Document:

exv10w19

EXHIBIT 10.19

THIRD AMENDMENT TO LEASE

     THIS THIRD AMENDMENT TO LEASE (the “Third Amendment”) is entered into as of this 25th
day of February, 2008, by and between PLYMOUTH PROPERTIES REALTY LLC, a Delaware limited liability
company, with an address in care of Great Point Investors LLC, Two Center Plaza, Suite 410, Boston,
MA 02108 (“Landlord”), and ZAREBA SYSTEMS, INC., a Minnesota corporation, with an address
of 13705 26th Avenue N., Suite 102, Plymouth, MN 55441-3644, formerly known as Water
Instruments, Inc. (“Tenant”).

WITNESSETH:

     WHEREAS, Plymouth Properties Realty Corp., as landlord (“Predecessor”), and Tenant,
entered into a Lease Agreement dated January 4, 2002, as amended by Amendment of Lease Agreement
dated March 18, 2002, and by Amendment of Lease Agreement dated April 30, 2004 (the “Second
Amendment”) (as amended, the “Lease”), whereby Tenant is leasing from Landlord
approximately 6,895 rentable square feet of floor area (the “Existing Premises”) in the
building commonly known as Annapolis Business Centre, 13705 26th Avenue N., Plymouth,
Minnesota (the “Building”); and

     WHEREAS, Landlord has succeeded to the rights of Predecessor, as landlord under the Lease; and

     WHEREAS, Tenant has changed its name from “Water Instruments, Inc.” to “Zareba Systems, Inc.”;
and

     WHEREAS, Tenant and Landlord have agreed to extend the Term of the Lease for a period of
thirty-eight (38) months commencing on February 1, 2008 and expiring on March 31, 2011; and

     WHEREAS, Landlord and Tenant desire to amend the Lease, upon the terms and provisions set
forth herein, to extend the Term as set forth herein, and to make other modifications to the terms
and provisions of the Lease.

     NOW, THEREFORE, in consideration of the mutual promises herein contained and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties
hereto, Landlord and Tenant agree as follows:

     1. Capitalized terms not otherwise expressly defined herein shall have the meanings ascribed
to them in the Lease. The term “Lease”, as used in the Lease shall include the Lease, as
amended by this all amendments thereto, including this Third Amendment.

     2. (a) Tenant acknowledges that Predecessor has transferred its interest in the Lease, as
landlord, to Landlord. As of November 1, 2004, all references in the

 

 

Lease to Predecessor and its address (including but not limited to Section 3(f) and Section 24
of the Lease) are hereby deleted and replaced with the following:

“Plymouth Properties Realty LLC

c/o Great Point Investors LLC

Two Center Plaza, Suite 410

Boston, MA 02108

Attn: Joseph A. Versaggi

with a copy to:

United Properties LLC

3500 American Boulevard West

Suite 200

Bloomington, MN 55431

Attn: Lisa Dongoske

Rent payments to be sent to:

(a) by regular mail to:

Plymouth Properties Realty LLC

14577 Collections Center Drive

Chicago, IL 60693

(b) by overnight mail to:

Bank of America Lockbox Services

14577 Collections Center Drive

Chicago, IL 60693”

          (b) All references in the Lease to “Water Instruments, Inc.” are deleted in their entirety and
replaced with, “Zareba Systems, Inc.”

     3. Term. Notwithstanding any provisions of the Lease to the contrary, the Term of the
Lease shall expire on March 31, 2011.

     4. Base Rent. Paragraph 3(a) of the Lease, last amended by paragraph 3 of the Second
Amendment, is further amended by adding the following rental schedule thereto:

     “(v) No Minimum Rent is due to Landlord for the months of February and March, 2008;

     (vi) For the period commencing on April 1, 2008 and expiring on March 31, 2009, the
sum of $64,123.50 per annum, payable in equal monthly installments, in advance, of
$5,343.63 per month;

 

 

     (vii) For the period commencing on April 1, 2009 and expiring on March 31, 2010, the
sum of $66,047.21 per annum, payable in equal monthly installments, in advance, of
$5,503.93 per month; and

     (vii) For the period commencing on April 1, 2010 and expiring on March 31, 2011, the
sum of $68,028.62 per annum, payable in equal monthly installments, in advance, of
$5,669.05 per month.”

     5. Acceptance of the Leased Premises. Tenant acknowledges that all “Landlord Work” as
described in Section 5 of the Lease and in the Second Amendment has been completed to Tenant’s
satisfaction, and all allowances provided for therein and in the Second Amendment, if any, have
been paid in full and that Tenant accepts the Expansion Premises in its present “as is”, where is,
with all faults condition.

     6. Tenant represents to Landlord that Tenant has not dealt with any broker or agent in
connection with this Third Amendment, other than United Properties LLC (the “Broker”), and
no broker or agent, other than the Broker, negotiated this Third Amendment. Tenant agrees to
indemnify, defend and hold Landlord, its asset manager, its property manager and their respective
employees, harmless from and against any claims for a fee or commission made by any broker or
agent, other than the Broker, claiming to have acted by or on behalf of Tenant in connection with
this Third Amendment.

     7. It is mutually agreed that all covenants, conditions and agreements set forth in the Lease,
as amended hereby, shall remain binding upon the parties and inure to the benefit of the parties
hereto and their respective permitted successors and assigns.

     8. Except as modified hereby, all other terms and conditions of the Lease shall remain
unchanged and in full force and effect and are hereby ratified and confirmed by the parties hereto.
Tenant represents and warrants to Landlord that (a) Tenant is not in default under any of the
terms and provisions of the Lease, (b) Landlord is not in default in the performance of any of its
obligations under the Lease, and (c) Tenant is unaware of any condition or circumstance which, with
the giving of notice or the passage of time or both, would constitute a default by Landlord under
the Lease. Tenant further acknowledges that Tenant has no defenses, offsets, liens, claims or
counterclaims against Landlord under the Lease or against the obligations of Tenant under the Lease
(including, without limitation, any rentals or other charges due or to become due under the Lease).

     9. Any inconsistencies or conflicts between the terms and provisions of the Lease and the
terms and provisions of this Third Amendment shall be resolved in favor of the terms and provisions
of this Third Amendment.

     10. This Third Amendment shall not be modified except in writing signed by both parties
hereto.

 

 

     11. The submission of this Third Amendment shall not constitute an offer and this Third
Amendment shall not be effective and binding unless and until fully executed and delivered by each
of the parties hereto.

     12. Tenant represents and warrants for itself that all requisite organizational action has
been taken in connection with this transaction, and the individuals signing on behalf of Tenant
represent and warrant that they have been duly authorized to bind the Tenant by their signature.
Landlord represents and warrants for itself that all requisite organizational action has been taken
in connection with this transaction, and the individuals signing on behalf of Landlord represent
and warrant that they have been duly authorized to bind the Landlord by their signature.

     13. This Third Amendment may be executed in counterparts, each of which shall be deemed an
original and all of which when taken together shall constitute one fully executed original Third
Amendment, binding upon the parties hereto, notwithstanding that all of the parties hereto may not
be signatories to the same counterpart. Additionally, telecopied signatures may be used in place
of original signatures on this Third Amendment. Landlord and Tenant intend to be bound by the
signatures on the telecopied document, are aware that the other party will rely on the telecopied
signatures, and hereby waive any defenses to the enforcement of the terms of this Third Amendment
based on the form of signature.

[SIGNATURES ON FOLLOWING PAGE]

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment to be effective on
the date first indicated above.

Landlord:

	 	 	 	 	 
	 	PLYMOUTH PROPERTIES REALTY LLC, a Delaware limited liability company

 
	 	By:  	/s/ Randolph L. Kazazian III
 	 
	 	 	Name:  	Randolph L. Kazazian III 	 
	 	 	Title:  	Manager 	 

Tenant:

	 	 	 	 	 
	 	ZAREBA SYSTEMS, INC., a Minnesota corporation

 	 
	 	By:  	/s/ Jerry Grabowski
 	 
	 	 	Name:  	Jerry Grabowski 	 
	 	 	Title:  	President and CEOexv10w20

Exhibit 10.20

RESIGNATION AGREEMENT AND RELEASE

     This Resignation Agreement and Release (the “Agreement”) is made June 2, 2008, by and between
Executive (“Executive”) and Zareba Systems, Inc., f/k/a Waters Instruments, Inc. (“Zareba”), a
Minnesota corporation.

RECITALS:

     WHEREAS, Executive has been employed by Zareba under a certain Employment Agreement dated July
1, 1995 (the “Employment Agreement”);

     WHEREAS, under the Employment Agreement, Zareba has the right unilaterally to terminate
Executive’s employment by notice to Executive, but has offered Executive certain consideration in
exchange for Executive’s resignation which offer Executive wants to accept; and

     WHEREAS, Executive and Zareba want to document their agreement concerning the terms of the
termination of Executive’s employment and resolve any actual and potential disputes between them.

     NOW, THEREFORE, in consideration of the mutual promises and covenants in this Agreement,
Zareba and Executive agree as follows:

AGREEMENTS

     1. Premises. The Recitals are incorporated into this Agreement and made part of it.

     2. Definitions. The “Company” means Zareba, its subsidiaries and affiliated and
predecessor companies, and the present and former officers, directors, employees, shareholders,
consultants, attorneys, accountants, auditors and agents of any of them, whether in their
individual or official capacities, and the current and former trustees or administrators of any
pension or other benefit plan applicable to the employees or former employees of the Company, in
their individual and official capacities. “Executive” means Executive and anyone who has or
obtains legal rights or claims through Executive.

     3. End of Employment; Certain Resignations. Executive’s employment terminated
effective June 2, 2008. Executive acknowledges and expressly agrees Executive has received from
Zareba a written notice of termination which complies with Section 6(b)(3) of the Employment
Agreement. Upon such termination notice, the Company’s only obligation under the Employment
Agreement and any applicable incentive compensation plan is to pay Executive an amount equal to the
Base Salary (as defined in the Employment Agreement) in effect on June 2, 2008, for one (1) year in
twenty-six (26) equal bi-weekly installments beginning on the next day on which Zareba makes its
regular payroll payments, and continue to pay for the twelve (12) month period during which such
installments are payable, the cost of all existing health/medical and other benefit plans enjoyed
by Executive on June 2, 2008 (subject to the terms of the plans)

 

 

or provide substantially the same benefits if the terms of a plan exclude non-employees. Under the
Employment Agreement upon such termination notice, Executive is also entitled to receive on August
31, 2008, Incentive Compensation (as defined in the Employment Agreement) under Section 3 of the
Employment Agreement, determined in the manner described in the Employment Agreement. Because of
the Company’s performance, Executive acknowledges and expressly agrees that Executive is not
entitled to receive under the Employment Agreement any Incentive Compensation on August 31, 2008.

     Executive resigns effective immediately as a director and/or officer of Zareba and all of the
direct or indirect subsidiaries of the Company, including without limitation, Zareba Security,
Inc., Zareba Systems of Canada, Ltd., Zareba Systems Europe Limited, No. 549 Leicester Limited,
Rutland Electric Fencing Co., Limited, Rutland Electric Fencing Co. (Scotland) Limited and Electric
Shepherd Products Limited.

     4. Characterization of Termination as Resignation; Payments and Other Consideration.
Executive acknowledges and expressly agrees that under Section 6(d) the Employment Agreement if
Executive’s employment by Zareba ends by Executive’s resignation, the Company will have no further
obligation under the Employment Agreement or any applicable incentive compensation plan, including
any obligation to may any payments to Executive. Specifically in consideration for Executive’s
agreement to this Agreement, and as settlement of any and all claims which Executive has made or
could make against the Company, if Paragraph 5 of this Agreement is not rescinded by Executive or
otherwise such Paragraph is not or does not become void or unenforceable, the termination of
Executive’s employment will be characterized by the parties as a resignation, and notwithstanding
Section 6(d) of the Employment Agreement, Zareba will pay Executive an amount equal to the Base
Salary (as defined in the Employment Agreement) in effect on June 2, 2008, for one (1) year in
twenty-six (26) equal bi-weekly installments beginning on the next day on which Zareba makes its
regular payroll payments, and continue to pay for the twelve (12) month period during which such
installments are payable, the cost of all existing health/medical and other benefit plans enjoyed
by Executive on June 2, 2008 (subject to the terms of the plans) or provide substantially the same
benefits if the terms of a plan exclude non-employees.

     The Company will promptly pay Executive an amount equal to Executive’s accrued but unused
vacation as of June 2, 2008.

     The Company will continue to pay through the end of the current automobile lease term the
automobile lease payments and insurance respecting the automobile heretofore used by Executive, but
in no event after December 31, 2008. At the end of such lease term, Executive will be offered the
opportunity to purchase, at Executive’s sole expense, the automobile pursuant to the terms of the
automobile lease.

     If it is reasonably possible, at Executive’s sole expense, Executive may arrange for the
transfer to a new cell phone purchased by Executive the telephone number of the cell phone
heretofore used by Executive.

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     The Company will have no other obligations to pay Executive any other amounts or provide other
benefits or consideration to Executive except as set out in this Section 4. Sections 7-12, 14 and
17 of the Employment Agreement will continue to be binding and in effect as set forth in the
Employment Agreement.

     Except as provided for in this Agreement, neither Executive or Executive’s attorneys will make
any claim against the Company for attorneys’ fees, costs, interest or any and all other expenses
which may have been incurred by Executive and that Executive is personally responsible for all of
Executive attorney’s fees and costs, if any.

     5. Release of Claims by Executive.

     a. Executive releases and forever discharges the Company of and from any and all claims,
actions, causes of action, administrative claims, individual or class action claims, or demands of
any kind whatsoever Executive has or might have against the Company, whether in law or equity,
contract or tort, arising out of or in connection with Executive employment with the Company, the
termination of that employment, or otherwise. Except for the consideration payable to Executive
under Section 4, such release includes, without limiting the generality of the foregoing, any
claims Executive may have for wages, bonuses, commissions, penalties, claims for punitive or
liquidated damages, severance, attorney’s fees, costs and disbursements, vacation pay, or other
benefit, based upon any claim of defamation, breach of contract or tort, at common law, or under
any federal, state or local statute or ordinance prohibiting discrimination or harassment in
employment, including any claims for discrimination arising under the Age Discrimination in
Employment Act, 29 U.S.C. § 621, et seq., Title VII of the Civil Rights Act, 42 U.S.C. § 2000e
et seq., the Americans With Disabilities Act, 42 U.S.C. § 12101 et
seq., the Civil Rights Acts of 1866 and 1991, including Section 1981 of the Civil Rights
Act, the Family and Medical Leave Act, the Vocational Rehabilitation Act, Employee Retirement
Income Security Act of 1976, the Minnesota Human Rights Act, § 363.01A et seq., or any other claim
of discrimination, harassment and/or retaliation arising under federal, state or local law, or any
other claims in any manner relating to Executive employment with and termination of employment with
Zareba, or otherwise, arising in law or equity, whether known, suspected, or unknown, and however
originating or existing, to the date of Executive signing of this Agreement. Executive releases
and discharges the Company not only from any and all claims that Executive could make on Executive
own behalf, but also those that may or could be brought by any other person or organization on
Executive behalf. Executive is not waiving any right to file a charge with the Equal Employment
Opportunity Commission (in connection with any statutes enforced by that agency), or to participate
in any Equal Employment Opportunity Commission investigation. Executive understands and
specifically acknowledges however, that Executive is waiving all of Executive’s rights to any
individual relief under any and all claims encompassed by the preceding language.

     b. To the extent permitted by law, Executive will not institute any claim for damages, by
civil action, administrative proceeding or other legal proceeding, or authorize any other party,
governmental or otherwise, to institute any claim for damages via civil action,

3

 

administrative proceeding, or other legal proceeding against the Company based on any claim,
including but not limited to the claims described in Paragraph 5(a), arising in law or equity,
whether known, suspected or unknown and however originating or existing, to the date of Executive
signing of this Agreement. Executive waives any and all relief not provided for in this Agreement.
Executive expressly agrees the payments and other consideration provided to Executive under this
Agreement fully compensates Executive for and extinguishes any and all claims arising out of
Executive’s employment, separation from employment, or otherwise with Zareba.

     c. Executive affirms that Executive has not caused or permitted to be filed any charge,
complaint or action against the Company. In the event that there is outstanding any such charge,
complaint, or action, Executive will seek its immediate withdrawal and dismissal with prejudice.
In the event that for any reason any such charge, complaint, or action is not withdrawn, Executive
will not testify, provide documents, or otherwise participate, or permit others to voluntarily
participate on Executive behalf, in any investigation or litigation arising therefrom or associated
therewith and will execute such other papers or documents as the Company’s counsel determines in
such counsel’s sole discretion may be necessary to have any such charge, complaint or action
dismissed with prejudice. This Paragraph 5 will not prohibit either party from testifying or
responding pursuant to a court order or a subpoena issued by a government agency which appears
valid on its face, or as otherwise required by law. Executive’s agreements in this Paragraph will
not affect Executive’s rights to file for unemployment compensation and/or workers’ compensation,
if any.

     d. Under this Paragraph 5, Executive is not releasing any of the obligations or liabilities of
Zareba created by this Agreement.

     6. Notification of Rights Pursuant to the Minnesota Human Rights Act (Minn. Stat. §
363A.01, et seq.) and the Federal Age Discrimination in Employment Act (29 U.S.C. §§ 621-634).
Executive is notified of Executive’s right to rescind the release of claims in regard to
Executive’s rights under the Minnesota Human Rights Act, Minn. Stat. § 363A.01, et
seq., within fifteen (15) calendar days of Executive signing this Agreement and the federal
Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., within seven (7)
calendar days of Executive signing this Agreement, such rescission periods to run concurrently. In
order to be effective, the rescission must be in writing and delivered to Jeffrey Mathiesen, Zareba
Systems, Inc., 13705 – 26th Avenue N., Suite 102, Plymouth, Minnesota, 55441, by hand or
mail. If delivered by mail, the rescission must be postmarked within the required period, properly
addressed to Mr. Mathiesen, at the address set forth above and sent by certified mail, return
receipt requested. Executive understands and expressly agrees that if Executive rescinds the
release of claims set out in Paragraph 5 in accordance with this Paragraph 6, Zareba will have no
obligation to provide the payments and other consideration described in Paragraph 4, Executive will
be obligated to return to Zareba any payment(s) already received in connection with this Agreement,
Paragraphs 4, 5 and 9 of this Agreement will be null and void, but the other Paragraphs of this
Agreement will be binding and enforceable agreements of the parties.

4

 

     7. Non-disclosure by Executive. Executive expressly agrees, now and in the future,
not to disclose, either directly or indirectly, in any manner whatsoever, any information of any
kind regarding either (a) the substance or the existence of any belief that Executive or any other
person may have that the Company engaged in any unlawful, discriminatory, unfair or tortious
conduct towards Executive, or breached any contract, or (b) the terms of this Agreement, to any
person or organization, including, but not limited to, representatives of local, state or federal
agencies, members of the press and media, present and former officers, employees and agents of the
Company (except to effect the terms of this Agreement), and other members of the public. In the
event of a breach by Executive of this Paragraph, Zareba may commence an action to pursue its
available legal or equitable remedies, including the recovery of money damages. In the event that
Zareba takes steps to seek relief from an alleged breach of this Paragraph all of the remaining
provisions of this Agreement will remain in full force and effect. Notwithstanding anything in
this Agreement to the contrary, nothing in this Agreement will prohibit Executive from (i)
discussing the consideration being provided under this Agreement with Executive’s tax advisors,
provided however, that such individuals will comply with the terms of this Paragraph, (ii)
discussing the terms of this Agreement with Executive’s attorneys, their immediate family members
or medical doctors, provided however, that such individuals will comply with the terms of this
Paragraph, (iii) advising a governmental taxing authority of the payments or other consideration
under or of the existence of this Agreement, in response to a question or questions posed by such
taxing authority, (iv) testifying pursuant to a court order or a subpoena issued by a governmental
agency, Court of law or their duly authorized agents, which appears valid on its face, (v)
revealing the terms of this Agreement as required by and in accordance with any law, regulation or
ordinance, or Court order or proceeding, (vi) revealing the terms of this Agreement in order to
enforce its terms, or (vii) stating “the matter has been resolved and the terms of the resolution
are confidential” in response to an inquiry.

     8. Nonadmission. Nothing in this Agreement will constitute or be construed as an
admission of any liability or wrongdoing of any nature on the part of the Company. The Company
specifically denies any liability or unlawful conduct.

     9. Right to Receive Payments and Other Consideration. Executive warrants and
represents that Executive has the right to receive the payments and other consideration under this
Agreement and has not filed for bankruptcy or otherwise assigned the claims Executive has released
by this Agreement.

     10. No Disparagement. Executive will not disparage the Company.

     11. No Future Employment with the Company. Executive will never seek or accept or
remain employed by the Company, and/or any successor of the Company.

     12. Return of Property. Executive expressly agrees all documents or other tangible
materials relating to the business of, or the products or services provided by the Company,
including Executive’s personnel records, are the sole property of the Company, and Executive

5

 

oes not possess, has returned all such property or will return such property within seven (7) days
of Executive signing this Agreement.

     13. Severability. If any term, clause or provision of this Agreement is for any
reason be found invalid, unenforceable or void by a court of competent jurisdiction, the same will
not impair or invalidate any of the other terms, clauses or provisions of this Agreement, all of
which will be performed in accordance with their respective terms.

     14. Non-Waiver. Any party’s delay or failure to enforce any term, clause or provision
of this Agreement will not constitute a waiver of such party’s right to enforce that or any other
term, clause or provision.

     15. Entire Agreement. This Agreement states the entire agreement of the parties with
respect to the subject matter of this document. No modification, release, discharge or waiver of
any term, clause or provision of this Agreement will be of any force or effect unless it is made in
writing and signed by the parties to this Agreement. The parties each acknowledge that they have
not relied on any representations or statements of the other party, whether oral or written, other
than the express statements of this Agreement, in signing this Agreement.

     16. Law Governing. This Agreement will be governed and construed in accordance with
the laws of the State of Minnesota.

     17. Acknowledgment of Reading and Understanding; Consultation with Counsel; Twenty-One
(21) Day Consideration Period. Executive, by Executive signing of this Agreement, acknowledges
and expressly agrees that Executive has carefully read and understands all provisions of this
Agreement and that Executive has entered into this Agreement knowingly and voluntarily. Executive
further acknowledges that Zareba, has advised Executive to consult with legal counsel before
signing this Agreement and that Executive has in fact consulted with or had the opportunity to
consult with legal counsel before signing this Agreement. Executive also acknowledges that Zareba,
has informed Executive that Executive has twenty-one (21) days from the receipt of this Agreement
to consider whether the terms, clauses and provisions are acceptable to Executive. Executive
further acknowledges by Executive signing this Agreement that Executive has had the benefit of the
twenty-one (21) day period and if Executive signs this Agreement during twenty-one (21) day period,
Executive has done so knowingly and voluntarily and pursuant to the advice of Executive’s counsel.
Executive acknowledges and expressly agrees that if Executive does not sign this Agreement, Zareba,
will have no obligation to provide any of the payments or other consideration under this Agreement
and that this Agreement will be null and void. Furthermore, Executive understands and agrees that
if Executive does not sign this Agreement, Executive will be required to return any payment(s) or
other consideration already received and, if necessary, Zareba, may commence a legal action to
enforce return of the payments or other consideration and/or reimbursement by Executive.

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     IN WITNESS WHEREOF, the parties have signed this Agreement on the dates set out below.

	 	 	 	 	 
	 	 	 
	Date:  June 2, 2008  	/s/Gerald W. Grabowski
 	 
	 	Gerald W. Grabowski
 	 
	 	Zareba Systems, Inc. 	 
	 

	 	 	 	 	 
	 	 	 
	Date:  June 2, 2008 	By:  	/s/ William R. Franta
 	 
	 	 	Chair of the Board of Directors 	 
	 	 	 	 
	 

The offer documented by this Resignation Agreement and Release is valid until the close of business
on the 21st day after Executive receives this document, which is June 23, 2008.

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