<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 23, 1997.
REGISTRATION NO. 333-29303.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 3
TO
FORM SB-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
GRANITE FINANCIAL, INC.
(Name of small business issuer in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 6153 84-1349929
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code) Identification No.)
WILLIAM W. WEHNER
6424 WEST 91ST AVENUE 6424 WEST 91ST AVENUE
WESTMINSTER, COLORADO 80030 WESTMINSTER, COLORADO 80030
TELEPHONE: (303) 650-4059 TELEPHONE: (303) 650-4059
(Address and telephone number of principal executive (Name, address and telephone number
offices and principal place of business) of agent for service)
Copies to:
ROBERT W. WALTER, ESQ. STEVEN E. SEGAL, ESQ. NOLAN S. TAYLOR, ESQ.
DAVID C. ROOS, ESQ. LEBOEUF, LAMB, GREENE THOMAS R. TAYLOR, ESQ.
CURT R. FOUST, ESQ. & MACRAE, L.L.P. LEBOEUF, LAMB, GREENE
BERLINER ZISSER WALTER & GALLEGOS, P.C. SUITE 2000 & MACRAE, L.L.P.
1700 LINCOLN STREET, SUITE 4700 633 SEVENTEENTH STREET 136 SOUTH MAIN STREET, SUITE 1000
DENVER, COLORADO 80203 DENVER, COLORADO 80202 SALT LAKE CITY, UTAH 84101
TELEPHONE: (303) 830-1700 TELEPHONE: (303) 291-2600 TELEPHONE: (801) 320-6700
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the
Securities Act, please check the following box and list the Securities Act
registration statement number
of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check
the following box and list the Securities Act registration statement number of
the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law permits a corporation organized
thereunder to indemnify its directors and officers for certain of their acts.
The Certificate of Incorporation of the Company has been framed so as to conform
to the Delaware General Corporation Law.
In general, any officer, director, employee or agent may be indemnified
against expenses, fines, settlements or judgments arising in connection with a
legal proceeding to which such person is a party, if that person's actions were
in good faith, were believed to be in the Company's best interest and were not
unlawful. Unless such person is successful upon the merits in such an action,
indemnification may be awarded only after a determination by independent
decision of the Board of Directors, by legal counsel or by a vote of the
stockholders that the applicable standard of conduct was met by the person to be
indemnified.
The circumstances under which indemnification is granted in connection with
an action brought on behalf of the Company are generally the same as those set
forth above; however, with respect to such actions, indemnification is granted
only with respect to expenses actually incurred in connection with the defense
or settlement of the action. In such actions, the person to be indemnified must
have acted in good faith, in a manner believed to have been in the Company's
best interest and with respect to which such person was not adjudged liable for
negligence or misconduct.
Indemnification may also be granted pursuant to the terms of agreements
which may be entered into in the future pursuant to a vote of stockholders or
directors. The Delaware General Corporation Law and the referenced portion of
the Certificate of Incorporation also grant the power to the Company to purchase
and maintain insurance which protects its officers and directors against any
liabilities incurred in connection with their services in such a position, and
such a policy may be obtained by the Company in the future.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses other than
underwriting discounts, payable by the Company in connection with the sale and
distribution of the Common Stock being registered hereby. All amounts shown are
estimates, except the SEC registration fee, the NASD filing fee and the Nasdaq
listing fee.
<TABLE>
<CAPTION>
AMOUNT PAYABLE
BY THE
ITEM COMPANY
- ---------------------------------------- ---------------
<S> <C>
S.E.C. Registration Fees................ $ 7,492.30
N.A.S.D. Filing Fees.................... 2,972.46
State Securities Laws (Blue Sky) Legal
Fees.................................. 2,500.00*
Printing and Engraving.................. 120,000.00*
Legal Fees.............................. 120,000.00
Nasdaq Additional Registration Fee...... 10,000.00
Accounting Fees and Expenses............ 80,000.00*
Transfer Agent's Fees................... 5,000.00*
Miscellaneous Expenses.................. 27,035.24*
---------------
Total......................... $375,000.00*
============
</TABLE>
- ---------------
* Estimated for the purpose of filing.
II-1
<PAGE> 3
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
(a) The Company has made the following sales of its Common Stock within the
past three years to the following persons for the cash or other consideration
indicated, which sales were not registered under the Securities Act of 1933.
<TABLE>
<CAPTION>
DATE OF NUMBER OF
NAME ISSUANCE CONSIDERATION SHARES
---- -------- ------------- ---------
<S> <C> <C> <C>
1. William W. Wehner(1)........................... 07/11/96 $2,000 200,000
10/07/96 Membership interest in 180,000
Granite Financial, LLC
2. James E. Lewis(1).............................. 10/07/96 Membership interest in 720,000
Granite Financial, LLC
3. Heartland Leasing Corporation of Missouri...... 10/07/96 Membership interest in 900,000
Granite Financial, LLC
</TABLE>
- ---------------
(1) Director or officer.
All the foregoing sales were made to individuals or entities which had
access to information enabling them to evaluate the merits and risks of the
investment by virtue of their relationship to the Company or their economic
bargaining power.
The Company relied on Section 4(2) of the Securities Act of 1933 for the
exemption from the registration requirements of such Act. Each investor was
furnished with information concerning the operations of the Company and each had
the opportunity to verify the information supplied. Additionally, the Company
obtained a signed representation from each of the foregoing persons or entities
of his or its intent to acquire the Common Stock of the Company for the purpose
of investment only, and not with a view toward the subsequent distribution
thereof; each of the certificates representing the Common Stock issued to the
foregoing persons or entities has been stamped with a legend restricting
transfer of the Common Stock represented thereby, and the Company issued stop
transfer instructions to American Securities Transfer & Trust, Inc., the
Transfer Agent for the Common Stock of the Company, concerning all the
certificates representing the Common Stock of the Company issued and outstanding
as represented by the foregoing table.
ITEM 27. EXHIBITS.
The following is a complete list of Exhibits filed as part of this
Registration Statement and which are incorporated herein.
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<C> <S> <C>
*1.1 -- Form of Purchase Agreement by and between Granite
Financial, Inc. (the "Company"), Piper Jaffray Inc. and
Cruttenden Roth Incorporated.
+2.1 -- Exchange Memorandum, dated October 7, 1996 regarding the
reorganization of the Registrant from a Colorado limited
liability company to a Delaware corporation (the
"Exchange Memorandum").
+3.1 -- Certificate of Incorporation of the Company as filed on
June 20, 1996 with the Secretary of State of the State of
Delaware.
+3.2 -- By-laws of the Company.
+4.1.1 -- Form of specimen certificate for Common Stock of the
Company.
+4.1.2 -- Form of Representative's Warrant issued by the Company to
Cruttenden Roth Incorporated in connection with the
Company's initial public offering.
**4.1.3 -- Underwriters' Warrant to be issued by the Company to
Piper Jaffray Inc. and Cruttenden Roth Incorporated
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<C> <S> <C>
**5. -- Opinion of Berliner Zisser Walter & Gallegos, P.C.,
regarding legality of the securities covered by this
Registration Statement.
*10.1.1 -- Form of Employment Agreement, dated April 1, 1997, by and
between William W. Wehner and the Company.
*10.1.2 -- Employment Agreement, dated April 28, 1997, by and
between Larry K. White and the Company.
+10.2 -- Form of Indemnification Agreement entered into between
the Company and each officer and director of the Company.
+10.3 -- 1996 Omnibus Stock Option Plan, as amended effective
April 24, 1997, authorizing 900,000 shares of Common
Stock for issuance pursuant to the Plan.
+10.4.1 -- Membership Units Purchase Agreement, dated January 31,
1996, by and among Heartland Leasing Corporation of
Missouri, Granite Financial, LLC, James E. Lewis, William
W. Wehner, Andrew S. Love, Jr., Laurence A. Schiffer and
Heartland Bank.
+10.4.2 -- Members' Agreement of Granite Financial, LLC, dated
January 31, 1996, by and among Granite Financial, LLC,
James E. Lewis, William W. Wehner and Heartland Leasing
Corporation of Missouri.
+10.4.3 -- Lease Purchase Agreement, dated June 14, 1995, by and
between Granite Financial, LLC and Heartland Bank.
+10.4.4 -- Lease Sale Agreement, dated April 1, 1996, by and between
Heartland Bank and Granite Financial, LLC.
+10.4.5 -- Lease Service Agreement, dated June 14, 1995, by and
between Heartland Bank and Granite Financial, LLC.
++10.5.1 -- Loan and Security Agreement, dated February 4, 1997, by
and between CoreStates Bank, N.A. and Granite Financial,
Inc.
++10.5.2 -- Unsecured Revolving Credit Agreement, dated January 30,
1997, by and between Colorado National Bank, and Granite
Financial, Inc.
+10.6 -- Lease of Space, dated June 26, 1995, by and between Arbor
Lake Limited Partnership, a Colorado limited partnership,
and Granite Financial, LLC.
+10.7 -- Form of Broker/Lessor Partnership Agreement, dated
various dates, by and between Lease Originators and
Granite Financial, LLC.
+10.8.1 -- Servicing Agreement, dated April 1, 1996, by and among GF
Funding Corp. I, Norwest Bank Minnesota, National
Association and Granite Financial, LLC.
+10.8.2 -- Indenture, dated April 1, 1996, by and among GF Funding
Corp. I, Norwest Bank Minnesota, National Association and
Granite Financial, LLC.
+10.8.3 -- Lease Acquisition Agreement, dated April 10, 1996, by and
between Granite Financial, LLC and GF Funding Corp. I.
++10.9.1 -- Trust and Security Agreement, dated November 1, 1996,
among G.F. Funding Corp. II, the Company, Norwest Bank
Minnesota, National Association.
++10.9.2 -- Lease Acquisition Agreement, dated November 1, 1996,
between the Company and G.F. Funding Corp. II.
++10.9.3 -- Servicing Agreement, dated November 1, 1996, among G.F.
Funding Corp. II, the Company, Norwest Bank Minnesota,
National Association.
++10.10.1 -- Trust and Security Agreement, dated March 1, 1997, by and
among GF Funding Corp. III, the Company and Norwest Bank
Minnesota, National Association.
++10.10.2 -- Lease Acquisition Agreement, dated March 1, 1997, by and
between the Company and GF Funding Corp. III.
++10.10.3 -- Servicing Agreement, dated March 1, 1997, by and among
the Company, GF Funding Corp. III and Norwest Bank
Minnesota, National Association.
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ------------ ------------
<C> <S> <C>
+10.11.1 -- CreditDesk(R) License Agreement, dated September 22, 1995, by and between Fair, Isaac
and Company, Inc. and Granite Financial, LLC.
+10.11.2 -- InfoLease License Agreement, dated October 5, 1995, by and between Decision Systems,
Inc. and Granite Financial, LLC.
++10.12 -- Asset Purchase Agreement, dated March 31, 1997, by and among Granite Financial
Acquisition Corp. I, Global Finance & Leasing, Inc. and Thomas Mannes.
*10.13 -- Agreement, dated December 13, 1996, by and between BrokerWare, Inc. and the Company.
**10.14 -- Standard Form Industrial Lease, dated June 6, 1997, by and between General American
Life Insurance Company and the Company.
*22. -- List of Subsidiaries.
**23.1 -- The consent of Berliner Zisser Walter & Gallegos, P.C., to the use of its opinion with
respect to the legality of the securities covered by this Registration Statement and to
the references to such firm in the Prospectus filed as part of this Registration
Statement is included in Exhibit 5.
*23.2 -- Consent of Ehrhardt Keefe Steiner & Hottman PC, independent certified public
accountants for the Company.
*24. -- The Power of Attorney is included in the signature page of this Registration Statement.
++27. -- Financial Data Schedule.
</TABLE>
- ---------------
<TABLE>
<S> <C>
* Previously filed.
** Filed herewith.
- - To be filed by amendment.
+ Incorporated by reference from the Company's Registration
Statement on Form SB-2 (S.E.C. File No. 333-5264-D).
++ Incorporated by reference from the Company's Form 10-QSB
filed February 14, 1997 (S.E.C. File No. 1-21591).
+ Incorporated by reference from the Company's Form 10-QSB
filed December 6, 1996 (S.E.C. File No. 1-21591).
++ Incorporated by reference from the Company's Form 10-QSB
filed May 15, 1997 (S.E.C. File No. 1-21591).
</TABLE>
ITEM 28. UNDERTAKINGS.
(e) Indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE> 6
(f) Rule 430A.
The undersigned Registrant hereby undertakes that:
(i) For the purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of Prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of Prospectus filed by the Registrant under Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time the Commission declared
it effective.
(ii) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and authorized this Registration Statement
or Amendment to be signed on its behalf by the undersigned in the City of
Westminster, State of Colorado on July 22, 1997.
GRANITE FINANCIAL, INC.
By: /s/ WILLIAM W. WEHNER
----------------------------------
William W. Wehner,
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, jointly and severally, William W. Wehner
or James E. Lewis, or any of them, with full power to act alone, his true and
lawful attorneys-in-fact, with full power of substitution, and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement or any Registration Statement filed pursuant to Rule 462 under the
Securities Act of 1933, and file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact full power and authority to do and perform
each and every act and thing requisite and necessary to be done as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ WILLIAM W. WEHNER Chairman of the Board and Chief July 22, 1997
- ----------------------------------------------------- Executive Officer (Principal
William W. Wehner Executive Officer)
/s/ WILLIAM S. COBB Senior Vice President of July 22, 1997
- ----------------------------------------------------- Corporate Development and Chief
William S. Cobb Financial Officer (Principal
Financial and Accounting
Officer)
/s/ JAMES E. LEWIS* Director July 22, 1997
- -----------------------------------------------------
James E. Lewis
/s/ LAURENCE A. SCHIFFER* Director July 22, 1997
- -----------------------------------------------------
Laurence A. Schiffer
/s/ ANDREW S. LOVE, JR.* Director July 22, 1997
- -----------------------------------------------------
Andrew S. Love, Jr.
/s/ SAMUEL R. FREEMAN* Director July 22, 1997
- -----------------------------------------------------
Samuel R. Freeman
*By: /s/ WILLIAM W. WEHNER
-------------------------------------------------
William W. Wehner
Attorney-in-fact
</TABLE>
II-6
<PAGE> 8
EXHIBIT INDEX
The following is a complete list of Exhibits filed as part of this
Registration Statement and which are incorporated herein.
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<C> <S> <C>
*1.1 -- Form of Purchase Agreement by and between Granite
Financial, Inc. (the "Company"), Piper Jaffray Inc. and
Cruttenden Roth Incorporated.
+2.1 -- Exchange Memorandum, dated October 7, 1996 regarding the
reorganization of the Registrant from a Colorado limited
liability company to a Delaware corporation (the
"Exchange Memorandum").
+3.1 -- Certificate of Incorporation of the Company as filed on
June 20, 1996 with the Secretary of State of the State of
Delaware.
+3.2 -- By-laws of the Company.
+4.1.1 -- Form of specimen certificate for Common Stock of the
Company.
+4.1.2 -- Form of Representative's Warrant issued by the Company to
Cruttenden Roth Incorporated in connection with the
Company's initial public offering.
**4.1.3 -- Underwriters' Warrant to be issued by the Company to
Piper Jaffray Inc. and Cruttenden Roth Incorporated
**5. -- Opinion of Berliner Zisser Walter & Gallegos, P.C.,
regarding legality of the securities covered by this
Registration Statement.
*10.1.1 -- Form of Employment Agreement, dated April 1, 1997, by and
between William W. Wehner and the Company.
*10.1.2 -- Employment Agreement, dated April 28, 1997, by and
between Larry K. White and the Company.
+10.2 -- Form of Indemnification Agreement entered into between
the Company and each officer and director of the Company.
+10.3 -- 1996 Omnibus Stock Option Plan, as amended effective
April 24, 1997, authorizing 900,000 shares of Common
Stock for issuance pursuant to the Plan.
+10.4.1 -- Membership Units Purchase Agreement, dated January 31,
1996, by and among Heartland Leasing Corporation of
Missouri, Granite Financial, LLC, James E. Lewis, William
W. Wehner, Andrew S. Love, Jr., Laurence A. Schiffer and
Heartland Bank.
+10.4.2 -- Members' Agreement of Granite Financial, LLC, dated
January 31, 1996, by and among Granite Financial, LLC,
James E. Lewis, William W. Wehner and Heartland Leasing
Corporation of Missouri.
+10.4.3 -- Lease Purchase Agreement, dated June 14, 1995, by and
between Granite Financial, LLC and Heartland Bank.
+10.4.4 -- Lease Sale Agreement, dated April 1, 1996, by and between
Heartland Bank and Granite Financial, LLC.
+10.4.5 -- Lease Service Agreement, dated June 14, 1995, by and
between Heartland Bank and Granite Financial, LLC.
++10.5.1 -- Loan and Security Agreement, dated February 4, 1997, by
and between CoreStates Bank, N.A. and Granite Financial,
Inc.
++10.5.2 -- Unsecured Revolving Credit Agreement, dated January 30,
1997, by and between Colorado National Bank, and Granite
Financial, Inc.
+10.6 -- Lease of Space, dated June 26, 1995, by and between Arbor
Lake Limited Partnership, a Colorado limited partnership,
and Granite Financial, LLC.
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<C> <S> <C>
+10.7 -- Form of Broker/Lessor Partnership Agreement, dated
various dates, by and between Lease Originators and
Granite Financial, LLC.
+10.8.1 -- Servicing Agreement, dated April 1, 1996, by and among GF
Funding Corp. I, Norwest Bank Minnesota, National
Association and Granite Financial, LLC.
+10.8.2 -- Indenture, dated April 1, 1996, by and among GF Funding
Corp. I, Norwest Bank Minnesota, National Association and
Granite Financial, LLC.
+10.8.3 -- Lease Acquisition Agreement, dated April 10, 1996, by and
between Granite Financial, LLC and GF Funding Corp. I.
++10.9.1 -- Trust and Security Agreement, dated November 1, 1996,
among G.F. Funding Corp. II, the Company, Norwest Bank
Minnesota, National Association.
++10.9.2 -- Lease Acquisition Agreement, dated November 1, 1996,
between the Company and G.F. Funding Corp. II.
++10.9.3 -- Servicing Agreement, dated November 1, 1996, among G.F.
Funding Corp. II, the Company, Norwest Bank Minnesota,
National Association.
++10.10.1 -- Trust and Security Agreement, dated March 1, 1997, by and
among GF Funding Corp. III, the Company and Norwest Bank
Minnesota, National Association.
++10.10.2 -- Lease Acquisition Agreement, dated March 1, 1997, by and
between the Company and GF Funding Corp. III.
++10.10.3 -- Servicing Agreement, dated March 1, 1997, by and among
the Company, GF Funding Corp. III and Norwest Bank
Minnesota, National Association.
+10.11.1 -- CreditDesk(R) License Agreement, dated September 22,
1995, by and between Fair, Isaac and Company, Inc. and
Granite Financial, LLC.
+10.11.2 -- InfoLease License Agreement, dated October 5, 1995, by
and between Decision Systems, Inc. and Granite Financial,
LLC.
++10.12 -- Asset Purchase Agreement, dated March 31, 1997, by and
among Granite Financial Acquisition Corp. I, Global
Finance & Leasing, Inc. and Thomas Mannes.
*10.13 -- Agreement, dated December 13, 1996, by and between
BrokerWare, Inc. and the Company.
**10.14 -- Standard Form Industrial Lease, dated June 6, 1997, by
and between General American Life Insurance Company and
the Company.
*22. -- List of Subsidiaries.
**23.1 -- The consent of Berliner Zisser Walter & Gallegos, P.C.,
to the use of its opinion with respect to the legality of
the securities covered by this Registration Statement and
to the references to such firm in the Prospectus filed as
part of this Registration Statement is included in
Exhibit 5.
*23.2 -- Consent of Ehrhardt Keefe Steiner & Hottman PC,
independent certified public accountants for the Company.
*24. -- The Power of Attorney is included in the signature page
of this Registration Statement.
++27. -- Financial Data Schedule.
</TABLE>
- ---------------
<TABLE>
<S> <C>
* Previously filed.
** Filed herewith.
- - To be filed by amendment.
</TABLE>
<PAGE> 10
+ Incorporated by reference from the Company's Registration
Statement on Form SB-2 (S.E.C. File No. 333-5264-D).
++ Incorporated by reference from the Company's Form 10-QSB
filed February 14, 1997 (S.E.C. File No. 1-21591).
+ Incorporated by reference from the Company's Form 10-QSB
filed December 6, 1996 (S.E.C. File No. 1-21591).
++ Incorporated by reference from the Company's Form 10-QSB
filed May 15, 1997 (S.E.C. File No. 1-21591).
<PAGE> 1
EXHIBIT 4.1.3
THIS WARRANT WAS ORIGINALLY ISSUED ON JULY 28, 1997, AND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1993, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT (I) THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH TRANSFER MAY BE LAWFULLY MADE WITHOUT REGISTRATION UNDER THE
ACT AND APPLICABLE STATE SECURITIES LAWS OR (II) REGISTRATION UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS.
STOCK PURCHASE WARRANT
To Subscribe for and Purchase
_______ Shares of Common Stock of
GRANITE FINANCIAL, INC.
THIS CERTIFIES THAT, for value received, __________________ (herein
called the "Purchaser"), or its registered assigns, is entitled to subscribe
for and purchase from Granite Financial, Inc. (herein called the "Company"), a
corporation organized and existing under the laws of the State of Delaware, at
the price specified below (subject to adjustment as noted below) at any time
after the first anniversary of the date hereof to and including the fifth
anniversary of the date hereof (the "Expiration Date"), _____________________
(_____________) fully paid and nonassessable shares of common stock, $0.001 par
value per share (herein the "Common Stock"), subject to adjustment as noted
below. This Warrant has been issued pursuant to a Purchase Agreement dated as
of July ____, 1997 (the "Agreement"), by and among the Company and the
underwriters named therein, including the Purchaser.
The warrant purchase price (subject to adjustment as noted below)
shall be $__________ per share.
This Warrant is subject to the following provisions, terms and
conditions:
1. The rights represented by this Warrant may be exercised by the
holder hereof, in whole or in part, by written notice of exercise delivered to
the Company on or prior to the intended date of exercise and by the surrender
of this Warrant (properly endorsed if required) at the principal office of the
Company and upon payment to it by check or wire transfer of the purchase price
for such shares. The Company agrees that the shares so purchased shall be and
are deemed to be issued to the holder hereof as the record owner of such shares
as of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. Subject to the
provisions of the next succeeding paragraph, certificates for the shares of
stock so purchased shall be delivered to the holder hereof within a reasonable
time, not exceeding seven days, after the rights represented by this Warrant
shall have been so
<PAGE> 2
exercised, and, unless this Warrant has expired, a new Warrant representing the
number of shares, if any, with respect to which this Warrant shall not then
have been exercised shall also be delivered to the holder hereof within such
time.
2. Notwithstanding the foregoing, however, the Company shall not
be required to deliver any certificate for shares of stock upon exercise of
this Warrant except in accordance with the provisions, and subject to the
limitations, of paragraph 7 hereof.
3. The Company represents and warrants that this Warrant has been
duly authorized by all necessary corporate action, has been duly executed and
delivered and is a legal and binding obligation of the Company. The Company
covenants and agrees that all shares which may be issued upon the exercise of
the rights represented by this Warrant according to the terms hereof or
represented by the Common Stock will, upon issuance, be duly authorized and
issued, fully paid and nonassessable. The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized, and reserved for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of its Common Stock to
provide for the exercise of the rights represented by this Warrant.
4. The above provisions are, however, subject to the following:
(a) The warrant purchase price shall, from and after the
date of issuance of this Warrant, be subject to adjustment from time to time as
hereinafter provided. Upon each adjustment of the warrant purchase price, the
holder of this Warrant shall thereafter be entitled to purchase, at the warrant
purchase price resulting from such adjustment, the number of shares obtained by
multiplying the warrant purchase price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the warrant
purchase price resulting from such adjustment.
(b) In case the Company shall (i) declare a dividend upon
the Common Stock payable in Common Stock (other than a dividend declared to
effect a subdivision of the outstanding shares of Common Stock, as described in
subparagraph (c) below) or in any obligations or any shares of stock of the
Company which are convertible into or exchangeable for Common Stock (any of
such obligations or shares of stock being hereinafter referred to as
"Convertible Securities"), or in any rights or options to purchase any Common
Stock or Convertible Securities, or (ii) declare any other dividend or make any
other distribution upon the Common Stock payable otherwise than out of earnings
or earned surplus, then thereafter the holder of this Warrant upon the exercise
hereof will be entitled to receive the number of shares of Common Stock to
which such holder shall be entitled upon such exercise, and, in addition and
without further payment therefor, such number of shares of Common Stock, such
that upon exercise hereof, such holder would receive such number of shares of
Common Stock as a result of each dividend described in clause (i) above and
each dividend or distribution described in clause (ii) above which such holder
would have received by way of any such dividend or distribution if continuously
since the record date for any such dividend or distribution such holder (i) had
been the record holder of the number of shares of Common Stock then received,
and (ii) had retained
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<PAGE> 3
all dividends or distributions in stock or securities (including Common Stock
or Convertible Securities, or in any rights or options to purchase any Common
Stock or Convertible Securities) payable in respect of such Common Stock or in
respect of any stock or securities paid as dividends or distributions and
originating directly or indirectly from such Common Stock. For the purposes of
the foregoing, a dividend or distribution other than in cash shall be
considered payable out of earnings or surplus only to the extent that such
earnings or surplus are charged an amount equal to the fair value of such
dividend as determined by the Board of Directors of the Company.
(c) In case the Company shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the warrant
purchase price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding shares of
Common Stock of the Company shall be combined into a smaller number of shares,
the warrant purchase price in effect immediately prior to such combination
shall be proportionately increased.
(d) If any capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holder hereof shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions
specified in this Warrant and in lieu of the shares of the Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby had such reorganization, reclassification,
consolidation, merger or sale not taken place, and in any such case appropriate
provision shall be made with respect to the rights and interests of the holder
of this Warrant to the end that the provisions hereof (including without
limitation provisions for adjustments of the warrant purchase price and of the
number of shares purchasable upon the exercise of this Warrant) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise hereof.
In connection with any such consolidation, merger or sale, the successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing such assets shall assume, by written
instrument executed and mailed to the registered holder hereof at the last
address of such holder appearing on the books of the Company, the obligation to
deliver to such holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be entitled to
purchase.
(e) Upon any adjustment of the warrant purchase price, then
and in each such case the Company shall give written notice thereof, by first-
class mail, postage prepaid, addressed to the registered holder of this Warrant
at the address of such holder as shown on the books of the Company, which
notice shall state the warrant purchase price resulting from such adjustment
and the increase or decrease, if any, in the number of shares purchasable at
such price
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<PAGE> 4
upon the exercise of this Warrant, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.
(f) In case any time prior to the expiration of this
Warrant:
i) the Company shall declare any cash dividend on its
capital stock at a rate in excess of the rate of the last cash dividend
theretofore paid;
ii) the Company shall pay any dividend payable in stock
upon its capital stock or make any distribution (other than regular cash
dividends) to the holders of its capital stock;
iii) the Company shall offer for subscription pro rata
to the holders of its capital stock any additional shares of stock of any
class or other rights;
iv) there shall be any capital reorganization, or
reclassification of the capital stock of the Company, or consolidation or
merger of the Company with, or sale of all or substantially all of its
assets to, another corporation; or
v) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company.
then, in any one or more of said cases, the Company shall give written notice,
by first-class mail, postage prepaid, addressed to the registered holder of
this Warrant at the address of such holder as shown on the books of the
Company, of the date on which (A) the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights,
or (B) such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up shall take place, as the case may be.
Such notice shall also specify the date as of which the holders of capital
stock of record shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their capital stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be. Such written notice shall be given at least 30
days prior to the action in question and not less than 30 days prior to the
record date or the date on which the Company's transfer books are closed in
respect thereto.
(g) If any event occurs as to which in the opinion of the
Board of Directors of the Company the other provisions of this paragraph 4 are
not strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the holder of this Warrant or of Common Stock in accordance
with the essential intent and principles of such provisions, then the Board of
Directors shall make an adjustment in the application of such provisions, in
accordance with such essential intent and principles, so as to protect such
purchase rights as aforesaid.
(h) No fractional shares of Common Stock shall be issued
upon the exercise of this Warrant, but, instead of any fraction of a share
which would otherwise be
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<PAGE> 5
issuable, the Company shall pay a cash adjustment (which may be effected as a
reduction of the amount to be paid by the holder hereof upon such exercise) in
respect of such fraction in an amount equal to the same fraction of the Market
Price per share of Common Stock as of the close of business on the date of the
notice required by paragraph 1 above. "Market Price" shall mean, if the Common
Stock is traded on a securities exchange or on the Nasdaq National Market, the
average of the closing prices of the Common Stock on such exchange or the
Nasdaq National Market on the 20 trading days ending on the trading day prior
to the date of determination, or, if the Common Stock is otherwise traded in
the over-the-counter market, the average of the closing bid prices on the 20
trading days ending on the trading day prior to the date of determination. If
at any time the Common Stock is not traded on an exchange or the Nasdaq
National Market, or otherwise traded in the over-the-counter market, the Market
Price shall be deemed to be the higher of (i) the book value thereof as
determined by any firm of independent public accountants of recognized national
standing selected by the Board of Directors of the Company as of the last day
of any month ending within 60 days preceding the date as of which the
determination is to be made, or (ii) the fair value thereof determined in good
faith by the Board of Directors of the Company as of a date which is within 15
days of the date as of which the determination is to be made.
5. This Warrant shall not entitle the holder hereof to any voting
rights or other rights as a stockholder of the Company.
6. The holder of this Warrant, by acceptance hereof, agrees to
give written notice to the Company before transferring this Warrant or
transferring any Common Stock issuable or issued upon the exercise hereof of
such holder's intention to do so, describing briefly the manner of any proposed
transfer of this Warrant or such holder's intention as to the disposition to be
made of shares of Common Stock issuable or issued upon the exercise hereof. If
such notice is required pursuant to the preceding sentence, such holder shall
also provide the Company with an opinion of counsel satisfactory to the Company
to the effect that the proposed transfer of this Warrant or disposition of
shares may be effected without registration or qualification (under any federal
or state law) of this Warrant or the shares of Common Stock issuable or issued
upon the exercise hereof. Upon receipt of such written notice and such opinion
by the Company, such holder shall be entitled to transfer this Warrant, or to
exercise this Warrant in accordance with its terms and dispose of the shares
received upon such exercise or to dispose of shares of Common Stock received
upon the previous exercise of this Warrant, all in accordance with the terms of
the notice delivered by such holder to the Company, provided that an
appropriate legend respecting the aforesaid restrictions on transfer and
disposition may be endorsed on this Warrant or the certificates for such
shares.
7. Subject to the provisions of paragraph 6 hereof, this Warrant
and all rights hereunder are transferable, in whole or in part, at the
principal office of the Company by the holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant properly endorsed. Each
taker and holder of this Warrant, by taking or holding the same, consents and
agrees that the bearer of this Warrant, when endorsed, may be treated by the
Company and all other persons dealing with this Warrant as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented by this Warrant, or to the transfer hereof on the
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<PAGE> 6
books of the Company, any notice to the contrary notwithstanding; but until
such transfer on such books, the Company may treat the registered holder hereof
as the owner for all purposes.
8. This Warrant is exchangeable, upon the surrender hereof by the
holder hereof at the principal office of the Company, for new Warrants of like
tenor representing in the aggregate the right to subscribe for and purchase the
number of shares which may be subscribed for and purchased hereunder, each of
such new Warrants to represent the right to subscribe for and purchase such
number of shares as shall be designated by said holder hereof at the time of
such surrender.
9. The Company covenants and agrees as follows:
(a) For purposes of this Section 9:
i) The term "register," "registered" and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document;
ii) The term "Registrable Securities" means (i) the
Common Stock issuable or issued upon exercise of this Warrant; and (ii)
any Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, such Common Stock; provided, however,
that Common Stock or other securities shall only be treated as
Registrable Securities if and so long as (A) they have not been sold to
or through a broker or dealer or underwriter in a public distribution or
a public securities transaction, (B) they have not been sold in a
transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions and restrictive legends with respect thereto are
removed upon the consummation of such sale, and (C) the registration
rights associated with such securities have not been terminated pursuant
to Section 9(n) hereof;
iii) The number of shares of "Registrable Securities
then outstanding" shall be determined by the number of shares of Common
Stock outstanding which are, and the number of shares of Common Stock
issuable pursuant to then exercisable securities which are, Registrable
Securities;
iv) "Securities Act" means the Securities Act of 1933,
as amended;
v) The term "Securities Holder" means any person
owning or having the right to acquire Registrable Securities or any
assignee thereof, including without limitation and without need for an
express assignment, subsequent holders of Registrable Securities; and
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<PAGE> 7
vi) The term "S-3" means such form under the Securities
Act as in effect on the date hereof or any registration form under the
Securities Act subsequently adopted by the Securities and Exchange
Commission ("SEC") which permits inclusion or incorporation of
substantial information by reference to other documents filed by the
Company with the SEC.
(b) i) If the Company shall receive at any time after the
first anniversary of the date hereof, a written request from the
Securities Holders of a majority of the Registrable Securities then
outstanding that the Company file a registration statement under the
Securities Act covering the registration of all or a portion of the
Registrable Securities then outstanding, then the Company shall, within
ten (10) days of the receipt thereof, give written notice of such request
to all Securities Holders and shall, subject to the limitations of
subsections 9(b)(ii) and 9(b)(iii), use its best efforts to effect as
soon as practicable, and in any event within 90 days of the receipt of
such request, the registration under the Securities Act of all
Registrable Securities which the Securities Holders request to be
registered within twenty (20) days of the mailing of such notice by the
Company;
ii) If the Securities Holders initiating the
registration request hereunder ("Initiating Holders") intend to
distribute the Registrable Securities covered by their request by means
of an underwriting, they shall so advise the Company as a part of their
request made pursuant to this Section 9 and the Company shall include
such information in the written notice referred to in subsection 9(b)(i).
In such event, the right of any Securities Holder to include his
Registrable Securities in such registration shall be conditioned upon
such Securities Holder's participation in such underwriting and the
inclusion of such Securities Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority of the
Initiating Securities Holders and such Securities Holder to the extent
provided herein). All Securities Holders proposing to distribute their
securities through such underwriting shall (together with the Company as
provided in subsection 9(d)(v)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provision of this Section 9, if
the underwriter advises the Initiating Holders in writing that marketing
factors require a limitation of the number of shares to be underwritten,
then the Initiating Holders shall so advise all Securities Holders of
Registrable Securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities that may be
included in the underwriting shall be allocated among all Securities
Holders thereof, including the Initiating Holders, in proportion (as
nearly as practicable) to the amount of Registrable Securities of the
Company owned by each Securities Holder; provided, however, that the
number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities are first
entirely excluded from the underwriting; and
iii) The Company is obligated to effect only one such
registration pursuant to this Section 9 (other than on Form S-3). The
Company is obligated to effect one additional such registrations pursuant
to this Section 9 on Form S-3.
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<PAGE> 8
(c) If (but without any obligation to do so) at any time the
Company proposes to file with the SEC a registration statement to register
(including for this purpose a registration effected by the Company for
shareholders other than the Securities Holders) any of its stock or other
securities under the Securities Act in connection with the public offering of
such securities solely for cash (other than a registration relating solely to
the sale of securities to participants in a Company stock plan, or a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities or an SEC Rule 145
transaction), the Company shall, at such time, give each Securities Holder
written notice of such registration not later than 30 days prior to filing of
such registration statement. Upon the written request of each Securities
Holder given within thirty (30) days after mailing of such notice by the
Company, the Company shall, subject to the provisions of Section 9(h), cause to
be registered under the Securities Act all of the Registrable Securities that
each such Securities Holder has requested to be registered.
(d) Whenever required under this Section 9 to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
i) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best
efforts to cause such registration statement to become effective, and,
upon the request of the Securities Holders of a majority of the
Registrable Securities registered thereunder, keep such registration
statement effective for up to 90 days;
ii) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement;
iii) Furnish to the Securities Holders such numbers of
copies of a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents as
they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them;
iv) Use its best efforts to register and qualify the
securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Securities Holders, provided that the Company shall not
be required in connection therewith or as a condition thereto to qualify
to do business or to file a general consent to service of process in any
such states or jurisdictions;
v) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement,
in usual and customary form, with the managing underwriter of such
offering;
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<PAGE> 9
vi) Notify each Securities Holder of Registrable
Securities covered by such registration statement, promptly after it
shall receive notice thereof, of the time when such registration
statement has become effective or a supplement to any prospectus forming
a part of such registration statement has been filed;
vii) Notify such Securities Holders promptly of any
request by the Commission for the amending or supplementing of such
registration statement or prospectus or for additional information;
viii) Prepare and file with the Commission,
promptly upon the request of any such Security Holders, any amendments or
supplements to such registration statement or prospectus which, in the
opinion of counsel for such holders, is required under the Securities Act
or the rules and regulations thereunder in connection with the
distribution of the Registrable Securities by such holder;
ix) Prepare and promptly file with the Commission and
promptly notify such Securities Holders of the filing of such amendment
or supplement to such registration statement or prospectus as may be
necessary to correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be delivered under
the Securities Act, any event shall have occurred as the result of which
any such prospectus or any other prospectus as then in effect would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances in which they were made, not misleading;
x) Advise such Security Holders, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any proceeding
for that purpose and promptly use its best efforts to prevent the
issuance of any stop order to obtain its withdrawal if such stop order
should be issued;
xi) Not file any amendment or supplement to such
registration statement or prospectus to which a majority in interest of
such Security Holders shall have reasonably objected on the grounds that
such amendment or supplement does not comply in all material respects
with the requirements of the Securities Act or the rules and regulations
thereunder, after having been furnished with a copy thereof at least two
business days prior to the filing thereof, unless in the opinion of
counsel for the Company the filing of such amendment or supplement is
reasonably necessary to protect the Company from any liabilities under
any applicable federal or state law and such filing will not violate
applicable law;
xii) At the request of any such Security Holder, furnish
(i) an opinion, dated as of the closing date, of the counsel representing
the Company for the purposes of such registration, addressed to the
underwriters, if any, and to the Security Holder or Security Holders
making such request, covering such matters as such
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<PAGE> 10
underwriters and Security Holder or Security Holders may reasonably
request; and (ii) letters dated as of the effective date of the
registration statement and as of the closing date, from the independent
certified public accountants of the Company, addressed to the
underwriters, if any, and to the Security Holder or Security Holders
making such request, covering such matters as such underwriters and
holder or holders may reasonably request; and
xiii) Notify each Securities Holder of Registrable
Securities covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(e) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 9 with respect to the
Registrable Securities of any selling Securities Holder that such Securities
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities and shall be required to effect the registration of such
Securities Holder's Registrable Securities.
(f) All expenses other than underwriting discounts and
commissions incurred in connection with registrations, filings, or
qualifications pursuant to Section 9(b), including (without limitation) all
registration, filing, and qualification fees, printers' and accounting fees,
reasonable fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the selling Securities
Holders shall be borne by the Company; provided, however, that the Company
shall not be required to pay for any expenses of any registration proceeding
begun pursuant to Section 9(b) if the registration request is subsequently
withdrawn at the request of the Securities Holders of a majority of the
Registrable Securities to be registered (in which case all participating
Securities Holders shall bear such expenses), unless the Securities Holders of
a majority of the Registrable Securities agree to forfeit their right to one
demand registration pursuant to Section 9(b), provided further, however, that
if at the time of such withdrawal, the Securities Holders have learned of a
material adverse change in the condition, business or prospects of the Company
from that known to the Securities Holders at the time of their request and have
withdrawn the request with reasonable promptness following disclosure by the
Company or discovery by the Securities Holders of such material adverse change,
then the Securities Holders shall not be required to pay any such expenses and
shall retain their right pursuant to Section 9(b).
(g) The Company shall bear and pay all expenses incurred in
connection with any registration, filing or qualification of Registrable
Securities with respect to any registrations pursuant to Section 9(c) for each
Securities Holder, including (without limitation) all registration, filing and
qualification fees, printers and accounting fees relating or apportionable
thereto and the reasonable fees and disbursements of one counsel for the
selling Securities Holders
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<PAGE> 11
(if separate counsel is deemed necessary or desirable by such Securities
Holders) selected by them, but excluding underwriting discounts and commissions
relating to Registrable Securities.
(h) In connection with any offering involving an
underwriting of shares of the Company's capital stock, the Company shall not be
required under Section 9(c) to include any of the Securities Holders'
securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected
by the persons entitled to select the underwriters, and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by Securities Holders
to be included in such offering exceeds the amount of securities sold other
than by the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among all selling stockholders according to
the total amount of securities owned by each selling stockholder or in such
other proportions as shall mutually be agreed to by such selling stockholders).
For purposes of the preceding parenthetical concerning apportionment, for any
corporation, the partners, retired partners and stockholders of such holder, or
the estates and family members of any such partners and retired partners and
any trusts for the benefit of any of the foregoing persons shall be deemed to
be a single "selling stockholder," and any pro rata reduction with respect to
such "selling stockholder" shall be based upon the aggregate amount of shares
owned by all entities and individuals included in such "selling stockholder,"
as defined in this sentence. Those Registrable Securities which are thus
excluded from the underwritten public offering shall be withheld from the
market by the holders thereof for a period, not to exceed 90 days, which the
underwriters reasonably determine is necessary in order to effect the
underwritten public offering.
(i) No Securities Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 9.
(j) In the event any Registrable Securities are included in
a registration statement under this Section 9:
i) The Company will indemnify and hold harmless each
Securities Holder, any underwriter (as defined in the Securities Act) for
such Securities Holder and each person, if any, who controls such
Securities Holder or underwriter within the meaning of the Securities Act
or the Securities Exchange Act of 1934, as amended (the "1934 Act"),
against any losses, claims, damages or liabilities (joint or several) to
which they may become subject under the Securities Act, or the 1934 Act
or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations
(collectively, a "Violation"): (1) any untrue statement or alleged
untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus
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<PAGE> 12
or final prospectus contained therein or any amendments or supplements
thereto, (2) the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary to make the statements
therein not misleading, or (3) any Violation or alleged Violation by the
Company of the Securities Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Securities Act, or the 1934
Act or any state securities law, and the Company will pay to each such
Securities Holder, underwriter or controlling person, as incurred, any
legal or other expenses reasonably incurred by one law firm retained by
them (plus one additional law firm retained by a Securities Holder or
Securities Holders if such Securities Holder or Securities Holders
reasonably believe there exists a conflict of interest among them) in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this subsection 9(j)(i) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in
any such case for any such loss, claim, liability or action to the extent
that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such
Securities Holder, underwriter or controlling person;
ii) Each selling Securities Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers
who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any
underwriter, any other Securities Holder selling securities in such
registration statement and any controlling person of any such underwriter
or other Securities Holder, against any losses, claims, damages or
liabilities (joint or several) to which any of the foregoing persons may
become subject, under the Securities Act, or the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with
written information furnished by such Securities Holder expressly for use
in connection with such registration, and each such Securities Holder
will pay, as incurred, any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this subsection
9(j)(ii), in connection with investigating or defending any such loss,
claim, damage, liability or action; provided however, that the indemnity
agreement contained in this subsection 9(j)(ii) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the
Securities Holder, which consent shall not be unreasonably withheld; and
provided further that, in no event shall any indemnity under this
subsection 9(j)(ii) exceed the net proceeds from the offering received by
such Securities Holder;
iii) Promptly after receipt by an indemnified party
under this Section 9(j) of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a
claim in respect thereto is to be made against any indemnified party
under this Section 9(j), deliver to the indemnified party a written
notice
12
<PAGE> 13
of the commencement thereof and the indemnified party shall have the
right to participate in, and to the extent the indemnified party so
desires, jointly with any other indemnified party similarly noticed, to
assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party (together with all
other indemnified parties which may be represented without conflict by
one counsel) shall have the right to retain one separate counsel, with
the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 9(j), but the omission so to
deliver written notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than
under this Section 9(j); and
iv) The obligations of the Company and Securities
Holders under this Section 9(j) shall survive the completion of any
offering of Registrable Securities in a registration statement under this
Section 9, and otherwise.
(k) With a view to making available to the Securities Holder
the benefits of rule 144 promulgated under the Securities Act and any other
rule or regulation of the SEC that may at any time permit a Securities Holder
to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
i) Make and keep public information available, as
those terms are understood and defined in SEC Rule 144, at all times;
ii) Use its best efforts, including maintaining
registration of its Common Stock under Section 12 of the 1934 Act, to
qualify for registration on Form S-3 for the sale of their Registrable
Securities as soon as possible;
iii) File with the SEC in a timely manner all reports
and other documents required by the Company under the Securities Act and
the 1934 Act; and
iv) Furnish to any Securities Holder, so long as the
Securities Holder owns any Registrable Securities, forthwith upon request
(A) a written statement by the Company that it has complied with the
reporting requirements of SEC Rule 144, the Securities Act and the 1934
Act, or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time after it so qualifies), (B) a copy of
the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (C) such other
information as may be reasonably requested in availing any Securities
Holder of any rule or regulation of the SEC which permits the selling of
any such securities without registration or pursuant to such form.
13
<PAGE> 14
(l) From and after the date of this Agreement, the Company
shall not, without the prior written consent of the Securities Holders of a
majority of the outstanding Registrable Securities, enter into any agreement
with any holder or prospective holder of any securities of the Company which
would allow such holder or prospective holder to include such securities in any
registration filed under Section 9(b) or 9(c) hereof, unless under the terms of
such agreement, such holder or prospective holder may include such securities
in any registration filed under (i) Section 9(b) hereof only to the extent that
the inclusion of such securities is subject to all Registrable Securities
requested to be included therein by the Securities Holders first being included
pursuant to Section 9(b)(ii) and (ii) under Section 9(c) hereof only to the
extent that the inclusion of such securities does not have priority on
inclusion over any Registrable Securities requested to be included therein by
the Securities Holders if not all securities requested to be included therein
may be included pursuant to Section 9(h) hereof.
(m) Any provision of this Section 9 may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of
the Company and the Securities Holders owning a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each Securities Holder of any
Registrable Securities then outstanding, each future Securities Holder of all
such Registrable Securities, and the Company.
(n) No Securities Holder shall be entitled to exercise any
right provided for in Section 9(b) or (c) at such time as all Registrable
Securities held by such Securities Holder can be sold within a given
three-month period without compliance with the registration requirements of the
Securities Act pursuant to Rule 144.
10. (a) In addition to and without limiting the rights of the
holder of this Warrant under the terms of this Warrant, the holder of this
Warrant shall have the right (the "Conversion Right") to convert this Warrant
or any portion thereof into shares of Common Stock as provided in this
paragraph 10 at any time or from time to time prior to its expiration. Upon
exercise of the Conversion Right with respect to a particular number of shares
subject to this Warrant (the "Converted Warrant Shares"), the Company shall
deliver to the holder of this Warrant, without payment by the holder of any
exercise price or any cash or other consideration, that number of shares of
Common Stock equal to the quotient obtained by dividing the Net Value (as
hereinafter defined) of the Converted Warrant Shares by the fair market value
(as defined in paragraph (c) below) of a single share of Common Stock,
determined in each case as of the close of business on the Conversion Date (as
hereinafter defined). The "Net Value" of the Converted Warrant Shares shall be
determined by subtracting the aggregate warrant purchase price of the Converted
Warrant Shares from the aggregate fair market value of the Converted Warrant
Shares. Notwithstanding anything in this paragraph 10 to the contrary, the
Conversion Right cannot be exercised with respect to a number of Converted
Warrant Shares having a Net Value below $100. No fractional shares shall be
issuable upon exercise of the Conversion Right, and if the number of shares to
be issued in accordance with the foregoing formula is other than a whole
number, the Company shall pay to the holder of this Warrant an amount in cash
equal to the fair market value of the resulting fractional share.
14
<PAGE> 15
(b) The Conversion Right may be exercised by the holder of
this Warrant by the surrender of this Warrant at the principal office of the
Company together with a written statement specifying that the holder thereby
intends to exercise the Conversion right and indicating the number of shares
subject to this Warrant which are being surrendered (referred to in paragraph
(a) above as the Converted Warrant Shares) in exercise of the Conversion Right.
Such conversion shall be effective upon receipt by the Company of this Warrant
together with the aforesaid written statement, or on such later date as is
specified therein (the "Conversion Date"), but not later than the expiration
date of this Warrant. Certificates for the shares of Common Stock issuable
upon exercise of the Conversion Right, together with a check in payment of any
fractional share and, in the case of a partial exercise, a new warrant
evidencing the shares remaining subject to this Warrant, shall be issued as of
the Conversion Date and shall be delivered to the holder of this Warrant within
15 days following the Conversion Date.
(c) For purposes of this paragraph 10, the "fair market
value" of a share of Common Stock as of a particular date shall be its Market
Price, calculated as described in paragraph 4(h) hereof.
11. As used herein, the term "Common Stock" means and includes the
Company's presently authorized Common Stock and also includes any capital stock
of any class of the Company hereafter authorized which shall not be limited to
a fixed sum or percentage in respect of the rights of the holders thereof to
participate in dividends or in the distribution of assets upon the voluntary or
involuntary liquidation, dissolution or winding up of the Company; provided
that the shares purchasable pursuant to this Warrant shall include shares
designated as Common Stock of the Company on the date of original issue of this
Warrant or, in the case of any reclassification of the outstanding shares
thereof, the stock, securities or assets provided for in Section 4(d) above.
12. All questions concerning this Warrant will be governed and
interpreted and enforced in accordance with the internal law, not the law of
conflicts, of the State of Minnesota.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
15
<PAGE> 16
IN WITNESS WHEREOF, Granite Financial, Inc. has caused this Warrant
to be signed by its duly authorized officer and this Warrant to be dated as of
July 28, 1997.
GRANITE FINANCIAL, INC.
By
----------------------------------
Its
----------------------------
16
<PAGE> 17
SUBSCRIPTION FORM
To be Executed by the Holder of this Warrant if such Holder
Desires to Exercise this Warrant in Whole or in Part
To: Granite Financial, Inc. (the "Company")
The undersigned ______________________________
Please insert Social Security or other
identifying number of Subscriber:
______________________________
hereby irrevocably elects to exercise the right of purchase represented by this
Warrant for, and to purchase thereunder, ______________________ shares of the
Common Stock (the "Common Stock") provided for therein and tenders payment
herewith to the order of the Company in the amount of $___________________,
such payment being made as provided on the face of this Warrant.
The undersigned requests that certificates for such shares of Common
Stock be issued as follows:
Name: ___________________________________________________________________
Address: ___________________________________________________________________
Deliver to : _________________________________________________________________
Address: ___________________________________________________________________
and, if such number of shares of Common Stock shall not be all the shares of
Common Stock purchasable hereunder, that a new Warrant for the balance
remaining of the shares of Common Stock purchasable under this Warrant be
registered in the name of, and delivered to, the undersigned at the address
stated above.
Dated:
Signature _____________________________________________
Note: The signature on this Subscription
Form must correspond with the name as written
upon the face of this Warrant in every
particular, without alteration or enlargement
or any change whatever.
17
<PAGE> 18
FORM OF ASSIGNMENT
(To Be Signed Only Upon Assignment)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
this Warrant, and appoints
to transfer this Warrant on the books of the Company with the full power of
substitution in the premises.
Dated:
In the presence of:
____________________________________________________
(Signature must conform in all respects to the name
of the holder as specified on the face of this
Warrant without alteration, enlargement or any
change whatsoever, and the signature must be
guaranteed in the usual manner)
18
<PAGE> 1
EXHIBIT 5.0
July 22, 1997
Granite Financial, Inc.
6424 West 91st Avenue
Westminster, Colorado 80030-2913
Re: Registration Statement on Form SB-2
(S.E.C. File No. 333-29303) Covering
Public Offering of 2,100,000 Shares of
Common Stock of Granite Financial, Inc.
Gentlemen:
We have acted as counsel to Granite Financial, Inc., a Delaware
corporation (the "Company"), in connection with the proposed offering by the
Company (i) to the public of 2,100,000 shares of Common Stock (collectively,
the "Shares"), (ii) to the representatives of the several underwriters,
Representatives' Warrants (collectively, the "Representatives' Warrants") to
purchase 150,000 shares of Common Stock, and (iii) to holders of the
Representatives' Warrants, the Common Stock underlying such Representatives'
Warrants, all in accordance with the registration provisions of the Securities
Act of 1933, as amended.
In such capacity, we have examined, among other documents, the
Registration Statement on Form SB-2 (File No. 333-29303) filed by the Company
with the Securities and Exchange Commission (the "Commission") on June 16,
1997, as amended by Amendment No. 1 which the Company filed with the Commission
on June 23, 1997, Amendment No. 2 filed with the Commission on June 25, 1997
and by Amendment No. 3 filed with the Commission today or shortly hereafter (as
the same may be further amended from time to time, the "Registration
Statement"), covering the public offering of the above-described securities.
Based on the foregoing and on such further examination as we have
deemed relevant and necessary, we are of the opinion that:
1. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware.
<PAGE> 2
Granite Financial, Inc.
July 22, 1997
Page 2
2. The Shares, Representatives' Warrants and the shares of Common
Stock underlying the Representatives' Warrants have been legally and validly
authorized under the Certificate of Incorporation of the Company, and on
receipt of the consideration required by, and when issued in accordance with
the description set forth in, the Registration Statement, the Shares,
Representatives' Warrants and the shares of Common Stock underlying the
Representatives' Warrants will constitute duly and validly issued, outstanding,
and fully paid and nonassessable securities of the Company.
We hereby consent to the use of our name and to the references to our
firm beneath the caption "LEGAL MATTERS" in the Prospectus forming a part of
the Registration Statement, and to the filing of a copy of this opinion as
Exhibit No. 5 thereto.
Very truly yours,
/s/ Berliner Zisser Walter & Gallegos, P.C.
<PAGE> 1
GA Property No. 17301
STANDARD FORM OF INDUSTRIAL LEASE
(NET)
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
ARTICLE I. DEFINITIONS PAGE
- ---------------------- ----
<S> <C>
1.1 Address of Landlord 1
1.2 Address of Tenant 1
1.3 Base Rent 1
1.4 Base Year 1
1.5 Building/s 1
1.6 Center 1
1.7 Common Area 1
1.8 Lease Term 1
1.9 Permitted Use of the Premises 1
1.10 Premises 1
1.11 Rent 1
1.12 Additional Rent 1
1.13 Security Deposit 1
1.14 Tenant's Allocated Share 1
1.15 Tenant's Proportionate Share 2
1.16 Tenant's Prorata Share 2
ARTICLE II. THE DEMISED PREMISES.
- ----------------------------------
2.1 Lease of the Premises 2
2.2 Use of Common Area 2
2.3 Quiet Enjoyment 2
2.4 Reservations by Landlord 2
ARTICLE III. TERM OF THE LEASE.
- --------------------------------
3.1 Term 2
3.2 Tender of Possession 2
3.3 Holding Over 3
ARTICLE IV. RENT.
- ------------------
4.1 Base Rent 3
4.2 Additional Rent 3
4.2(a) Utilities and Services 3 & 4
4.2(b) Insurance 4
4.2(c) Real Estate Taxes 4
4.2(d) HVAC Maintenance 4
4.2(e) Common Area Expenses 4 & 5
4.2(f) Rent on Sales Taxes 5
4.3 Late Payment 5
4.4 Security Deposit 5
ARTICLE V. LANDLORD'S RIGHTS AND OBLIGATIONS.
- ----------------------------------------------
5.1 Maintenance by Landlord 6
5.2 Mortgage and Transfer; Estoppel Certificates 6
5.3 Landlord's Inability to Perform 6 & 7
5.4 Rights of Landlord 7
5.4(a) Name of Center 7
5.4(b) Redecorate 7
5.4(c) Re-Lease 7
5.4(d) Vehicles 7
5.4(e) Preservation of Center 7
</TABLE>
<PAGE> 2
ARTICLE VI. TENANT'S RIGHTS AND OBLIGATIONS. Page
- -------------------------------------------- ----
6.1 Acceptance of Premises 7
6.2 Alterations and Additions 7
6.3 Assignment and Subletting 8
6.4 Locks 8
6.5 Maintenance by Tenant 8
6.6 Mechanic's Liens 8
6.7 Redelivery of Premises 8
6.8 Signs and Advertisements 8
6.9 Use of Common Areas 9
6.10 Use of Premises 9
6.11 Hazardous Substances 9
ARTICLE VII. INSURANCE.
- -----------------------
7.1 Liability Insurance 9
7.2 Fire and Extended Coverage Insurance 9
7.3 Indemnification of Landlord 10
ARTICLE VIII. EMINENT DOMAIN AND DAMAGE OR DESTRUCTION.
- -------------------------------------------------------
8.1 Eminent Domain 10
8.2 Damage or Destruction 10 & 11
ARTICLE IX. DEFAULTS AND REMEDIES.
- ----------------------------------
9.1 Events of Default 11
9.1(1) Nonpayment 11
9.1(b) Noncompliance 11
9.1(c) Insolvency or Transfer 11
9.1(d) Bankruptcy 11
9.1(e) Receiver 11
9.1(f) Abandonment 11
9.2 Remedies 11 & 12
9.2(a) Repossession and Sale 12
9.2(b) Releasing 12
9.2(c) Cancellation 12
9.2(d) Anticipatory Breach 12
9.2(e) Attorney's Fees 12
9.3 Remedies Cumulative 12
9.4 No Waiver
ARTICLE X. MISCELLANEOUS.
- -------------------------
10.1 Bankruptcy or Assignment to Trustee 12
10.2 Brokers 12
10.3 Captions 13
10.4 Certificates of Occupancy 13
10.5 Entire Agreement 13
10.6 Joint and Several Liability of Multiple
Tenants 13
10.7 Notices 13
10.8 Partial Invalidity 13
10.9 Recording 13
10.10 Successors 13
10.11 Use of the Singular; Gender 13
10.12 Rider 13
EXHIBIT A. RULES AND REGULATIONS.
- ---------------------------------
EXHIBIT B. THE CENTER AND PREMISES.
- -----------------------------------
EXHIBIT C. ADDENDUM TO LEASE.
- -----------------------------
EXHIBIT D. LANDLORD'S IMPROVEMENTS TO PREMISES. PRELIMINARY SPACE PLAN.
- -----------------------------------------------------------------------
<PAGE> 3
STANDARD FORM OF INDUSTRIAL LEASE
(NET)
THIS LEASE, made this 6th day of June , 1997, by and between GENERAL
AMERICAN LIFE INSURANCE COMPANY, a Missouri corporation (hereinafter
"Landlord"), and GRANITE FINANCIAL, INC., a Delaware corporation. (Hereinafter
"Tenant").
ARTICLE I. DEFINITIONS.
- -----------------------
1.1 Address of Landlord: 350 Indiana Street, Suite 100, Golden CO 80401
1.2 Address of Tenant: 6424 W. 91st Avenue, Westminster, CO 80030
1.3 Base Rent: $11,237.90 per month.
1.4 Base Year: The calendar year in which this Lease commences.
1.5 Building/s: The Building/s in which the Premises is located. The specific
Building in which the Premises is located contains 31,200 square feet. The total
square footage of all the Buildings in the Center is 149,000 square feet.
1.6 Center: The land, improvements and appurtenances depicted on Exhibit B
attached hereto and commonly referred to as: (Name of Center:) Triad West
Business Center and located at (Street Address:) 16100 Table Mountain Parkway
(City:) Golden (State:) Colorado 80403.
1.7 Common Areas: The term "Common Area" means all the areas of the Center
designed for the common use and benefit of the Landlord and all of the tenants,
their employees, agents, customers and invitees. The Common Area includes, but
not by way of limitation, parking lots, truck courts, landscaped and vacant
areas, driveways, rail spurs, walks and curbs with facilities appurtenant to
each as such areas may exist from time to time.
1.8 Lease Term: The lease term shall commence on August 15, 1997, and run for
- -5- years, and -0- months, expiring on August 14, 2002.
1.9 Permitted Use of the Premises: office/warehouse for Granite Financial,
Inc.
1.10 Premises: Approximately 13,080 square feet of space in the Center located
as outlined on Exhibit B attached hereto, and addressed as: (Street
Address/Suite Number of Premises:) 16100 Table Mountain Parkway, suite number to
be determined prior to commencement date.
1.11 Rent: All sums, moneys or payments required to be paid by Tenant to
Landlord pursuant to this Lease, including Base Rent and Additional Rent.
1.12 Additional Rent: All sums, moneys or payments required to be paid by
Tenant to Landlord pursuant to this Lease other than Base Rent.
1.13 Security Deposit: $14,400.00
1.14 Tenant's Allocated Share: The percentage figure determined by dividing
the number of square feet in the Premises by the number of square feet in the
Building that is then leased to Tenant and to other tenants.
1
<PAGE> 4
1.15 Tenant's Proportionate Share: The percentage figure determined by
dividing the number of square feet in the Premises by the total number of square
feet in all the Buildings (this paragraph is applicable when the Center contains
more than one Building), which percentage figure is: 8.78%.
1.16 Tenant's Prorata Share: The percentage figure determined by dividing the
number of square feet in the Premises by the number of square feet in the
specific Building in which the Premises is located, which percentage figure is:
41.92%.
ARTICLE II. THE DEMISED PREMISES.
- ---------------------------------
2.1 Lease of the Premises. In consideration of the Rents, covenants,
agreements and conditions hereinafter provided to be paid, kept, performed and
observed, the Landlord leases to the Tenant and the Tenant hereby hires from the
Landlord the Premises, upon all the terms and conditions set forth in this
Lease.
2.2 Use of Common Area. Landlord grants the Tenant the nonexclusive revocable
use of the Common Area by Tenant, Tenant's employees, agents, customers and
invitees, under all the terms and conditions hereof, which use shall be subject
at all times to such reasonable, uniform and non-discriminatory rules and
regulations as may from time to time be established by Landlord.
2.3 Quiet Enjoyment. Landlord covenants that the Tenant, on paying the Rent
herein provided and keeping, performing and observing the covenants, agreements
and conditions herein required of the Tenant, shall peaceably and quietly hold
and enjoy the Premises for the Lease Term, subject, however, to the terms and
conditions of this Lease.
2.4 Reservations by Landlord. Landlord excepts and reserves from the Premises
the roof and exterior walls of the Building/s, and further reserves the right to
place, install, maintain, carry through, repair and replace such utility lines,
air ducts, pipes, wires, appliances, tunneling and the like in, over, through
and upon the Premises as may be reasonably necessary or advisable for the
servicing of the Premises or any other portions of the time to: (I) make
alterations, changes and additions to the Building/s and other improvements in
the Center; (ii) add additional areas to the Center and/or to exclude areas
therefrom; (iii) construct additional buildings and other improvements in the
Center; (iv) remove or relocate the whole or any part of any building or other
improvement in the Center; and (v) relocate any other tenant in the Center. It
is further understood that the existing layout improvements shall not be deemed
to be a warranty, representation or agreement on the part of the Landlord that
the Center will remain exactly as presently built, it being understood and
agreed that Landlord may change the number, dimensions and locations of the
walks, buildings and parking spaces as Landlord shall deem proper.
ARTICLE III. TERM OF THE LEASE.
- -------------------------------
3.1 Term. Tenant shall have and hold the Premises for and during the Lease
Term subject to the payment of the Rent and the full and timely performance by
Tenant of all the covenants and conditions set forth in this Lease.
3.2 Tender or Possession. Landlord shall use its best efforts to tender
possession of the Premises to Tenant of the commencement of the Lease Term.
Landlord shall not be subject to any liability for any failure to tender
possession of the Premises to Tenant, provided that such failure occurred as a
consequence of any circumstance or cause beyond Landlord's reasonable control,
including but not limited to any Act of God or the failure of a prior tenant to
vacate all or any portion of the Premises.
2
<PAGE> 5
3.3 Holding Over. In the event of a holding over by Tenant or any of its
successors in interest after expiration or termination of this Lease without
the consent in writing of the Landlord, Tenant shall be deemed a Tenant at
sufferance and shall pay as liquidated damages, double Rent for the entire
holdover period and all attorney's fees and expenses incurred by Landlord in
enforcing its rights hereunder. Any holding over with the consent of Landlord
shall constitute Tenant a month-to-month tenant upon and subject to all the
terms, covenants and conditions of this Lease.
ARTICLE IV. RENT.
- ------------------
4.1 Base Rent. Tenant covenants to pay without notice, deduction, set-off or
abatement to Landlord the Base Rent in lawful money of the United States in
equal consecutive monthly installments in advance on the first day of each
month during the Lease Term. Base Rent for any partial month shall be prorated
on a perdiem basis. Base Rent shall be payable to Landlord at Landlord's
Address or such other place as Landlord may designate from time to time in
writing. Tenant shall pay the first full month's Base Rent upon execution of
this Lease.
4.2 Additional Rent. Tenant covenants to pay without notice, deduction,
set-off or abatement to Landlord the Additional Rent in lawful money of the
United States in equal consecutive monthly installments in advance on the first
day of each month during the Lease Term. Additional Rent for any partial month
shall be prorated on a per diem basis. Additional Rent shall be payable to
Landlord at Landlord's Address or such other place as Landlord may designate in
writing. In order to provide for current payments of Additional Rent
reasonably estimated by Landlord from time to time commencing on the first day
of the month following the month in which Landlord notifies Tenant of the
amount of such Additional Rent. If, as finally determined, the amount of
Additional Rent owing by Tenant shall be greater than or less than the
aggregate of all installments so paid to Landlord for each calendar year, the
Tenant shall pay to Landlord the amount of such underpayment, or Landlord shall
credit Tenant for the amount of such overpayment, as the case may be. It is the
intention hereunder to estimate the amount of Additional Rent for each calendar
year then to adjust such estimate in the following year based on the actual
amount of Additional Rent owing. The obligation of Tenant with respect to the
payment of Additional Rent shall survive the termination of this Lease. Any
payment, refund or credit made pursuant to this paragraph shall be made without
prejudice to any right of Tenant to dispute the amount of Additional Rent
owing, or the right of Landlord to correct any items as billed pursuant to the
provisions hereof. Within 30 days of the date Landlord notifies Tenant of the
amount of Additional Rent owing, Tenant or its authorized agent shall have the
right to inspect the books of Landlord during the business hours of Landlord at
such location that Landlord may specify, for the purpose of verifying such
amount. Unless Tenant asserts specific errors within such 30 days, such
notification by Landlord shall be deemed to be correct. No decrease in
Additional Rent shall reduce Tenant's liability hereunder below the amount of
Base Rent payable hereunder.
4.2(a) Utilities and Services. Landlord shall not be liable for any
interruption or failure whatsoever in utility services. Tenant shall
contract in its own name and pay for all charges for electricity, gas, fuel
if any, telephone, and any other services or utilities used in, servicing or
assessed against the Premises, unless otherwise herein expressly provided.
Additionally, and if the Building is master metered for water, sewer and
exterior lighting, Tenant agrees to pay to Landlord as Additional Rent
Tenant's Prorata Share of the cost of such utilities for the Building.
Additionally, and as containerized rubbish collection bins will be provided
to the Building, Tenant agrees to pay to Landlord as Additional Rent,
Tenant's Allocated Share of the service cost of such bins (Unless Landlord,
exercising reasonable discretion, should determine that Tenant's actual use
thereof is greater than such Tenant's Allocated Share therefore, in which
case an equitable adjustment shall be made). Landlord may, however, require
Tenant to contract for
3
<PAGE> 6
his own rubbish collection, in the event Tenant's needs for such containers
constitute excessive demand on common containers. In such event, Tenant
shall contract with the same provider as the Center's common bins.
4.2(b) Insurance. Tenant shall pay to Landlord as Additional Rent Tenant's
Prorata Share (or, Tenant's Proportionate Share in the event there is more
than one Building in the Center) of the cost of the premiums for the fire
and extended coverage insurance that Landlord maintains for the Center.
4.2(c) Real Estate Taxes. Tenant shall pay to Landlord as Additional Rent
Tenant's Prorata Share (or, Tenant's Proportionate Share in the event there
is more than one Building in the Center) of Real Estate Taxes levied against
the Center. "Real Estate Taxes" shall mean: (a) all ad valorem Real Estate
Taxes on the Center (adjusted after protest or litigation, if any) for any
part of the term of this Lease, exclusive of penalties; (b) any taxes which
shall be levied in lieu of any such ad valorem Real Estate Taxes; (c) any
special assessments for benefits on or to the Center paid in annual
installments by Landlord; (d) occupational taxes or excise taxes levied on
rentals derived from the operation of the property of the privilege of
leasing property; (e) any private subdivision assessment made against the
Center; and (f) the expense of protesting, negotiating or contesting the
amount or validity of any such taxes, charges or assessments, such expense
to be applicable to the period of the item contested, protested or
negotiated.
If the Lease Term shall end during a tax year ("tax year" shall mean the
annual period for which Real Estate Taxes are assessed and levied) of which
only part is included in the Lease Term, the amount of such Additional Rent
shall be prorated on a per diem basis and shall be paid on or before the
last day of the lease Term. If the Lease Term ends in any tax year before
the amount to be payable by Tenant for the partial period has finally been
determined, the amount shall be adjusted between Landlord and Tenant. Tenant
shall be liable for all taxes levied against personal property and trade
fixtures placed by Tenant in the Premises.
4.2(d) HVAC Maintenance. Tenant shall pay to Landlord as Additional Rent
Tenant's Allocated Share of Landlord's cost and expense of the maintenance
service agreements to the heating, ventilating and air conditioning
equipment and controls servicing the Premises. Tenant shall pay all expenses
incurred to repair the heating, ventilating and air conditioning equipment
servicing the Premises, except to the extent that those items for Year One
of this Lease are covered by Landlord's contractor's.
4.2(e) Common Area Expenses. Tenant will pay to Landlord as warranty.
Additional Rent Tenant's Prorata Share (or, Tenant's Proportionate Share in
the event there is more than one Building in the Center) of the Common Area
Operating Cost, however, such Common Area Expenses shall not exceed 5% per
year increase exclusive of taxes and insurance.
"Common Area Operating Cost" means the Landlord's total cost and expense
incurred in owning, operating, maintaining and repairing the Common Area,
including but without limitation by enumeration, costs for all electricity,
gas, water, sewer or fuel used in connection with the operation, maintenance
and repair of the Common Area; the amount paid for all electricity furnished
to the Common Area to light the parking lots or for any other purpose; the
amount paid for
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all labor and/or wages and other payments including costs to Landlord of
workmen's compensation and disability insurance, payroll taxes, welfare and
fringe benefits made to janitors, employees, contractors and subcontractors
of the Landlord involved in the operation and maintenance of the Common
Area; managerial, administrative, and telephone expenses related to
operation and maintenance of the Common Area; the total charges of any
independent contractors employed in the care, operation, repair,
maintenance, cleaning, snow removal, salting and landscaping of the Common
Area; the amount paid for all supplies, tools, replacement parts of
components, equipment and necessities which are occasioned by everyday wear
and tear of the Common Area; the amount paid for premiums for all insurance
required from time to time by Landlord or Landlord's mortgagees; the costs
of machinery and equipment purchased or leased by Landlord to perform its
Common Area maintenance obligations; and property management fees not to
exceed five percent (5%) of the gross income of the Center. To the extent
that Landlord elects to provide services which are not separately metered or
directly billed to the tenant, such as water, sewer and trash hauling, the
costs of such services shall be included in Common Area Operating Cost.
Common Area Operating cost shall not, however, include interest on debt,
capital retirement of debt, depreciation costs properly chargeable to the
capital account, except for capital expenditures which reduce other
operating expenses or such capital expenditures that are required by
changes in any governmental law or regulation in which case such
expenditures, plus interest on the unamortized principal investment at ten
(10%) percent per annum, shall be amortized over the life of the
improvements, and such costs shall be directly chargeable by the Landlord to
Tenant in the Tenant's Prorata share (or, Tenant's Proportionate Share in
the event there is more than one Building in the Center).
4.2(f) Rent on Sales Taxes. Tenant shall pay to Landlord as Additional
Rent any Sales or Rent Taxes, however named or designated, levied on any
form of Rent or Additional Rent.
4.3 Late Payment. Tenant's failure to make any rental payment or other
payment required of Tenant hereunder within five (5) days of the due date
therefor shall automatically result in the imposition of a service charge for
such late payment in the amount of ten (10%) percent of such payment, without
notice.
4.4 Security Deposit. Tenant herewith deposits with Landlord the Security
Deposit as security for the performance by Tenant of every covenant and
condition of this Lease. Said Security Deposit may be mingled with other funds
of Landlord and shall bear no interest. If Tenant shall default with respect
to any covenant or condition of this Lease, Landlord may apply the whole or any
part of such Security Deposit to the payment of any sum in default, including
Rent and Additional Rent, or any sum which Landlord may be required to spend by
reason of Tenant's default. This includes, but is not limited to, applying the
Security Deposit first to any restoration, relamping, repairs and/or cleanup
costs necessary over and above normal wear and tear of the vacated space.
Should Landlord so apply the Security Deposit or any portion thereof during
the Lease Term, Tenant shall promptly reimburse Landlord for same. It is
understood that the Security Deposit is not to be considered as the last month's
rent. Should Tenant comply with all of the covenants and conditions of this
Lease, the Security Deposit or any balance thereof shall be returned to Tenant
within 30 days of the expiration of the Lease Term.
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ARTICLE V. LANDLORD'S RIGHTS AND OBLIGATIONS.
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5.1 Maintenance by Landlord. During the Lease Term, Landlord shall operate
and maintain the Common Area and shall keep and maintain the roof, exterior
walls (excluding doors, glass or plate glass), gutters and down spouts of the
Building/s in good condition and repair. Landlord shall be under no obligation
and shall not be liable for any failure to make repairs that are Landlord's
responsibility herein until and unless Tenant notifies Landlord in writing of
the necessity therefor, in which event Landlord shall have a reasonable time
thereafter to make such repairs. Landlord reserves the right to the exclusive
use of the roof and exterior walls of the Building/s which Landlord is so
obligated to maintain and repair. Landlord shall enter into a service contract
on the Building for the heating, ventilation and air condition equipment for
periodic inspection and service of such equipment, and Tenant shall reimburse
Landlord pursuant to the provisions hereof. If any portion of the Center which
Landlord is obligated to maintain or repair is damaged by the negligence of
Tenant, its agents, employees or invitees, then repairs necessitated by such
damage shall be paid for by Tenant. If the maintenance or repair is not made
necessary by the negligence of Tenant, its agents, employees or invitees, then
Tenant shall pay to Landlord, Tenant's Prorata Share (or Proportionate Share) of
such cost and expense.
5.2 Mortgage and Transfer; Estoppel Certificates. Landlord shall have the
right to transfer, mortgage, pledge or otherwise encumber, assign or convey, in
whole or in part, the Center, the Building/s, this Lease, and all or any part of
the rights now or thereafter existing therein and all Rents and amounts payable
to Landlord under the provisions hereof. In the event of any such transfer or
transfers, Landlord herein named (and in case of any subsequent transfer, the
then transferor) shall be automatically freed and relieved from and after the
date of such transfer of all personal liability as respects the performance of
any covenants or agreements on the part of Landlord contained in this Lease
thereafter to be performed. Nothing herein contained shall limit or restrict any
such rights, and the rights of the Tenant under this Lease shall be subject and
subordinate to all instruments executed and to be executed in connection with
the exercise of any such rights, including, but not limited to, the lien of any
mortgage, deed of trust, or security agreement now or hereafter placed upon
Landlord's interest in the Premises. This paragraph shall be self-operative.
However, Tenant covenants and agrees to execute and deliver upon demand such
further instruments subordinating this Lease to the lien, of any such mortgage,
deed of trust or security agreement as shall be requested by Landlord and/or
mortgagee or proposed mortgagee or holder of any security agreement and hereby
irrevocably appoints Landlord as its agent and attorney-in-fact to execute and
deliver any such instrument for and in the name of Tenant. Tenant shall, within
ten (10) days after written request of Landlord, execute, acknowledge, and
deliver to Landlord or to Landlord's mortgagee, proposed mortgagee, Land Lessor
or proposed purchaser of the Center or any part thereof, any estoppel
certificates requested by Landlord from time to time, which estoppel
certificates shall show whether the lease is in full force and effect and
whether any changes may have been made to the original lease; whether the term
of the lease has commenced and full rental is accruing; whether there are any
defaults by Landlord and, if so, the nature of such defaults; whether possession
has been assumed and all improvements to be provided by Landlord have been
completed; and whether rent has been paid more than thirty (30) days in advance
and that there are no liens, charges or offsets against rental due or to become
due and that the address shown on such estoppel is accurate.
5.3 Landlord's Inability to Perform. If, by reason of: inability to obtain
and utilize labor, materials or supplies; circumstances directly or indirectly
the results of a state of war or national or local emergency; any laws, rules,
orders, regulations or requirements of any governmental authority now or
hereafter in force; strikes or riots; accident in, damage to or the making of
repairs, replacements or improvements to, the premises or any of the equipment
thereof; or by reason of any other cause beyond the reasonable control of the
Landlord including "Acts of God", Landlord shall be unable to perform or shall
be delayed in the performance of any covenant to supply any
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service, such nonperformance or delay in performance shall not render Landlord
liable in any respect for damages to either person or property, constitute a
total or partial eviction, constructive or otherwise, work an abatement of rent
or relieve Tenant from the fulfillment of any covenant or agreement contained
in this Lease.
5.4 Rights of Landlord. Landlord may enter upon the Premises for the purpose
of exercising any or all of the rights hereby reserved without being deemed
guilty of an eviction or disturbance of Tenant's use or possession and without
being liable in any manner to Tenant. The reservation of these rights by
Landlord shall not render Landlord liable for not performing any of the matters
specified herein.
5.4(a) Name of Center. To change the name of the Building/s or the
Center without notice or liability of the Landlord to Tenant;
5.4(b) Redecorate. During the last ninety (90) days of the Lease Term
or any renewal or extension thereof, if during or prior to that time the
Tenant has vacated the premises, to decorate, remodel, repair, alter or
otherwise prepare the Premises for reoccupancy;
5.4(c) Re-Lease. To exhibit the Premises to others and to display "For
Lease" signs on the Premises during the last one hundred eighty (180) days
of the Lease Term or any renewal or extension thereof:
5.4(d) Vehicles. To remove abandoned or unlicensed vehicles and
vehicles that are unreasonably interfering with the use of the parking lot
by others, and to charge the responsible tenant for the expense of
removing said vehicles;
5.4(e) Preservation of Center. To take any and all measures, including
making inspection, repairs alterations, additions and improvements to the
premises or to the Center as may be necessary or desirable for the safety,
protection or preservation of the Premiss or the Center or the Landlord's
interests, or as may be necessary or desirable in the operation of the
Premises or the Center.
ARTICLE VI. TENANT'S RIGHTS AND OBLIGATIONS.
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6.1 Acceptance of Premises. Landlord will complete the Premises in accordance
with Exhibit C, if attached hereto. Tenant acknowledges that it will examine
the Premises before taking possession hereunder. Unless Tenant furnishes
Landlord with a notice in writing specifying any defect in the construction or
condition of the Premises within thirty (30) days after taking possession, such
taking of possession shall be conclusive evidence as against Tenant that at
the time thereof the Premises were in good order and satisfactory condition.
6.2. Alterations and Additions. Tenant shall not make any alterations,
improvements, or additions to the Premises without the prior written consent
and approval of plans therefor by Landlord not to unreasonably withheld.
Alterations, improvements or additions made by either of the parties upon the
Premises, except moveable furniture and equipment placed in the Premises at the
expense of Tenant, shall be the property of Landlord and shall remain upon and
be surrendered with the Premises as a part thereof at the termination of this
lease, without disturbance, molestation, injury or damage unless Landlord
elects to require Tenant to remove such alterations or improvements from the
Premises at the expiration of this Lease. In the event damage shall be caused
by moving said furniture and equipment in or out of the Premises, said damage
shall be repaired at the cost of Tenant.
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6.3 Assignment and Subletting. Tenant shall not assign or hypothecate
this Lease or sublet all or any part of the Premises without the prior written
consent of Landlord not to be unreasonably withheld. If Tenant wishes to assign
or sublet the Premises, it shall give notice in writing (by certified mail or
by personal delivery) of such intention to Landlord and, thereupon, Landlord
shall, within thirty (30) days of receipt of such notice, have the right to
unilaterally terminate this Lease or to approve said subletting by written
notice to Tenant. If no notice is given by Landlord, Landlord will be deemed to
have elected to approve the assignment or subletting. If the assignment or
subletting is approved and rents under the sublease are greater than the rents
provided for herein, then Landlord shall have the further option either (a) to
convert the sublease to a prime Lease and receive all of the rents, in which
case Tenant will be relieved of further liability hereunder and under the
proposed sublease, or (b) to require Tenant to remain liable under this Lease,
in which event Tenant shall be entitled to retain such excess rents. If the
assignment or subletting is approved and rents under the sublease are less than
the rents provided for herein, Tenant shall remain liable under all the
covenants and conditions of this Lease. Landlord may withhold its consent to
any proposed assignee or subtenant which in Landlord's judgement (a) would
conflict with the tenancy, use or business of any other tenant or the tenant
mix of the Center, (b) has a net worth and/or credit history inferior to that
of Tenant, or (c) is currently a tenant or negotiating for space in the Center.
6.4 Locks. No additional locks or similar devices shall be attached to any
door or window without Landlord's prior written consent. No keys for any door
other than those provided by the Landlord shall be made. If more than two keys
for one lock are desired, the Landlord will provide the same upon payment by
the Tenant. All keys must be returned to Landlord at the expiration or
termination of the lease.
6.5 Maintenance by Tenant. Tenant shall be responsible for all maintenance
and repair to the Premises of whatsoever kind or nature that is not herein set
forth specifically as the obligation of Landlord. Tenant shall take good care
of the Premises and fixtures, and keep them in good repair free from filth,
overloading, danger of fire or any pest or nuisance, repair any damage or
breakage done by Tenant or Tenant's agents, employees or invitees, including
damage done to the Building/s by Tenant's equipment or installations. Tenant
shall be responsible for the repair and replacement of all glass and plate
glass on the Premises. In the event Tenant fails to maintain the Premises as
provided for herein Landlord shall have the right, but not the obligation, to
perform such maintenance as is required of Tenant in which event Tenant shall
reimburse Landlord for its costs in providing such maintenance or repairs
together with a ten (10%) percent charge for Landlord's overhead and Tenant
shall promptly reimburse Landlord for the amount so billed to Tenant by
Landlord.
6.6 Mechanic's Lien. Tenant will not permit any mechanic's liens, or
other liens, to be placed upon the Premises, the Building/s or the Center during
the Lease Term or any extension or renewal thereof, and in case of the filing
of any such lien, Tenant will promptly pay same. Tenant agrees to pay all legal
fees that might be incurred by Landlord because of any mechanic's liens being
placed upon the Premises, as a result of Tenant's actions.
6.7 Redelivery of Premises. No later than the last day of the Lease Term
(or any renewals or extensions thereof), Tenant will remove all Tenant's
personal property and repair all injury done by or in connection with
installation or removal of such property and surrender the premises broom clean
(together with all keys to the Premises) in as good a condition as they were in
at the beginning of the Lease Term, reasonable wear and tear excepted.
6.8 Signs and Advertisements. Tenant shall not put upon nor permit to be
put upon any part of the Premises, the Building/s or the Center, any signs,
billboards or advertisements whatever in any location or any form without the
prior written consent of Landlord. A charge of $50.00 per day per sign,
billboard or advertisement will be assessed against Tenant if Tenant fails to
obtain the written consent of Landlord prior to placing any such signs.
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6.9 Use of Common Areas. Tenant shall not use any part of the Center
exterior to the Premises for outside storage. No trash, crates, pallets, or
refuse shall be permitted anywhere on the Center outside of the Building/s by
Tenant except in enclosed metal containers to be located as directed by
Landlord. Tenant shall not park any trucks or trailers, loaded or empty,
except in front of the loading areas.
6.10 Use of Premises. The Premises hereby leased shall be used by the
Tenant only for the Permitted Use of the Premises and for no other purposes.
Tenant shall, at Tenant's expense, comply promptly with all applicable
statutes, ordinances, rules, regulations, orders and requirements in effect
during the term or any part of the term hereof regulating the use by Tenant of
the Premises. Tenant shall not use or permit the use of the Premises in any
manner that will tend to create waste or a nuisance, or will tend to
unreasonably disturb such other tenants in the Center. Tenant, its employees
and all persons visiting or doing business with the Tenant in the Premises
shall be bound by and shall observe the Rules and Regulations attached to this
Lease, as Exhibit A, and such further and other reasonable rules and
regulations made hereafter by the Landlord relating to the Center or the
premises of which notice in writing shall be given to the Tenant and all such
rules and regulations shall be deemed to be incorporated into and form a part
of this Lease.
6.11 Hazardous Substances. Tenant shall not cause or permit to be released
(whether by way of uncapping, pouring, spilling, spraying, spreading,
attaching, or otherwise) into or onto the premises, or the Building/s, or the
Center, or the Common Areas (including the ground and ground water thereunder
and the sewer and drainage systems therein) any hazardous substances (as
defined or established from time to time by applicable local, state or federal
law). Tenant shall immediately notify Landlord if any such release occurs,
and, as to any such release that has been caused or permitted by Tenant: (I)
Tenant shall immediately and entirely remove such released hazardous substance,
and in a manner fully in compliance with all laws pertaining to the removal and
storage or deposit thereof; and (ii) Tenant hereby agrees to hold Landlord
harmless of and from any liability, public or private, resulting to Landlord as
a result of such release. Further, Tenant shall, upon Landlord's demand and at
Tenant's sole expense, demonstrate to Landlord (through such tests, professional
inspections, sampling or otherwise as is, in Landlord's sole judgment,
sufficient for the purpose) that Tenant has not caused or permitted any such
release of hazardous substances.
ARTICLE VII. INSURANCE.
7.1 Liability Insurance. Tenant covenants and agrees to maintain on the
Premises at all times during the Lease Term, or any extension or renewal
thereof, a policy or policies of comprehensive public liability and property
damage insurance with not less than $1,000,000.00 combined single limit for
both bodily injury and property damage.
7.2 Fire and Extended Coverage Insurance. Landlord shall, throughout the
Lease Term, or any extension or renewal thereof, maintain fire and extended
coverage (FEC) insurance on the property owned by landlord located on the
Center in such amounts and with such deductibles as Landlord shall determine.
Landlord shall not in any way or manner insure any property of Tenant or any
property that may be in the Premise not owned by Landlord. Tenant shall comply
with all insurance regulations so that the lowest fire, lightning, explosion,
extended coverage and liability insurance rates may be obtained; and nothing
shall be done or kept in or on the Premises by Tenant which will cause an
increase in the premium for any such insurance on the Premises or on any
Building/s of which the Premises are a part or on any contents located therein,
over the rate usually obtained for the proper use of the Premises permitted by
this lease or which will cause cancellation of any such insurance.
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7.3 Indemnification of Landlord. Tenant shall indemnify Landlord and save
Landlord harmless from and against any and all loss (including loss of rentals
payable by Tenant or other tenants) and against all claims, actions, damages,
liability and expenses in connection with loss of life, bodily and personal
injury or damage to property arising from any occurrence in, upon or at the
Premises or any part thereof, or occasioned wholly or in part by any act or
omission of Tenant, or by anyone permitted to be on the Premises by Tenant,
except for any occurrence caused by Landlord's negligence or willful
misconduct. Tenant assumes all risk of and Landlord shall not be liable for
injury to person or damage to property resulting from the conditions of the
Premises or from the bursting or leaking of any and all pipes, utility lines,
connections, or air conditioning or heating equipment in, on or about the
premises, or from water, rain or snow which may leak into, issue or flow from
any part of the Building/s. Tenant agrees, at all times, to indemnify and hold
Landlord harmless against all actions, claims, demands, costs, damages, or
expenses of any kind which may be brought or made against Landlord or which
Landlord may pay or incur by reason of Tenant's occupancy of the Premises or
its negligent performance of or failure to perform any of its obligations
under this Lease. In case Landlord shall, without fault on its part, be made a
party to any litigation commenced by or against Tenant, then Tenant shall
protect and hold Landlord harmless and shall pay all costs, expenses and
reasonable attorney's fees incurred or paid by Landlord in connection with
such litigation.
ARTICLE VIII. EMINENT DOMAIN AND DAMAGE OR DESTRUCTION.
8.1 EMINENT DOMAIN. In the event that title to the whole or substantial part
of the Premises shall be lawfully condemned or taken in any manner for any
public or quasi-public use, this lease and the term and estate hereby granted
shall forthwith cease and terminate as of the date of vesting of title and
Landlord shall be entitled to receive the entire award, Tenant hereby assigning
to Landlord the Tenant's interest therein, if any. However, nothing herein
shall be deemed to give Landlord any interest in or to require Tenant to assign
to Landlord any award made to Tenant for the taking of personal property or
fixtures belonging to tenant or for the interruption of public or quasi-public
authority under threat of condemnation shall constitute a taking by eminent
domain. In the event that title to a part of the Building/s other than the
Premises shall be so condemned or taken, Landlord may terminate this lease and
the term and estate hereby granted by notifying Tenant of such termination
within sixty (60) days following the date of vesting of title, and this lease
and the term and estate hereby granted shall expire on the date specified in
the notice of termination, not less than sixty (60) days after the giving of
such notice, as fully and completely as if such date were the date herein set
for the expiration of the Lease Term, and the Rent hereunder shall be
apportioned as of such date. In the event of any condemnation or taking of any
portion of the parking area of the Center, which does not result in a reduction
of the parking area by more than twenty percent (205), the terms of this lease
shall continue in full force and effect. If more than twenty percent (20%) of
the parking area is taken, either party shall have the right to terminate this
lease upon giving written notice to the other party within thirty (30) days of
such taking.
8.2 DAMAGE OR DESTRUCTION. If the Premises, the Building/s or the Center or
any part thereof is damaged by fire or other casualty, cause or condition
whatsoever and Landlord shall determine not to restore said Premises,
Building/s or Center, Landlord may, by written notice to Tenant given within
sixty (60) days after such damage, terminate this Lease. Such termination
shall become effective as of the date of the damage. If this Lease is not
terminated as above provided and if the Premises are made partially or wholly
untenantable, landlord, at its expense, shall restore the same with
reasonable promptness to the condition in which Landlord furnished the Premises
to Tenant at the commencement of the Lease Term as to those items that were
provided to the Premises at Landlord's expense without any reimbursement by
Tenant. Landlord shall be under no obligation to restore any alteration,
improvements or additions to the premises made by Tenant or paid for by Tenant,
including, but not limited to, any of the initial tenant finish done or paid
for by Tenant or any subsequent changes, alterations or additions made by
Tenant or reimbursed by Tenant.
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If, as a result of fire or other casualty, cause or condition whatsoever the
Premises are made partially or wholly untenantable and, if Landlord has not
given the sixty (60) day notice above provided for and fails within one hundred
twenty (120) days after such damage occurs to eliminate substantial
interference with Tenant's use of said Premises or substantially to restore
said Premises, Tenant may terminate this Lease after the end of said one
hundred twenty (120) days, effective as of the date such damage occurs, by
notice to Landlord given not later than ten (10) days after expiration of said
one hundred twenty (120) days period. If the Premises are rendered totally
untenantable but this Lease is not terminated, all rent shall abate from the
date of the fire or other relevant cause or condition until the Premises are
ready for occupancy and reasonably accessible to Tenant. If a portion of the
Premises is untenantable, rent shall be prorated on a per diem basis and
apportioned in accordance with the portion of the Premises which is usable by
the Tenant until the damaged part is ready for the Tenant's occupancy. In all
cases, due allowance shall be made for reasonable delay caused by adjustment of
insurance loss, strikes, labor difficulties or any cause beyond Landlord's
reasonable control. For the purposes of this Lease, said Premises shall be
considered tenantable so long as and to the extent that the Premises are
occupied. In any event, Tenant shall be responsible for the removal, or
restoration, when applicable, of all its damaged property and debris from the
Premises, upon request by Landlord or else Tenant must reimburse Landlord for
the cost of removal.
ARTICLE IX. DEFAULT AND REMEDIES.
9.1 Events of Default. The occurrence of any one or more of the following
events shall constitute a Default and material breach of this Lease by Tenant:
9.1(a) Nonpayment. Failure of Tenant to pay any installment of Rent or
other sum payable to Landlord hereunder on the date that same is due and
such failure shall continue for a period of five (5) days; or
9.1(b) Noncompliance. Failure of Tenant to comply with any term,
condition or covenant of this Lease, other than the payment of Rent or
other sum of money, and such failure shall not be cured within ten (10)
days after written notice thereof has been delivered by Landlord to
Tenant; or
9.1(c) Insolvency or Transfer. Insolvency, the making of a transfer in
fraud of creditors or the making of an assignment for the benefit of
creditors by Tenant or any guarantor of Tenant's obligation; or
9.1(d) Bankruptcy. The filing by or against Tenant or any guarantor of
Tenant's obligations hereunder of a petition in bankruptcy or for
liquidation, or adjudication as a bankrupt or insolvent in proceedings
filed by or against Tenant or such guarantor; or
9.1(e) Receiver. Appointment of receiver or trustee for all or
substantially all of the assets of Tenant or any guarantor of Tenant's
obligations hereunder; or
9.1(f) Abandonment. Abandonment by Tenant of any substantial portion of
the Premises or cessation of use of the Premises for the purpose
leased.
9.2 Remedies. In the event of the occurrence of any Default, Landlord shall
have the right, without further notice to or demand upon Tenant and without
being liable to Tenant for any damages or to any prosecution therefor, to do
any and all of the following:
9.2(a) Repossession and Sale. Re-enter and take exclusive possession
of the Premises with or without force or legal process, refuse to allow
Tenant to enter the same or have possession thereof, change the locks on
the doors to the
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Premises, take possession of any furniture or fixtures or other property in or
upon the Premises sell the same at public or private sale without notice and
apply the proceeds thereof to the costs of sale, payment of damages and payment
of all sums owing under this Lease; and/or
9.2(b) Releasing. Relet the Premises as agent of Tenant for the balance
of the term of this Lease or for a shorter or longer term and receive
the rents therefor, applying them first to the payment of the expense of
such reletting and, second, to the payment of damages suffered to the
Premises, and third to all sums due and to become due under this Lease,
Tenant remaining liable for and hereby agreeing to pay Landlord any
deficiency; and/or
9.2(c) Cancellation. Cancel and terminate the remaining term of this
Lease, and re-enter and take possession of the Premises free of this
Lease. Thereafter this Lease shall be null and void and the Rent in such
case shall be apportioned and paid on and up to the date of such entry.
Thereafter both parties shall be released and relieved from and of any
and all obligations thereafter to accrue hereunder. Tenant shall be
liable for all loss and damage resulting from such breach or default;
and/or
9.2(d) Anticipatory Breach. Treat such default as an anticipatory
breach of this Lease and, as liquidated damages for such default, be
entitled to the difference, if any, between the sum which, at the time
of termination for anticipatory breach represents the then present worth
(computed at ten percent (10%) per year) of the excess aggregate rents
and additional rents payable hereunder that would have accrued over the
balance of the Lease Term (including renewals) had such term not been
prematurely terminated, over the aggregate market rental value of the
Premises over the term (including renewals) that the Lease would have
run had it not been prematurely terminated; and/or
9.3 Remedies Cumulative. All rights and remedies expressly provided in this
Lease for Landlord's and Tenant's protection shall be cumulative as to each
other and of any other rights and remedies provided hereunder or by law.
9.4 No Waiver. A waiver by Landlord of a breach or default by Tenant under
the terms and conditions of this Lease shall not be construed to be a waiver of
any subsequent breach or default or of any other or the same term or condition
of this Lease, and the failure of Landlord to assert any breach or to declare a
default by Tenant shall not be construed to constitute a waiver thereof so long
as such breach or default continues unremedied.
ARTICLE X. MISCELLANEOUS
10.1 Bankruptcy or Assignment to Trustee. Neither this Lease nor any interest
therein nor any estate hereby created shall pass to any trustee or receiver in
bankruptcy or to any other receiver or assignee for the benefit of creditors or
otherwise by operation of law during the term of this Lease or any renewal
thereof.
10.2 Brokers. Except as may be expressly set forth to the contrary in the
Rider, each party represents to the other that no person, firm, corporation or
other entity is entitled to any brokerage commission or finder's fee on account
of the execution, delivery, and consummation of this Lease. Tenant hereby agrees
to indemnify Landlord and to hold Landlord free and harmless of and from any
and all claims, losses, damages, costs and expenses of whatsoever nature,
including attorneys' fees and costs of litigation arising from or relating to
any brokerage commissions or finder's fees incurred by Tenant in connection
with this Lease.
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10.3 Captions. The captions used throughout this Lease are for convenience and
reference only and shall in no way be held to explain, modify, amplify, or aid
in the interpretation, construction or meaning of any provisions in this Lease.
10.4 Certificates of Occupancy. Tenant may, prior to the commencement of the
Lease Term, apply for a certificate of occupancy to be issued by the
municipality in which the Premises are located, but this Lease shall not be
contingent on issuance thereof.
10.5 Entire Agreement. This Lease including its Exhibits and Rider, if any,
contains the entire agreement between the parties and no modification of this
lease shall be binding upon the parties unless evidenced by an agreement in
writing signed by Landlord and Tenant after the date hereof.
10.6 Joint and Several Liability of Multiple Tenants. If there be more than one
Tenant named herein, the provisions of this Lease shall be applicable to and
binding upon such Tenants jointly and severally.
10.7 Notices. Except as otherwise herein provided, whenever by the terms of
this Lease notice shall or may be given either to Landlord or to Tenant, such
notice shall be in writing and shall be deemed to have been properly delivered
if sent by certified mail, return receipt requested, postage prepaid, to
Landlord at Landlord's Address and to Tenant at the Premises, or to such other
place as Landlord or Tenant may designate in writing. The date of mailing shall
be deemed the date of delivery.
10.8 Partial Invalidity. If any term, covenant, condition or provision of this
Lease or the application thereof to any person or circumstances shall, to any
extent be invalid, unenforceable or violate a party's legal rights, then such
term, covenant, condition or provision shall be deemed to be null and void and
unenforceable, however, all other provisions of this Lease, or the application
of such term or provision to persons or circumstances other than those which
are held invalid, unenforceable or violative of legal rights, shall not be
affected thereby, and each and every other term, condition, covenant and
provision of this Lease shall be valid and be enforced to the fullest extent
permitted by law.
10.9 Recording. This lease shall not be recorded by either party without the
written consent of the other.
10.10 Successors. The agreements, covenants and conditions of this Lease shall
be binding upon and inure to the benefit of the heirs, legal representatives,
successors and assigns of each of the parties hereto, except that no
assignment, encumbrance or subletting by Tenant, unless permitted by the
provisions of lease, without the written consent of Landlord shall vest any
right in the assignee, encumbrances or sublessee of Tenant.
10.11 Use of the Singular; Gender. The terms "Landlord" and "Tenant", and
pronouns representing the same, wherever used herein shall include the plural
as well as the singular, the feminine as well as the masculine.
10.12 Addendum. An Addendum, attached as Exhibit "C" consisting of 2 Pages,
with paragraphs numbered 1 through 2 Consecutively, is attached hereto and made
a part hereof.
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IN WITNESS WHEREOF, the parties have executed this Lease as of the date
hereinabove stated.
LANDLORD:
GENERAL AMERICAN LIFE INSURANCE
COMPANY, a Missouri Corporation
BY: /s/ [ILLEGIBLE] V.P. REAL ESTATE
----------------------------------
as representative
TENANT:
GRANITE FINANCIAL, INC., a Delaware
corporation
BY: /s/ LARRY K. WHITE
----------------------------------
ITS: President/ COO
---------------------------------
BY:
----------------------------------
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EXHIBIT A
RULES AND REGULATIONS
1. Signs. Tenant shall not inscribe any inscription or post, place, or in
any manner display any sign, notice, picture, placard or advertising
matter whatsoever anywhere in or about Premises at places visible
(either directly or indirectly as an outline or shadow on a glass pane)
from anywhere outside the Premises or from public and common areas
within Premises without first obtaining Landlord's written consent
thereto and landlord shall specify the color, size, style and material
to be used.
2. Showcases. No showcase shall be placed in front of or in the lobbies or
corridors of the Premises and Landlord reserves the right to remove all
showcases so placed and all signs other than those above provided for,
without notice and at the expense of the tenant responsible.
3. Installation of Signs. All exterior and interior signs must be
installed by Landlord or someone designated by Landlord and the actual
cost thereof shall be paid by Tenant and all such signs are so placed at
the risk of Tenant.
4. Telephone Connections. If Tenant desires telegraphic, cable television,
or telephone connections, Landlord will direct electricians where the
wires are to be introduced and without such direction no boring or
cutting for wires shall be permitted.
5. Submission of Plans. Tenant shall submit to Landlord for Landlord's
approval, a copy of its construction and equipment layout plan prior to
commencement of construction. In the event that Tenant is unable to
obtain landlord's approval for said plans and layout, this Lease shall
at Tenant's sole option be deemed null and void and any amounts paid by
Tenant to Landlord pursuant to this Lease shall be reimbursed to Tenant
without offset.
6. No Nuisances. Tenant shall not do or permit anything to be done in the
Premises which will be dangerous to life, or limb, or which will tend
to create a nuisance or injure the reputation of the Building/s. Tenant
shall not use burning fluid, camphene, alcohol, kerosene, or anything
else in order to light or heat the Premises except steam, gas or
electricity. Tenant shall not bring into the Premises or keep therein
any heating or lighting apparatus other than that provided by landlord;
or install any air conditioning or air cooling apparatus without the
written consent of Landlord; or in any way injure, modify, or tamper
with any of such apparatus in any manner or in any manner in violation
of the regulations of the Fire Department, or with any insurance policy
upon said Building/s or any part thereof. Tenant shall not do or
permit to be done in the Premises any activity in conflict with any of
the laws, rules or regulations of any governmental agency or
municipality purpose. No beer, wine or intoxicating liquor shall be sold
on or about the Premises without the written consent of Landlord in each
instance.
7. Passageways. The sidewalk, passages, lobbies, corridors, elevators and
stairways shall not be obstructed by Tenant; or used except for ingress
and egress from and to the Premises. The doors, skylights, windows and
transoms that reflect or admit light into passageways or into any place
in said Building/s, shall not be covered or obstructed by Tenant.
8. Water Closets. The water closets and other apparatus shall not be used
for any purpose other than those for which were constructed, and no
sweepings, rubbish, rags or other substances shall be thrown therein.
Any damage resulting to them from misuse shall be borne by the tenant
who shall cause is.
9. No Defacing or Offensive Business. Tenant and its employees and guests
are not to injure or deface the Building/s nor the woodwork, nor the
walls of the Premises, nor to carry on upon the premises any noisome,
noxious,
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<PAGE> 18
noisy or offensive business nor conduct an auction therein, nor
interfere in anyway with other tenants or those having business with
them.
10. No Lodging. No room or rooms on or about the Premises shall be
occupied or uses as sleeping or lodging apartments.
11. Lock all Doors. Tenant shall, when leaving Premises at close of
business, or unoccupied at any time, lock all doors and windows and
for any default or carelessness in this respect shall make good all
injury sustained by other tenants and by Landlord or by either of
them, for damages resulting from such default or carelessness.
12. No Animals. No animal or bird shall be allowed in any part of the
Premises or Building/s without the consent of the Landlord.
13. No Accumulation of Rubbish. Tenant shall not accumulate or store on or
about the Premises any waste paper, discarded records, paper files,
sweepings, rags, rubbish or other combustible matter other than the
normal accumulation needed to conduct the Permitted Use of the
Premises. Nothing shall be thrown by Tenant, its employees or guests,
out of the windows or doors or down the passages or skylights or over
balcony rails of the Building/s or in the parking areas.
14. Exclusion of Peace Disturbers. Landlord reserves the right to exclude
from the Premises or Building/s all drunken persons, idlers, diseased
persons, peddlers, solicitors, persons of a general character or
conduct so as to create a disturbance, and persons entering in crowds
or in such unusual numbers as to cause inconvenience to tenants of
the Building/s.
15. Changes to Rules. Landlord reserves the right to change these rules
and to make such other and further reasonable rules and regulations
either as it affects one or all tenants as in its judgment may from
time to time be needed for the safety, care and cleanliness of the
Center, for the preservation of good order therein or for any other
cause. When such changes are made such modified or new rules shall be
deemed a part hereof with the same effect as if written herein, when
a copy shall have been delivered to Tenant or left with some person
in charge of the Premises.
16. No Live Christmas Trees. No live or fresh cut Christmas Trees are
permitted on or about the Premises.
17. No Picnics. No outside picnics or barbecues are permitted without the
prior written consent of Landlord.
18. No Outside Storage. No outside storage of any material is permitted.
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EXHIBIT "B"
[MAP]
<PAGE> 20
EXHIBIT "C" - ADDENDUM TO LEASE
DATED JUNE 6, 1997 By and Between
GENERAL AMERICAN LIFE INSURANCE COMPANY, AS LANDLORD
GRANITE FINANCIAL, INC., AS TENANT
1) BASE RENT - Base rent shall be $8.20 per square foot, escalating at the
rate of 3.0% per year for 5 years as shown on the rent schedule as follows:
<TABLE>
<CAPTION>
Rent per SF Rent per Month Rent per Year
<S> <C> <C> <C>
Base Rent Year 1 $8.20 $ 8,938.00 $107,256.00
Base Rent Year 2 $8.45 $ 9,210.50 $110,526.00
Base Rent Year 3 $8.70 $ 9,483.00 $113,796.00
Base Rent Year 4 $8.96 $ 9,766.40 $117,196.80
Base Rent Year 5 $9.23 $10,060.70 $120,728.40
</TABLE>
2) TENANT IMPROVEMENT ALLOWANCE - Landlord shall provide a total
allowance of up to $209,280.00 for tenant improvements ("TI"). Of the total
allowance, $104,640.00 is included in the base rent as stated above. The
balance, or $104, 640.00 shall be amortized in monthly payments over the term
of the lease at the annual rate of 12% and added to the base rent as follows:
<TABLE>
<Caption
Rent per SF Rent per Month Rent per Year
<S> <C> <C> <C>
Amort. TI Rent Year 1 $2.11 $2,299.90 $27,598.80
Amort. TI Rent Year 2 $2.11 $2,299.90 $27,598.80
Amort. TI Rent Year 3 $2.11 $2,299.90 $27,598.80
Amort. TI Rent Year 4 $2.11 $2,299.90 $27,598.80
Amort. TI Rent Year 5 $2.11 $2,299.90 $27,598.80
</TABLE>
3) ACTUAL CONSTRUCTION COST - Should the actual construction cost of
tenant improvement be more or less than the $209,280.00 tenant improvement
allowance, but in any case more than the $104,640.00 included in base rent as
stated in paragraph 1 above, then Landlord and Tenant shall agree, in an
Amendment to this Lease as to the exact amount of said Tenant improvement and
any amount of said improvements in excess of $104,640.00 up to, but not in
excess of, $209,280.00 shall be amortized over the term of the lease at the
annual rate of 12% and added to base rent in the same method as set forth in
paragraph 2 above.
4) AUTHORIZATION FOR CONSTRUCTION - Upon execution of this Lease, Tenant
hereby authorizes construction in substantial compliance with the estimate and
description of work set forth in Exhibit "D" hereto and shall be bound by the
terms of this Lease.
5) COMMENCEMENT OF RENT - Rent shall commence upon August 15, 1997 or upon
the issuance of a Certificate of Occupancy by Jefferson County, whichever is
earlier, Landlord and Tenant shall agree, in an Amendment to this lease, as to
the exact date of commencement of rent upon issuance of said Certificate of
Occupancy.
6) COMMENCEMENT OF LEASE - The five (5) year Lease Term shall commence
upon August 15, 1997, the "Commencement Date".
7) PARKING - Tenant shall be provided with 26 free, non-exclusive surface
parking spaces (or 2 spaces per 1,000 SF of the Premises, to be adjusted
accordingly) in the general parking lot for Triad West through the term of the
Lease and any extension or renewal thereof. In addition, Tenant shall be
allowed to park approximately 24 employee vehicles in free, exclusive space
outside the rear or southerly side of Tenant's Premises. Tenant shall not park
vehicles in the rear of any adjoining tenant's premises without prior written
permission from the Landlord and any adjoining tenant. If Tenant exceeds its
usage of 26 unreserved parking spaces in the general parking lot and such usage
results in complaints from other tenants, then Landlord reserves the right to
fine Tenant in an amount of $100.00 per day per vehicle in excess of 26
vehicles parked in the general parking lot.
6/9/97 9:40 a.m.
<PAGE> 21
8) LEASE OPTION - Tenant shall have the option to lease, upon
availability, adjoining space of 9,600 SF, more or less, (the "Option Space")
at any time during the initial lease term. If Landlord receives a third party
offer to lease the Option Space, Landlord shall provide written notice to
Tenant and Tenant shall have 72 hours from written notification of a third
party offer to match or better the offer and exercise its option. Lease term
for Option Space shall be coterminous with the initial lease agreement.
9) AGENCY DISCLOSURE - Henry Johnson of The David Johnson Group is the
exclusive real estate agent and representative of Tenant for the purposes of
this transaction. The David Johnson Group shall be compensated 3.0% of total
base rent by GEI Brokers, Inc., for this transaction. Golden Equities, Inc.,
and its brokerage division, GEI Brokers, Inc., are agents of the Landlord in
this transaction and shall be compensated 5.0% of total base rent by the
Landlord for this transaction.
<PAGE> 22
SPACE PLAN
EXHIBIT "D"
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