HomeMy WebLinkAboutRes 2012-07-03 EDC Lease Agreement with Image Vision Labs.pdfCITY OF ANNA, TEXAS
RESOLUTION NO. 2012-07-03
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS,
APPROVING THE ANNA ECONOMIC DEVELOPMENT CORPORATION'S LEASE
AGREEMENT WITH IMAGE VISION LABS, INC.
WHEREAS, the City Council of the City of Anna, Texas ("the City Council") recognizes
that the Anna Economic Development Corporation ("EDC") wishes to enter into a Lease
Agreement with Image Vision Labs, Inc. for property owned by the EDC located at 312
N Powell Parkway.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
ANNA, TEXAS, THAT:
Section 1. Recitals Incorporated.
The recitals set forth above are incorporated herein for all purposes as if set forth in full.
Section 2. City Council Approval of Lease Agreement.
The City Council hereby approves and ratifies the EDC entering into the Lease
Agreement, attached hereto as EXHIBIT A, incorporated herein for all purposes, and
authorizes the EDC President to execute same on its behalf, subject to approval as to
form by legal counsel for the EDC, and final content by the EDC Chief Administrative
Officer.
PASSED by the City Council of the City of Anna, Texas, on this the 24th day of July,
2012.
APPROVED ATTEST:
Mike Crist, Mayor Natio Wilkison, City Secretary
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RES. 2012-07-03 Lease Agreement between EDC and Image Vision PAGE 1 OF 1 07-24-12
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is entered into by and between
ANNA ECONOMIC DEVELOPMENT CORPORATION, a Type A corporation created
pursuant to the Texas Development Corporation Act of 1979, as amended and
codified ("Landlord") and Image Vision Labs, Inc., a Delaware corporation
("Tenant"). For valuable consideration the parties agree and act as follows:
1. Definitions. The following terms have the meanings set forth below:
(a) Effective Date. The effective date of this Lease is
(b) Landlord. The Anna Economic Development Corporation.
(b) Leased Premises. A one-story building of approximately 2,784 total
square feet and exclusive use of the parking lot located on real property at 312 N.
Powell Parkway, Anna, Texas 75409 (collectively, the "Leased Premises") located in
the City of Anna, Collin County, Texas, described in the legal description and survey
attached hereto as Exhibit A and in the building floor plan and sketches attached
hereto as Exhibit A-1, together with exclusive use of (i) any and all common
improvements of the building and on the Premises now or hereafter situated on the
Leased Premises, including but not limited to any infrastructure, structures,
buildings or other alterations to the Premises (collectively, the "Improvements"),
(ii) any and all appurtenances, easements and privileges pertaining to the
Premises, the Improvements and/or the items listed in clauses (i) and (ii) above.
(c) Lease Year. Each 12 -month period commencing on the first day of the
first full month of the Term of this Lease following the Effective Date, or
anniversary of such date, if this Lease is renewed under paragraph 2(c) below.
(d) Permitees. All partners, officers, directors, employees, agents,
contractors, customers, visitors and invitees of Tenant at the Leased Premises.
(e) Permitted Exceptions. The conditions, restrictions, easements and
encumbrances, if any, affecting title to the Leased Premises set forth in the title
policy attached hereto as Exhibit B.
(f) City Council. The City Council of the City of Anna, Texas.
2. Demise. Term.
(a) Demise and Grant of Leased Premises. Landlord hereby leases to
Tenant and Tenant accepts from Landlord under the terms, provisions and
conditions of this Lease the Leased Premises commencing on the Effective Date
hereof and continuing until the expiration or earlier termination of the Term as
hereinafter provided.
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(b) Term. The primary term ("Primary Term") of this Lease shall
commence as of the Effective Date hereof, and shall expire on the last day of the
twelfth full month following the Effective Date, subject to earlier termination as
provided elsewhere in this Lease and to the Renewal Option described in paragraph
2(g) below. The Primary Term and any Renewal Term or extension thereof pursuant
to paragraph 2(c) or 2(g) below is referred to in this Agreement as the "Term".
(c) Renewal. This Lease shall automatically renew for 12 -month periods
beginning immediately after the end of each successive Lease Year—subject to
earlier termination that may occur under the terms of this Lease—unless, subject to
Tenant's Renewal Option in Section 2(g) below, either Landlord or Tenant delivers
written notice, one to the other, at least 90 days in advance of the end of the
current Lease Year, of the intent that this Lease be terminated, in which case this
Lease shall terminate at the end of said Lease Year.
(d) Quiet Enjoyment. Upon Tenant's payment of all Rent and utilities
hereunder as same becomes due and observance and performance of all of the
covenants, terms and conditions to be observed and performed by Tenant pursuant
to this Lease, Tenant shall have throughout the Term, peaceful, quiet and
undisturbed use and possession of the Leased Premises and all rights and privileges
appertaining thereto, subject to the terms, conditions and provisions of this Lease.
(e) Landlord's Title, Subordination. Landlord covenants, represents and
warrants to Tenant as follows:
(1) Title. Landlord hereby represents and warrants that it owns good
and indefeasible fee simple title in and to the Leased Premises, subject only to the
Permitted Exceptions, and has full right and authority to make this Lease. This
Lease shall not be recorded.
(2) No Actions. There are no actions, suits or proceedings pending or
to the best of Landlord's knowledge, threatened against Landlord and affecting any
portion of the Leased Premises, at law or in equity, or before any federal, state,
municipal or other governmental court, department, commission, board, bureau,
agency or instrumentality, domestic or foreign.
(3) Authoritv. The execution and consummation of this Lease by
Landlord has been duly authorized and does not result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, agreement,
instrument or obligation to which Landlord is a party or by which the Leased
Premises or any portion thereof is bound. However, notwithstanding the foregoing
or any term or provision of this Lease, and all rights and obligations of Landlord and
Tenant hereunder are subject to and shall not be effective unless and until there
has been formal approval by the City Council of this Lease at a duly noticed public
meeting.
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(f) Condition of Leased Premises. TENANT ACKNOWLEDGES THAT TENANT
HAS INSPECTED THE LEASED PREMISES AND ACCEPTS THE LEASED PREMISES AS
STATED IN THE CERTIFICATION ATTACHED HERETO AS EXHIBIT C AND DELIVERED
BY TENANT TO LANDLORD. FURTHER, IF AT ANY TIME THIS LEASE SHALL BE
FOUND OR DECLARED NULL, VOID, ILLEGAL OR OTHERWISE INVALID FOR ANY
REASON BY A COMPETENT COURT OR TRIBUNAL WITH PROPER JURISDICTION,
TENANT EXPRESSLY COVENANTS AND WARRANTS THAT IT SHALL CEASE ALL
OPERATIONS AND VACATE AND SURRENDER THE LEASED PREMISES FORTHWITH
IN ACCORDANCE WITH THE SURRENDER REQUIREMENTS UNDER PARAGRAPH
10 e AND OTHER APPLICABLE PROVISIONS OF THIS LEASE AND AGREES THAT
LANDLORD SHALL NOT BE LIABLE FOR ANY SPECIAL, DIRECT, INDIRECT,
CONSEQUENTIAL, OR OTHER DAMAGES CAUSED BY ANY SUCH FINDING OR
DECLARATION OF NULLITY, VOIDNESS, ILLEGALITY OR INVALIDITY.
(g) Tenant's Renewal Option. Tenant shall have the option (the "Renewal
Option") to extend the Primary Term of this Lease upon the same terms, covenants
and conditions as those contained in this Lease, for one (1) additional period of
twelve (12) months (the "First Renewal Term"), which First Renewal Term shall
commence on the date immediately succeeding the expiration of the Term of this
Lease, provided that as of the expiration of the Term this Lease shall not have been
previously terminated, and no Event of Default shall have been committed by
Tenant and remain uncured after notice and the applicable cure period. Such
Renewal Option may be exercised with respect to the entire Premises only and shall
be exercisable by Tenant delivering the Renewal Notice to Landlord at least thirty
(30) days prior to the expiration of the Term. The Tenant may exercise the First
Renewal Option under this paragraph 2(g) only once to extend the Primary Term
for twelve months. Any subsequent renewals shall be pursuant to paragraph 2(c)
and not subject to this paragraph 2(g).
3. Rent and Taxes. Tenant shall pay Landlord the following amounts:
(a) Rent. Tenant shall pay $2,500 per month as rent ("Rent") for the
Leased Premises, which shall be due within five business days of the first day of the
each month during any Term, and shall be responsible for utilities used at and billed
to the building address at actual cost.
(b) Taxes. Landlord and Tenant acknowledge and agree that to the extent
this Lease results in the Leased Premises being subject to ad valorem taxes
("Taxes"), Tenant shall be liable to pay for any such Taxes as they become due and
upon receipt of any tax statement or invoice for same, subject to the following. If
during the Term of this Agreement, Taxes shall become due and owing concerning
the Leased Premises, Tenant shall thereafter pay directly to the applicable taxing
entity, if permitted by such taxing entity, or, in the alternative, to Landlord, the
Taxes assessed against the Leased Premises for any prior, current or subsequent
Lease Year during any Term of the Lease. In such event, any such Taxes shall be
paid prior to the delinquency date for such Taxes, but in no event earlier than ten
days after written notice of the Tax due is delivered to Tenant, along with copies of
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statements of assessed value and tax statements applicable to each Lease Year to
which such taxes apply. Tenant shall have the first and prior right to contest the
amount or validity of the taxes pertaining to the Leased Premises by appropriate
administrative and legal proceedings brought either in its own name, Landlord's
name, or jointly, as Tenant deems appropriate. Landlord shall reasonably cooperate
with Tenant in its efforts to minimize the taxes to the lowest possible level but
Landlord shall not be required to incur any cost or expense in connection therewith.
Landlord shall from time -to -time execute and deliver to Tenant whatever
documents may be reasonably required by governmental authorities to evidence
Tenant's authority to contest taxes attributable to the Leased Premises. Landlord
will send Tenant copies of any assessed values and statements received by
Landlord promptly upon receipt and Tenant shall have the right, at its own expense,
in good faith, to contest any such values, Taxes or payments in lieu of taxes and
permit the items so contested to remain unpaid during the period of contest and
any appeal therefrom, provided that prior to the date the taxes would become
delinquent, Tenant provides a bond or other security required by applicable law and
otherwise reasonably satisfactory to Landlord in the full amount of the unpaid
taxes, together with any penalties, interest or fees attributable thereto that are due
or are reasonably anticipated to accrue between the date thereof and the date of
final payment of the taxes. Tenant shall be solely responsible for any taxes due and
owing with respect to Tenant's personal property. Landlord shall be responsible for
payment of any and all taxes attributable to any income of Landlord related to the
Leased Premises.
4. Improvements. Signs. Additions and Repairs.
(a) Delivery of Leased Premises. Landlord shall deliver exclusive
possession of the Leased Premises to Tenant upon the Effective Date, with
renovations completed, suitable for commercial office use, empty, broom clean, and
with working HVAC, subject only to the provisions and terms of this Lease and the
Permitted Exceptions.
(b) Alterations and Improvements. With the exception of signs erected in
conformance with applicable laws and ordinances, and construction of
Improvements as approved in writing by Landlord, approval not to be unreasonably
withheld, and, if required under City ordinance(s), set forth on one or more site
plans submitted to and formally approved by the City Council during a duly posted
meeting, and constructed in accordance with construction plans submitted to and
approved in writing by the City or City staff, Tenant may not at any time construct,
alter, change, and/or demolish any signs or Improvements now or hereafter
situated on the Leased Premises. If any such construction by Tenant is at any time
approved:
(1) All such work shall be performed in a good and workmanlike
manner, in accordance with accepted standards of engineering and architecture, if
applicable, and in accordance with local, state and federal law, including but not
limited to the Americans with Disabilities Act;
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(2) Such construction, alteration, additions, changes or
demolishment shall be in compliance with all applicable building codes, zoning,
rules, regulations and ordinances affecting construction of such alterations,
additions, and changes and shall be commenced only after Tenant has been duly
granted all applicable permits for same; and
(3) At Landlord's election, Landlord may serve as the general
contractor for the construction of the Tenant Improvements. In such event,
Landlord and Tenant shall enter into a construction contract on terms and
conditions mutually acceptable to each of them pursuant to which Landlord agrees
to construct the Tenant Improvements, Tenant agrees to pay all third -party costs
approved by Tenant with respect to such construction with no additional costs to be
charged to Landlord and with reasonable fees being payable by Tenant to Landlord
for its services as general contractor, and Tenant agrees to indemnify, defend
(using counsel acceptable to Landlord in its reasonable discretion), and hold
harmless Landlord from and against any liability, damages and third -party costs it
may incur as a result of its so acting as the general contractor for the Tenant
Improvements.
(c) No Mechanic's Liens. Tenant shall not permit any mechanic's or
materialman's liens to be filed against Landlord's interest in the Leased Premises
arising out of the Tenant Improvements (unless the same are fully bonded so as to
cause same to be removed in accordance with applicable law), and Tenant shall
indemnify, defend (using counsel acceptable to Landlord in its reasonable
discretion), and hold harmless Landlord from and against any costs, liability or
expense, including attorneys fees, attributable to any such liens. Tenant's
obligations under this paragraph 4(c) shall expressly survive the expiration or
earlier termination of this Lease.
(d) Environmental. Tenant will conduct its business in a lawful manner and
will not make or permit any unlawful use of the Leased Premises. Tenant will, at its
own expense, promptly comply with all laws, regulations, and ordinances affecting
the Leased Premises and the cleanliness, safety, occupancy, and use thereof.
TENANT SHALL INDEMNIFY, DEFEND (USING COUNSEL ACCEPTABLE TO LANDLORD
IN ITS REASONABLE DISCRETION) AND HOLD HARMLESS LANDLORD FROM AND
AGAINST ANY COST, LIABILITY OR EXPENSE ARISING OUT OF OR ATTRIBUTABLE
TO ANY CLAIMS, DEMANDS, CAUSES OF ACTION, FINES, PENALTIES, LIABILITY OR
EXPENSES (INCLUDING ATTORNEY FEES AND COURT COSTS) ARISING OUT OF OR
RELATED TO THE EXISTENCE, REMOVAL OR DISPOSAL OF ANY TOXIC OR
HAZARDOUS SUBSTANCES OR MATERIALS WITHIN OR UPON THE LEASED
PREMISES CAUSED BY TENANT, ITS EMPLOYEES, AGENTS OR REPRESENTATIVES
DURING THE TERM OF THIS LEASE FOLLOWING THE EFFECTIVE DATE. FOR
PURPOSES HEREOF, THE PHRASE -TOXIC OR HAZARDOUS SUBSTANCES OR
MATERIALS" SHALL INCLUDE ITEMS COVERED BY THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, 42
U.S.C. §§9601-75(1986), AS AMENDED BY THE SUPERFUND AMENDMENT AND
LEASE AGREEMENT PAGE 5 OF 13
REAUTHORIZATION ACT, PUB. L. NO. 99-499, 100 STAT. 1613 (1986) (-CERCLA"),
THE TOXIC SUBSTANCES CONTROL ACT, 15 U.S.C. §2601 ET SEQ., THE CLEAN
WATER ACT, 33 U.S.C. §1251 ET SEQ., THE SAFE DRINKING WATER ACT, 42
U.S.C. §§300(f) -300(j), AND OTHER FEDERAL, STATE AND LOCAL LAWS NOW OR
HEREAFTER IN EFFECT GOVERNING THE EXISTENCE, REMOVAL OR DISPOSAL OF
TOXIC OR HAZARDOUS SUBSTANCES OR MATERIALS. Tenant's obligations under
this paragraph 4(d) shall expressly survive the expiration or earlier termination of
this Lease.
(e) Repairs. Landlord shall, at its sole cost and expense, perform all repairs
and preventative maintenance necessary to maintain the Leased Premises in good
condition and repair, including but not limited to the HVAC system, roof, structural
portions, foundation, exterior portions, windows, interior and exterior walls and
moldings, floors, doors, carpeting, attached light fixtures, plumbing, electrical
wiring, switches and circuitry, exterior grounds and parking areas, all to be repaired
and maintained in a condition suitable for commercial office use, and keep the
Leased Premises in compliance with applicable law throughout the Term. Tenant is
otherwise responsible for maintaining the interior of the Leased Premises in good
condition, reasonable wear and tear excepted. The foregoing shall not in any way
impair or limit Tenant's right to make alterations or additions to the Leased
Premises as set forth in paragraph 4(b) above. Landlord may charge Tenant for
reasonable third party charges for repair of damage to the Leased Premises, other
than ordinary wear and tear, caused by Tenant's negligence, willful misconduct or
breach of this Lease Agreement.
(f) Tenant's Fixtures. Tenant may install in or upon the Leased Premises
such trade fixtures and equipment as Tenant deems desirable, provided that Tenant
does so in accordance with a written plan demonstrating the size and configuration
of such fixtures and equipment upon the Leased Premises, with said written plan
having been approved in advance by Landlord in writing, said approval not to be
unreasonably withheld. All of said items shall remain Tenant's property whether or
not affixed or attached to the Leased Premises. Tenant may remove such items
from the Leased Premises at any time during the Term.
(g) Platting, Site Plans, Approvals. Landlord and Tenant acknowledge that
it may be necessary, from time -to -time, for Landlord or Tenant to seek
governmental approvals with respect to platting, zoning, site plans, permitting
and/or obtaining other permits in connection with its use and occupancy of the
Leased Premises for the uses permitted hereby (collectively, "Approvals"). Landlord
agrees to reasonably cooperate with Tenant with respect to its obtaining the
Approvals and to execute such documents as may be required of the owner of fee
title to the Leased Premises in order for Tenant to obtain the Approvals, provided
that Landlord shall not incur any costs or liabilities in connection therewith, and
Landlord does not guarantee or make any representations with regard to Tenant's
ability to actually obtain the Approvals. Tenant expressly understands and agrees
that approval by the City Council of this Lease does not constitute the City Council's
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granting of an Approval and does not bind the City Council to grant or approve any
other Approvals.
5. Utilities. Landlord shall at its own expense arrange with the appropriate
utility suppliers for services to the Leased Premises, pay all connection, meter and
service charges required to connect utilities to the Leased Premises, and pay such
utility suppliers directly for such services; and Tenant shall accept Landlord's
reasonable and customary arrangement for the provision of utilities to the Leased
Premises suitable for commercial office use and be responsible for utilities billed to
the building address at actual cost, and for any reasonable and customary deposits
required by utilities providers to secure utilities to the Leased Premises.
6. Use. Transfers, or Assignments.
(a) Tenant's Use. Except as prohibited or restricted by the Permitted
Exceptions, Tenant may use the Leased Premises for any lawful purpose, including
commercial office use, provided that such purpose is otherwise in conformity with
all applicable site plans, zoning, and Approvals, and other restrictions set forth in
this Lease and which may otherwise apply to the Leased Premises. Landlord
represents that the Leased Premises are zoned and otherwise appropriate for
commercial office use.
(b) Assignment. Subletting. Tenant shall not assign all or any part of this
Lease or sublet all or any part of the Leased Premises without Landlord's written
consent, which shall not be unreasonably withheld. In the case of any assignment
or sublease permitted by Landlord, Tenant shall not be released from liability.
7. Indemnification. Insurance.
(a) Indemnification. IN ADDITION TO ANY OTHER PROVISIONS OF THIS
LEASE, TENANT SHALL INDEMNIFY, HOLD HARMLESS, AND, AT LANDLORD'S
OPTION, DEFEND (USING COUNSEL ACCEPTABLE TO LANDLORD IN ITS
REASONABLE DISCRETION) LANDLORD AND ITS OFFICERS, DIRECTORS, AGENTS
AND EMPLOYEES (COLLECTIVELY, THE "INDEMNIFIED PARTIES") FROM AND
AGAINST ANY AND ALL LIABILITY, LIENS, CLAIMS, DEMANDS, DAMAGES,
EXPENSES, FEES, COSTS, REASONABLE ATTORNEY FEES AND LITIGATION COSTS,
FINES, PENALTIES, SUITS, PROCEEDINGS, ACTIONS AND CAUSES OF ACTION OF
ANY AND EVERY KIND AND NATURE ARISING OUT OF TENANT'S USE, OCCUPANCY,
CONSTRUCTION, MANAGEMENT OR CONTROL OF THE LEASED PREMISES,
IMPROVEMENTS OR TENANT'S OPERATIONS, CONDUCT OR ACTIVITIES, UNLESS
AND TO THE EXTENT THE SAME IS DUE TO THE GROSS NEGLIGENCE OR
INTENTIONAL ACTS OR OMISSIONS OF LANDLORD, ITS AGENTS, EMPLOYEES OR
CONTRACTORS. TENANT'S OBLIGATIONS UNDER THIS PARAGRAPH 7(a) SHALL
SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THE LEASE TERM. THE
FOREGOING INDEMNIFICATIONS ARE EXPRESSLY INTENDED AND SHALL
OPERATE TO PROTECT AND INURE TO THE BENEFIT OF THE INDEMNIFIED
PARTIES EVEN IF SOME OR ALL OF LIABILITIES ARE ALLEGED OR PROVEN
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TO HAVE BEEN CAUSED BY THE NEGLIGENCE OR STRICT LIABILITY OF ANY
ONE OR MORE OF THE INDEMNIFIED PARTIES.
(b) Tenant's Insurance. Tenant shall, at its expense, obtain comprehensive
general liability insurance against all claims on account of bodily injury, personal
injury or property damage, for which Tenant may, as a result of its business
operations or other use of the Leased Premises, become liable, with limits of not
less than (1) $1,000,000.00 for bodily injury to or death of any one person,
(2) $2,000,000.00 for any one occurrence for bodily injury to or death of one or
more persons arising out of any one occurrence, and (3) $1,000,000.00 per
occurrence with respect to any property damage; with a $5,000,000.00 umbrella
policy in addition to the foregoing policies. All polices of insurance to be maintained
by Tenant hereunder may be maintained by way of "blanket policies" insuring the
Leased Premises and other premises and/or property owned or operated by Tenant
or its Affiliates, and shall be subject to such self-insured retention as may be
included in Tenant's policies, all in accordance with Texas law.
(c) Workers Compensation. Tenant shall maintain workers compensation or
similar insurance affording not less than Texas statutory coverage minimums and
providing not less than statutory limits or benefits for all employees of Tenant
employed at the Leased Premises.
(d) Scope. Each insurance or risk policy to be provided by Tenant
hereunder shall name Landlord or its designee as additional insured and shall also
contain a provision whereby the insurer agrees that such policy shall not be
cancelled except after 30 days' written notice to Landlord or its designee. The
insurance policies or duly executed certificates thereof, together with satisfactory
evidence that the premium has been paid, shall be provided to Landlord on or
before the Effective Date of this Lease; and, thereafter, evidence of continuing
insurance and premium payment shall be delivered to Landlord not less than
30 days prior to the expiration of each policy required to be in force hereunder. If
Tenant fails to maintain the required insurance or to deliver evidence of same,
Landlord may, but shall not be obligated to, obtain such insurance and be
reimbursed by Tenant upon demand.
(e) Waiver of Subrogation. Landlord shall not be liable by way of
subrogation or otherwise to Tenant or to any insurance company insuring Tenant
for any loss or damage to any of the property of the Landlord or Tenant covered by
insurance even though such loss or damage might have been occasioned by the
negligence of: (1) Landlord or its officers, directors, employees, agents,
contractors, customers, or visitors and invitees of Landlord at the Leased Premises;
or (2) Tenant or its Permittees. This waiver shall be in effect only so long as the
applicable insurance policies shall contain a clause or endorsement to the effect
that the waiver shall not affect the right of the insured to recover under such
policies. Tenant shall use its best efforts, including payment of any additional
premium, to have its insurance policies contain the standard waiver of subrogation
clause. In the event Tenant's insurance carrier declines to include in such carrier's
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policies a standard waiver of subrogation clause, Tenant shall promptly notify
Landlord.
S. Destruction. Condemnation.
(a) Destruction.
(1) Cancellation. Subject to subsection (a), below, if any portion of
the Improvements situated on the Leased Premises shall be damaged or destroyed
to the extent that Tenant can no longer peaceably enjoy the Leased Premises after
Landlord has had at least 30 days after written notice from Tenant to cure any such
damage or destruction , then this Lease shall terminate at Tenant's sole option and
discretion indicated by written notice from Tenant within 30 days following such
damage or destruction.
(2) Restoration. In the event of damage or destruction not caused by
Tenant's or Landlord's intentional misconduct or breach of this Agreement, and in
the event Tenant has elected not to terminate the lease, Landlord shall, at its sole
discretion: (1) remove any debris and cause the Leased Premises to be repaired or
restored as Tenant may deem necessary or desirable, but in any event the Leased
Premises shall be repaired or restored by Landlord to a safe and sightly condition in
compliance with all applicable laws; or (2) terminate this Lease as indicated by
written notice from Landlord within 30 days following such damage or destruction.
(3) Insurance Proceeds. Subject to any contrary provision of Section
7 above, all of Tenant's insurance proceeds, if any, payable with respect to damage
or destruction of the improvements situated on the Leased Premises shall be
retained by and be the property of Tenant.
(b) Condemnation.
(1) Taking of Parking or Access. In the event of a taking by the
power of eminent domain or conveyance in lieu thereof ("Taking") of the whole or
any part of the Leased Premises, this Lease shall terminate. at Tenant's sole option
and discretion indicated by written notice from Tenant within 30 days' following
such Taking. If Tenant continues under this Lease, the rental amount shall not be
adjusted therefore, except by mutual agreement of the parties. However, neither
this provision nor any other provision in this Lease shall be interpreted to restrict in
any manner the Landlord's right to grant, convey, or dedicate easements on any
part of the Leased Premises to any person or entity allowing any type of use so long
as such use does not degrade Tenant's ability to operate its business.
(2) Awards. All compensation awarded for any Taking of the Leased
Premises (other than a Taking initiated or consummated by the City of Anna,
Texas), including any interest of Landlord or Tenant therein, shall be the property
of Landlord, and Tenant hereby assigns to Landlord all of Tenant's rights, title and
interest in and to any and all such compensation.
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9. Default.
(a) Events of Default. The following are events of default ("Events of
Default"):
(1) Obligations. Either party ("Defaulting Party") fails to perform any
obligation, covenant or condition or to comply with any provisions of the Lease and
such failure continues for 30 days after written notice from the other party ("Non -
Defaulting Party"), unless said default requires more than 30 days to cure and the
Defaulting Party commences a cure within 30 days after written notice and
thereafter maintains a diligent effort to complete the cure.
(2) Bankruptcy. Either party files in any court pursuant to any statute
a petition in bankruptcy or insolvency or for reorganization or arrangement or
makes an assignment for the benefit of creditors or any such petition is filed
against a party and a receiver or trustee of all or any portion of that party's
property is appointed and such proceeding is not dismissed or the trusteeship
discontinued within 90 days after such appointment.
(b) Remedies. Upon the occurrence of an Event of Default by either party,
the Non -Defaulting Party shall have the right to terminate this Lease due to the
other's default and has the additional right to pursue a cause of action at law or in
equity. In the event of early termination as a remedy to default, Tenant shall be
liable to Landlord for a prorated portion of the rent and any utility amounts that
would normally be due up and until the date that Tenant surrenders the Leased
Premises in accordance with this Lease, subject to offset for any damages at law or
in equity.
10. General Provisions.
(a) Notice. "Notice" shall mean any notice, notification, consent, approval,
request, designation, submission, specification, election or other communication
required or permitted under this Lease. All Notices shall be in writing and shall be
deemed to have been given and received the earlier of (1) the date the Notice is
delivered by one party to the other party personally or delivered to the party's
address by a party or by a delivery service which records delivery dates, or
(2) three days after the Notice is placed in the mail addressed to the other party at
the party's address, properly stamped, certified or registered mail, return receipt
requested. A party's address shall be as follows or as set forth in a written Notice to
the other party:
Landlord: President
Anna Economic Development Corporation
111 N. Powell Parkway
Anna, Texas 75409
Fax: 972-924-2620
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with a copy to: City Manager
City of Anna, Texas
111 N. Powell Parkway
Anna, Texas 75409
Fax: 972-924-2620
and to: Clark McCoy
Wolfe, Tidwell & McCoy, LLP
2591 Dallas Parkway, Suite 205
Frisco, Texas 75034
Fax: 972-712-3540
Tenant: Image Vision Labs, Inc.
Steven W. White, CEO
312 N. Powell Parkway
Anna, Texas 75409
(b) Entire Agreement. This Lease embodies the entire agreement and
understanding between the parties as to the lease of the Leased Premises by
Tenant and supersedes all prior negotiations, agreements and understandings
pertaining to such lease. Any provision of this Lease may be modified, waived or
discharged only by an instrument in writing signed by the party against which
enforcement of such modification, waiver or discharge is sought. This Lease is not
intended to be nor shall it be construed as a service contract or contract for the sale
of goods by Tenant to Landlord. Landlord does not by entering into this Lease waive
any immunities it may have under common law or statute.
(c) Commission. Tenant and Landlord hereby represent to each other that
neither has entered into any agreement or understanding that would give rise to a
real estate commission being owed in connection with this Lease, and each of
Landlord and Tenant shall indemnify and hold the other harmless against any
commission, payment, interest or participation claimed on account of this Lease
with any party under any alleged agreement or understanding entered into on that
party's behalf with the person or entity claiming the commission, payment, interest
or participation.
(d) Force Majeure. Each party shall be excused from performing an
obligation or undertaking provided for in this Lease for so long as such performance
is prevented, delayed, retarded or hindered by an Act of God, fire, earthquake,
flood, explosion, action of the elements, war, invasion, insurrection, riot, mob
violence, sabotage, strike, lockout, action of labor unions, requisitions, laws, or
orders of government or civil or military authorities.
(e) Surrender. Upon the expiration of the Term or earlier termination of
this Lease, Tenant shall surrender the Leased Premises to Landlord. Tenant shall
remove all Personal Property, which are not fixtures (other than fixtures installed by
Tenant pursuant to Section 4(f) above, which Tenant may remove at Tenant's
LEASE AGREEMENT PAGE 11 OF 13
expense), and shall return any area altered by Tenant for use into its previous
condition, subject to Landlord's election to allow any specific items to remain "as
is," which election Tenant may secure only in writing from Landlord. All other
installations or improvements, including all infrastructure, structures, buildings,
HVAC equipment, paneling, decorating, partitions, railings, mezzanine floors, and
galleries made by either party shall be and become upon installation, the property
of Landlord and shall be surrendered with the Leased Premises at the expiration or
termination of this Lease unless Landlord notifies Tenant to the contrary in writing,
in which event Tenant may remove such property at its expense.. Any property not
promptly removed by Tenant under the provisions of this subparagraph may, at
Landlord's option, be deemed to have been abandoned by Tenant and may be
retained by Landlord without any claim by Tenant. Tenant shall in any event repair
any damage to the Leased Premises caused by Tenant's removal of any property.
(f) Applicable Law, Construction. The laws of the State of Texas shall
govern the validity, performance and enforcement of this Lease. The invalidity or
unenforceability of any provision of this Lease shall not affect or impair any other
provision. If any provision of this Lease is capable of two constructions, one of
which would render the provision invalid and the other of which would make the
provision valid, the provision shall have the meaning which renders it valid. The
submission of this document for examination does not constitute an offer to lease,
this document being effective only upon the conditions stated herein.
(g) Time of the Essence. Time is of the essence with respect to each
provision, term and covenant of this Lease.
(h) Captions. The captions are for convenience and do not limit or define
the provisions of this Lease.
(1) Gender. Number, Whenever the sense of this Lease requires it, the use
of (1) singular number shall be deemed to include the plural, (2) the masculine
gender shall be deemed to include the feminine or neuter gender, and (3) the
neuter gender shall be deemed to include the masculine and feminine gender.
(j) Counterparts. This Lease may be executed in multiple counterparts,
each of which shall be an original, but all of which shall constitute one instrument.
(k) Contract Interpretation. This Lease is the result of negotiation between
the parties, and shall, in the event of any dispute over the meaning or application
of any portion thereof, be interpreted fairly and reasonably, and not to be more
strictly construed against one party than another, regardless of which party
originally drafted the language in dispute.
(1) No Joint Venture. It is acknowledged and agreed by the parties that the
terms hereof are not intended to and shall not be deemed to create a partnership
or joint venture among the parties.
LEASE AGREEMENT PAGE 12 OF 13
(m) Binding Effect. All provisions of this Lease shall be binding upon and
inure to the benefit of the parties and their respective successors and permitted
assigns.
6-3 lei ►le1ro1[i .1
LANDLORD:
ANNA ECONOMIC DEVELOPMENT CORPORATION
By:
Name:
Title:
STATE OF TEXAS
Constance Stump
President
COUNTY OF COLLIN
This instrument was acknowledged before me on the _ day of
2012, by Constance Stump, President of Anna Economic Development Corporation,
a Type A corporation created pursuant to the Texas Development Corporation Act of
1979, as amended and codified, on behalf of said Type A corporation.
Notary Public/State of Texas
TENANT:
Image Vision Labs, Inc.
By:
Name:
Title:
STATE OF TEXAS §
COUNTY OF COLLIN §
This instrument was acknowledged before me on the _ day of
2012, by
Notary Public/State of Texas
LEASE AGREEMENT PAGE 13 OF 13
EXHIBITS
Exhibit A - Legal Description and Survey of Leased Premises
Exhibit A-1 - Building Floor Plan and Sketches
Exhibit B - Permitted Exceptions as shown in Title Policy
Exhibit C - Tenant's As -Is Certificate And Agreement
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1____J
EXHIBIT B
TITLE POLICY AND PERMITTED EXCEPTIONS
Any and all easements and encumbrances of any kind recorded in the Collin
County, Texas land records pertaining to the Leased Premises or granted or
conveyed by Landlord in accordance with applicable provisions of the Lease.
EXHIBIT C
TENANT'S CERTIFICATE AND AGREEMENT
THIS TENANT'S AS -IS CERTIFICATE AND AGREEMENT (this
"Agreement"), is made as of _, 2012 by ANNA ECONOMIC
DEVELOPMENT CORPORATION, a Type A corporation created pursuant to the
Texas Development Corporation Act of 1979, as amended and codified ("Landlord")
and Image Vision Labs, Inc. ("Tenant").
RECITALS
WHEREAS, pursuant to the terms of that certain Lease, effective as
of _, 2012, by and between Landlord and Tenant (as the same may
have been amended or modified, the "Lease"), Landlord agreed to lease to Tenant,
inter alia, that certain real Leased Premises legally described on Exhibit A attached
thereto and incorporated herein by this reference, the improvements located
thereon and certain rights appurtenant thereto, all as more particularly described in
the Lease. Initially capitalized terms not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Lease; and
WHEREAS, the Lease requires, inter alia, that, as a condition precedent to
Landlord's obligations under the Lease, Tenant shall execute and deliver this
Agreement to Landlord at Closing.
NOW, THEREFORE, in consideration of TEN AND NO/100 DOLLARS ($10.00)
and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Tenant hereby certifies and agrees as follows:
1. For purposes of this Agreement, the following terms shall have the following
meanings:
"Assumed Liabilities" shall mean any and all Liabilities attributable to the
physical condition of the Leased Premises, other than latent defects or conditions
unknown to Tenant at the Effective Date, or conditions giving rise to work or repairs
agreed to be done by Landlord, arising on or after the date hereof and attributable
to events or circumstances which may hereafter occur, including, without limitation,
(a) all Liabilities with respect to the condition of the Leased Premises for which
Tenant is to be responsible for repairs or maintenance under this Lease; (b) all
Liabilities relating to the release of or the presence, discovery or removal of any
Hazardous Materials caused by Tenant in, at, about or under the Leased Premises,
or for, connected with or arising out of any and all claims or causes of action based
upon CERCLA (Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. §§9601 et seq., as amended by SARA (Superfund
Amendment and Reauthorization Act of 1986) and as may be further amended from
time to time), the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
§§6901 et seq., or any related claims or causes of action or any other Federal,
State or municipal -based statutory or regulatory causes of action for environmental
contamination at, in, about or under the Leased Premises to the extent that any of
TENANT'S AS -IS CERTIFICATE AND AGREEMENT PAGE 1 OF 7
the foregoing causes of actions or claims arise from or relate to any environmental
contamination or violation of Environmental Laws caused or committed by Tenant
during Tenant's occupancy of the Leased Premises; and (c) any tort claims made or
brought with respect to the Leased Premises arising out of the use or operation
thereof by Tenant or its invitees and not arising from Landlord's breach of its
obligations under this Lease or with respect to the Leased Premises.
Notwithstanding the foregoing, however, "Assumed Liabilities" shall not include any
Liabilities arising out of or in connection with:
(i) any claims made or causes of action brought by any governmental authority
as a result of any violations of any applicable laws that were caused by
Landlord or by persons other than Tenant, or its invitees during the Lease
term, during the time that Landlord owned title to the Leased Premises;
and/or
(ii) any and all Liabilities relating to the release of or the presence, discovery or
removal of any Hazardous Materials introduced or installed by Landlord or by
persons other than Tenant, or its invitees during the Lease term, during or
prior to Landlord's period of ownership of the Leased Premises to in, at,
about or under the Leased Premises, or for, connected with or arising out of
any and all claims or causes of action based upon CERCLA (Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C.
§§9601 et seq., as amended by SARA (Superfund Amendment and
Reauthorization Act of 1986) and as may be further amended from time to
time), the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
§§6901 et seq., or any related claims or causes of action or any other
Federal, State or municipal -based statutory or regulatory causes of action for
environmental contamination (collectively "Environmental Laws") at, in,
about or under the Leased Premises to the extent that any of the foregoing
causes of actions or claims arise from or relate to any environmental
contamination or violation of Environmental Laws caused by Landlord, or any
person other than Tenant or its invitees, during or prior to Landlord's period
of ownership of the Leased Premises.
(iii)any and all Liabilities relating to, arising from or based upon latent defects,
or conditions giving rise to work required to be done by Landlord under the
Lease.
The items listed in clauses (i) -(iii) above are referred to collectively as the
"Excluded Liabilities".
"Tenant's Representatives" shall mean Tenant and any officers, directors and
senior employees of Tenant involved with the negotiation of the Lease.
"deemed to know" (or words of similar import) shall have the following
meaning:
(a)Tenant shall be "deemed to know" of the existence of a fact or circumstance
TENANT'S AS -IS CERTIFICATE AND AGREEMENT PAGE 2 OF 7
to the extent that:
(i) any Tenant's Representative has actual knowledge of such fact or
circumstance, or
(ii) such fact or circumstance is disclosed by the Lease, or any other
Document' delivered to any of Tenant's Representatives.
(b)Tenant shall be "deemed to know" that any of Landlord's warranties or
representations is untrue, inaccurate or incorrect to the extent that:
(i) any Tenant's Representative has actual knowledge of information which
is inconsistent with any of Landlord's Warranties, or
(ii) the Lease or any Document contains information, which is inconsistent
with any of Landlord's warranties or representations.
"Documents" shall mean the documents and instruments applicable to the
Leased Premises or any portion thereof that any of the Landlord Parties deliver or
make available to any Tenant's Representative prior to the date hereof or which are
otherwise obtained by any Tenant's Representative prior to the date hereof,
including, but not limited to, the Title Commitment, the Survey, the Title
Documents, and the Leased Premises Documents.
"Due Diligence" shall mean examinations, inspections, investigations, tests,
studies, analyses, appraisals, evaluations and/or investigations with respect to the
Leased Premises, the Documents, and other information and documents regarding
the Leased Premises, including, without limitation the physical condition of the
Leased Premises.
"Hazardous Materials" shall mean any substance, chemical, waste or material
that is or becomes regulated by any Federal, State or local governmental authority
because of its toxicity, infectiousness, radioactivity, explosiveness, ignitability,
corrosiveness or reactivity, including, without limitation, asbestos or any substance
containing more than 0.1 percent asbestos, the group of compounds known as
polychlorinated biphenyls, flammable explosives, oil, petroleum or any refined
petroleum product.
"Liabilities" shall mean, collectively, any and all losses, costs, damages, claims,
liabilities, expenses, demands or obligations of any kind or nature whatsoever.
"Leased Premises Documents" shall mean, collectively, any documents or
instruments which constitute, evidence or create or relate to any portion of the
Leased Premises.
Tenant is deemed to have knowledge if any fact or circumstance is disclosed by any
Documents (a broadly defined term) delivered or made available to Tenant, whether or not
Tenant has actual conscious awareness of a particular fact.
TENANT'S AS -IS CERTIFICATE AND AGREEMENT PAGE 3 OF 7
"Landlord Parties" shall mean and include, collectively, (a) Landlord; (b) its
legal counsel; and (c) any third -party consultants engaged by Landlord to evaluate
the feasibility of the Lease.
2. Tenant acknowledges and agrees that, prior to the date hereof: (a) Landlord
has made available to Tenant, or otherwise allowed Tenant access to, the Leased
Premises; (b) Tenant has conducted (or has waived its right to conduct) all Due
Diligence as Tenant considered necessary or appropriate; (c) Tenant has reviewed,
examined, evaluated and verified the results of its Due Diligence to the extent it
deems necessary or appropriate with the assistance of such experts as Tenant
deemed appropriate; and (d) except for, and only to the extent of, Landlord's
warranties and representations contained in the Lease, is acquiring the Leased
Premises based exclusively upon its own Due Diligence.
3. Tenant acknowledges and agrees that, except for, and only to the extent of,
Landlord's warranties and representations under the Lease:
(a)The Leased Premises is being demised, and Tenant is accepting possession of
the Leased Premises on the date hereof, "AS IS, WHERE IS, WITH ALL
FAULTS", with no right of setoff or reduction in any payment of Rent or
Additional Rent which may become due under the Lease, excepting any
Excluded Liabilities, latent defects, or work required to be done by Landlord
under the Lease.
(b) Except as stated in this Lease, none of the Landlord Parties have or shall be
deemed to have made any verbal or written representations, warranties,
promises or guarantees (whether express, implied, statutory or otherwise) to
Tenant with respect to the physical condition of the Leased Premises, any
matter set forth, contained or addressed in the Documents (including, but
not limited to, the accuracy and completeness thereof) or the results of
Tenant's Due Diligence.
(c) Tenant has confirmed independently all information that it considers material
to its acceptance of the Leased Premises.
(d)Tenant is not relying on (and Landlord and each of the other Landlord Parties
does hereby disclaim and renounce) any representations or warranties of any
kind or nature whatsoever, whether oral or written, express, implied,
statutory or otherwise, from any of the Landlord Parties, as to:
(i) the operation or performance of the Leased Premises, the income
potential, economic status, uses, or the merchantability, habitability or
fitness of any portion of the Leased Premises for a particular purpose
other than for commercial office use;
(ii) the physical condition of the Leased Premises or the condition or safety
of the Leased Premises or any component thereof, including, but not
TENANT'S AS -IS CERTIFICATE AND AGREEMENT PAGE 4 OF 7
limited to, plumbing, sewer, heating, ventilating and electrical systems,
roofing, air conditioning, foundations, soils and geology, including
Hazardous Materials, lot size, or suitability of the Leased Premises or any
component thereof for a particular purpose other than for commercial
office use;
(iii) the presence or absence, location or scope of any Hazardous Materials
in, at, about or under the Leased Premises;
(iv) the habitability or suitability for occupancy of any structure and the
quality of its construction other than occupancy for commercial office
use;
(v) whether the improvements are structurally sound, in good condition, or
in compliance with applicable Laws, other than that the Leased Premises
have been delivered by the Landlord empty and broom clean, that the
HVAC system is in working order at the time of delivery, and that the
Leased Premises are suitable for commercial office use;
(vi) the dimensions of the Leased Premises or the accuracy of square
footage, sketches, or revenue or expense projections related to the
Leased Premises;
(vii)the locale of the Leased Premises, the leasing market for the Leased
Premises, or the market assumptions Tenant utilized in its analysis of
the Leased Premises and determination of the Rent amount; and
(viii)whether the Leased Premises is or would likely constitute a target of
terrorist activity or other acts of war.
(e) Except as otherwise set forth in the Lease, Landlord is under no duty to
make any affirmative disclosures or inquiry regarding any matter, which may
or may not be known to any of Landlord Parties regarding the physical
condition of the Leased Premises, and Tenant, for itself and for its successors
and assigns, hereby specifically waives and releases each of the Landlord
Parties from any such duty that otherwise might exist.
4. Except as may be provided in the Lease regarding any repairs agreed to be
done by Landlord, any repairs or work required by Tenant are the sole responsibility
of Tenant, and Tenant agrees that there is no other obligation on the part of
Landlord to make any changes, alterations or repairs to the Leased Premises,
including, without limitation, to cure any violations of Law, comply with the
requirements of any insurer or otherwise. Except as may be provided in the Lease,
Landlord is solely responsible for obtaining any certificate of occupancy or any other
approval or permit necessary for the transfer or occupancy of the Leased Premises;
TENANT'S AS -IS CERTIFICATE AND AGREEMENT PAGE 5 OF 7
provided further, Landlord is responsible for any repairs or alterations necessary to
obtain the same, at Landlord's sole cost and expense.
5. Tenant (i) having inspected the Leased Premises as described above,
(ii) having conducted, reviewed, examined, evaluated and verified the results of all
Due Diligence to the extent Tenant deems appropriate as described above, (iii)
having notified Landlord of any changes, alterations or repairs required to be made
to the Leased Premises that Tenant has discovered as a result of such Due
Diligence at the time of the signing of this Lease, and (iv) having determined that
Tenant shall accept the Leased Premises based exclusively upon its own Due
Diligence (except for, and only to the extent of, Landlord's warranties and
representations under the Lease), then, accordingly, Tenant agrees with Landlord
that Tenant is in fact accepting the Leased Premises based exclusively upon its owr
Due Diligence, except for, and only to the extent of, Landlord's warranties and
representations under the Lease, and to evidence the foregoing, Tenant agrees to
release Landlord as set forth below. Accordingly, except as expressly provided
hereinbelow in this Section 5, Tenant, for Tenant and Tenant's successors and
assigns, hereby releases each of the Landlord Parties from, and waives any and all
Assumed Liabilities against each of the Landlord Parties for or attributable to or in
connection with the Leased Premises, whether arising or accruing before, on or
after the date hereof and whether attributable to events or circumstances, which
have heretofore or may hereafter occur.
Notwithstanding the foregoing, the release and waiver set forth in this Section 5 is
not intended and shall not be construed as (i) affecting or impairing any rights or
remedies that Tenant may have against Landlord as a result of a breach of any of
Landlord's warranties and representations under the Lease, or (ii) shifting to Tenant
any obligation, responsibility or liability for any Liability that does not constitute an
Assumed Liability. Landlord hereby confirms it takes responsibility and liability for
the Excluded Liabilities.
6. Tenant hereby assumes and takes responsibility and liability for all Assumed
Liabilities. Notwithstanding the foregoing, nothing in this Section 6 shall be
construed to affect or limit Tenant's rights or remedies against Landlord as a result
of Landlord's breach of Landlord's warranties and representations under the Lease.
7. Tenant expressly understands and acknowledges that it is possible that
unknown Assumed Liabilities may exist with respect to the Leased Premises and
that Tenant explicitly took that possibility into account in determining and agreeing
to accept the Leased Premises, and that a portion of such consideration, having
been bargained for between parties with the knowledge of the possibility of such
unknown Assumed Liabilities has been given in exchange for a full accord and
satisfaction and discharge of all such Assumed Liabilities, except for Assumed
Liabilities arising as a result of Landlord's breach of Landlord's warranties and
representations under the Lease.
8. Tenant acknowledges and agrees that the provisions of this Agreement were
material factor in Landlord's agreement to lease the Leased Premises to Tenant
TENANT'S AS -IS CERTIFICATE AND AGREEMENT PAGE 6 OF 7
and, while Landlord has provided the Documents and cooperated with Tenant,
Landlord is unwilling to lease the Leased Premises unless the Landlord Parties are
expressly released as set forth in Section 5 and Tenant assumes the obligations
specified in Section 6.
9. This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
10. If any term or provision of this Agreement or the application thereof to any
persons or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement or the application of such term or provision to persons
or circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby, and each term and provision of this Agreement shall
be valid and enforced to the fullest extent permitted by law.
IN WITNESS WHEREOF, Tenant has executed this Agreement as of the date
first set forth hereinabove.
Image Vision Labs, Inc.
By:
Name:
Title:
STATE OF TEXAS §
COUNTY OF COLLIN §
This instrument was acknowledged before me on the _ day of
2012, by
Notary Public/State of Texas
TENANT'S AS -IS CERTIFICATE AND AGREEMENT PAGE 7 OF 7
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REPUBLIC TITLE®
December 21, 2011
ANNA ECONOMIC DEVELOPMENT CORP.
P.O. BOX 776
ANNA, TX 75409
RE: Our File No. 1IR22806 MK3
71 BRANTLY, HENRY SY 0.35 AC
312 POWELL (N)
We are pleased to enclose your Owner's Title Policy No. R-111-152577
issued in connection with the above referenced property.
We appreciate the opportunity to be of service to you and hope
you will remember us should you need assistance in selling the
property insured by the enclosed policy.
Very truly yours,
REPUBLIC TITLE OF TEXAS, INC.
By ��.....J�
Enclosure
REPUBLIC TITLE OF TEXAS, INC.
2701 West Plano Parkway Suite 100 Plano, Texas 75075
(972) 578-5611 Fax (972) 424-5621
IMPORTANT NOTICE
To obtain information or make a complaint:
You may contact: Republic Title of Texas,
Inc. at
1-972-578-8611
You may call:
First American Title Insurance Company's
toll-free telephone number for information
or to make a complaint at:
1-800-347-7826
You may also write to
First American Title Insurance Company
at:
1500 South Dairy Ashford, Suite 300
Houston, TX 77077
You may contact the Texas Department of
Insurance to obtain information on companies,
coverages, rights or complaints at:
1-800-252-3439
You may also write the Texas Department of
Insurance:
P. O. Box 149104
Austin, TX 78714-9104
Fax: (512) 475-1771
Web: hftp://www.tdi.state.tx.us
E-mail: ConsumerProtection@tdi.state.tx.us
PREMIUM OR CLAIM DISPUTES:
Should you have a dispute concerning your
premium or about a claim you should contact the
First American Title Insurance Company
first. If the dispute is not resolved,
you may contact the Texas Department of
Insurance.
ATTACH THIS NOTICE TO YOUR POLICY
This notice is for information only and does not
become a part or condition of the attached
document.
AVISO IMPORTANTE
Para obtener informacion o para someter una queja:
Puede cominicarse con su: Republic Title of
Texas, Inc, at
1-972-578-8611
Usted puede Ilamar all numero de telefono gratis de
First American Title Insurance Company's
para informacion o para someter una queja al:
1-800-347-7826
Usted tambien puede escribir a
First American Title Insurance Company
1500 South Dairy Ashford, Suite 300
Houston, TX 77077
Puede comunicarse con at Departamento de
Seguros de Texas para obtener informacion
acerca de companies, coberturas, derechos o
quejas ah
1-800-252-3439
Puede escribir at Departament de Seguros de
Texas:
P. O. Box 149104
Austin, TX 78714-9104
Fax: (512) 475-1771
Web: http://www.tdi.state.tx.us
E-mail: ConsumerProtection@tdi.state.tx.us
DISPUTAS SOBRE PRIMAS O RECLAMOS:
SI tiene disputa concerniente a su prima o
a un reclamo, dabs comunicarse con
First American Title Insurance Company
primero. SI no se resueive Is disputa, puede
entonces comunicarse con el departmento
(TDI).
UNA ESTE AVISO A SU POLIZA
Este aviso as solo para proposito de information y
no as convierte en parte o condicion del documento
adjunto.
Owner's Policy of Title Insurance (T-1)
ISSUED BY
First American Title Insurance
POLICY NUMBER
umers Policy R-111-152577
Any notice of claim and any other notice or statement in writing required to be given the Company under this policy must be given to the
Company at the address shown in Section 18 of the Conditions.
COVERED RISKS
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B, AND THE
CONDITIONS, FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation (the "Company") insures, as of Date of Policy and, to the
extent stated in Covered Risks 9 and 10, after Date of Policy, against loss or damage, not exceeding the Amount of Insurance, sustained or
incurred by the Insured by reason of:
1. Title being vested other than as stated in Schedule A.
2. Any defect in or lien or encumbrance on the Title. This Covered Risk includes but is not limited to insurance against loss from:
(a) A defect in the Title caused by:
(i) forgery, fraud, undue influence, duress, incompetency, incapacity or impersonation;
(ii) failure of any person or Entity to have authorized a transfer or conveyance;
(iii) a document affecting Title not properly created, executed, witnessed, sealed, acknowledged, notarized, or delivered;
(iv) failure to perform those acts necessary to create a document by electronic means authorized by law;
(v) a document executed under a falsified, expired or otherwise invalid power of attorney;
(vi) a document not properly filed, recorded or indexed in the Public Records including failure to perform those acts by electronic
means authorized by law; or
(vii) a defective judicial or administrative proceeding.
(b) The lien of real estate taxes or assessments imposed on the Title by a governmental authority due or payable, but unpaid.
(c) Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an
accurate and complete land survey of the Land. The term "encroachment" includes encroachments of existing improvements located on
the Land onto adjoining land, and encroachments onto the Land of existing improvements located on adjoining land.
(d) Any statutory or constitutional mechanic's, contractor's, or materlalman's lien for labor or materials having its inception on or before
Date of Policy.
3. Lack of good and indefeasible Title.
4. No right of access to and from the Land.
(Covered Risks Continued on Page 2)
In Witness Whereof, First American Title Insurance Company has caused its corporate name to be hereunto affixed by its authorized officers as of
Date of Policy shown in Schedule A.
First American TitleInsurance Company
w ;•�� 42,,, •t y Dennis J. Gilmore
President
SEPTEMBER24
a, ••.. ` 1968 . � � �N /
Timothy Kemp
Secretary
(This Policy is valid only when Schedules A and B are attached)
ISSUING AGENT
Iwwouc nnr:•
2701 West Plano Parkway, Suite 100
Plano, Texas 75075
(972) 578-8611 Fax (972) 424-5621
RTT Form Number 111 (2/1/10) Page 1 of 6 TX T-1 Owner's Policy of Title Insurance (Rev. 2-1-10)
COVERED RISKS (Continued)
5. The violation or enforcement of any law, ordinance, permit, or governmental regulation (Including those relating to building and zoning)
restricting, regulating, prohibiting or relating to:
(a) the occupancy, use or enjoyment of the Land;
(b)' the character, dimensions or location of any improvement erected on the land;
(c) subdivision of land; or
(d) environmental protection
if a notice, describing any pan of the Land, is recorded in the Public Records setting forth the violation or intention to enforce, but only to
the extent of the violation or enforcement referred to in that notice.
6. An enforcement action based on the exercise of a governmental police power not covered by Covered Risk 51f a notice of the enforcement
action, describing any part of the Land, is recorded In the Public Records, but only to the extent of the enforcement referred to in that
notice.
7. The exercise of the rights of eminent domain if a notice of the exeroise, describing any part of the Land, is recorded in the Public Records.
6. Any taking by a governmental body that has occurred and Is binding on the rights of a purchaser for value without Knowledge.
9. Title being vested other than as stated in Schedule A or being defective:
(a) as a result of the avoidance in whole or in part, or from a court order providing an alternative remedy, of a transfer of all or any part of
the title to of any interest in the Land occurring prior to the transaction vesting Title as shown in Schedule A because that prior
transfer constituted a fraudulent or preferential transfer under federal bankruptcy, state insolvency or similar creditors' rights laws; or
(b) because the Instrument of transfer vesting Title as shown in Schedule Aconstitutes a preferential transfer under federal bankruptcy,
state Insolvency or similar creditors' rights laws by reason of the failure of Its recording in the Public Records:
(I) to be timely, or
Qq to Impart notice of its existence to a purchaser for value or to a judgment or lien creditor.
10. Any detect In or lien or encumbrance an the Title or other matter included in Covered Risks t through 9 that has been created or attached
or has been filed or recorded in the Public Records subsequent to Date of Policy and prior to the recording of the deed or other Instrument
of transfer in the Public Records that vests Title as shown in Schedule A.
The Company will also pay the costs, attorneys' fees and expenses incurred in defense of any matter Insured against by this Policy, but only to
the extent provided in the Conditions.
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of
this policy and the Company will not pay loss or damage, costs,
attorneys' fees or expenses that arise by reason of:
1. (a) Any law, ordinance, permit, or governmental regulation
Qncluding those relating to building and zoning) restricting,
regulating, prohibiting or relating to:
Q) the occupancy, use, or enjoyment of the Land;
(ii) the character, dimensions or location of any
improvement erected on the Land;
(iii) subdivision of land; or
Qv) environmental protection;
or the effect of any violation of these laws, ordinances or
governmental regulations. This Exclusion 1(a) does not modify
or limit the coverage provided under Covered Risk 5.
(b) Any governmental police power. This Exclusion 1(b) does
not modify or limit the coverage provided under Covered
Risk 6.
2. Rights of eminent domain. This Exclusion does not modify or
limit the coverage provided under Covered Risk 7 or 6.
3. Defects, liens, encumbrances, adverse claims or other matters:
(a) created, suffered, assumed or agreed to by the Insured
Claimant;
(b) not Known to the Company, not recorded in the Public
Records at Date of Policy, but Known to the Insured
Claimant and not disclosed in writing to the Company by
the Insured Claimant prior to the date the Insured Claimant
became an Insured under this policy;
(c) resulting in no loss or damage to the Insured Claimant;
(d) attaching or created subsequent to Data of Policy
(however, this does not modify or limit the coverage
provided under Covered Risk 9 and 10); or
(e) resulting in loss or damage that would not have been
sustained if the Insured Claimant had paid value for the
Title.
4. Any claim, by reason of the operation of federal bankruptcy,
state Insolvency, or similar creditors' rights laws, that the
transaction vesting the Title as shown in Schedule A, is:
(a) a fraudulent conveyance or fraudulent transfer; or
(b) a preferential transfer for any reason not stated In Covered
Risk 9 of this policy.
5. Any lien on the Title for real estate taxes or assessments
imposed by governmental authority and created or attaching
between Date of Policy and the date of recording of the deed or
other instrument of transfer in the Public Records that vests Title
as shown in Schedule A.
6. The refusal of any person to purchase, lease or lend money on
the estate or Interest covered hereby in the land described in
Schedule A because of Unmarketable Title.
RTT Form Number 111 (2/1/10) Page 2 of 6 TX T-1 Owner's Policy of Title Insurance (Rev. 2.1-10)
OWNER'S POLICY OF F POLICY NUMBER A POLICY AMOUNT I EFFECTIVE DATE
TITLE INSURANCE (f-1). 3 COUAIY6 RATE
IY TYPEPREMIUM AMENDMENT
CODE 9 ADDITIONAL CHAINS
R-111-152577
lc2i
085
175,000.00
1,244.00
00
11.0
11/17/2011
1
0
1
a
4
6
7
a
e
First American Title Insurance Company
1500 South Dairy Ashford, Suite 300 Houston, TX 77077
THE POLICY NUMBER SHOWN
aF1,10.011FILEN0. DATE OF POLICY ON THIS SCHEDULE MUST
11R22806 MK3 11/17/2011 AGREE WITH NU THE PRF%
PRINTED NUMBER OX THE
COVER SHEET.
Address for Reference only: 312 POWELL (N) ANNA, TEXAS 75409
Amount of Insurance: $ 175, 000.00
Schedule A
1. Name of Insured:
ANNA ECONOMIC DEVELOPMENT CORP.
2, The estate or Interest In the Land that is Insured by this policy Is:
FEE SIMPLE
3. Title is insured as vested in:
ANNA ECONOMIC DEVELOPMENT CORP.
4. The Land referred to in this policy is described as follows:
POLICY NUMBER
R-111-152577
Being a tract of land situated in the HENRY BRANTLEY SURVEY, ABSTRACT No. 71,
CITY OF ANNA, Collin County, Texas and being more particularly described on
Exhibit "All attached hereto and made a part hereof for all purposes.
REPUBLIC TITLE OF TEXAS, INC.
Countersigned at REPUBUCTHLE OFTEXAS, INC.
6051 West Virginia Pkwy., Suite 200 TE SA HENDRY, ESCROV OFFICER
Mci6naay, Texas 75071 Au1heH2Xd CounterRignalule
Phone (972) 5694MM
THIS POLICY IS INVALID Page I of Schad. A
To... lore IdlAty. 0611,20001 UNLESS THE COVER SHEET
AND SCHEDULE B ARE ATTACHED, oMner•s Polity - Fore Prescribed by State Board of Insurance of Texas
First American Title Insurance Company R-111-152577
Exhibit A GF -Number 11R22806
BEING a tract of land situated in the Henry Brantley Survey, Abstract No. 71,
City of Anna, Collin County, Texas, and being all of a 0.359 acre tract as
conveyed to Russell Lambert and wife Carolyn Lambert and recorded in volume
4624, Page 1949, Deed Records of Collin County, Texas and being more
particularly described by metes and bounds as follows:
BEGINNING at a capped 1/2" iron rod set for corner at the intersection of the
East Right Of Way line of Powell Parkway / State Highway No. 5 (80' ROW) and
the South Right Of Way line of 1st Street (80' ROW);
THENCE S 88 degrees 10 minutes 55 seconds E following the South ROW line of 1st
Street a distance at 125.04' to a capped 1/2" iron rod set for corner;
THENCE S 00 degrees 25 minutes 16 seconds W a distance of 125.04' to a capped
1/2" iron rod set for corner;
THENCE N 88 degrees 10 minutes 55 seconds W a distance of 125.04' to a capped
1/2" iron rod set for corner in the East ROW line of Powell Parkway / S.H. No.
5;
THENCE N 00 degrees 25 minutes 16 seconds E following the East ROW line of
Powell Parkway / S.H. No. 5 a distance of 125.04' to the POINT OF BEGINNING and
containing 15,630 square feet or 0.359 acres of land.
NOTE: The Company is prohibited from insuring the area or quantity of the
land described herein. Any statement in the above legal description of the
area or quantity of land is not a representation that such area or quantity
is correct, but is made only for informational and/or identification purposes
and does not override Item 2 of Schedule B hereof.
First American Title Insurance Company
OWNER'S POLICY OF
THE POLICY NUMBER $NOVM TITLE INSURANCE
ON
GF No. Off FILE
BCNEOULE Nust
FILE No. DATE OF POLICY POLICY NUMBER
NUMBER ON THE COVERRINEEE0. BXEn
11R22806 MK3 11/17/2011 WITH THE OR-111-152577
Schedule B
EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) that arise by
reason of the terms and conditions of the leases and easements, if any, shown in Schedule A, and the following matters:
1. [Intentionally Omitted]
2. Any discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping
of improvements.
3. Homestead or community property or survivorship rights, if any, of any spouse of any Insured. (Applies to the Ownefs Policy only.)
4. Any titles or rights asserted by anyone, including but not limited to, persons, the public, corporations, governments or other entitles,
a. to tidelands, or lands comprising the shores or beds of navigable or perennial rivers and streams, lakes, bays, gulfs or oceans, or
b. to lands beyond the line of the harbor or bulkhead lines as established or changed by any government, or
c. to filled-in lands, or artificial islands, or
d. to statutory water rights, including riparian rights, or
e. to the area extending from the line of mean low tide to the line of vegetation, or the right of access to that area or easement
along and across that area.
5. Standby fees, taxes and assessments by any taxing authority for the year 2012 , and subsequent years; and subsequent taxes and
assessments by any taxing authority for prior years due to change in land usage or ownership, but not those taxes or assessments
for prior years because of an exemption granted to a previous owner of the property under Section 11.13, Texas Tax Code, or
because of Improvements not assessed for a previous tax year.
6. The following matters and all terms of the documents creating or offering evidence of the matters (The Company must insert
matters or delete this exception.):
a. All leases, grants, exceptions or reservations of coal, lignite, oil, gas and
other minerals, together with all rights, privileges, and immunities relating
thereto, appearing in the Public Records whether listed in Schedule B or not.
There may be leases, grants, exceptions or reservations of mineral interest
that are not listed.
b. Mineral lease, and all rights incident thereto, to J.W. Holsey, described in
instrument filed 06/11/1951, recorded in Volume 430, Page 426, Real Property
Records of Collin County, Texas. Title to said interest not checked
subsequent to the date thereof.
c. Terms, provisions, and conditions of lease dated 02/01/1986, between Russ
Lambert, Sr. and Russ Lambert, Jr. dba Lambert & Son Construction Company,
and United States Postal Service, filed 04/04/1986, recorded in Volume 2340,
Page 495, Real Property Records of Collin County, Texas. Corrected Lease
filed 03/14/2000, recorded in Volume 4624, Page 2009, Real Property Records,
Collin County, Texas. As affected by Amendments recorded in Volume 4598, Page
1597 and Volume 4923, Page 641, Real Property Records, Collin County, Texas.
d. Concrete pavement/parking over boundary line on the northiside of subject
property as shown on survey of Boundary Survey, certified to by David J.
Surdukan, R.P.L.S. #4613, dated 9//15/2011.
Page 1 of Schad. B
(CONTINUED ON NEXT PAGE)
teras iam t-IE0.er. 1913) Ovner's PBilby - Tarp prescribed by CPKIPrI... r Of I.S.11n16 Of sears
OWNER'S POLICY OF TITLE INSURANCE
' POLICY NUMBER
GF Number: 1IR22806 First American Title Insurance Company R-111-152577
Schedule 6
Page 2
e. All visible and apparent easements or uses and all underground easements or
uses, the existence of which may arise by unrecorded grant or by use.
f. Rights, if any, of third parties with respect to any portion of the subject
property lying within the boundaries of a public or private road.
Ier,f for. FLL9e,. 1993) 99nar'. Pnilq • Porm pco vlCe9 by C..J ...r 0 1... ncc of Inaf
CONDITIONS
1. DEFINITION OF TERMS.
The following terms when used in this policy mean:
(a) "Amount of Insurance": the amount stated in Schedule A, as
may be increased or decreased by endorsement to this
policy, Increased by Section 8(b), or decreased by Sections
10 and 11 of these Conditions.
(b) "Date of Policy": the date designated as "Date of Policy" In
Schedule A.
(c) "Entity": a corporation, partnership, trust, limited liability
company or other similar legal entity.
(d) "Insured": the Insured named in Schedule A.
(I) The term "Insured" also includes:
(A) successors to the Title of the Insured by operation
of law as distinguished from purchase, including
heirs, devisees, survivors, personal representatives
or next of kin;
(8) successors to an Insured by dissolution, merger,
consolidation, distribution or reorganization;
(C) successors to an Insured by Its conversion to
another kind of Entity;
(0) a grantee of an Insured under a dead delivered
without payment of actual valuable consideration
conveying the Title;
(1) If the stock, shares, memberships, or other
equity Interests of the grantee are wholly-
owned by the named Insured,
(2) If the grantee wholly owns the named
Insured,
(3) If the grantee Is wholly-owned by an
affiliated Entity of the named Insured,
provided the affiliated Entity and the named
insured are both wholly-owned by the same
person or Entity, or
(a) B the grantee is a trustee or beneficiary of a
trust created by a written Instrument
established by the Insured named in
Schedule A for estate planning purposes.
Iii) With regard to (A), (8), (C) and (D) reserving, however,
all rights and defenses as to any successor that the
Company would have had against any predecessor
Insured.
(e) "Insured Claimant": an Insured claiming loss or damage.
(1) "Knowledge or "Known": actual knowledge, not constructive
knowledge or notice that may be imputed to an insured by
reason of the Public Records or any other records that Impart
constructive notice of matters affecting the Title.
(g) "Land": the land described in Schedule A, and affixed
Improvements that by law constitute real property. The term
"Land" does not include any property beyond the lines of the
area described in Schedule A, nor any right, title, interest,
estate or easement in abutting streets, roads, avenues,
alleys, lanes, ways or waterways, but this does not modify or
limit the extent that a right of access to and from the Land is
Insured by this policy.
(h) "Mortgage": mortgage, deed of trust, trust deed, or other
security Instrument, Including one evidenced by electronic
means authorized by law.
(1) "Public Records": records established under state statutes at
Date of Policy for the purpose of imparting constructive notice
of matters relating to real property to purchasers for value and
without Knowledge. With respect to Covered Risk 5(d),
"Public Records" shall also Include environmental protection
liens filed in the records of the clerk of the United States
District Court for the district where the Land is located.
Q) "Title the estate or interest described in Schedule A.
(k) "Unmarketable Title": Title affected by an alleged or apparent
matter that would permit a prospective purchaser or lessee of
the Title or lender on the Title to be released from the
obligation to purchase, lease or lend if there is a contractual
condition requiring the delivery of marketable title.
2. CONTINUATION OF INSURANCE.
The coverage of this policy shall continue In force as of Date of
Policy in favor of an Insured, but only so long as the Insured
retains an estate or interest in the Land, or holds an obligation
secured by a purchase money Mortgage given by a purchaser
from the insured, or only so long as the insured shall have liability
by reason of warranties in any transfer or conveyance of the Title.
This policy shall not continue in force in favor of any purchaser
from the Insured of either (1) an estate or Interest in the Land, or (ii)
an obligation secured by a purchase money Mortgage given to the
Insured.
3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT.
The Insured shall notify the Company promptly in writing (1) in case
of any litigation as set forth In Section 5(a) below, or III) in case
Knowledge shall come to an Insured hereunder of any claim of title
or Interest that is adverse to the Title, as Insured, and that might
cause loss or damage for which the Company may be liable by
virtue of this policy. If the Company is prejudiced by the failure of
the Insured Claimant to provide prompt notice, the Company's
liability to the Insured Claimant under the policy shall be reduced
to the extent of the prejudice.
When, after the Date of the Policy, the Insured notifies the
Company as required herein of alien, encumbrance, adverse
claim of other defect in Title insured by this policy that is not
excluded or excepted from the coverage of this policy, the
Company shall promptly investigate the charge to determine
whether the lien, encumbrance, adverse claim or defect or other
matter is valid and not barred by law or statute. The Company
shall notify the Insured in writing, within a reasonable time, of its
determination as to the validity or invalidity of the Insured's claim
or charge under the policy. If the Company concludes that the lien,
encumbrance, adverse claim or defect is not covered by this
policy, or was otherwise addressed in the closing of the
transaction In connection with which this policy was Issued, the
Company shall specifically advise the Insured of the
reasons for Its determination. If the Company concludes that
the lien, encumbrance, adverse claim or defect Is valid, the
Company shall take one of the following actions: (i) institute the
necessary proceedings to clear the lien, encumbrance, adverse
claim or defect from the Title as insured; (ii) indemnity the Insured
as provided in this policy; (111) upon payment of appropriate
premium and charges therefor, issue to the Insured Claimant or
to a subsequent owner, mortgages or holder of the estate or
Interest in the Land insured by this policy, a policy of title
PITT Form Number 111 (2/1/10) Page 3 of 8 TXT -1 Owner's Policy of Title Insurance (Rev, 2.1.10)
CONDITIONS (Continued)
Insurance without exception for the lien, encumbrance,
adverse claim or defect, said policy to be in an amount equal to
the current value of the Land or, if a mortgagee policy, the
amount of the loan; (v) indemnify another title insurance
company in connection with its Issuance of a policy(les) of title
Insurance without exception for the lien, encumbrance,
adverse claim or defect; (v) secure a release or other
document discharging the lien, encumbrance, adverse
claim or defect; or (vi) undertake a combination of (i) through
(v) herein.
4. PROOF OF LOSS.
In the event the Company is unable to determine the amount of
loss or damage, the Company may, at Its option, require as a
condition of payment that the Insured Claimant furnish a signed
proof of loss. The proof of loss must describe the defect, lien,
encumbrance or other matter insured against by this policy that
constitutes the basis of loss or damage and shall state, to the
extent possible, the basis of calculating the amount of the loss or
damage.
5. DEFENSE AND PROSECUTION OF ACTIONS.
(a) Upon written request by the Insured, and subject to the
options contained in Sections 3 and 7 of these Conditions, the
Company, at its own cost and without unreasonable delay,
shall provide for the defense of an Insured in litigation in
which any third party asserts a claim covered by this policy
adverse to the Insured. This obligation is limited to only those
stated causes of action alleging matters insured against by
this policy. The Company shall have the right to select
counsel of Its choice (subject to the right of the Insured to
object for reasonable cause) to represent the Insured as to
those stated causes of action. it shall not be liable for and will
not pay the fees of any other counsel. The Company will not
pay any fees, costs or expenses incurred by the Insured in
the defense of those causes of action that allege matters not
insured against by this policy.
(b) The Company shall have the right, in addition to the options
contained in Sections 3 and 7, at its own cost, to institute and
prosecute any action or proceeding or to do any other act that
in Its opinion may be necessary or desirable to establish the
Title, as insured, or to prevent or reduce loss or damage to
the Insured. The Company may take any appropriate action
under the terms of this policy, whether or not it shall be liable
to the Insured. The exercise of these rights shall not be an
admission of liability or waiver of any provision of this policy.
If the Company exercises its rights under this subsection, it
must do so diligently.
(c) Whenever the Company brings an action or asserts a
defense as required or permitted by this policy, the Company
may pursue the litigation to a final determination by a court of
competent jurisdiction and it expressly reserves the right, in
its sole discretion, to appeal from any adverse judgment or
order.
6. DUTY OF INSURED CLAIMANT TO COOPERATE.
(a) in all cases where this policy permits or requires the
Company to prosecute or provide for the defense of any
action or proceeding and any appeals, the Insured shall
secure to the Company the right to so prosecute or provide
defense in the action or proceeding, including the right to use,
at its option, the name of the Insured for this purpose.
Whenever requested by the Company, the Insured, at the
Company's expense, shall give the Company all reasonable
aid (i) In securing evidence, obtaining witnesses, prosecuting
or defending the action or proceeding, or effecting settlement
and (ii) in any other lawful act that in the opinion of the
Company may be necessary or desirable to establish the Title
or any other matter as Insured. If the Company is prejudiced
by the failure of the Insured to furnish the required
cooperation, the Company's obligations to the Insured under
the policy shall terminate, including any liability or obligation
to defend, prosecute, or continue any litigation, with regard to
the matter or matters requiring such cooperation.
(b) The Company may reasonably require the Insured Claimant
to submit to examination under oath by any authorized
representative of the Company and to produce for
examination, Inspection and copying, at such reasonable
times and places as may be designated by the authorized
representative of the Company, all records, in whatever
medium maintained, including books, ledgers, checks,
memoranda, correspondence, reports, e-mails, disks, tapes,
and videos whether bearing a date before or after Date of
Policy, that reasonably pertain to the loss or damage.
Further, if requested by any authorized representative of the
Company, the Insured Claimant shall grant its permission, in
writing, for any authorized representative of the Company to
examine, Inspect and copy all of these records in the custody
or control of a third party that reasonably pertain to the loss or
damage. All information designated as confidential by the
Insured Claimant provided to the Company pursuant to this
Section shall not be disclosed to others unless, in the
reasonable judgment of the Company, It Is necessary In the
administration of the claim. Failure of the Insured Claimant to
submit for examination under oath, produce any reasonably
requested information or grant permission to secure
reasonably necessary Information from third parties as
required in this subsection, unless prohibited by law of
governmental regulation, shall terminate any liability of the
Company under this policy as to that claim.
7. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS;
TERMINATION OF LIABILITY.
In case of a claim under this policy, the Company shall have the
following additional options:
(a) To Pay or Tender Payment of the Amount of Insurance.
To pay or tender payment of the Amount of Insurance under
this policy together with any costs, attorneys' fees and
expenses incurred by the Insured Claimant that were
authorized by the Company up to the time of payment or
tender of payment and that the Company is obligated to pay.
Upon the exercise by the Company of this option, all liability
and obligations of the Company to the Insured under this
policy, other than to make the payment required in this
subsection, shall terminate, Including any liability or obligation
to defend, prosecute, or continue any Itdgation.
(b) To Pay or Otherwise Settle With Parties Other than the Insured
or With the Insured Claimant.
(1) To pay or otherwise settle with other parties for or in the
name of an Insured Claimant any claim insured against
under this policy. In addition, the Company will pay any
costs, attorneys' fees and expenses incurred by the
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CONDITIONS (Continued)
Insured Claimant that were authorized by the Company
up to the time of payment and that the Company is
obligated to pay; or
(11) To pay or otherwise settle with the Insured Claimant
the loss or damage provided for under this policy, together
with any costs, attorneys' fees and expenses incurred by the
Insured Claimant that were authorized by the Company up to
the time of payment and that the Company is obligated to
pay. Upon the exercise by the Company of either of the
options provided for in subsections (b)(1) or (ti), the
Company's obligations to the Insured under this policy for the
claimed loss or damage, other than the payments required to
be made, shall terminate, including any liability or obligation
to defend, prosecute or continue any litigation.
8. DETERMINATION AND EXTENT OF LIABILITY.
This policy is a contract of indemnity against actual monetary loss
or damage sustained or incurred by the Insured Claimant who has
suffered loss or damage by reason of matters insured against by
this policy.
(a) The extent of liability of the Company for loss or damage under
this policy shell not exceed the lesser of:
0) the Amount of Insurance; or
(II) the difference between the value of the Title as Insured
and the value of the Title subject to the risk insured
against by this policy.
(b) If the Company pursues its rights under Section 3 or 5 and is
unsuccessful in establishing the Title, as insured,
(1) the Amount of Insurance shall be increased by 10%, and
((t) the Insured Claimant shall have the right to have the loss
or damage determined either as of the date the claim
was made by the Insured Claimant or as of the date it is
settled and paid.
(o) In addition to the extent of liability under (a) and (b), the
Company will also pay those costs, attorneys' fees and
expenses incurred in accordance with Sections 5 and 7 of
these Conditions.
9. LIMITATION OF LIABILITY.
(a) If the Company establishes the Title, or removes the alleged
defect, lien or encumbrance, or cures the lack of a right of
access to or from the land, all as Insured, or takes action In
accordance with Section 3 or 7, in a reasonably diligent
manner by any method, including litigation and the completion
of any appeals, it shall have fully performed Its obligations
with respect to that matter and shall not be liable for any loss
or damage caused to the Insured.
(b) In the event of any litigation, including litigation by the
Company or with the Company's consent, the Company shall
have no liability for loss or damage until there has been a final
determination by a court of competent Jurisdiction, and
disposition of all appeals, adverse to the Title, as insured.
(c) The Company shall not be liable for loss or damage to the
Insured for liability voluntarily assumed by the Insured In
settling any claim or suit without the prior written consent of
the Company.
10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION
OF LIABILITY.
All payments under this policy, except payments made for costs,
attorneys' fees and expenses, shall reduce the Amount of
Insurance by the amount of the payment.
11. LIABILITY NONCUMULATIVE.
The Amount of Insurance shall be reduced by any amount the
Company pays under any policy insuring a Mortgage to which
exception is taken in Schedule 8 or to which the Insured has
agreed, assumed, or taken subject or which is executed by an
Insured after Date of Policy and which Is a charge or lien on the
Title, and the amount so paid shall be deemed a payment to the
Insured under this policy.
12. PAYMENT OF LOSS.
When liability and the extent of loss or damage have been
definitely fixed In accordance with these Conditions, the payment
shall be made within 30 days.
13. RIGHTS OF RECOVERY UPON PAYMENT OR SETTLEMENT.
(a) Whenever the Company shall have settled and paid a claim
under this policy, it shall be subrogated and entitled to the
rights of the Insured Claimant in the Title and all other rights
and remedies in respect to the claim that the Insured
Claimant has against any person or property, to the extent of
the amount of any loss, costs, attorneys' fees and expenses
paid by the Company. If requested by the Company, the
Insured Claimant shall execute documents to evidence the
transfer to the Company of these rights and remedies. The
Insured Claimant shall permit the Company to sue,
compromise or settle in the name of the Insured Claimant and
to use the name of the Insured Claimant In any transaction or
litigation involving these rights and remedies.
If a payment on account of a claim does not fully cover the
loss of the insured Claimant, the Company shall defer the
exercise of Its right to recover until after the Insured Claimant
shall have recovered Its loss.
(b) The Company's right of subrogatlon includes the fights of the
Insured to indemnities, guaranties, other policies of insurance
or bonds, notwithstanding any terms or condltionsoontained
In those Instruments that address subrogation rights.
14. ARBITRATION.
Either the Company or the Insured may demand that the claim or
controversy shall be submitted to arbitration pursuant to the Title
Insurance Arbitration Rules of the American Land Title Association
("Rules"). Except as provided In the Rules, there shall be no
joinder or consolidation with claims or controversies of other
persons. Arbitrable matters may include, but are not limited to,
any controversy or claim between the Company and the Insured
arising out of or relating to this policy, any service in connection
with Its Issuance or the breach of a policy provision, or to any other
controversy or claim arising out of the transaction giving rise to this
policy. Al arbitrable matters when the Amount of Insurance Is
$2,000,000 or less shall be arbitrated at the option of either the
Company or the Insured, unless the Insured is an Individual person
(as distinguished from an Entity). All arbitrable matters when the
Amount of Insurance is In excess of $2,000,000 shall be arbitrated
only when agreed to by both the Company and the Insured.
Arbitration pursuant to this policy and under the Rules shall be
binding upon the parties. Judgment upon the award rendered by
the Arbitrator(s) may be entered in any court of competent
jurisdiction.
15. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE
CONTRACT.
(a) This policy together with all endorsements, if any, attached to it
by the Company is the entire policy and contract between the
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CONDITIONS (Continued)
Insured and the Company. In interpreting any provision of
this policy, this policy shall be construed as a whole.
(b) Any claim of loss or damage that arises out of the status of
the Title or by any action asserting such claim, shall be
restricted to this policy.
(c) Any amendment of or endorsement to this policy must be in
writing and authenticated by an authorized person, or
expressly Incorporated by Schedule A of this policy.
(d) Each endorsement to this policy issued at anytime is made a
part of this policy and is subject to all of its terms and
provisions. Except as the endorsement expressly states, it
does not (I) modify any of the terms and provisions of the
policy, (ii) modify any prior endorsement, (iii) extend the Date
of Policy or (iv) increase the Amount of Insurance. Each
Commitment, endorsement or other form, or provision in the
Schedules to this policy that refers to a term defined in
Section 1 of the Conditions shall be deemed to refer to the
term regardless of whether the term is capitalized in the
Commitment, endorsement or other form, or Schedule. Each
Commitment, endorsement or other form, or provision in the
Schedules that refers to the Conditions and Stipulations shall
be deemed to refer to the Conditions of this policy.
16. SEVERABILITY. -
In the event any provision of this policy, in whole or in part, Is held
invalid or unenforceable under applicable law, the policy shall be
deemed not to include that provision or such part held to be
invalid, and all other provisions shall remain in full force and effect.
17. CHOICE OF LAW; FORUM.
(a) Choice of Law: The Insured acknowledges the Company has
underwritten the risks covered by this policy and determined
the premium charged therefor in reliance upon the law
affecting Interests in real property and applicable to the
interpretation, rights, remedies or enforcement of policies of
title insurance of the jurisdiction where the Land is located.
Therefore, the court or an arbitrator shall apply the law of the
jurisdiction where the Land is located to determine the validity
of claims against the Title that are adverse to the Insured, and
in Interpreting and enforcing the terms of this policy, in
neither case shall the court or arbitrator apply its conflicts of
laws principles to determine the applicable law.
(b) Choice of Forum: Any litigation or other proceeding brought by
the Insured against the Company must be filed only in a state
or federal court within the United States of America or its
territories having appropriate jurisdiction.
18. NOTICES, WHERE SENT.
Any notice of claim and any other notice or statement in writing required
to be given to the Company under this Policy must be given to the
Company at Fust American Title Insurance Company, Attn: Claims
National Intake Center, 1 First American Way, Santa Ana,
California 92707. Phone: 888-632-1642.
First American Title
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