representations and warranties which shall be true and correct at Closing and at all times during the term of this Agreement and so long as any Obligations remaining outstanding or unsatisfied:

 

3.1    Good Standing/Ownership. Borrower is duly organized, validly existing and in good standing under the laws of the State of its charter or organization as provided in the caption of this Agreement and any other state or jurisdiction in which it regularly does business and has the requisite corporate, company or partnership power and authority, as applicable, to own its property and to carry on its business in each jurisdiction in which it regularly does business;

 

3.2    Authority and Compliance. (a) Each Obligor has full power and authority to execute and deliver this Agreement and the Loan Documents and to incur and perform the Obligations provided for herein and therein, all of which have been duly authorized by all proper and necessary corporate, company or partnership action, as applicable, of such Obligor; (b) each Obligor is in compliance with all laws and regulatory requirements to which it is subject; and (c) no consent or approval of any public authority or other third party is required as a condition to the validity of any of the Loan Documents with respect to any Obligor;

 

3.3    Binding Agreement. This Agreement and the other Loan Documents executed by each Obligor constitute valid and legally binding obligations of each such Obligor enforceable in accordance with their terms;

 

3.4    Litigation. There is no proceeding involving any Obligor pending or, to the knowledge of such Obligor, threatened, before any court or Governmental Authority, agency or arbitration authority that could have an adverse effect on the ability of any Obligor to pay their obligation when due or to perform their duties under the Loan Document on a timely basis.

 

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3.5    No Conflicting Agreements. There is no charter, bylaw, operating agreement, stock provision, partnership agreement or other document, instrument or agreement pertaining to the organization, power, or authority of any Obligor, nor a provision of any existing material agreement, mortgage, indenture or contract binding on any Obligor or affecting such Obligor’s properties, which would conflict with or in any way prevent the execution, delivery, or carrying out of the terms of this Agreement and the other Loan Documents.

 

3.6    Ownership of Assets. Each Obligor has good title to its assets, including, without limitation, the Collateral, and such assets are free and clear of all judgments, liens, and encumbrances, except for the Permitted Liens.

 

3.7    Taxes. All taxes and assessments due and payable by any Obligor have been paid or are being contested in good faith by appropriate proceedings, and each Obligor has filed all tax returns which it is required to file.

 

3.8    Environmental Matters. Except as may be otherwise disclosed to and acknowledged by Lender in writing prior to Closing and otherwise as would not reasonably be expected to cause a Material Adverse Change, any real property owned or leased by Borrower, including, without limitation, the Real Property Collateral (collectively, the “Subject Property”) (i) to Borrower’s knowledge, has never been and is not now being used in violation of Environmental Laws; (ii) there are no proceedings that have been commenced against Borrower concerning any alleged violations of any Environmental Laws on or related to the Subject Property, nor does Borrower have any reason to know of any; (iii) the Subject Property is free of any Substances and is not being used for the storage, treatment or disposal of any Substances except for amounts of Substances that are stored and used in a manner that (a) does not violate or result in a potential violation of any Environmental Laws and (b) is consistent with customary business operations permitted under the zoning of the Real Property Collateral; (iv) if such Obligor is transporting any Substances, such transportation is being conducted in compliance with all applicable laws; and (v) such Obligor has all required permits for the use and discharge of any Substances on the Real Property and all uses and discharges on such Subject Property are being made in compliance with such permits.

 

3.9    Compliance with Laws. Except as otherwise disclosed to and acknowledged by Lender prior to Closing, each Obligor is in material compliance with all federal, state, and local laws, regulations and governmental requirements applicable to it or to any of its property, business operations, employees, and transactions (including, but not limited to, any Environmental Laws, OSHA, ERISA, Pension Benefit Guaranty Board, and laws regulating wetlands).

 

3.10    Accurate Financial Information and Periodic Reports. The financial information and other reports, including, without limitation, those periodic reports described on Schedule 4.1(b), furnished to Lender by each Obligor are complete and accurate in all material respects and will be complete and accurate in all mutual respects, and disclose, without limitation, any and all direct and contingent liabilities of such Obligor, and accurately reflect the matters addressed therein, including, without limitation, that no change has occurred in the financial condition of such Obligor since such information was furnished that would cause a Material Adverse Change with respect to such Obligor.

 

3.11    Solvency. (i) Each Obligor is Solvent, and the pledge of the Collateral and execution and performance of the Loan Documents will not cause any Obligor to no longer be Solvent; (ii) each Obligor has made adequate provision for the payment of all of its creditors; and (iii) no Obligor has entered into any transaction contemplated in this Agreement or any other Loan Document to provide preferential treatment to Lender or any other creditor of such Obligor in anticipation of seeking relief under federal or state bankruptcy or insolvency laws.

 

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3.12    ERISA. Except as otherwise disclosed to Lender in writing: (i) no employee benefit plan established or maintained, or to which contributions have been made, by Borrower, which is subject to Part 3 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), has an “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA) as of the date hereof, or would have had such an accumulated funding deficiency on such day if such year were the first year of such plan to which such Part 3 applied; (ii) no “Prohibited Transaction” or “Reportable Event”, as defined under ERISA, occurred with respect to such employee benefit plan as of the date hereof; (iii) no material liability to the Pension Benefit Guaranty Corporation has been incurred with respect to any such plan; (iv) each such employee benefit plan (if any exists) complies and will comply fully with all applicable requirements of ERISA and of the Internal Revenue Code of 1986 as amended (“Internal Revenue Code”) and with all applicable rulings and regulations issued under the provisions of ERISA and the Internal Revenue Code; and (v) this Agreement and the consummation of the transactions contemplated herein will not involve any prohibited transaction within the scope of ERISA or Section 4975 of the Internal Revenue Code.

 

3.13    Third Eye Capital Corporation and MBI/TEC Private Debt Opportunities Fund II, L.P. Borrower is not an Affiliate of Third Eye Capital Corporation or MBI/TEC Private Debt Opportunities Fund II, L.P.

 

3.14    Place of Business, Charter State and Residence. (a) Borrower’s chief executive office and principal place of business is located at 20400 Stevens Creek Boulevard, Suite 700, Cupertino, California 95014 and its state of organization is Delaware; and (b) Guarantor’s place of business is 20400 Stevens Creek Boulevard, Suite 700, Cupertino, California 95014 and its state of organization is Delaware.

 

3.15    Location of Personal Property Collateral and Records. All tangible Personal Property Collateral, including, without limitation, all Inventory, Furniture and Equipment, and any records, documents or instruments relating to such Collateral are located only at such locations as listed in Schedule 3.15 hereof.

 

3.16    Inventory Production, Warehousing and Consignment. (a) All Inventory, including, but not limited to the collections processing refining and production of methane gas and renewable natural gas, produced or offered for sale by Borrower during the term hereof will be produced in compliance with the requirements of the Federal Fair Labor Standards Act; (b) where any Inventory or is stored with a bailee, warehouseman or similar party, Borrower shall cause to be issued and deliver the same to Lender periodically upon request by Lender, in form and substance acceptable to Lender, warehouse receipts therefor in Lender’s name; PROVIDED, FURTHER, that nothing in this section shall be construed to otherwise permit any Inventory to be stored or located at any location other than as expressly permitted in this Agreement; and (c) no Inventory of Borrower shall be consigned to any Person without Lender’s prior written consent, and, if such consent is given, Borrower shall, prior to the delivery of any Inventory on consignment: (i) provide Lender with all consignment agreements to be used in connection with any consigned Inventory all of which shall be acceptable to Lender, (ii) prepare, execute and file appropriate financing statements with respect to any such consigned Inventory showing Lender as assignee, (iii) conduct a search of all filings made against the consignee in all jurisdictions in which any consigned Inventory are to be located and deliver to Lender copies of the results of all such searches, (iv) notify, in writing, all of the creditors of the consignee which are or may be holders of Liens in the Inventory to be consigned that Borrower expects to deliver certain Inventory to the consignee, all of which Inventory shall be described in such notice by item or type, and (v) do all such other things and acts as may be necessary or desirable to fully perfect on a first priority basis Lender’s security interest in said Inventory.

 

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3.17    Labor Relations. No Obligor is a party to any collective bargaining agreement, and there are no material grievances, disputes or controversies with any union or any other organization of such Obligor’s employees, or threats of strikes, work stoppages or any asserted pending demands for collective bargaining by any union or organization.

 

3.18    Trade Relations. There exists no actual or threatened termination, cancellation or limitation of, or any modification or change in, the business relationship between any Obligor and any customer or any group of customers whose purchases individually or in the aggregate are material to the business of such Obligor, or with any material supplier, franchisor or franchisee of any such Obligor, and there exists no present condition or state of facts or circumstances which would materially affect or prevent any such Obligor from conducting its business after the consummation of the transactions contemplated by this Agreement in substantially the same manner in which it has heretofore been conducted.

 

3.19    Name; No Merger. (a) No Obligor has changed such Obligor’s name or been known by any other name within the last five (5) years; (b) no Obligor uses or has ever used any trade or fictitious name in the conduct of its business except as identified as a “d/b/a” in the caption of this Agreement; each such Obligor is the sole owner of all such names listed in the caption of this Agreement; and any and all business done, and all invoices issued, in such names are such Obligor’s sales, business and invoices; (c) any trade name of any Obligor permitted under (b) above, if any, represents a division or trading style of such Obligor and not a separate Subsidiary or Affiliate or independent entity; and (d) no Obligor has been the surviving entity in a merger effected within the last five (5) years.

 

3.20    Partnerships; Contingent Liabilities. Except as indicated in the Financial Statements of Borrower and Guarantor delivered to Lender prior to Closing, neither Borrower or Guarantor are a partner or joint venturer with any other Person or a participant in any business enterprise for which it is generally liable, nor does Borrower or guarantor have any contingent liabilities of any description except for Permitted Indebtedness and as otherwise expressly disclosed in this Agreement,

 

3.21    Regulation U. No proceeds from the Loan shall be used directly or indirectly for the purpose of purchasing or carrying any margin stock in violation of the provisions of Regulation U of the Board of Governors of the Federal Reserve System.

 

3.22    Commercial Loan. The Loan is not a “consumer transaction”, as defined in the Code or any other applicable law, rule or regulation, and none of the Collateral has been, is currently or will be future purchased or held primarily for personal, family or household purposes.

 

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3.23    Racketeering. No Obligor is engaged in any activity that might constitute a pattern of racketeering activity or in any other conduct that might subject all or a material portion of such Obligor’s assets to forfeiture.

 

3.24    Equal Opportunity and ADA. (a)Equal Opportunity. For all construction contracts in excess of $10,000, the Borrower will insure that the General Contractor complies with Executive Order 11246, “Equal Employment Opportunity,” as amended by Executive Order 11375, and as supplemented by applicable Department of Labor regulations (41 CFR part 60). (b) Americans with Disabilities Act (ADA): If the construction of or addition to the Project accommodates the public and is a commercial facility, as defined by the ADA, the Project will comply with the ADA.

 

4.       Covenants of Parties.

 

4.1    Affirmative Covenants. During the term of this Agreement and so long as any Obligations remaining outstanding or unsatisfied, each Obligor covenants and agrees as follows:

 

(a)    Continuation of Pre-Closing Conditions, Representations and Warranties. All conditions precedent to the making of the Loan shall remain satisfied at all times in all material respects during the term of this Agreement, and all representations and warranties made by each Obligor in the Loan Documents shall be deemed to be made at all times during the term of this Agreement.

 

(b)    Financial Statements and Periodic Reports. Each Obligor, as noted, shall furnish or cause to be furnished to Lender such information reports and financial statements as identified on Schedule 4.1(b) attached hereto and made a part hereof, on the dates set forth therein or on a more frequent basis if reasonably requested by Lender.

 

(c)    Insurance. In addition to any other insurance requirements under any other Loan Documents: (i) each Obligor shall maintain with financially sound and reputable insurance companies insurance of the kinds, covering the risks, and in the amounts reasonably comparable to those usually carried by similar entities and individuals and sufficient to avoid the application of any co-insurance provisions, such insurance shall include, but not be limited to, liability insurance, flood insurance (to the extent required by Federal law or regulation including, without limitation, the Flood Disaster Protection Act of 1973), comprehensive hazard/casualty insurance on buildings, business theft (fidelity bond), contents and equipment and such coverage on the Collateral in amounts satisfactory to Lender; and (ii) Borrower shall exhibit or deliver certificates of such policies of insurance to Lender and provide appropriate clauses in the insurance policies indicating Lender’s status as co-insured mortgagee, additional insured, or lender loss payee, as applicable, as to the Collateral, as its interest may appear; PROVIDED, FURTHER, that Borrower hereby assigns to Lender the right, and further designates Lender as its lawful attorney-in-fact, to collect and receive any indemnity payment otherwise owed to such Obligor under any policy of insurance, regardless of whether Lender is named in such policy as a person entitled to collect upon the same. In addition to all other insurance requirements, Borrower shall increase its business interruption upon Substantial Completion of the Project to an amount that is acceptable to Lender;

 

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(d)    Audits, Inspections and Appraisals. (i) Each Obligor shall permit the Lender’s officers or other representatives to visit and inspect upon reasonable notice, not to be less than two (2) business days, during business hours any of the locations of any Obligor, the Project (each location) or the location of any Collateral (provided that, while an Event of Default exists, and is not cured within any applicable cure period expressly set forth herein, Lender may make such visits and inspections at any time without prior notice) to examine and audit all of such Obligor’s Collateral, books of account, financial statements and ledgers, digital and printed records, contracts, reports, writings, certificates of title and other documents, papers and statements, to make copies and extracts therefrom and to discuss its affairs, finances and accounts with its officers, employees and independent accountants; and (ii) Lender may, on the occurrence and continuation of an Event of Default that is not cured within any applicable cure period expressly set forth herein and at Borrower’s sole cost and expense, require appraisals for all or some portion of the Collateral at any time, and such appraisals shall be done by an appraiser reasonably acceptable to Lender and shall be in form, substance and amount satisfactory to Lender; (iii) each Obligor, as applicable, assigns to Lender all right, title and interest of such Obligor in and to any leases or other agreements between any such Obligor and various persons having in their possession any or all of the Collateral, and such persons may rely upon this Agreement or a copy hereof as authority of Lender for entry upon said premises to the same extent and for the same purpose as such Obligor may enter thereupon; and (iv) the results of any of foregoing examinations, audits, appraisals, inspections and evaluations described in Subsections (i), (ii) and (iii) of this Section, and any reports produced in connection therewith, shall remain the sole and exclusive property of Lender, and no Obligor shall be entitled to inspect or review same; PROVIDED, HOWEVER, that each such Obligor agrees to remain bound to the party having possession of the Collateral for the performance of all obligations with respect to such Collateral, and the entry of Lender under the terms of this Agreement upon such premises shall not constitute an acceptance by Lender of any obligation of any such Obligor to any person having possession of such Collateral;

 

(e)    Maintenance, Remediation and Notification of Environmental Claims. Borrower shall: (i) maintain any Substances brought upon the Real Property Collateral in accordance with all applicable laws and promptly take all action that is needed to abate any material environmental risk or comply with any Environmental Laws on or related to the Real Property Collateral at its sole expense, subject to such legal and/or equitable defenses available to Borrower; (ii) promptly, upon Borrower having actual knowledge thereof, inform Lender in writing of any environmental risk or violation of any Environmental Laws on or related to the Real Property Collateral or the commencement of any proceeding against it or receipt of any notices by it concerning any alleged violation of Environmental Laws on or related to the Real Property and which would likely result in a Material Adverse Change; (iii) at Lender’s reasonable request or where notice to Lender is required under Subsection (v) hereof, obtain additional environmental audits covering any Real Property Collateral from experts reasonably acceptable to Lender; (iv) permit Lender, or any person or firm designated by Lender, to inspect the Real Property Collateral on reasonable notice, not less than two (2) business days, and during normal business hours; and (v) upon Borrower having actual knowledge thereof, immediately notify Lender in writing of: (A) any and all enforcement, cleanup, remedial, removal, or other governmental or regulatory actions instituted, completed, or threatened pursuant to any applicable federal, state, or local laws, ordinances or regulations relating to any Substances affecting its business operations; and (B) all claims made or threatened by any third party against it relating to damages, contributions, cost recovery, compensation, loss or injury resulting from any Substances and which would likely result in a Material Adverse Change.

 

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(f)    Environmental Indemnity. Borrower shall indemnify and hold Lender harmless from and against all liability, claims, demands, causes of action, losses, damages, costs and expenses (including reasonable attorneys’ fees and court costs), directly or indirectly arising out of the use, generation, storage, release, or disposal of Substances, whether resulting from the actions of Borrower, any predecessor in interest, or any other party, including, without limitation, the cost of any required or necessary inspection, audit, clean-up, or detoxification and the preparation of any closure or other required plans, consent orders, license applications, or the like, whether such action is required or necessary prior to or following transfer of title of Borrower’s Personal Property Collateral or Real Property Collateral, to the full extent that such action is attributable, directly or indirectly, to the use, generation, storage, release or disposal of Substances on Borrower’s Personal Property Collateral or Real Property Collateral; PROVIDED, FURTHER, that the indemnity obligations under this Section are exclusive of, and in addition to, any other insurance, indemnity or reimbursement obligations which Borrower has under this Agreement or under any of the other Loan Documents, and the provisions of this Section shall survive the satisfaction or release of all Obligations and shall continue thereafter in full force and effect.

 

(g)    Purpose of Loan. Borrower shall use the proceeds of the Loan only for the purpose or purposes represented to Lender in Section 2.5.

 

(h)    Notice of Litigation. Borrower shall promptly, and in any event, no later than thirty (30) days after being served or otherwise receiving notice, notify Lender in the event that any legal action is filed against such Obligor, excepting workers’ compensation claims and matters for which the damages sought are less than One Hundred Thousand and No/100 Dollars ($100,000.00) in the aggregate.

 

(i)    Free of Liens. Borrower shall maintain, at all times, the Collateral free of any Lien or encumbrance other than Permitted Liens.

 

(j)    Compliance with Laws. Borrower shall comply with all applicable federal, state, and local laws and regulations including, but not limited to, consumer protection laws, Food Safety Laws, Environmental Laws, OSHA, ERISA, and the Pension Benefit Guaranty Board.

 

(k)    Payment of Obligations. Borrower shall duly and punctually pay all Obligations, including, without limitation, principal and interest on the Notes, and each Obligor shall duly and punctually pay all other Indebtedness of such Obligor to any other Person other than Lender, it being understood, however, that this Section shall not be deemed to permit any Indebtedness other than Permitted Indebtedness.

 

(l)    Maintenance of Properties. Borrower shall: (i) keep the Project and all its properties, including, without limitation, the Collateral, in good repair and in good working order and condition, reasonable wear and tear excepted, and from time to time make all needed and proper repairs, renewals, replacements, additions, and improvements thereto; (ii) comply with the provisions of all leases to which it is a party or under which it occupies property so as to prevent any loss or forfeiture thereof or thereunder; and (iii) preserve and maintain all licenses, trademarks, privileges, permits, franchises, certificates and the like necessary for the operation of the Project at nameplate capacity.

 

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(m)    Notice to Lender. Borrower shall promptly (within three Business Days) notify Lender: (i) on the occurrence of any Event of Default; (ii) of any fact, condition or event, that would be giving of notice or passage of time, or both, could become an Event of Default; (iii) of any event causing a material loss or depreciation in the value of the Collateral and the amount of such loss or depreciation; (iv) on the failure of any Obligor to observe its undertakings hereunder; (v) on the occurrence of a Material Adverse Change with respect to any Obligor.

 

(n)    Landlord and Storage Agreements. Borrower shall provide Lender with copies of all agreements between Borrower and any landlord, custodian, bailee or warehouseman which owns any premises at which any Inventory, or other Collateral may reside, from time to time and shall promptly deliver to Lender any warehouse receipts, if applicable, and obtain lien waivers and subordinations as Lender may require covering any of the Collateral.

 

(o)    Bank Accounts. Borrower shall maintain: (i) depository and checking accounts with Lender, Servicer or with a federally insured financial institution acceptable to Lender and; and (ii) all hedging and securities accounts, in a financial institution, depository institution or broker, which are not federally insured, acceptable to Lender. If requested by Lender, the bank or financial institution shall execute, procure and deliver one or more control agreements in favor of Lender with respect to accounts held by them, including the acknowledgment and agreement of the subject depository institution or broker, all in a form and of substance satisfactory to Lender.

 

(p)    Additional Covenants Regarding Receivables.

 

(i)    Generally. Except as provided herein below or as otherwise provided in this Agreement or in the other Loan Documents, Borrower is obligated and authorized, in its own name, to diligently collect on any Receivable and pursue, in accordance with any applicable law, any available remedies against any Account Debtor or any other obligor thereon, with respect to such Receivable, subject to the direction and control of Lender.

 

(ii)    Joint Checks. Upon the occurrence of an Event of Default and the continuation thereof beyond any applicable cure period, and at the written request of Lender, Borrower shall cause all checks payable to Borrower by any Account Debtor on any Receivable of such Obligor shall be made payable jointly to such Obligor and Lender, and such Obligor shall, and does further authorize Lender to, send a notice of the foregoing joint check requirement to any such Account Debtor and take such action necessary to maintain compliance with the foregoing joint check requirement;

 

(iii)    Verification of Receivables. Borrower will submit annual account receivable, account payable and business debt schedules to Lender, each in form and substance reasonably acceptable to Lender, within 90 days of Borrower’s fiscal year-end. Upon the occurrence of an Event of Default and the continuation thereof beyond any applicable cure period, any of Lender’s officers, authorized representatives, employees or agents shall have the right, at any time, in Lender’s sole and absolute discretion, in the name of Lender, or in the name of any designee of Lender or Borrower, to verify the validity, amount or any other matter relating to any Receivable by mail, telephone, telegraph, or otherwise, and Borrower shall cooperate fully with Lender in an effort to facilitate and promptly conclude any such verification process;

 

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(iv)    Lock Box and Collections Account. Upon the occurrence and continuance of an Event of Default that is not cured within any applicable cure period expressly set forth herein: (A) Lender may, in its sole and absolute discretion, require all payments on any Receivables or proceeds from the sale of any other Collateral of Borrower to be deposited or forwarded directly from the account party to either: (1) a Deposit Account designated by and under the exclusive control of Lender (the “Collections Account”) pursuant to Section 2.7 hereof or (2) a post office box under the exclusive control of Lender to which Lender and its designees alone shall have access (the “Lock Box”), and Borrower further agrees to give notice to all of its trade or account debtors to mail payments due on all Receivables to the Lock Box and wire such funds to the Collections Account; (B) Borrower further agrees that Lender, or its designees, may open the Lock Box at any time and may receive, open and dispose of all mail addressed to Borrower therein, and may deposit any payments contained in the Lock Box in the Collections Account; (C) Borrower authorizes Lender, as its attorney-in-fact, to make any necessary endorsements on any draft, document or instrument evidencing any such Receivables and further waives presentment, demand, notice of dishonor, protest and notice of protest and all other notices with respect thereto; (D) if any of Borrower’s Receivables are paid directly to Borrower in contravention of the foregoing, Borrower will immediately deliver the same to Lender, endorsed or assigned with recourse to Lender’s order to be deposited in the Collections Account and applied as provided herein; and (E) Lender shall, from time to time, apply such good funds in the Collections Account, or any portion thereof, against the Obligations or may pay such funds directly to Borrower, as Lender may so decide, in its sole and absolute discretion;

 

(v)    Collection and Enforcement (A) Upon the occurrence of an Event of Default and the continuation thereof beyond any applicable cure period, Lender may, in its sole and absolute discretion, notify any and all trade debtors and Account Debtors obligated on any or all Receivables of Borrower to make payment thereof directly to Lender and to take control of all proceeds of any such Receivables; (B) Borrower, if requested by Lender, shall stamp or cause to be stamped prominently on the face of each Receivable item evidenced by written instrument, and any documentation evidencing the same, in legible letters “PLEDGED AND ASSIGNED TO GREATER NEVADA CREDIT UNION AS SECURED PARTY, TOGETHER WITH ITS SUCCESSORS AND ASSIGNS, AND ANY SALE, ASSIGNMENT OR TRANSFER THEREOF WOULD VIOLATE THE RIGHTS OF GREATER NEVADA CREDIT UNION” and shall turn over physical possession of such Receivables and any documentation related thereto to Lender; (C) the costs of such collection and enforcement, including reasonable attorney’s fees and out-of-pocket expenses and all other expenses and liabilities resulting therefrom, shall be borne solely by Borrower whether the same are incurred by Lender or Borrower; and (D) in addition to the rights set forth in this Section and elsewhere in this Agreement and in the Loan Documents, Lender directly, and as Borrower’s lawful attorney-in-fact, shall be entitled to enforce Borrower’s rights against trade debtors and Account Debtors;

 

(vi)    Government Receivables. If any of Borrower’s Receivables in excess of Ten Thousand and No/100 Dollars ($10,000.00) arise out of contracts with the United States or any department, agency, or instrumentality thereof, Borrower shall immediately notify Lender thereof in writing and execute any instruments and take any steps required by Lender in order that all monies due and to become due under such Receivables shall be assigned to Lender and notice thereof given to the government under the Federal Assignment of Claims Act.

 

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(q)    Continuing Guaranty. If Borrower acquires, forms or purchases any other entity, such entity shall, without any further action by the Parties, unconditionally guarantee the repayment of all of the Obligations and waive any right to notice or demand and shall further execute and deliver to Lender an unlimited and continuing guaranty evidencing same; it being understood, however, that this Section shall not be deemed to permit any mergers or acquisitions or creation of any Subsidiary in violation of the provisions of this Agreement.

 

(r)    Equipment Covered by Certificates of Title. If any Equipment, Inventory or other Collateral is subject to or covered by any Certificate of Title statute, Borrower shall note Lender’s security interest thereon, and, on Lender’s request, promptly deliver each original copy of any such Certificate of Title covering such Collateral to Lender, or its designee, to be held until satisfaction in full of all of the Obligations, and Borrower shall take any steps necessary to perfect Lender’s security interest in such Collateral and shall further authorize Lender to do the same; PROVIDED, FURTHER, that Borrower shall not apply for any replacement Certificate of Title regarding any Collateral nor take any other steps or actions that may otherwise impair Lender’s security interest in the same.

 

(s)    Commercial Tort Claims. Borrower shall promptly notify Lender should Borrower obtain any “Commercial Tort Claim” (as defined in the Code) and take such steps as shall be requested by Lender to further evidence and perfect Lender’s security interest in the same.

 

(t)    Continuing Enforceability Covenants.

 

(i)    Continuing Enforceability of Loan Documents. The terms and conditions of each presently existing Loan Document shall remain in full force and effect and the transactions contemplated in this Agreement and the other Loan Documents executed concurrently herewith shall not be construed as a novation, waiver or release of the repayment or performance of any indebtedness, obligation or liability of any Obligor arising under any Loan Document, as such may have been modified, amended, restated and renewed from time to time.

 

(ii)    Continuing Priority of Liens and Security Interests. Each Obligor acknowledges and agrees that this Agreement, together with any transactions contemplated herein or occurring contemporaneously herewith, shall not disturb the existing priority of any Loan Document, or any lien or security interest in favor of Lender granted or created thereunder, and any such Loan Document, lien or security interest shall retain the same priority and effective date as originally provided in any such Loan Document.

 

(iii)    Cross-Collateralization of the Loan. Each Obligor hereby acknowledges and agrees that the repayment of the Note, whether presently outstanding, executed concurrently herewith or arising at any time hereafter, together with the repayment and performance of any and all other indebtedness, obligations and liabilities of Borrower or any of its Affiliates to Lender, including, without limitation, the Obligations, arising under any Loan Document or any other agreement, document or instrument executed in favor of Lender shall be secured with equal force and effect by the Collateral, as may be modified from time to time, and any and all security documents, instruments and agreements executed with respect thereto, whether or not any such indebtedness, obligation or liability is specifically referenced or identified in any such document, instrument or agreement.

 

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(iv)    Statement of Consideration. Guarantor represents and warrants that the making of the Loan to Borrower will result in a substantial benefit to it and acknowledges that its liability for the Obligations, as such liability is variously described in the Loan Documents, is unconditional, unlimited, joint and several, and that Lender is making the Loan in reliance upon the Guaranty of Guarantor and that Lender would be unwilling to make or continue to make the Loan without its Guaranty.

 

(v)    Release of Claims. Each Obligor acknowledges and agrees that no Obligor has any claim, defense, claim of offset or cause of action of any nature against Lender, its successors, assigns, representatives or officers, which would or will impair, reduce or diminish such Obligor’s liability to Lender under the Loan and any other Loan Documents or otherwise subject Lender, its successors, assigns, representatives or officers, to any direct or indirect liability, including, without limitation, any claim based on any act or omission of Lender or any officer, agent or representative of Lender related to the Loan or the administration of the Loan or any claim arising by reason or on account of or related directly or indirectly to any contractual relationship or transaction between any Obligor and Lender, its successors, assigns, agents, representatives or officers; PROVIDED, FURTHER, THAT, TO THE EXTENT THAT ANY SUCH CLAIM, DEFENSE, CLAIM OF OFFSET OR CAUSE OF ACTION OF ANY NATURE EXISTS AS OF THE DATE HEREOF, THEY ARE HEREBY WAIVED, RELEASED AND DISCHARGED BY EACH OBLIGOR AS AGAINST LENDER, ITS SUCCESSORS, ASSIGNS, REPRESENTATIVES AND OFFICERS.

 

(u)    USDA Guarantee Requirements. As long as any of the Obligations remain outstanding, each Obligor shall comply with all requirements, terms and conditions set forth therein and under the USDA Conditional Commitment. In the event of any inconsistency between the terms, conditions and requirements of the USDA Conditional Commitment and this Agreement or any other Loan Document the terms of USDA Conditional Commitment shall control, provided that any provision of any Loan Document which imposes additional obligations upon any Obligor or provides additional rights or remedies to Lender shall be deemed to be supplemental to, and not inconsistent with, the USDA Conditional Commitment and provided, further, that any pre-condition, continuing obligation or requirement applicable to Lender in favor of the USDA under the USDA Conditional Commitment shall be construed to be an obligation and requirement of each Obligor and a condition precedent to Lender’s obligations hereunder, all at Borrower’s sole cost and expense. The foregoing includes all requirements of Borrower set forth in the USDA Conditional Commitment under Section 18 “Environmental”, and Borrower will provide Lender with reasonable evidence of compliance with such provisions during the course of construction of the Project and as otherwise may be necessary to satisfy the USDA that all such requirements have been complied with and satisfied.

 

(v)    Operations and Maintenance Services Agreements. Borrower, post-closing, but prior to Substantial Completion, must provide detailed operating plans relating to the daily operation and maintenance of the Project. The documentation should identify the proposed management team and their qualifications, staffing needs of the plant, standard operating procedures, training manuals and curriculums, and any other related services. If services are to be externally contracted, then copies of the contracts must be provided.

 

4.2    [Reserved]

 

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4.3    Negative Covenants. During the term of this Agreement and so long as any Obligations remaining outstanding or unsatisfied, each Obligor, as noted, further covenants and agrees as follows:

 

(a)    Merger/Changes. Borrower shall not: (i) enter into any merger, reorganization or consolidation; (ii) make any substantial change in the basic type of business now conducted by it; (iii) undergo any material change in the ownership, management, effective control or day to day operations of Borrower; or (iv) change or otherwise modify its accounting methods, practices or fiscal reporting period for accounting or tax purposes, in each case without the prior consent of the Lender which consent shall not be unreasonably withheld or conditioned.

 

(b)    Name; Location of Collateral. Borrower shall not: (i) change the locations at which the Collateral or any books, records, contracts, writings, documents of title, or other documents, agreements or instruments related thereto are located, stored or maintained, without the prior written approval from Lender (ii) change its chief executive office and principal place of business without providing Lender with at least 30 days advance written notice thereof; (iii) adopt or make use of any fictitious or trade name not disclosed elsewhere in this Agreement; or (iv) change its name, identity or corporate structure or change its state of charter or organization without the prior written consent of Lender which consent shall not be unreasonably withheld or conditioned.

 

(c)    Judgments, etc. Borrower shall not allow any judgment or judgments for the payment of money in excess of the aggregate sum of Fifty Thousand and No/100 Dollars ($50,000.00), excluding amounts with respect to which an insurance carrier admits full coverage (except for applicable deductibles), to remain undischarged, unvacated, unbonded in full or unstayed for a period of sixty (60) days, unless execution thereof is stayed by a court of competent jurisdiction.

 

(d)    Sale of Collateral. Borrower shall not sell, transfer, assign, lease, pledge, abandon or otherwise dispose of any of the Collateral or any interest therein, without the prior consent of the Lender and USDA (as may be required), except for (i) Inventory in the ordinary course of business and (ii) machinery or equipment which has become obsolete and for which suitable replacement equipment, of equal value or usage, shall have been procured which becomes Collateral for the Loan.

 

(e)    Loan to and from Members, Stockholders, Affiliates and Others. Borrower shall not make loan, advances, extensions of credit to, or guaranty or become surety for, any other Person, including, without limitation, loans or advances to Affiliates. Loans/advances to stockholders, partners, members, owners, officers, or other Affiliates are prohibited. Except as provided herein, loans from stockholders, owners, officers or Affiliates must be subordinated to the Loan or converted to stock or partnership interests, and no payments are to be made on these debts unless (i) the Loan is current and in good standing and (ii) Lender consents to such payment.

 

(f)    Indebtedness/Guarantees. Borrower shall not create, incur, assume or suffer to exist any Indebtedness or obligation for money borrowed, or guarantee, endorse, or otherwise be or become contingently liable on any debt or obligations to any Person without first obtaining the written consent of Lender, except for the following (“Permitted Indebtedness”): (i) in addition to any other Indebtedness permitted under this Section, obligations to any Person (including, without limitation, to any Affiliate) other than the Lender not exceeding $1,000,000 in the aggregate; (ii) capital leases with rental payments not exceeding $100,000.00 in the aggregate per year; and (iii) operating leases with rental payments not exceeding $50,000.00 per year; (iv) any debt secured by purchase money liens permitted pursuant to Section 4.3(g)(iii) below; and (iv) other liabilities and obligations in existence as of the date of this Agreement and disclosed in the most recent financial statement submitted to Lender.

 

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(g)    Liens and Security Interests. Borrower shall not create, incur, assume, or suffer to exist any mortgage, security deed, deed of trust, security interest, pledge, encumbrance, Lien or charge of any kind (including charges on property purchased under conditional sales or other title-retention agreements) on any of its property or assets, including, without limitation, the Collateral, now owned or hereafter acquired, except for (collectively, “Permitted Liens”) (i) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings and against which reserves deemed adequate by Lender have been set up (excluding any Lien imposed pursuant to any of the provisions of ERISA); (ii) Liens arising in the ordinary course of business such as (A) Liens of carriers, warehousemen, mechanics and materialmen and other similar liens imposed by applicable Law, and (B) Liens in the form of deposits or pledges incurred in connection with worker’s compensation, unemployment compensation and other types of governmentally imposed social security (excluding Liens arising under ERISA) or (C) Liens in connection with surety bonds, bids, performance bonds and similar obligations for sums not overdue or being diligently contested in good faith by appropriate proceedings and not involving any advances or borrowed money or the deferred purchase price of property or services and, in each case, for which Borrower maintain adequate reserves in accordance with GAAP and the execution or other enforcement of which is effectively stayed; (iii) subject to the limitation set forth in Section 4.2(f), Liens arising in connection with capital leases or operating leases (and attaching only to the property being leased) or Liens that constitute purchase money security interests on any property securing permitted debt incurred for the purpose of financing all or any part of the cost of acquiring such property, provided that any such purchase money security interest attaches to such property within twenty (20) days after the acquisition of such property and attaches solely to the property so acquired; (v) Liens arising under the Loan Documents; and (vi) easements, rights of way, zoning ordinances and other similar encumbrances affecting the Real Property Collateral that do not create a Material Adverse Change on the value or use of the Real Property Collateral or in the operations as expected to be operated thereon, provided however, that Borrower shall obtain the subordination of any easement or right of way to Lender’s Mortgage upon request of Lender.

 

(h)    Affiliate Transactions. Borrower shall not purchase, finance the purchase of, acquire or lease property from, or sell, transfer or lease any assets or property to, any Affiliate of Borrower except in the ordinary course of Borrower’s business, under terms and conditions equivalent to or better than the terms and conditions which would apply if disinterested parties were involved and otherwise in accordance with the Loan Documents. Borrower shall provide written notice to Lender of each transaction with Affiliates within 30 days of the limitation of the contracting for such transaction(s).

 

(i)    Security Instruments and Financing Statements. Borrower shall not permit any financing statement, mortgage, deeds of trust, deed to secure debt or other security instrument, filing or document, excepting filings related to Permitted Liens, to be on file with respect to any of the Collateral.

 

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(j)    Acquisitions. Borrower shall not purchase or acquire the obligations, assets, equity, stock or any other interest of any Person, except direct obligations of the United States of America or certificates of deposit or other investments issued by Lender (if offered).

 

(k)    Restrictions of Compensation. Compensation of officers of the Borrower, paid by the Borrower, will be limited to an amount that, when taken, will not adversely affect the repayment ability of the Borrower. This amount may not be increased year to year unless (1) the Borrower’s operations were cash flow positive in the preceding fiscal year after taking into account all operating expenses, non-financed capital expenditures, appropriate funding of all reserves and debt service, (2) the Borrower is in compliance with covenants of the Loan Agreement and those identified in this Conditional Commitment as applying throughout, and (3) all Borrower debts are paid to a current status, and (4) the prior written concurrence of the Lender is obtained.

 

(l)    Lease Transactions. Borrower shall not enter into any sale and lease-back arrangement, either directly or indirectly without the prior consent of Lender which consent shall not be unreasonable withheld or conditioned.

 

(m)    Amendments. Borrower shall not amend any instrument evidencing a Permitted Lien or the indebtedness secured thereby.

 

(n)    Deposit of Funds. Subject to the Collections Account and Lock Box provisions of Section 4.1(p)(iv), Borrower shall deposit proceeds of the Collateral into a depository account as approved by Lender, in its sole and absolute discretion and such deposit account must be subject to a deposit account control agreement in favor of Lender and in form acceptable to Lender.

 

(o)    Adverse Transactions. Borrower shall not enter into any transaction, or permit any Subsidiary to enter into any transaction, which does or may materially and adversely affect the Collateral or Borrower’s ability to repay the Obligations when due.

 

(p)    Subsidiary Divestiture. Borrower shall not transfer, sell, pledge, encumber or otherwise assign any Membership interest or shares of stock or other interest in any Subsidiary or permit any Subsidiary to sell or otherwise dispose of substantially all of its assets.

 

(q)    Partnerships or Joint Ventures. Other than those existing and disclosed to Lender in writing before the Closing Date, Borrower shall not become or agree to become a general or limited partner in any general or limited partnership or joint venturer in any joint venture.

 

(r)    Capital Expenditures. The Borrower will not invest in additional fixed asset purchases in excess of $100,000 in an annual aggregate amount, without Lender and USDA approval (as may be required). The Borrower will not lease, sell, transfer, or otherwise encumber equipment or fixed assets without the concurrence of the Lender (except for replacement of equipment the ordinary course of business).

 

(s)    Dividend and Distribution Restrictions. Borrower will only make dividend payments or distribution payments in an amount that, when made, will not adversely affect the repayment ability of the Borrower on the Loan and other Obligations when due. In addition, no dividend payments or distribution payments will be made unless Borrower’s operations were cash flow positive in the preceding fiscal year after taking into account all operating expenses, non-financed capital expenditures, appropriate funding of all reserves and debt service, (2) the Borrower is in compliance with covenants of the Loan Agreement and those identified in this Conditional Commitment as applying throughout, (3) all Borrower debts are paid to a current status, and (4) the prior written concurrence of the Lender is obtained. This is not intended to apply to distribution payments to cover personal tax liability resulting from the profitability of Borrower’s business.

 

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(t)    Sale of Business. Borrower shall not enter into any agreement for the sale of its business or a material portion thereof, or to sell its business or a material portion thereof, without first obtaining the written consent of Lender which consent shall not be unreasonably withheld or conditioned.

 

4.4    Financial Covenants. During the term of this Agreement and so long as any Obligations remaining outstanding or unsatisfied, Borrower shall at all times maintain the following (collectively, the “Financial Covenants”):

 

(a)    Maximum Debt to Net Worth. Borrower shall maintain a ratio of (1) Indebtedness to (2) Tangible Net Worth of less than 9.0 to 1.0 measured annually, beginning at the end of the second year after Closing for the term of the Loan, and based on year-end CPA-reviewed financial statements;

 

(b)    Debt Service Coverage Ratio: Borrower’s Debt Service Coverage Ratio shall not fall below 1.25 to 1.00 beginning the second full year of operations of the Project, to be measured as of the last day of each fiscal year beginning fiscal year end 2023, annually for the term of the Loan and based on year-end CPA-reviewed financial statements. Debt Service Coverage Ratio shall be measured by EBITDA divided by aggregate annualized business debt service.

 

(c)    Global Definitions. For purposes of this Section 4.4, capitalized terms shall be as defined or determined under GAAP.

 

(d)    Testing Frequency and Calculations. The Financial Covenants shall be tested annually and calculated based upon the Financial Statements of the Borrower, prepared and delivered to Lender in accordance with Schedule 4.1(b).

 

(e)    Other Conditions. Unless otherwise agreed to by Lender in writing or as otherwise set forth in this Section 4.4, Borrower’s compliance with the Financial Covenants shall be determined after eliminations for Intercompany Transactions and reported on the Financial Statements and Covenant Compliance Certificate prepared in accordance with Schedule 4.1(b).

 

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5.       Security Agreement and Collateral for the Loan.

 

5.1    Security Agreement and Collateral. Subject to the Permitted Liens, the payment and performance of the Obligations are secured by all Liens in favor of Lender created under the Security Agreement, the Mortgage and under any other instrument or agreement delivered to Lender in conjunction with this Loan Agreement, encumbering the following personal property (collectively, the “Personal Property Collateral”):

 

(i)    All Personal Property of Borrower, including, but not limited to, all Goods, Accounts, Inventory, Equipment, Fixtures, Chattel Paper, Instruments, Investment Property, Letter of Credit Rights, Deposit Accounts, Commercial Tort Claims, General Intangibles, Payment Intangibles, Cash Proceeds, Certificates of Title, Documents (as defined in the Code), As-Extracted Collateral, licenses and licensing rights, revenue, income, securities, letters of credit, deposits, money, intellectual property rights, systems, cash, timber, timber to be cut, oil, gas and other minerals extracted or to be extracted, shrubbery, apparatus, building materials and components, leases, rents and rent proceeds;

 

(ii)    All cash, investments and securities on deposit in the various accounts established pursuant to Section 2.7(a) hereof; and

 

(iii)    the Construction Contract; and

 

(iv)    All of the foregoing whether now owned or hereafter acquired and wherever located, together with any products, proceeds and progeny thereof, and any appurtenances, accessions and other rights, claims or benefits arising from or pertaining thereto, including, but not limited to, any claims to any of the foregoing property, and any claims Borrower has against any third parties, for the damage to or destruction of any or all portions of such property and or for proceeds payable under, or unearned premiums with respect to, policies of insurance.

 

5.2    Real Property Collateral. Subject to the Permitted Liens, the payment and performance of the Obligations are secured by all Liens in favor of Lender created under the Mortgage encumbering the Real Property Collateral, including the land, structures, improvements and fixtures, and in and to all leases relating thereto,.

 

5.3    Additional Security Covenants. Borrower agrees to execute and deliver to Lender at Closing and at any time thereafter so long as any Obligations remain outstanding, any security documents, instruments or other agreements as reasonably requested by Lender and related to the Collateral, or any portion thereof, and further authorizes Lender to file any such documents, instruments or other agreements, or other proper notice of Lender’s security interest, and any continuation statements or amendments thereto, with any filing authority that Lender deems appropriate. PROVIDED, FURTHER, that each Obligor agrees that to the extent accepted by the applicable filing authority, a carbon, photographic or other reproduction of this Agreement, or any memorandum thereof, with respect to the Collateral shall be sufficient as a financing statement and may be filed as such by Lender, and that Lender may execute any financing statement filed pursuant to this Section either in its own name or in that of any applicable Obligor. In addition, upon request of Lender, Borrower shall cause deposit account control agreements to be executed and delivered in favor of Lender from each financial institution in which Borrower maintains deposit or securities accounts upon request of Lender for any accounts in which control agreements were not delivered at Closing or in which are not effective, each in form and substance acceptable to Lender.

 

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5.4    Term. Notwithstanding anything set forth herein to the contrary, Lender’s security interests in the Collateral as provided in this Section 5 and as otherwise provided in this Loan Agreement, the Notes and the other Loan Documents, shall continue for as long as any Obligor is indebted to Lender or other person pursuant to this Loan Agreement, the Notes or other Loan Documents.

 

6.       Events of Default. The occurrence of any of the following shall constitute an event of default (each an “Event of Default”):

 

6.1    Payment. Any payment of principal, interest, or other sum owed to Lender under the Note, under this Loan Agreement or under any of the other Loan Documents or otherwise due from any Obligor to Lender, is not made when due (subject to any applicable grace period provided in the Note).

 

6.2    Additional Defaults. (i) Any provision or covenant of any Loan Document is breached; or (ii) any warranty, representation, or statement made or furnished to Lender by any Obligor in writing in connection with the Loan and the Loan Documents, including any warranty, representation, or statement included in any Obligor’s Periodic Reports under Schedule 4.1(b), or to induce Lender to make or continue to make the Loan, is or becomes untrue or misleading in any material respect or (iii) any default or Event of Default under any of the Loan Documents occurs that, in the case of each of clauses (i), (ii) and (iii) is not cured within the applicable cure period described in Section 7.1 below, if any.

 

6.3    Cross-Default. (i) A default under one or more of the Note or other Obligations which is not cured within any applicable cure period shall be an Event of Default hereunder; (ii) the occurrence of any Event of Default under the terms of loan documents evidencing any loan from Lender to Aemetis Biogas 2 LLC, a Delaware limited liability company, which is not cured within any applicable cure period, (iii) any default by any Obligor that occurs under any other agreement with Lender other than the Loan Documents, whether now existing or hereafter arising, including, without limitation, a default under any agreement that evidences any Indebtedness, other than the Loan, owed by any Obligor to Lender; or (iv) any default under any loan, credit or financing agreement between any Obligor and any other Person other than Lender, whether now existing or hereafter arising, which is not cured within the applicable cure period, if any.

 

6.4    Dissolution, Insolvency or Bankruptcy. (i) The dissolution, termination of existence, liquidation or insolvency of any Borrower or of other Obligor; (ii) the appointment of a receiver, custodian, trustee, executor, administrator, successor, personal representative, special administrator, guardian, attorney-in-fact, trustee, committee, conservator, or other fiduciary or agent over any part of the property of Borrower or of any other Obligor; (iii) any assignment for the benefit of creditors of Borrower or of any other Obligor; (iv) commencement of any proceeding by Borrower or by any other Obligor under state or federal bankruptcy laws or other insolvency laws; (v) the commencement of any involuntary proceeding against Borrower or against any other Obligor under state or federal bankruptcy laws or other insolvency laws, which is not dismissed within sixty (60)) days after such commencement; or (vi) any merger, consolidation or sale of Borrower’s or of any other Obligor’s assets other than as permitted hereunder.

 

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6.5    Material Adverse Changes. Any Material Adverse Change occurs that materially adversely affects the ability of Borrower to meet its obligations under this Loan Agreement, any of the Notes, or the other Loan Documents.

 

6.6    Uninsured Losses; Unauthorized Dispositions. Any material loss, theft, damage or destruction not fully covered by insurance (as required by this Loan Agreement and subject to such deductibles as Lender shall have agreed to in writing), or sale, lease or encumbrance of any of the Collateral or the making of any levy, seizure, or attachment thereof or thereon except in all cases as may be specifically permitted by other provisions of this Agreement.

 

6.7    Business Disruption; Condemnation. (i) Any cessation of a substantial part of the business of any Borrower for a period which significantly affects its capacity to continue its business, on a profitable basis such that it is reasonably likely that Borrower will not be in compliance with Financial Covenants contained herein; (ii) the loss of any permits or licenses from any Governmental Authority to operate any of the [anaerobic digester facilities] at full nameplate capacity that continues for a period of 30 days; (iii) Borrower shall be enjoined, restrained or in any way prevented by court, governmental or administrative order from conducting all or any material part of its business affairs; (iv) any material lease or agreement pursuant to which Borrower leases, uses or occupies any of its properties shall be canceled or terminated prior to the expiration of its stated term; or (v) any part of the Collateral shall be taken through condemnation or the value of such properties shall be impaired through condemnation.

 

6.8    Change in Control. If: (i) any of the executive officers of Borrower should resign or be removed for any reason and an acceptable replacement officer is not appointed within 30-days thereof, unless written notice thereof shall be provided to Lender advising of any such occurrence and providing a corporate plan reasonably acceptable Lender on Borrower’s plan to address such situation, or (ii) the Guarantor fails to own a majority of the equity interests (and accompanying voting control rights) of Borrower’s general partner.

 

6.9    Sale of Assets. The sale or transfer of all or substantially all of Borrower’s assets without the prior written consent of Lender.

 

6.10    First Priority, Perfected Security Interest. If for any reason (other than solely as a result of Lender's failure to timely file any mortgage reinscription and/or Code continuation statements), Lender’s priority position with respect to any Collateral ceases to be a fully perfected, first-priority security interest or lien, except for Permitted Liens, either by virtue of the filing of a Code financing statement, a mortgage, security deed or other security instrument, by virtue of the operation of statute, or otherwise, or if any person shall make any filing altering or terminating any financing statement or other security instrument in favor of Lender without Lender’s prior written consent which is not reinstated or resolved to Lender’s satisfaction within ten (10) days of the filing thereof.

 

6.11    [Reserved]

 

6.12    RINS. If, for any reason, Borrower is unable to obtain renewable identification numbers associated with the sale of RNG for a period of 60 days. Notwithstanding the foregoing, the 60 day period shall be extended for so long as reasonably required up to a maximum of 120 days to allow the Environmental Protection Agency to complete its verification process.

 

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6.13    Lender Insecurity. Lender reasonably and in good faith deems itself insecure due to a Material Adverse Change in circumstances affecting the Borrower or affecting Lender’s Lien on any of the Collateral or diminishing the value of the Collateral.

 

6.14         USDA Conditional Commitment. A term loan in the principal amount of at least $25,000,000, as approved under the USDA Conditional Commitment, fails to close for any reason and the proceeds used to repay the Loan.

 

7.       Lender’s Remedies

 

7.1    Remedies. Upon: (i) the occurrence of an Event of Default under Section 6.1, or (ii) the occurrence of any Event of Default other than an Event of Default under Section 6.1 (except for any Event of Default arising under Section 6.4, for which there shall be no cure period), which shall remain uncured thirty (30) days after the occurrence thereof, provided that if (i) it is reasonably certain that the default cannot be cured within that thirty (30) day period and (ii) Borrower has commenced curing that default within the thirty (30) day period and thereafter diligently and expeditiously proceeds to cure that default, then that thirty (30) day period will be extended for long as reasonably required by Borrower in the exercise of due diligence to cure that default, up to a maximum of sixty (60) days after notice to Borrower of the Event of Default; Lender shall, to the fullest extent permitted by law, have the following rights and remedies, such rights and remedies being cumulative, non-exclusive and exercisable by Lender in its sole and absolute discretion and in addition to those available to Lender under any other Loan Document or otherwise available at law or in equity:

 

(a)    Acceleration. To declare the entire unpaid principal amount of the Loan, accrued interest thereon and all other Obligations to be immediately due and payable, without presentment, demand, or notice of any kind, and to terminate any advances under the Loan;

 

(b)    Discontinue Funding Draws. To discontinue all or any portion of disbursements under the Construction Promissory Note for the payment of construction related costs or for other purposes.

 

(c)    Immediate Possession and Control of Collateral. To take immediate possession and control of all Collateral whether now owned or hereafter acquired, without notice, demand, presentment, or resort to legal process, and, for those purposes, to enter the Project and any other premises where any such Collateral is located and remove such Collateral therefrom or render it unusable;

 

(d)    Assembly of Collateral. To require Borrower and other Obligors to assemble and make the Personal Property Collateral available to Lender at a place to be designated by Lender which is also reasonably convenient to Borrower;

 

(e)    Sale of Collateral. To retain all Personal Property Collateral in full or partial satisfaction of any unpaid Obligations as provided in the Code or sell such Personal Property Collateral at public or private sale after giving at least ten (10) days’ notice of the time and place of the sale in accordance with the Code, with or without having such Collateral physically present at the place of the sale;

 

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(f)    Repair and Improvements of Collateral. To make any repairs and improvements to the Collateral which Lender deems necessary or desirable for the purposes of sale;

 

(g)    Set-off. To exercise any and all rights of set-off which Lender may have against any account, fund, or property of any kind, tangible or intangible, belonging to any Obligor which shall be in Lender’s possession or under its control;

 

(h)    Appointment of Receiver. To appoint or have so appointed a receiver, without bond, to take exclusive possession and control of the Collateral, or any portion thereof, together with any and all documents, instruments, agreements, books and records related thereto, for the purpose of preserving, improving, maintaining, and/or disposing of the Collateral, or any portion thereof, and collecting rents and proceeds arising therefrom and further exercising any such other rights and remedies as may be customary or otherwise available at law and in equity; the foregoing rights and remedies to be exercised by such receiver in its sole discretion or as otherwise directed by court order, and any and all costs, fees and expenses related thereto shall be an Obligation payable on demand;

 

(i)    Removal of Records. To remove from the Project and each Obligor’s premises, or any other location, all of the records described in Section 4.1(d) and keep and retain the same in Lender’s possession until all of the Obligations shall have been fully paid and discharged and Lender has no further obligation under this Agreement and the other Loan Documents;

 

(j)    Cure. To cure any Event of Default in such manner as deemed appropriate by Lender;

 

(k)    Foreclosure. To foreclose on any Collateral pursuant to the terms of the Mortgage and any of the other Loan Document, or at law or in equity; and

 

(l)    Law of Equity. To take any other action or remedy available under applicable law or in equity.

 

7.2    Proceeds. The proceeds from any disposition of all or any part of the Collateral shall be allocated by Lender as it determines in its reasonable discretion and in accordance with applicable Law.

 

7.3    Resort to Obligors. Lender may, at its option, pursue any and all rights and remedies directly against any and every Obligor, in the same or separate actions, at the same time or at different times, and with or without resort to any Collateral or any other Obligor.

 

7.4    Deficiency. To the extent the proceeds realized from the disposition of the Collateral shall fail to satisfy all of the Obligations, each Obligor, to the extent that such Obligor is also a Borrower or Guarantor hereunder and under the other Loan Documents, shall remain liable to pay any deficiency in the total amount owed to Lender under the Note and Loan Documents subject to applicable law.

 

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7.5    Advances/Reimbursements. All amounts due to Lender as a result of expenditures made by Lender or losses suffered by Lender shall bear interest at the highest default rate as provided under the Note, or as otherwise provided in this Agreement, from the date demanded until paid in full. Unless otherwise specified in the Loan Documents, such advances and other sums, together with accrued interest, shall be due and payable from Borrower upon demand.

 

7.6    Marshaling of Assets; Payments Set Aside. Lender shall be under no obligation to marshal any assets or securities in favor of any Obligor or any other Person, or against or in payment of any or all of the Obligations. To the extent that any sum credited against the Obligations is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state of federal law, common law or equitable cause, then to the extent of such recovery, the Obligations or such part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or set-off had not occurred.

 

7.7    Attorney in Fact. In addition to any other rights and remedies of Lender under this Agreement and the other Loan Documents, whether available on the occurrence of an Event Default or otherwise, on the occurrence of an Event of Default (and only for so long as such Event of Default is continuing), Borrower hereby irrevocably designates, makes, constitutes and appoints Lender (and all Persons designated by Lender) as Borrower’s true and lawful attorney (and agent-in-fact) and Lender, or Lender’s agent, may, without notice to Borrower and in Borrower’s or Lender’s name, but at the cost and expense of Borrower: (i) sell, transfer, settle, adjust, compromise, discharge or release any of the Collateral; (ii) prepare, file and sign Borrower’s name to a proof of claim in bankruptcy or similar document against any Account Debtor or to any notice of lien, assignment or satisfaction of lien or similar document in connection with any of the Collateral; (iii) receive and open all mail addressed to Borrower and notify postal authorities to change the address for delivery thereof to such address as Lender may designate; (iv) endorse the name of Borrower upon any of the items of payment or proceeds relating to any Collateral and deposit the same to the account of Lender or any other Lender on account of the Obligations; (v) endorse the name of Borrower upon any chattel paper, document, instrument, invoice, freight bill, bill of lading or similar document or agreement relating to the Collateral; (vi) use the information recorded on or contained in any data processing equipment and computer hardware and software relating to the other Collateral and to which Borrower has access; (vii) for and in the name of Borrower, give instructions and direct any bank or financial institution in which proceeds of the Collateral are deposited to turn over said proceeds to Lender; and (viii) do all other acts and things necessary, in Lender’s determination, to fulfill Borrower’s obligations under this Agreement and the other Loan Documents.

 

7.8    License of Rights. In advertising for sale and in selling any Collateral, subsequent to an Event of Default, Lender is hereby granted a license or other right to use, without charge, each Obligor’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks and advertising matter or any property of a similar nature as it pertains to the Collateral and such Obligor’s rights under all licenses and all franchise agreements shall inure to Lender’s benefit.

 

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8.       Miscellaneous.

 

8.1    General Indemnity. Unless resulting solely from acts or conduct of Lender constituting willful misconduct or gross negligence (as determined by a non-appealable ruling of a court of competent jurisdiction) and in addition to any other indemnity obligations of any Obligor under this Agreement or any other Loan Document, each Obligor hereby releases and shall indemnify, defend and hold harmless Lender and its successors and assigns, and each entity which may be a current or future participant in the Loan or any portion thereof, their respective officers, employees and agents, of and from any claims, demands, liabilities, obligations, judgments, injuries, losses, damages and costs and expenses (including, without limitation, reasonable legal fees) resulting from: (a) acts or conduct of any Obligor under, pursuant or related to this Agreement and the other Loan Documents; (b) any Obligor’s breach or violation of any representation, warranty, covenant or undertaking contained in this Agreement or the other Loan Documents; (c) any Obligor’s failure to comply with any applicable Laws (including, without limitation, any Environmental Law, etc.); and (d) any claim by any other Obligor, or any principal, officer, agent, employee, or creditor thereof, against Lender arising out of any transaction whether hereunder or in any way related to the Loan Documents and all costs, expenses, fines, penalties or other damages resulting therefrom.

 

8.2    Discharge of Taxes, Obligors’ Obligations, Etc. Lender, in its sole discretion, shall have the right at any time, and from time to time, with at least ten (10) days prior notice to Obligor and if the applicable Obligor fails to do so, to: (a) pay for the performance of any Obligor’s obligations hereunder; and (b) discharge taxes, Liens, fines or penalties at any time levied against any Obligor or Lender in connection with the Loan or placed on the Collateral, or any of it, in violation of this Agreement unless such Obligor is in good faith with due diligence by appropriate proceedings contesting such taxes or Liens and maintaining proper reserves therefor in accordance with GAAP. Such payments and advances shall: (i) be added to the Obligations; (ii) be secured with equal force and effect by the Collateral; and (iii) bear interest at the highest rate (including any default rate) applicable to the Loan, until reimbursed to Lender. Such payments and advances made by Lender shall not be construed as a waiver by Lender of a Default or Event of Default under this Agreement or any other Loan Document.

 

8.3    Notice. All notices, demands, or other communications given under the Loan Documents shall be in writing, and shall be sent via overnight courier or mailed to the address of each party as set forth below, said mailing to be certified United States government mail to the mailing address, with notice in each case to be effective when sent. Obligors must provide written direction to Lender to the designated Obligor for notice hereunder in order to change the address to which said notice shall be sent. Notices shall deemed to have been duly given, served, and delivered: (a) on the date personally delivered; (b) on the date of receipt by the addressee of any item transmitted by United States registered or certified mail (return receipt requested), postage prepaid; (c) on the date of receipt by the addressee of any item transmitted by e-mail other commercial electronically transmitted means, or (d) on the first (1st) Business Day following the date on which delivered to a commercially-responsible overnight courier which provides service between the point of origin and the point of destination, addressed to the party which is to receive such notice at the address stated above or to such other address(es) as may be designated in writing by the other parties:

 

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			If to Lender, to:

				
			Greater Nevada Credit Union

			c/o Greater Commercial Lending

			5190 Neil Road, Suite 205

			Reno, NV 89502

			Attention: Servicing Department         

			
	 	 
	
			If to Borrower, to:

				
			Aemetis Biogas 1 LLC

			20400 Stevens Creek Blvd., Suite 700

			Cupertino, CA 95014

			Attention: Todd Waltz, Manager

			
	 	 
	
			If to Guarantor, to:

				
			Aemetis Biogas Holdings LLC

			20400 Stevens Creek Blvd., Suite 700

			Cupertino, CA 95014

			Attention: Todd Waltz, Manager

			

 

8.4    Waiver. No failure or delay on the part of Lender in exercising any power or right hereunder, and no failure of Lender to give any Obligor any notice of an Event of Default, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power preclude any other or further exercise thereof or the exercise of any other right or power hereunder. No modification or waiver of any provision of any Loan Document or consent to any departure by any Obligor from any Loan Document shall in any event be effective unless the same shall be in writing and signed by Lender, and such waiver or consent shall be effective only in the specific instance and for the particular purpose for which it was given.

 

8.5    Benefit. The Loan Documents shall be binding upon and shall inure to the benefit of each Obligor and Lender and their respective successors and assigns.

 

8.6    Assignment and Participation. No Obligor may transfer, assign or delegate any of its duties or obligations hereunder without Lender’s prior written consent. Lender may (i) assign the Notes (or any of them), the Loan and the Loan Documents, in whole or in part, to any third-party financial institution and on the occurrence thereof Lender shall thereafter be relieved of all liability hereunder (excluding causes of action for Lender’s gross negligence or intentional acts prior to such transfer), (ii) and sell participations in the Loan, the Notes and the Loan Documents or any interest therein, to one, of more participants without any notice to, or consent from Borrower or any other Obligor. Borrower and each Obligor hereby authorizes Lender to disclose all information (including financial) provided to Lender by Borrower and any Obligor in connection with the Loan to any actual or prospective assignee or participant of all or part of the Obligations.

 

8.7    No Third-Party Beneficiaries. The Loan Documents, including this Agreement, and the terms, conditions, covenants and agreements of the Parties set forth therein are for the sole benefit of the Parties, together with their successors and assigns, and no third party shall be deemed to have any privity of contract nor any right to rely on or use against any Party any term, condition, covenant or agreement contained therein to any extent or for any purpose whatsoever, nor shall any third party have any right of action of any kind arising therefrom or be deemed to be a third party beneficiary thereof.

 

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8.8    Governing Law and Jurisdiction. This Agreement and the other Loan Documents, unless otherwise specifically provided therein, and all matters relating thereto, shall be governed by and construed and interpreted in accordance with the laws of the State of California; PROVIDED, HOWEVER, to the extent that the creation, validity, perfection, enforceability or priority of any lien or security interest, or the rights and remedies with respect to any lien or security interest, in the Collateral are governed by the laws of a jurisdiction other than the State of California, then the laws of such jurisdiction shall govern, except as superseded by applicable United States Federal Law.

 

8.9    Severability. Invalidity of any one or more of the terms, conditions or provisions of this Agreement shall in no way affect the balance hereof, which shall remain in full force and effect.

 

8.10    Construction. (a) Whenever the context and construction so require, all words used in the singular number herein shall be deemed to have been used in the plural, and vice versa, and the masculine gender shall include the feminine and neuter and the neuter shall include the masculine and feminine; (b) all references to “Sections” shall mean, with respect to the applicable Loan Document, the articles, sections, or paragraphs thereof, however denoted, if denoted at all, and the terms “herein,” “herein below,” “hereunder,” and similar terms are references to the particular Loan Document in its entirety and not merely the particular article, section, or exhibit in which any such term appears; (c) captions and headings are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope of the Loan Document or the intent of any provision thereof; (d) all references to any Loan Document shall include all amendments, extensions, renewals, restatements or replacements of the same; (e) the terms “include”, “including” and similar terms shall be construed as if followed by the phrase “without being limited to” and “Real Property” “Real Estate,” “Personal Property” and “Collateral” shall be construed as if followed by the phrase “or any part thereof”; (f) no inference in favor of any party shall be drawn from the fact that such party has drafted any portion of the Loan Documents; (g) in the event of any inconsistency between the terms of this Agreement and any other Loan Document (with the exception of the Note) the terms of this Agreement shall control, provided that any provision of any Loan Document, other than this Agreement, which imposes increased or additional obligations upon any Obligor or provides enhanced or additional rights or remedies to Lender shall be deemed to be supplemental to, and not inconsistent with, this Agreement and the other Loan Documents; and (h) any right, remedy, consent or choice of action in favor of Lender under this Agreement and the other Loan Documents shall be exercisable by Lender in its sole and absolute discretion, unless otherwise expressly noted.

 

8.11    Representation and Disclosure. Each Obligor acknowledges that: (a) each Obligor had the opportunity to seek the advice of independent counsel and has shared equally in the drafting of this Agreement and the other Loan Documents, and (b) it did not rely upon any advice from legal counsel to Lender in the preparation of the Loan Documents or in the closing of the Loan.

 

8.12    Execution in Counterparts. The Loan Agreement and other Loan Documents may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument, and in making proof of the Loan Document, it shall not be necessary to produce or account for more than one such counterpart.

 

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8.13    Examinations/Communications. Lender’s examinations, inspections, or receipt of information pertaining to the matters set forth in the Loan Documents shall not in any way be deemed to reduce the full scope and protection of the Loan Documents or the obligations of each Obligor related to the Loan Documents. Lender shall have no duty or obligation of any nature to make any investigation, inspection or review regarding any Collateral at any time, with any such investigation that is undertaken being solely for the benefit of Lender.

 

8.14    No Partnership. Nothing in the Loan Documents, and no action or inaction whatsoever on the part of Lender undertaken in connection with the Loan, shall be deemed to make Lender a partner or joint venturer with any Obligor, and Borrower shall indemnify and hold Lender harmless from and against any and all claims, losses, causes of action, expenses (including attorneys’ fees) and damages arising from the relationship between Lender and any Obligor being construed as or related to be anything other than that of a lender, borrower, guarantor or pledgor, as applicable.

 

8.15    Notice of Conduct. Each Obligor agrees to use commercially reasonable efforts to give Lender written notice of any action or inaction, to the extent that such Obligor has actual knowledge thereof, by Lender or any agent or attorney of Lender in connection with the Loan Documents or the Obligations of any party under the Loan Documents that such Obligor reasonably believes may be actionable against Lender or any agent or attorney of Lender or a defense to payment of any Obligations, including commission of a tort or violation of any contractual duty implied by law, and a reasonable opportunity to cure or correct such action or inaction. Upon request of Lender from time to time, Borrower shall also confirm in writing the status of the Loan, and the Obligations, and provide other information reasonably requested by Lender.

 

8.16    Costs, Expenses and Attorneys’ Fees. In addition to any payment or reimbursement obligations of any Obligor hereunder and under the other Loan Documents, Borrower shall pay to Lender immediately on demand, the full amount of all reasonable out-of-pocket costs and expenses, including all reasonable and documented attorneys’ fees of its outside counsel to Lender, costs of experts that are reasonably necessary in connection with the transactions contemplated by this Loan Agreement and the other Loan Documents and all other reasonable out-of-pocket expenses incurred by Lender: (a) in connection with the analysis, negotiation, preparation, execution, administration, delivery and termination of this Loan Agreement and each of the other Loan Documents and any amendment, modification, restatement, supplement, waiver or consent with respect thereto; (b) upon the occurrence of an Event of Default, and the continuation thereof beyond any applicable cure period, the costs of additional appraisals, environmental studies, collateral and financial audits, title insurance, survey updates and any legal, financial and/or operational reviews; (c) the perfection, preservation, protection and continuation of the liens and security interest granted Lender in the Collateral and the custody, preservation, protection, repair and operation of any of the Collateral; (d) the pursuit by Lender of its rights and remedies under the Loan Documents and applicable law; and (e) defending any counterclaim, cross-claim or other action, or participating in any bankruptcy proceeding, mediation, arbitration, litigation or dispute resolution of any other nature involving Lender, any Obligor or any Collateral.

 

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8.17    Further Assurances. At any time after the date hereof, each Obligor, at the request of Lender, shall execute and deliver such further documents and agreements and take such further actions as Lender reasonably deems necessary or appropriate to permit each transaction contemplated by the Loan Documents to be consummated in accordance with the provisions thereof and to perfect, preserve, protect, continue and enforce Lender’s rights and remedies regarding all liens, security interests and rights of Lender under the Loan Documents, security agreements, financing statements, continuation statements, new or replacement Notes, and/or agreements supplementing, extending or otherwise modifying any Note, this Loan Agreement, and/or any mortgage or security agreement, and certificates as to the amount of the indebtedness evidenced by the Notes.

 

8.18    Time of the Essence. Time is of the essence to all Loan Documents.

 

8.19    Integration. This Agreement and the other Loan Documents supersede any and all prior expressions, written or oral (including, but not limiting to any commitment letter or term sheets), among the Parties related to, describing or governing the terms of, the Loan and any transaction related thereto.

 

8.20    USA Patriot Act Notice. Lender hereby notifies each Obligor that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies each Obligor, which information includes the name and address of such Obligor, and other information includes the name and address of Obligors and other information that will allow Lender, as applicable, to identify each Obligor in accordance with the Act.

 

8.21    Obligors’ Agent. Lender shall have the right to deal with Eric A. McAfee, the Chief Executive Officer of the Borrower, and Todd Waltz, the Chief Financial Officer of the Borrower in regard to all matters arising hereunder and under the other Loan Documents, or otherwise concerning the rights, duties and obligations of Lender and any Obligor hereunder or under the other Loan Documents. PROVIDED, FURTHER, the foregoing authorization shall continue to be binding and effective against each Obligor and may be relied upon by Lender with regards to all future modifications, amendments, increases, waivers and restructurings of the indebtedness and obligations of any Obligor and the Loan Documents and any collateral security with respect thereto, together with any hereafter additional indebtedness and Obligations of any Obligor that may arise in favor of Lender.

 

8.22    Subordination. Each Obligor, individually and on behalf of such Obligor’s Subsidiaries and Affiliates, subordinates any claims, including any right of payment, rents, subrogation, contribution and indemnity, that it may have from or against any other Obligor or its Subsidiaries and Affiliates, and any successor or assign of any such Person, including any trustee, receiver or debtor-in-possession, howsoever arising, due or owing or whether heretofore, now or hereafter existing, to the full payment of all of the Obligations to Lender.

 

8.23    Savings Clause. Each Obligor acknowledges and agrees that if any such Obligor’s indebtedness, liability or obligation under any Loan Document, or if any liens or security interests in favor of Lender securing same, whether now existing or hereafter arising, would, but for the application of this Section, be unenforceable under applicable law as determined by a court of competent jurisdiction, such indebtedness, liability, obligation, lien or security interest shall be valid and enforceable to the maximum extent that would not cause such indebtedness, liability, obligation, lien or security interest to be unenforceable under such applicable law, and such indebtedness, liability, obligation, lien or security interest shall be deemed to have been automatically modified accordingly at all relevant times and without any further action by the Parties.

 

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8.24    No Duty to Investigate or Advise. Each Obligor acknowledges and agrees that Lender will have no obligation to investigate or disclose the financial condition or affairs of any other Obligor for the benefit of such Obligor nor to advise of or disclose to such Obligor any fact respecting, or any change in the financial condition or affairs of any other Obligor which might come to the knowledge of Lender at any time, whether or not Lender knows or believes or has reason to know or believe that any such fact or change is unknown to such Obligor or might (or does) materially increase the risk of such Obligor as a co-obligor or might (or would) affect the willingness of such Obligor to continue as a co-obligor with respect to the Obligations.

 

8.25    Survival. All representations, warranties, covenants and agreements of each Obligor in this Agreement and any other Loan Document shall survive the execution of such Loan Document, and all indemnity and other reimbursement obligations of any Obligor under this Agreement and any other Loan Document shall survive the termination of such Loan Document.

 

8.26    Additional Provisions. Riders, schedules and exhibits attached hereto, if any, are hereby incorporated into this Agreement as if set forth verbatim.

 

8.27    Confidentiality. The Lender agrees that it shall maintain in confidence any information relating to Borrower and Guarantor furnished to it by or on behalf of Borrower or Guarantor (other than information that (a) has become available to the public other than as a result of a disclosure by such party in breach of this Section 8.27, (b) has been independently developed by Lender without violating this Section 8.27 or (c) was or becomes available to Lender from a third party which, to such person's knowledge, had not breached an obligation of confidentiality to Borrower or Guarantor) and shall not reveal the same other than to its Affiliates and its and their respective directors, trustees, officers, employees, agents and advisors with a need to know or to any person that approves or administers the Loan on behalf of Lender or to any numbering, administration or settlement service providers (so long as each such person shall have been instructed to keep the same confidential), except: (A) to the extent necessary to comply with law, rule or regulation or any legal process or the requirements of any Governmental Authority, self-regulatory authority, the National Credit Union Administration or of any securities exchange on which securities of the disclosing party or any affiliate of the disclosing party are listed or traded, (B) as part of normal reporting or review procedures to, or examinations by, governmental authorities or self-regulatory authorities, including the National Credit Union Administration , (C) in order to enforce its rights under any Loan Document in a legal proceeding of (D) to any servicer of the Loan or agent of Lender or servicer, (E) to any potential or actual participant or assignee of the Loan or any portion thereof, and (F) to the USDA in connection with the approval or the Loan.

 

8.28    Equal Credit Opportunity Act. In accordance with Title V of Public Law 93-495, the Equal Credit Opportunity Act, with respect to any aspect of a credit transaction, neither the Lender nor the USDA will discriminate against any applicant on the basis of race, color, religion, national origin, sex, marital status or age (providing the applicant has the capacity to contract), or because all or part of the applicant’s income derives from a public assistance program, or because the applicant has, in good faith, exercised any right under the Consumer Protection Act. If applicable to the Loan, the Lender will comply with the requirements of the Equal Credit Opportunity Act as contained in the Federal Reserve Board’s Regulation implementing that Act (see 12 CFR part 202). Such compliance will be accomplished prior to loan closing.

 

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8.29    Waiver of Jury Trial; Dispute Resolution.

 

THE BORROWER AND LENDER EACH WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS RELATED TO ANY OF THE LOAN DOCUMENTS. THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY THE PARTIES HERETO AND THEIR PARTIES ACKNOWLEDGE THAT NEITHER THE LENDER NOR ANY PERSON ACTING ON BEHALF OF THE LENDER HAS OR HAVE MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE BORROWER AND LENDER EACH FURTHER ACKNOWLEDGE THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. BORROWER AND LENDER EACH AGREE THAT THE OBLIGATIONS EVIDENCED BY THIS AGREEMENT IS AN EXEMPTED TRANSACTION UNDER THE TRUTH IN LENDING ACT, 15 U.S.C. SECTION 1061, ET SEQ. BORROWER FURTHER ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THE MEANING OF THIS WAIVER PROVISION AND AS EVIDENCE OF THIS FACT SIGNS ITS INITIALS.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ANY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, TO THE EXTENT THAT ANY SUIT, ACTION OR PROCEEDING SHALL BE INSTITUTED ARISING OUT OF OR RELATED TO THIS AGREEMENT IN ANY COURT WITHIN THE STATE OF CALIFORNIA, UNTIL SUCH TIME (IF AT ALL) AS THE CALIFORNIA LEGISLATURE ENACTS A LAW THAT WOULD RENDER THE JURY TRIAL WAIVER SET FORTH ABOVE VALID AND ENFORCEABLE OR FOR ANY OTHER REASON A COURT OF COMPETENT JURISDICTION DETERMINES THAT THE JURY TRIAL WAIVER SET FORTH ABOVE IS VALID AND ENFORCEABLE, THE REFERENCE PROVISION CONTAINED IN SCHEDULE 8.29 HERETO SHALL APPLY TO ANY SUCH SUIT, ACTION OR PROCEEDING COMMENCED PRIOR TO SUCH TIME IN LIEU OF THE JURY TRIAL WAIVER SET FORTH ABOVE.

 

Borrower’s Initials ____

 

[SIGNATURE PAGE ATTACHED]

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Construction Loan Agreement under seal to be effective as of the date first above written:

 

	 	
			BORROWER:

			
	 	 
	 	
			AEMETIS BIOGAS 1 LLC,

			a Delaware limited liability company

			
	 	 
	 	
			By: Aemetis Biogas Holdings LLC,

			its Sole Member

			 

			 

			    By: /s/ Todd Waltz_____________________________

			    Name: Todd Waltz

			    Title: Manager

			
	 	 
	 	
			GUARANTOR:

			
	 	 
	 	
			AEMETIS BIOGAS HOLDINGS LLC, a Delaware limited liability company

			
	 	 
	 	
			By: Aemetis Biogas LLC,

			       its Sole Member

			 

			By:/s/ Todd Waltz___________________________

			             Name: Todd Waltz

			             Title: Manager

			
	 	 
	 	
			LENDER:

			
	 	 
	 	
			GREATER NEVADA CREDIT UNION, a domestic non-profit cooperative corporation organized under the laws of the State of Nevada

			
	 	 
	 	
			By:/s/ Marcus Wertz                                                      

			Name: Marcus Wertz                                                     

			Title Chief Lending Officer:                                           

			

 

S-1

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