-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B958IjJiVP++KNMRsXbUa0HiKVjBLy0x/JJy0YyNUslrkZjKATXpx8Y4k5pjoCeA A7OtGMp9Y4HCD0GroIsU+g== 0000950134-00-002806.txt : 20000331 0000950134-00-002806.hdr.sgml : 20000331 ACCESSION NUMBER: 0000950134-00-002806 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CET ENVIRONMENTAL SERVICES INC CENTRAL INDEX KEY: 0000944627 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 330285964 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 033-91602 FILM NUMBER: 587242 BUSINESS ADDRESS: STREET 1: 7670 SOUTH VAUGHN CT STREET 2: SUITE 130 CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 3037081360 MAIL ADDRESS: STREET 1: 6900 E 47TH AVE STREET 2: STE 200 CITY: DENVER STATE: CO ZIP: 80216 10-K 1 FORM 10-K FOR FISCAL YEAR END DECEMBER 31, 1999 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended: DECEMBER 31, 1999 Commission File No. 1-13852 CET ENVIRONMENTAL SERVICES, INC. -------------------------------- (Exact Name of Registrant as Specified in its Charter) CALIFORNIA 33-0285964 - -------------------------------------------------------------- --------------------------------------- (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
7032 SOUTH REVERE PARKWAY, ENGLEWOOD, COLORADO 80112 ------------------------------------------------------------- (Address of Principal Executive Offices, Including Zip Code) Issuer's telephone number, including area code: (720) 875-9115 Securities registered pursuant to Section 12(b) of the Act: COMMON STOCK Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No , --- --- As of March 21, 2000, there were 6,284,288 shares of Common Stock outstanding. The aggregate market value of voting stock held by nonaffiliates of the Registrant on that date was approximately $5,635,000. Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [] DOCUMENTS INCORPORATED BY REFERENCE: The information required by Part III is incorporated by reference from the Registrant's definitive proxy statement to be filed with the Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this report. 2 PART I ITEM 1. BUSINESS. The Company The Company was incorporated in February 1988 under the name "Thorne Environmental, Inc." to conduct business in environmental consulting, engineering, remediation, and construction. The Company's initial growth resulted from its successful performance of emergency response cleanup services in certain western states and the Trust Territory of the Pacific Islands for the U.S. Government and various commercial clients. The Company has developed a broad range of expertise in non-proprietary technology-based environmental remediation and water treatment techniques for both the public and private sectors. The Company was suspended by the Environmental Protection Agency in August, 1999. This action caused significant short-term revenue loss. Shortly after the notice of suspension was received, the Company was notified by its bank, National Bank of Canada, that it required full repayment of the Company's loan. These events necessitated that the Company rapidly downsize its operations and change the focus of its ongoing operations. The Company is completing its existing government programs contractual obligations. However, the Company has decided not to pursue any further contracting relationship with the Environmental Protection Agency and the Department of Defense. As described in detail further in this Section, the Company is attempting to assign and sell this portion of the Company's business operations. The Company's strategy has been to distinguish itself in the market by providing full-service environmental contracting, water and wastewater treatment, and emergency response services. Through several major government contracts and a diversified commercial client base, the Company provides turnkey waste management for a complete range of water, soil, and air pollution issues. The Company's personnel have developed expertise in a broad range of remediation techniques such as bioremediation, bioventing, vapor extraction, gas/air sparging, thermal desorption, soil washing, and groundwater remediation systems. The Company also offers a variety of services in support of municipal and industrial water and wastewater treatment, military base closures, and other operations with significant environmental components. The Company believes it has gained a solid reputation for promptly providing cost-effective and innovative remediation and treatment solutions. In July 1995, the Company completed an initial public offering of 1.2 million shares of its Common Stock, and in August 1995, sold an additional 0.2 million shares pursuant to an overallotment option. The net proceeds to the Company from the public offering were approximately $5.8 million. Concurrent with the IPO, the Company became listed on the American Stock Exchange under the symbol "ENV." In conjunction with the offering, warrants for an additional 120,000 shares of Common Stock were issued as partial compensation for underwriting services. These warrants are exercisable at a price of $6.00 per share subject to certain price adjustments for five years from the date of the offering. In December 1996, the Company commenced a Private Placement Offering of Common Stock. This offering was completed in January 1997, and resulted in the issuance of 0.7 million shares with net proceeds to the Company totaling $2.0 million. The Common Stock sold via this offering was registered for resale in a Form S-3 Registration Statement which became effective January 7, 1998. In conjunction with the offering, warrants for an additional 72,925 shares of Common Stock were issued as partial compensation for underwriting services. These warrants are exercisable at a price of $3.60 per share for five years from the date of the offering. 1 3 In August 1997, the Company acquired all of the outstanding stock of Water Quality Management Corporation, a Colorado corporation ("WQM"), in a cash transaction. WQM was engaged in the operation and maintenance of municipal and industrial water and wastewater treatment facilities. WQM was operated as a wholly owned subsidiary of the Company. In January 1998, the Company acquired all of the outstanding stock of H2O Construction and Maintenance, Inc. a Colorado corporation ("H2O"), for cash and notes. H2O was engaged in the construction, operation and maintenance of water and wastewater treatment, collection and distribution facilities. H2O provides services to both public and private sector clients. As a result of the purchase, H20 was merged with WQM, a wholly owned subsidiary of the Company. In December 1998, the Company sold all of the outstanding stock of WQM and H2O for $12.5 million to AquaSource Services and Technologies, Inc. In addition to the $12.5 million, additional consideration may be paid based on the final audit of working capital levels. The Company recorded a gain of $10.2 million and received $11.3 million at the date of sale, and in the first quarter of 1999 received an additional $1.25 million. As of December 31, 1999, the Company has included in other receivables approximately $1.5 million remaining from amounts due on the sale of WQM. In February 2000, the Company and AquaSource signed a settlement agreement resolving the amounts due between the parties (see Item 3. Legal Proceedings). In August 1998, the Company completed a private financing, raising $1.9 million of net proceeds in a placement of convertible preferred stock and warrants. The preferred shares could be converted into shares of the Company's Common Stock at a 15 percent discount to the price of the Common Stock at the time of conversion with a maximum conversion price of $3.35. Three-year warrants to purchase an aggregate of 35,000 shares of the Company's Common Stock at a price of $3.00 per share were also issued. Through January 1999, a total of 430 shares of the preferred securities were converted into 472,803 shares of Common Stock by the holders. The Common Stock issued upon conversion was registered for resale in a Form S-3 Registration Statement which became effective August 13, 1998. In January 1999, the Company redeemed the remaining shares of Preferred Stock for $1,927,400 plus $4,873 of unpaid dividends through the date of redemption. The warrants issued in connection with the preferred stock remain outstanding. In August, 1999, the Company received a notice of suspension, pending further review, from the Environmental Protection Agency ("EPA"). The suspension resulted from EPA allegations that the Company engaged in intentional misconduct with respect to billing for services provided under various EPA contracts. Under the suspension, the Company was prohibited from receiving additional government contracts under the provisions of 48 C.F.R Subpart 9.4 of the Federal Acquisitions Regulations. The suspension did, however, allow the Company to continue performance on existing government contracts. In November 1999, following consideration of certain information provided by the Company to the EPA, the EPA's suspension was terminated; and an Administrative Agreement ("Administrative Agreement") between the EPA and the Company was executed. Upon execution of the Administrative Agreement, the Company became immediately eligible to bid for, receive, and perform any Federal contract or subcontract, or participate in any assistance, loan or benefit without restriction. In the Administrative Agreement, the Company agreed to cooperate in full with further investigations into the EPA allegations including access to records, availability of Company personnel, certain reporting requirements, audit of EPA billing prior to submission, and certain restrictions of Company assets. After review of available information and consultation with its legal counsel, management believes that the allegations brought against the Company did not warrant suspension. Additionally, 2 4 management intends to cooperate in full but also vigorously defend itself in the EPA's further investigation into the allegations. However, there can be no assurance that further suspension will not occur or that the Company will prevail in this matter. If further suspension occurs, it will have a material effect on the Company's financial position, results of operations and liquidity. In August 1999, following the EPA suspension, the Company initiated a restructuring plan ("Restructuring Plan") to reduce operating costs and gain efficiencies through sale, downsizing and closure of regional offices. In September 1999, under the Restructuring Plan, the Company sold substantially all its assets in the Mobile and Jackson regions for proceeds totaling $0.5 million. Also under the Restructuring Plan, in October 1999, the Company closed its regional offices located in New Orleans and Houston. In October 1999, the Company entered into an Asset Purchase and Assignment Agreement (the "IT Purchase Agreement") with IT Corporation to sell or assign substantially all of the assets in the Company's Seattle Regional office for a sales price of $1.3 million. The IT Purchase Agreement provides for the assignment of the Company's remaining EPA contract dated January 9, 1997 (the "EPA Contract") and the sale of certain assets and the assumption of certain liabilities and obligations used in, directly associated with, and necessary in the performance of the EPA Contract. Closing of the IT Purchase Agreement is contingent upon the execution of a novation agreement by and between the Company, IT Corporation and the EPA consenting to the assignment of the EPA Contract. The closing of this IT Purchase Agreement is also contingent on the normal closing conditions including the continued accuracy of representation and warranties, no material adverse changes, and the receipt of necessary consents from other parties. As discussed in Note C to the Company's Consolidated Financial Statements, EPA revenue represents approximately 60%, 50% and 39%, respectively, of the Company's revenue for the years ending December 31, 1999, 1998 and 1997. Upon novation of the EPA contract, the Company would receive no further EPA revenue. However, there can be no assurance that approval of the novation will be received from the EPA or that the subsequent closing of the IT Purchase Agreement will occur. At the date of this report, the parties are still in discussions with the EPA concerning the proposed novation. In December 1999, the Company entered into an Asset Purchase Agreement (the "CAPE Purchase Agreement ") with Cape Environmental Management, Inc. ("CAPE") to sell or assign substantially all of the assets in the Company's Tustin, California operations for a sale price of $2.1 million. The CAPE Purchase Agreement provides for the assignment of certain federal/non-EPA and commercial contracts, the sale of certain assets, and the assumption of certain liabilities directly associated with the performance of the contracts. Closing of the CAPE Purchase Agreement is contingent upon the execution of a novation agreement by and between the Company, CAPE, and the U.S. Defense Contract Management Command ("DCMC") consenting to the assignment of the federal contracts. The related federal contracts consist of the Pre-Placed Remedial Action Contracts ("PRAC"), the Air Force Center for Environmental Excellence ("AFCEE"), the Total Environmental Restoration Contract ("TERC"), and the McClellan Environmental Technologies Remediation Implementation Contract ("METRIC"). The closing of this CAPE Purchase Agreement is also contingent on the normal closing conditions including the continued accuracy of representation and warranties, no material adverse changes, and the receipt of necessary consents from other parties. Upon novation, the Company would receive no further federal revenue which consisted of approximated 8%, 12% and 9% for the years ending December 31, 1999, 1998 and 1997. In addition, the Company will enter into a non-compete agreement with CAPE which would prohibit the Company from performing environmental remediation services for the Department of Defense, with certain limited exceptions, anywhere in the United States, or for certain customers in California. The non-compete agreement would be for a term of four years. However, there can be no assurance that approval of the novation will be received from the DCMC or that the subsequent closing of the CAPE Purchase Agreement will occur. At the date of this report, the parties are still in discussions with the DCMC concerning the proposed novation. 3 5 In February 2000, the Company closed its Richmond, California office and transferred field equipment, office equipment and other assets to the Company's other locations, primarily to a project located near Hercules, California. The Environmental Industry Various analysts have recently estimated that the total United States environmental services industry generates revenues of $180-200 billion per year. Environmental Business Journal has indicated that the remediation industry accounted for approximately $6.1 billion of revenue in 1998. Driven largely by legislation passed during the late 1970's and early 1980's in response to widespread public concern regarding clean air and water, the environmental services business has expanded rapidly during the past decade. The Company is involved primarily in the remediation segment of the industry, which is focused on cleanup of existing environmental problems. The remediation business consists of three phases: site assessment, remediation program design, and the actual site remediation. The first phase is largely investigative and can involve substantial chemical analysis to understand the nature and extent of the problem. The design phase involves detailed engineering to develop the optimal solution for cleaning the site. The third phase is the true implementation of the site remediation plan and involves various onsite treatment procedures for contaminated materials or the excavation and containment or offsite transportation of toxic materials. The Company provides an extensive full-service offering in all phases of contaminated site remediation. Innovative onsite remediation technologies are in high demand to provide an alternative to offsite disposal of hazardous waste. These technologies have been provided to various Company clients in order to minimize and/or eliminate our clients' cradle-to-grave liability. Onsite technologies such as bioremediation, bioventing, vapor extraction, gas/air sparging, low-temperature thermal desorption, chemical fixation, and soil washing are gaining wide-spread regulatory acceptance. The Company strives to use these remediation techniques more efficiently than its competitors. The never ending need for clean pure water, the aging of the U.S. water and wastewater treatment facilities, the trend of public municipalities towards privatization, and recent regulatory pressure, has expanded the U.S. water market to new highs. The Environmental Review, the EPA's first survey of drinking-water utilities after reauthorization of the Safe Drinking Water Act in 1997, suggested that communities nationwide will need to spend around $12.1 billion "in the immediate future" to protect drinking water supplies. The EPA has also estimated that, over the next two decades, some $137 billion will need to be spent to build new wastewater-treatment plants or to improve existing ones. And the Water Environment Federation, a trade group, projects that the roughly 55,000 community water systems in the U.S. will need to spend some $330 billion over the next two decades to improve their water infrastructure. Public municipalities are becoming aware that considerable savings can be obtained by outsourcing the operations, management, and maintenance of their water-treatment facilities to private water-specialty firms. There remains approximately 24,000 government-owned-and-operated water authorities in the U.S. serving almost 80% of U.S. citizens. Since 1994, increased pressure to create uses for contaminated and idle properties has driven a rise in industrial redevelopment or "Brownfield" site remediation programs. The term "Brownfield" comes from an EPA-sponsored program to study the redevelopment of "abandoned, idled, or underused industrial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination" (U.S. EPA). The exact number of Brownfield sites is unclear; however, their existence and a governmental effort to facilitate their cleanup have created an opportunity for full service remediation as well as financial participation in the redevelopments. 4 6 Organization of the Company The Company is organized into three primary business lines: industrial services, which includes water and wastewater treatment, facility cleaning, operation, maintenance, construction, closures, and emergency response; environmental remediation; and government programs. This is overlaid with a geographic structure in which each office is able to provide manpower and equipment to support projects in each of the business lines. The Company uses the following resources to provide turnkey services to its customers: o Registered engineers, geologists, and environmental scientists for performing investigations and remediation feasibility studies. o Engineers, scientists, and construction managers to design remediation and water/wastewater treatment systems from the conceptual stage through final design. o Manpower and equipment for performing site preparation such as excavation, grading, berming and hauling soil; removal of obstacles (i.e., drums, transformers, USTs, and piping); and dismantling ASTs. o Manpower and specialized equipment for erecting or installing remediation equipment, support buildings, and enclosures for remediation of contaminated soil, water, sludge or sediment. Services and Products Provided by the Company The Company provides full turnkey environmental services for remediation of non-hazardous, hazardous, and toxic waste on a planned and emergency basis, industrial services, and water and wastewater treatment. This can include assessment and characterization studies, conceptual design, detail design, construction and installation, decontamination and demolition, and operation and maintenance. By offering turnkey services, the Company believes it enjoys a competitive advantage in soliciting new customers, as well as in obtaining follow-on contracts that may be tangential or unrelated to the original scope of work. Industrial Services. The Company performs a variety of industrial services, including maintenance and construction work for numerous groundwater treatment and remediation systems. The Company has also provided clients with a range of water, wastewater, and industrial wastewater treatment services. Detailed services include preventive and corrective maintenance, as well as replacement and emergency maintenance; industrial vacuuming of wet/dry materials; and construction of full-scale facilities, installation of off-the-shelf systems, and retrofitting of existing systems. The Company provides plant services to industrial clients as an outside contractor, or by offering full- or part-time onsite personnel on a contract basis. These services include: o Tank and sump services o Water and wastewater treatment o Specialty construction o Plant operation and maintenance o Waste management and removals o Regulatory agency coordination and permitting, regulatory management outsourcing, and compliance audits 5 7 o Waste area construction/closures o Facility closures o Emergency response Environmental Remediation Services. The Company provides full-scale turnkey environmental remediation services that range from Phase I environmental assessments and remedial investigation/feasibility studies (RI/FSs) to the design, construction, and operation of remediation systems. The Company does not promote a single technology but recommends the remediation methods that provide the most cost-effective and timely mitigation. The Company has developed a Brownfields Redevelopment Program that has proven success in quickly and cost-effectively returning underutilized properties to productive use. The cornerstone of this Program is CET's integrated expertise in site assessment, remediation, and regulatory approval. Government Programs. The Company works with government agencies at all levels: federal, state, county, municipal, and special districts. These contracts are performed with the Company as the prime contractor, a teaming partner, or a subcontractor. The services provided to the government are similar to those provided to the private sector and include emergency response and remediation services. The Company continues to perform work for the Environmental Protection Agency and the Department of Defense. As previously discussed in this Section under the heading "The Company", the Company has contracted for the sale of the government programs business. While the Company will complete its existing government program contractual obligations, it does not intend to procure new environmental contracts with either the Environmental Protection Agency or the Department of Defense. Customers The Company's customers include federal, state, and local government agencies and commercial enterprises including Fortune 500 companies. In August 1999, the Company secured a $16.0 million "brownfield" remediation contract at a former explosives manufacturing plant near Hercules, California. The project involves multiple phases including soil removal & disposal; commercial development consisting of sewer, storm drain, roadway, and sanitary sewer lift station construction; and wetland restoration. There remains approximately $13.0 million of work to be completed in 2000. The Company continues to perform work for the Environmental Protection Agency and the Department of Defense. As previously discussed in this Section under the heading "The Company", the Company has contracted for the sale of the government programs business. While the Company will complete its existing government program contractual obligations, it does not intend to procure new environmental contracts with either the Environmental Protection Agency or the Department of Defense. Business Strategy The Company plans to capitalize on the following trends: o The demand for consultation and construction to upgrade existing water and wastewater treatment facilities within the U.S. presents an opportunity for the Company. o The privatization or outsourcing of public municipalities' water and wastewater treatment facilities operation and maintenance offers untapped areas of growth within the industry. o The U.S. EPA's Brownfields Economic Redevelopment Initiative, various state voluntary cleanup programs, and a maturing of the environmental marketplace have reduced the risk 6 8 and uncertainty of selling, buying, and financing underutilized or Brownfield sites, creating an opportunity to redevelop prime land that was previously "untouchable" due to contamination. o Remediation at active industrial sites under the RCRA corrective action program represents an important private sector segment in an early stage of development. o To meet special requirements and budget constraints, industrial facilities are increasingly outsourcing environmental-related maintenance and construction services. The Company is targeting these facilities to perform this work on a contract basis or offering full- or part-time personnel on site. The Company's strategy to capitalize on these trends emphasizes the following key elements: Diversification through Controlled Expansion. The Company seeks controlled growth and diversification by providing its services to additional industries and by broadening the mix of related services performed for each client. Management has identified several areas of interest for expansion including additional work in the areas of water and wastewater treatment facilities' construction, operation and maintenance, U.S. military base closure services, in-plant services for industrial clients, and redevelopment of Brownfield properties. Emphasis on Recurring Revenue. The Company seeks to expand its base of recurring revenue sources to mitigate the cyclical nature of the environmental remediation services industry. The Company is on appropriate approved-contractor lists with its large corporate customers whereby the Company is invited to bid on future environmental engineering/remediation projects. Inclusion on such lists is a result of the Company having completed prior contracts to the satisfaction of these customers. The Company also intends to increase the number of operations and maintenance contracts, both for industrial services and water/wastewater facilities. These contracts are generally longer term, providing a more sustainable revenue base. Commitment to Quality. Management believes that the long-term success of the Company depends upon its reputation with customers and government regulators for performing top quality turnkey services. The Company must continue to distinguish itself with private and government sector customers by maintaining competence in various state-of-the-art, technology-based remediation and treatment alternatives, and by efficient and effective jobsite performance. Professional Marketing and Management. The Company is committed to maintaining a professional marketing and project management staff that understands the needs and requirements of its various customers, that can accurately evaluate requests for proposals and invitations to bid, and that responds in a timely manner with high-quality comprehensive formal proposals. This includes understanding the intricacies of the detailed and time-consuming process associated with bidding and managing projects. The Company uses non-proprietary specialized software for job cost accounting to assist with both bidding and managing projects. Stable Work Force. The Company strives to maintain a stable, dedicated work force of experienced professionals, managers, administrative personnel, and trained operators and laborers. The Company seeks to attract and retain such employees by providing fair compensation, incentives, and a dynamic work environment. The Company maintains a comprehensive program for providing health and safety training related to hazardous material exposure, in full compliance with the highest standards set forth by federal and other applicable regulatory agencies. Management believes that the Company's experienced work force will continue to contribute to the Company's excellent safety record, reducing insurance costs, and increasing customer satisfaction. 7 9 Ownership of Equipment. The Company attempts to purchase specialized emergency response and remediation equipment, thereby providing the Company with key business advantages, including reduced operating costs, greater flexibility in scheduling the use of resources (equipment, personnel, etc.) and greater reliability in meeting contractually-defined performance timetables and deadlines. The Company typically rents non-specialized equipment such as backhoes and excavators. Marketing The Company has a dedicated marketing staff of sales professionals, proposal writers, technical editors, and project estimators. A significant portion of new business is derived from current customers seeking services for additional sites and new needs. The Company has developed ongoing relations with a broad range of customers in various industries and geographical sites. The marketing organization is primarily decentralized. Sales leads and customer relationships are developed on a regional basis by the Regional Manager, Project Managers, or the Business Development Manager. Individual contracts have an award value of $25,000 to $100,000 for the performance of specific tasks, and from $125,000 to $7,000,000 for comprehensive turnkey services. The Company's contracts are primarily obtained through competitive bidding and through negotiations with long-standing customers. The Company is typically invited to bid on projects undertaken by recurring customers who maintain pre-qualified contractor bid lists. Bidding activity, backlog, and revenue resulting from the award of contracts to the Company vary significantly from period to period. Competition The environmental industry in the United States has developed rapidly since the passage of RCRA in 1976 and is highly competitive. The industry is going through a rapid transition resulting from several mergers and consolidations during the last two years. Several key players have emerged but the industry still has numerous small- and medium-sized companies serving niche markets according to geography, industry, media (air, water, soil, etc.), and technological specialization (bioremediation, etc.). Because the Company operates in many sectors of the environmental industry, the Company can adapt to changes in the marketplace by allocating its resources to the industry sector in which the business opportunities exist. Management believes that the keys to success in the industry today are service and capabilities. The Company will continue to focus on the application of new technology, as well as innovative applications of existing technologies, and continue providing high quality services to its customers. Management believes that the primary factors of competition are price, technological capabilities, reputation for quality and safety, relevant experience, availability of machinery and equipment, financial strength, knowledge of local markets and conditions, and estimating abilities. Management believes that the Company has competed and will continue to compete favorably on the basis of the foregoing factors. However, many of the Company's competitors have financial and capital equipment resources greater than that of the Company. Additionally, at any time and from time to time, the Company may face competition from new entrants into the industry. The Company may also face competition from technologies that may be introduced in the future, and there can be no assurance that the Company will be successful in meeting the challenges that will be posed by its competition in the future. 8 10 Government Regulation The Company is presently regulated by a myriad of federal, state, and local environmental and transportation regulatory agencies, including but not limited to the EPA, which regulates the generation and disposal of hazardous waste; the U.S. Department of Labor, which sets safety and training standards for workers; the U.S. Department of Transportation, which regulates transportation of hazardous materials and hazardous waste; and similar state and local agencies. The need for governments and business to comply with the complex scheme of federal and state regulations governing their operations is the market in which the Company operates, although the Company itself must operate under and in conformance with applicable federal and state laws and regulations. The Company attempts to pass the cost of compliance on to the customer through the prices paid by customers for the Company's services. Environmental Laws Most environmental laws and regulations are promulgated by the U.S. Congress and federal departments and agencies. For example, the National Environmental Policy Act compels federal governmental agencies at all levels to make decisions with environmental consequences in mind. The EPA and the U.S. Occupational Safety and Health Administration ("OSHA") are responsible for protecting and monitoring certain natural resources (such as air, water, and soil) and working conditions. These laws and regulations establish a comprehensive regulatory framework consisting of permitting processes, systems construction, monitoring and reporting procedures, and administrative, civil, and criminal enforcement mechanisms. Many of the federal laws and regulations contemplate enforcement by state agencies and adoption by the states of similar environmental laws and regulations that must meet minimum federal requirements. In areas of environmental law where federal regulation is silent, the states may adopt their own environmental laws. Local governments such as counties and municipalities may also enact and enforce environmental laws that address local concerns that may be more stringent than applicable state laws. The Company's ability to assist customers to comply with these environmental laws and regulations forms the basis for the current and future environmental consulting, engineering, remediation, laboratory, and other services provided by the Company. Enforcement of such laws and regulations, such as EPA mandated registration and upgrade of USTs, also leads to business for the Company. The federal laws and regulations described below constitute the major actions that have caused growth in the environmental and water/wastewater service industries. Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"). This legislation, as amended by the Superfund Amendments and Reauthorization Act of 1986, established the Superfund program to identify and clean up existing contaminated hazardous waste sites and other releases of hazardous substances into the environment. While federal funds of approximately $8.5 billion exist to pay for the cleanup, CERCLA gives the EPA authorization to compel private parties to undertake the cleanup and enforcement incentives including the imposition of penalties and punitive damages. Resource Conservation and Recovery Act of 1976 ("RCRA"). This legislation, as amended by the Hazardous and Solid Waste Amendments of 1984 ("HSWA"), provides for the regulation of 9 11 hazardous waste from the time of generation to its ultimate disposal as well as the regulation of persons engaged in generation, handling, transportation, treatment, storage, and disposal of hazardous waste. Hydrocarbon-based hazardous waste as defined by RCRA can include leaked/spilled crude oil, refined oil, gasoline, kerosene, and industrial solvents (used, for example, in the transportation and manufacturing industries). Hazardous waste also includes the by-products of virtually any business, including the production of plastics, pesticides, fertilizers, soaps, medicines, explosives, etc. These wastes can contain heavy metals, organic chemicals, dioxin, PCBs, cyanide, and other toxic substances. EPA UST Regulations. The EPA has mandated that USTs that are used to store gasoline, diesel fuel, fuel oil, waste oil and hazardous materials be registered with the appropriate state regulatory agency, designed or upgraded to meet construction and operational standards, and monitored to insure against groundwater and soil contamination from leaking. Owners and operators are further required to report leaks and undertake appropriate corrective action, including testing and monitoring to identify the extent of the contamination, removal and disposal of contaminated soil, or on-site treatment of contaminated soil or groundwater. The EPA has delegated the administration of UST regulations to state agencies. To assist the remediation process when leaking USTs are identified, many state legislatures have created reimbursement programs funded by gasoline taxes or other taxes and fees. Clean Water Act ("CWA"). The CWA established a system of standards, permits and enforcement procedures for the discharge of pollutants into navigable waters from industrial, municipal and other wastewater sources. The CWA requires, under certain circumstances, pretreatment of industrial wastewater before discharge into municipal treatment facilities. The EPA and delegated state agencies are also placing some non-complying municipalities under enforcement schedules. These regulations are creating the need for the upgrade or construction of new treatment facilities by both industrial and municipal entities. Safe Drinking Water Act ("SDWA"). Under the SDWA and its subsequent reauthorization, the EPA is empowered to set drinking water standards for public water systems in the United States. The SDWA requires that the EPA set maximum permissible contamination levels for over 80 substances and also requires the EPA to establish a list every 3 years of contaminants that may cause adverse health effects and may require regulation. Enforcement responsibility is placed on the states and includes water supply systems monitoring. The SDWA also requires that the EPA set criteria for the use of treatment techniques including when filtration should be used for surface water supplies and when to require utilities to disinfect their water. The EPA regulations under the SDWA are expected to result in significant expenditures by public water systems for evaluation and, ultimately, for upgrading of many facilities. Bolstering federal laws are stringent state laws, such as California's Safe Drinking Water and Toxic Enforcement Act of 1986 ("Prop 65"), which took full legal effect in 1992. To cite just one facet of Prop 65, California's drinking water must not have concentrations of more than one part per billion of benzene. However, one tablespoon of gasoline contains enough benzene to render 50,000 gallons of water undrinkable by California's standards. OSHA and OSHA Reform Act. OSHA has promulgated various regulations setting forth standards for disclosure of health hazards in the work place and for response thereto. The Hazard Communication Standard, for example, requires manufacturers and importers of chemicals to assess the hazards of their products and disclose the same through material data safety sheets and label warnings. In 1990, in an effort in part to create a self-funding administration, Congress increased the ceiling for certain OSHA-imposed penalties. 10 12 Potential Liability and Insurance The Company maintains quality assurance, quality control, and health and safety programs to reduce the risk of damage to persons and property. However, in providing environmental remediation services to the Company's customers, the Company faces substantial potential liability for environmental damage, personal injury, property damage, economic losses, and fines and costs imposed by regulatory agencies. Furthermore, it is possible that one or more of the Company's customers may assert a claim against the Company for negligent performance of services. The Company's potential environmental liability arises, in part, because some of its services involve the cleanup of petroleum products and other hazardous substances for its customers. The scope of liability under existing law for environmental damage is potentially very broad and could apply to the Company in a number of ways. For example, the Company may be exposed to liability under CERCLA when it conducts a cleanup operation that results in a release of hazardous substances, or when it arranges for disposal of such substances. Other liabilities may arise if the Company creates or exacerbates a contamination problem through errors or omissions in its cleanup work, potentially giving rise to, among other things, tort actions for resulting damages and Superfund liability for any resulting cleanup. Finally, it is possible that one or more of the Company's customers will assert a claim against the Company for an allegedly incomplete or inadequate cleanup. Many state and federal environmental laws apply to the Company's activities, and the potential for liability exists depending on the circumstances and substances involved in each cleanup operation. Moreover, the law in this area is developing rapidly and is thus subject to considerable uncertainty. The Company maintains comprehensive general liability insurance and worker's compensation insurance that provide $5 million of coverage each. In addition, the Company maintains pollution liability and errors and omissions insurance that provides $2 million of coverage each. Because there are various exclusions and retentions under the insurance policies described above, not all liabilities that may be incurred by the Company will necessarily be covered by insurance. In addition, certain of the policies are "claims made" policies that only cover claims made during the term of the policy. If a policy terminates and retroactive coverage is not obtained, a claim subsequently made, even a claim based on events or acts that occurred during the term of the policy, might not be covered by the policy. In the event the Company expands its services into a new market, no assurance can be given that the Company will be able to obtain insurance coverage for such activities or, if insurance is obtained, that the dollar amount of any liabilities incurred in connection with the performance of such services will not exceed policy limits. The market for liability insurance has been severely constrained at times, due in part to high losses experienced by the insurance industry from environmental impairment liability claims, including claims associated with hazardous materials and toxic wastes. Consequently, the available insurance coverage for enterprises such as the Company may be reduced, eliminated entirely or priced beyond the reach of many companies. To date, the Company has been able to obtain any insurance required by a customer. However, there can be no assurance that the Company will be able to maintain adequate liability insurance in the future. Bonding Requirements Commercial remediation projects, as well as federal, state, and municipal projects, often require contractors to post both performance and payment bonds at the execution of a contract. Performance bonds guarantee that the project will be completed, and payment bonds guarantee that vendors will be paid for equipment and other purchases. Contractors without adequate bonding may be ineligible to bid or negotiate on many projects. The Company has frequently been required to obtain such bonds, and it 11 13 should be assumed that the Company will continue to be required to obtain such bonds in the future. The Company obtains required bonds on a case-by-case basis as needed and has not experienced any problems in obtaining necessary bonds. The Company could experience such difficulties in the future if its total amount of bonds outstanding exceeds the limits imposed by bonding companies based on the financial condition of the Company at any given time. Bonds typically cost between 1% and 3% of the cost of a project. To date, no payments have been made by any bonding company for bonds issued for the Company. Employees As of March 2000, the Company employed approximately 73 employees full-time and 71 part-time at its four offices, including three Company officers. If the Asset Purchase and Assignment Agreement for the Seattle office and Environmental Protection Agency contract is completed, the total of full time employees will be decreased by 15 and the total of part-time employees will be decreased by 30. In addition, if the Asset Purchase Agreement for the Tustin office, certain commercial contracts, and the Department of Defense contracts is completed, the total of full-time employees will be decreased by 26 and the total of part-time employees total will be decreased by 26. The Company's employees are not represented by a labor union or covered by a collective bargaining agreement, and the Company believes it has good relations with its employees. While all of the Company's projects are performed under the supervision and direction of the Company's supervisors and foremen, and the Company attempts to utilize as many of the Company's regular laborers as possible to staff projects, the location and other factors affecting projects performed away from the immediate vicinity of the Company's permanent offices result in the Company occasionally hiring temporary workers on site. The Company carefully reviews the training and qualifications of all temporary workers hired to assure that all such personnel are qualified to perform the work in question. However, due to the temporary nature of such employment, there is no assurance that all such temporary workers will perform at levels acceptable to the Company and its customers. The operations of the Company are substantially dependent upon its executive officers. The Company has no employment contracts with these persons, and the loss of their services could have a material adverse effect on the Company. The Company's further success will also depend significantly on its ability to attract and retain additional skilled personnel, including highly trained technical personnel, project managers and supervisors. The Company believes it currently has adequate qualified supervisory personnel, but there is no assurance that experienced and qualified management level personnel will be available to the Company in the future to fill positions as needed. ITEM 2. PROPERTIES. The Company headquarters and administrative facilities are located at 7032 S. Revere Parkway, Englewood, Colorado, in approximately 12,027 square feet of leased office space. The lease expires May 31, 2004. The Company's corporate and administrative functions are conducted from these facilities. 12 14 The Company's services are conducted from the following locations:
CURRENT LEASE MONTHLY SQ. FT EXPIRATION RENT ----------------------------------------------------- ---------- ------------------------ --------------- 14761 BENTLEY CIRCLE TUSTIN, CALIFORNIA *** 18,490 April 14, 2002 $ 10,909.00 ----------------------------------------------------- ---------- ------------------------ --------------- 170 WEST DAYTON, STE. 106A EDMONDS, WASHINGTON (OFFICE) ** 6,920 March 31, 2001* 7,519.00 ----------------------------------------------------- ---------- ------------------------ --------------- 170 WEST DAYTON, STE. 106 B-D EDMONDS, WASHINGTON (WAREHOUSE) ** 5,568 March 31, 2001* 3,822.00 ----------------------------------------------------- ---------- ------------------------ --------------- 7032 S. REVERE PARKWAY ENGLEWOOD, COLORADO 12,027 May 31, 2004 11,025.00 ----------------------------------------------------- ---------- ------------------------ --------------- 100 N. E. LOOP 410, STE. 1200 SAN ANTONIO, TEXAS *** 150 Month to Month 414.00 ----------------------------------------------------- ---------- ------------------------ ---------------
* CONTAINS AN OPTION TO RENEW OR EXTEND THE LEASE. ** INCLUDED IN THE ASSETS UNDER THE IT PURCHASE AGREEMENT. *** INCLUDED IN THE ASSETS UNDER THE CAPE PURCHASE AGREEMENT. ITEM 3. LEGAL PROCEEDINGS. Except as set forth below, the Company is not a party to any material legal proceedings which are pending before any court, administrative agency or other tribunal. Further, the Company is not aware of any material litigation which is threatened against it in any court, administrative agency or other tribunal. Management believes that no pending litigation in which the Company is named as a defendant is likely to have a material adverse effect on the Company's financial position or results of operations. In 1998, the Company filed suit in the United States District Court for the District of Oregon against Road Runner Oil, Inc. and Bernard J. Roscoe, alleging breach of contract for non-payment of services performed by the Company at an oil field in Utah. The amount of unpaid invoices, including interest and collection costs, is approximately $2.1 million. In August 1998 the Oregon court determined that the venue for the United States District Court action should be in Utah, and venue for the action was changed accordingly. Road Runner also filed a claim in this action against the Company for breach of contract seeking unspecified damages. The Company has also filed mechanic's liens on certain equipment at the site and against Road Runner's rights in the oil field. The Default Judgments against Road Runner have been awarded in the Tribal Court and Utah state court, and foreclosure proceedings and corresponding asset investigation are in progress. This account receivable was written off in 1998. In 1998, the Company filed for arbitration against Environmental Chemical Corporation ("ECC") for various claims related to a Subcontractor Agreement under an Environmental Protection Agency ("EPA") contract. A Settlement Agreement was executed by the parties on November 30, 1999 which required the Company to pay to ECC $826,000 for work performed under the EPA contract. The EPA Administrative Agreement established a Financial Reserve of $700,000 in order to make certain that ECC was paid these monies. The first payment of $413,000 was due on December 31, 1999, and the EPA refused to release the funds to the Company. ECC has filed a lawsuit against the Company for the collection of all monies owed. The Company has paid $413,000; however, the EPA continues to refuse to release the Financial Reserve. The Company believes that the Financial Reserve is sufficient to pay the balance owed to ECC. 13 15 In 1998, the Company initiated a lawsuit in the U.S. District Court for the Southern District of Texas - Houston Division against PTS Properties, Inc., the building owner, Allchem Industries, Inc. and Fertilizers and Chemicals, Ltd., the chemical owners, and Aqua-Pak, Inc. for collection of an outstanding receivable of approximately $400,000 from performance of an emergency response in 1997 for Aqua-Pak, Inc. The Company has written off this account receivable. In 1999, two of the defendants settled with the Company for a total received by the Company of $200,000. And in February, 2000, the Company settled with the remaining defendant for a total sum received of $43,000. On July 15, 1999, the Company filed a Complaint and Jury Demand against AquaSource Services and Technologies, Inc. ("AquaSource"), a Texas corporation, for additional amounts due under the Water Quality Management Stock Purchase Agreement. On February 22, 2000, AquaSource and the Company signed a Settlement and Mutual Release Agreement. The Settlement Agreement states that AquaSource will pay the Company approximately $500,000 and release all claims is has against the approximately $698,000 of retention related to a project that was completed by the Company. The Company has agreed to indemnify AquaSource on certain projects that have been completed by the Company, which were transferred to AquaSource as part of the sale of WQM. In addition, the Company retained $219,000 for certain amounts collected on behalf of WQM. The Company is currently under investigation by the Office of the Inspector General (OIG) of the Environmental Protection Agency due to a past suspended audit. To date no claims have been made against the Company arising from this investigation, and subsequent independent audits by the Defense Contract Audit Agency (DCAA) have not been adverse and have not resulted in claims against the Company. The Company is cooperating with the OIG to complete its investigation. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to a vote of the Company's security holders during the quarter ended December 31, 1999. 14 16 PART II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. (a) Principal Market or Markets. Since July 18, 1995, the Company's Common Stock has been listed on the American Stock Exchange ("AMEX") under the symbol "ENV". The following table sets forth the high and low sale prices for the Company's Common Stock as reported on the AMEX for the periods indicated:
QUARTER ENDED HIGH LOW -------------------------------- ------------- ------------- March 31, 1998 $ 7.25 $ 5.4375 -------------------------------- ------------- ------------- June 30, 1998 6.375 2.50 -------------------------------- ------------- ------------- September 30, 1998 2.8125 1.50 -------------------------------- ------------- ------------- December 31, 1998 2.0625 .50 -------------------------------- ------------- ------------- March 31, 1999 2.00 1.125 -------------------------------- ------------- ------------- June 30, 1999 1.625 1.125 -------------------------------- ------------- ------------- September 30, 1999 1.50 .25 -------------------------------- ------------- ------------- December 31, 1999 $ 2.125 $ .3125
(b) Approximate Number of Holders of Common Stock. The number of record holders of the Company's common stock at March 21, 2000 was 52. This does not include approximately 800 shareholders who hold their shares in street name. (c) Dividends. The Board of Directors does not anticipate paying cash dividends on the Company's Common Stock in the foreseeable future as it intends to retain future earnings to finance the growth of the business. The payment of future cash dividends will depend on such factors as earnings levels, anticipated capital requirements, the operating and financial conditions of the Company and other factors deemed relevant by the Board of Directors. The California Corporations Code provides that a corporation may not pay dividends if the corporation is, or as a result of the distribution would likely be, unable to meet its liabilities as they mature. (d) Sales of Unregistered Securities. None 15 17 ITEM 6. SELECTED FINANCIAL DATA. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Following is a summary of the quarterly results of operations for the years ended December 31, 1999 and 1998.
Fiscal Quarter $ in thousands, except per share amounts March 31 June 30 September 30 December 31 Total -------- -------- ------------- ------------- -------- 1998: Revenues $ 11,455 $ 16,005 $ 17,125 $ 21,912 $ 66,497 Project costs 10,820 15,211 18,212 20,958 65,201 -------- -------- ------------- ------------- -------- Gross profit (loss) 635 794 (1,087) 954 1,296 -------- -------- ------------- ------------- -------- Selling 447 481 431 631 1,990 General and administrative (a) 664 665 729 5,478 7,536 Other (income) loss, net (b) 190 252 356 (9,745) (8,947) -------- -------- ------------- ------------- -------- Income (loss) before income tax (666) (604) (2,603) 4,590 717 -------- -------- ------------- ------------- -------- Income tax -- -- -- -- 183 -------- -------- ------------- ------------- -------- Net income (loss) $ (666) $ (604) $ (2,603) $ 4,590 $ 534 ======== ======== ============= ============= ======== Basic earning (loss) per common share $ (0.11) $ (0.10) $ (0.45) $ 0.75 $ 0.09 Diluted earning (loss) per common share $ (0.11) $ (0.10) $ (0.45) $ 0.75 $ 0.09 1999: Revenues $ 12,945 $ 8,503 $ 13,939 $ 7,802 $ 43,189 Project costs 11,289 8,299 13,797 6,745 40,130 -------- -------- ------------- ------------- -------- Gross profit (loss) 1,656 204 142 1,057 3,059 ======== ======== ============= ============= ======== Selling 308 404 560 131 1,403 General and administrative 678 968 910 974 3,530 Restructuring -- -- 913 (56) 857 Other (income) loss, net 105 325 133 (117) 446 -------- -------- ------------- ------------- -------- Income (loss) before income tax 565 (1,493) (2,374) 125 (3,177) -------- -------- ------------- ------------- -------- Income tax 215 (215) -- -- -- -------- -------- ------------- ------------- -------- Net income (loss) $ 350 $ (1,278) $ (2,374) $ 125 $ (3,177) ======== ======== ============= ============= ======== Basic earning (loss) per common share $ 0.06 $ (0.20) $ (0.38) $ 0.02 $ (0.51) Diluted earning (loss) per common share $ 0.06 $ (0.20) $ (0.38) $ 0.02 $ (0.51)
(a) Includes fourth quarter $4.1 million of audit adjustments (b) Includes fourth quarter gain on sale of subsidiary of $10.2 million. 16 18 The following selected financial information for the years ended December 31, 1999, 1998, 1997, 1996, and 1995 is derived from financial statements of the Company audited by Grant Thornton LLP, independent certified public accountants. Balance Sheet Data (in thousands):
----------------------------------------------- AT DECEMBER 31, ----------------------------------------------- 1999 1998 1997 1996 1995 - ---------------------------------------- ------- ------- ------- ------- ------- CURRENT ASSETS $11,132 $26,670 $25,089 $18,424 $21,245 - ---------------------------------------- ------- ------- ------- ------- ------- TOTAL ASSETS 13,805 30,202 29,883 23,795 25,708 - ---------------------------------------- ------- ------- ------- ------- ------- CURRENT LIABILITIES 7,619 18,835 12,970 15,121 12,921 - ---------------------------------------- ------- ------- ------- ------- ------- WORKING CAPITAL 3,513 7,835 12,119 3,303 8,324 - ---------------------------------------- ------- ------- ------- ------- ------- LONG TERM DEBT 179 251 8,204 1,700 2,077 - ---------------------------------------- ------- ------- ------- ------- ------- TOTAL LIABILITIES 7,798 19,086 21,174 16,821 14,998 - ---------------------------------------- ------- ------- ------- ------- ------- SHAREHOLDERS' EQUITY $ 6,007 $11,116 $ 8,709 $ 6,974 $10,710 - ---------------------------------------- ------- ------- ------- ------- -------
Statement of Operations Data (in thousands, except earnings per share data):
----------------------------------------------------------------- FOR THE YEARS ENDED DECEMBER 31, ----------------------------------------------------------------- 1999 1998 1997 1996 1995 - ---------------------------------------- ---------- ---------- ---------- ---------- ---------- REVENUES $ 43,189 $ 66,497 $ 54,170 $ 54,919 $ 47,872 - ---------------------------------------- ---------- ---------- ---------- ---------- ---------- OPERATING EXPENSES 45,920 74,727 54,047 58,096 44,858 - ---------------------------------------- ---------- ---------- ---------- ---------- ---------- NET INCOME (LOSS) FROM CONTINUING OPERATIONS (3,177) 538 (347) (3,756) 2,035 - ---------------------------------------- ---------- ---------- ---------- ---------- ---------- NET INCOME (LOSS) FROM CONTINUING OPERATIONS PER COMMON SHARE $ (0.51) $ 0.09 $ (0.06) $ (0.74) $ 0.49 - ---------------------------------------- ---------- ---------- ---------- ---------- ---------- WEIGHTED AVERAGE SHARES 6,282,346 5,828,537 5,785,264 5,066,537 4,113,725 - ---------------------------------------- ---------- ---------- ---------- ---------- ---------- CASH DIVIDENDS PER COMMON SHARE -0- -0- -0- -0- -0- - ---------------------------------------- ---------- ---------- ---------- ---------- ----------
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Annual Report on Form 10-K contains forward-looking statements (as such term is defined in the private Securities Litigation Reform Act of 1995), and information relating to the Company that is based on beliefs of management of the Company, as well as assumptions made by and information currently available to management of the Company. When used in this Report, the words "estimate," "project," "believe," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events based on currently available information and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. General The Company provides comprehensive environmental remediation services of hazardous and toxic waste on a planned and emergency basis to both government and private sector customers. It also provides water and wastewater treatment facilities and services to municipal and industrial clients. The Company provides these services from its offices in: Denver, Colorado; Edmond, Washington; Tustin, California; and San Antonio, Texas. 17 19 Business Strategy The Company is focused on basic strategies that should lead to improved profitability, specifically to focus on the completion of more profitable contracts, overall direct and indirect cost reductions, and administrative efficiencies. The Company continues to focus on business relationships where it can assure high quality and operate profitably. Cost reduction efforts will continue to focus on improved program management, field consolidation, reduction of corporate expenses, and assessment of field location efficiencies. Delivery of quality service has been and will continue to be closely monitored. While management believes that implementation of this strategy will improve operating performance, no assurances can be given as to its ultimate success. Future strategic alternatives currently being considered by the Company include, among others, (i) the pursuit of opportunities in its core environmental remediation business; (ii) expansion into water and wastewater treatment construction, operation and maintenance through direct investment or acquisitions; (iii) the proposed sales of the Edmond, Washington and Tustin, California offices and related EPA and federal contracts; and (iv) continued focus on the improvement of contract profitability. Results of Operations The following table presents, for the periods indicated, the percentage relationship which certain items of the Company's statements of income bear to project revenue and the percentage increase or (decrease) in the dollar amount of such items:
PERCENTAGE RELATIONSHIP TO PROJECT REVENUE PERIOD TO PERIOD YEAR ENDED CHANGE ------------------------- ----------------- 1999 1998 VS. VS. 1999 1998 1997 1998 1997 ----- ----- ----- ----- ------- Project Revenue 100.0% 100.0% 100.0% (35.1)% 22.8% Project Costs: Direct 78.5 87.7 79.9 (41.8) 34.7 Indirect 14.4 10.4 10.4 (9.9) 22.3 ----- ----- ----- ----- ------- Gross profit 7.1 1.9 9.7 136.0 (75.3) Other operating expense (income): Selling 3.2 3.0 3.8 (29.5) (3.9) General and administrative expense 10.2 11.3 5.6 (41.8) 147.6 ----- ----- ----- ----- ------- Operating income (loss) (6.3) (12.4) 0.3 (66.8) (6,790) Other income (expense) (1.0) 13.5 (1.1) 781.0 1,632.7 ----- ----- ----- ----- ------- Income (loss) before income taxes (7.4) 1.1 (0.8) (539.9) 256.6 Income tax (benefit) 0.3 (0.2) (260.5) ----- ----- ----- ----- ------- Net income (loss) (7.4) 0.8% (0.6)% (689.2) 255.3% ----- ----- ----- ----- -------
18 20 1999 COMPARED TO 1998 Project revenues. Project revenues decreased $23.3 million or 35%, from $66.5 million in 1998 to $43.2 million in 1999. The decrease is primarily attributed to (i) an $8.0 million decrease in revenues due to the sale of WQM in December 1998 (see Note E to the Company's Consolidated Financial Statements); (ii) a decline of $6.1 million in commercial contract revenue as a result of an overall decrease in the Company's commercial business in 1999; (iii) a decrease in EPA contract revenues of $6.9 million due to the suspension issued by the EPA against the Company for the months August through November of 1999. During the suspension period, the Company was not allowed to secure or bid on additional EPA or other government projects, which disrupted the normal flow of business, reducing EPA revenues by approximately $10.0 million dollars in the fourth quarter of 1999 compared to the fourth quarter of 1998 (see Note C to the Company's Consolidated Financial Statements); (iv) a $1.9 million reduction of other government contract revenues as a result of the EPA Suspension, which precluded the Company from bidding on any governmental projects; (v) and a decline of $2.6 million in revenues provided to the Company in 1998 under a Pre-Placed Remedial Actions Contract ("PRAC") with the US Army Corp of Engineers. These decreases were off-set by an increase of $2.2 million in project revenues from the Hercules project started in August 1999. The Following table sets forth the percentages of the Company's revenues attributable to the EPA vs. non-EPA public and private sector customers:
Year Ended December 31, =================================================================================== 1999 1998 1997 ------------------------- ------------------------- ------------------------- Non-EPA $17,231,604 39.9% $33,569,412 50.5% $33,125,032 61.2% EPA $25,957,715 60.1% $32,927,870 49.5% $21,044,721 38.8% ----------- ----------- ----------- ----------- ----------- ----------- Total $43,189,319 100.0% $66,497,282 100.0% $54,169,753 100.0% =========== =========== =========== =========== =========== ===========
DIRECT PROJECT COSTS. Direct costs decreased $24.4 million or 42%, from $58.3 million or 88% of project revenues in 1998 to $33.9 million or 79% or project revenues in 1999. The overall reduction in direct costs is commensurate with the overall decrease in project revenues noted above. However, the improvement of directs costs as a percentage of project revenues in 1999 results primarily from project cost overruns experienced in 1998. Specifically, the State of Washington and Monfort of Colorado, Inc. projects experienced $2.2 million in costs overruns or 3.3% of revenues in 1998. Other negative revenue adjustments of $.8 million or 1.3% of revenues were also experienced in 1998. In 1999, the Company had no significant project cost overruns. In addition, certain typical direct labor costs were charged to indirect costs as a result of the EPA Suspension as noted below. INDIRECT PROJECT COSTS. Indirect project costs decreased approximately $.68 million or 10%, from $6.93 million or 10.4% of project revenues in 1998, to $6.22 million or 14.4% of project revenues in 1999. The overall decrease is commensurate with the reduction in project revenues as noted above. However, the increase as a percentage of revenues is primarily attributed to retaining certain key project manager/employees during the EPA Suspension, which labor costs were not chargeable to direct projects. Total indirect labor costs increased slightly from $1.85 million in 1998 to $1.89 million in 1999. As a result, certain typical direct project labor costs were charged to indirect project costs due to the steady reduction in EPA projects during this period. In addition, there were increases in other indirect project costs related to employee training and relocation and certain non-recurring project costs related to the EPA Suspension. 19 21 SELLING EXPENSE. Sales and marketing expenses decreased approximately $.59 million or 30%, from $1.99 million or 3.0% of project revenues in 1998, to $1.40 million or 3.2% of project revenues in 1999. As a percentage of revenues, sales and marketing remained relatively constant between 1998 and 1999. The decrease in sales and marketing expenses is attributed to the significant restructuring of the Company during 1999, which resulted in the sale or closure of several operating regions/locations within the U.S. In addition, the Company reduced certain marketing expenses as an overall cost reduction policy for 1999 related to the Restructuring Plan (See Note D regarding discussion of the "Restructuring" in the Company's Consolidated Financial Statements). GENERAL AND ADMINISTRATIVE EXPENSE. General and administrative expenses decreased by approximately $3.15 million or 42%, from $7.54 million or 11.3% of project revenues in 1998 to $4.39 million or 10.2% of project revenues in 1999. The decrease is primarily attributed to certain non-recurring adjustments related to the write off of receivables of $2.4 million and provisions for bad debt allowances of $1.3 million is 1998. For comparative purposes, disregarding the $3.7 million of non-recurring adjustments in 1998, general and administrative expenses increased by approximately $.59 million, from $3.80 million in 1998 to $4.39 million in 1999. This increase is primarily attributed to the restructuring charge of approximately $.9 million incurred in September 1999 as a result of the EPA Suspension (See Note D regarding discussion of the "Restructuring" in the Company's Consolidated Financial Statements). The restructuring charges were off-set by cost savings in general and administrative expenses in the fourth quarter by implementation of the Restructuring Plan. RESTRUCTURING CHARGE. Following the EPA suspension, the Company initiated a restructuring plan ("Restructuring Plan") to reduce operating costs and gain efficiencies through sale, downsizing and closure of regional offices. In September 1999, under the Restructuring Plan, the Company sold substantially all its assets in the Mobile and Jackson regions for proceeds totaling $0.5 million. Also under the Restructuring Plan, in October 1999, the Company closed its regional office located in New Orleans and Houston. As a result, the Company recorded a total restructuring charge of approximately $0.9 million, including a $0.3 million non-cash charge for loss on the sale of the regional offices. OTHER INCOME (EXPENSE). Other income/expense decreased $9.4 million, from $8.95 million of income in 1998 to $.45 million of net expense in 1999. The decrease in attributed to the non-recurring gain of $10.2 million on the sale of WQM in 1998. In addition, interest expense decreased approximately $.42 million, from $.89 million in 1998 to $.47 million in 1999. This reduction is attributed to the Company reducing its line of credit and other debt during 1999. INCOME TAX EXPENSE (BENEFIT). During 1999 the Company did not record an income tax expense or benefit due to the net loss. During 1998 the Company recorded income tax expense of $0.2 million. The 1998 income tax expense is related to the gain on sale of WQM. NET INCOME (LOSS). Net loss for the year ended December 31, 1999 was $3.18 million compared to a net income of $.5 million for 1998. As discussed above, the income which was generated in 1998 was primarily the result of a $10.2 million gain from the sale of WQM, off-set by project cost overruns of $2.2 million, non-recurring general and administrative charges of $3.7 million, and the additional interest expense of approximately $.4 million. 1998 COMPARED TO 1997 PROJECT REVENUE. Project revenues increased 22.8% from $54.2 million in 1997 to $66.5 million in 1998. The increase was primarily due to (i) an increase of $11.9 million in revenue provided by EPA contracts (see table below); (ii) an increase of $2.0 million in revenue provided by WQM; and (iii) an increase resulting from the acquisition of H20 in January 1998 providing for revenues of approximately $1.5 million in 1998. See also, Item 1. Business - "The Company" and Note E to Company's 20 22 Consolidated Financial Statements. The following table sets forth the percentages of the Company's revenues attributable to the EPA vs. non-EPA public and private sector customers:
Year Ended December 31, =================================================================================== 1998 1997 1996 ------------------------- ------------------------- ------------------------- Non-EPA 33,569,412 50.5% $33,125,032 61.2% $44,065,990 80.2% EPA 32,927,870 49.5% $21,044,721 38.8% $10,852,530 19.8% ----------- ----------- ----------- ----------- ----------- ----------- Total 66,497,282 100.0% $54,169,753 100.0% $54,918,520 100.0% =========== =========== =========== =========== =========== ===========
DIRECT COSTS. Direct costs increased from 79.9% of revenue in 1997 to 87.7% of revenue in 1998. The increase was primarily due to cost overruns incurred on the following projects: (i) State of Washington resulting in a negative margin of $0.9 million or 1.3% of revenue in 1998 compared to a negative margin of $0.1 million or 0.1% of revenue in 1997; (ii) Monfort of Colorado, Inc. resulting in a negative margin of $1.3 million or 2.0% of revenue in 1998 compared to a margin of $0.7 million or 1.3% of revenue in 1997; (iii) various revenue adjustments related to closure of certain branch offices resulting in a negative margin of $0.8 million or 1.3% of revenue in 1998 compared to no adjustment in 1997; and (iv) other low margin projects finalized in 1998. INDIRECT COSTS. Indirect costs increased $1.3 million from $5.6 million in 1997 to $6.9 million in 1998. Indirect costs as a percentage of revenue remained constant at 10.4% in 1997 and 1998. Therefore, the increase in indirect costs was directly attributable to the increase in revenue described above. SELLING EXPENSE. Selling expense remained relatively constant from 1997 to 1998, while revenue increased 22.8%. Selling expense decreased to 3.0% of revenue 1998 from 3.8% of revenue in 1997. GENERAL AND ADMINISTRATIVE EXPENSE. General and administrative expense increased $4.5 million from $3.0 million in 1997 to $7.5 million in 1998. The increase was due primarily to a non-recurring adjustment of $2.4 million to write off amounts due under contracts. See also Item 3. Legal Proceedings. Additionally, non-recurring adjustments of $1.3 million were recorded in 1998 to provide allowances for accounts receivable, contracts in process, and disallowance of cost incurred on government contracts. OTHER INCOME (EXPENSE). Other income increased $9.5 million from $0.6 million other expense in 1997 to $8.9 million other income in 1998. The increase was due primarily to a non-recurring gain of $10.2 million on the sale of WQM in December 1998. See also Item 1. Business - "The Company" and Note E to Company's Consolidated Financial Statements. INCOME TAX EXPENSE (BENEFIT). During 1998 the Company recorded income tax expense of $0.2 million compared to an income tax benefit of $0.1 million in 1997. The 1998 income tax expense is related to the gain on sale of WQM. The 1997 benefit was based on an estimate of 1995 carryback benefits available. NET INCOME (LOSS). Net income for the year ended December 31, 1998 was $0.5 million compared to a net loss of $0.3 million in the year ended December 31, 1997. As discussed above, the improvement in net income was due primarily to the non-recurring gain on sale of business of $10.2 million offset by a decrease in gross profit of $3.9 million and increase in general and administrative expense of $4.5 million. 21 23 Liquidity and Capital Resources The Company's sources of liquidity and capital resources historically have been net cash provided by operating activities, funds available under its financing arrangements, proceeds from offerings of equity securities, and loans from shareholders. In the past, these sources have been sufficient to meet its needs and finance the Company's business. The Company can give no assurance that the historical sources of liquidity and capital resources will be available for future development and acquisitions, and it may be required to seek alternative financing sources not necessarily favorable to the Company. Other sources of liquidity included the sale of WQM in which proceeds for $11.3 million were received in 1998, with an additional payment of $1.3 million in January 1999. Additionally, the Company has entered into letters of intent for the sale of the EPA contract and related Edmond, Washington office and the sale of non-EPA federal contracts, its non-RFI commercial contracts and related Tustin, California office for amounts approximating $3.4 million in gross proceeds. These transactions are expected to close in the second quarter of 2000, subject to novation of the EPA and federal contracts, normal closing conditions including the continued accuracy of representation and warranties, no material adverse changes, and the receipt of necessary consents from other parties. The net proceeds will be used for working capital requirements and further expansion into the maintenance and construction of waste/water treatment facilities through either direct investment or through possible industry acquisitions. The Company's future growth will be dependent upon expansion into the maintenance and construction of waste/water treatment facilities, optimizing margins on its EPA and non-EPA environmental remediation projects, marketing, and its ability to obtain financing at favorable terms. In January 2000, the Company satisfied the repayment terms of its line of credit with the National Bank of Canada, which has now released all claims against the Company. The Company is currently exploring new financing arrangements; however, due to the recent EPA Suspension and continued Office of Inspector General's investigation, the Company can give no assurance that it will be able to obtain financing at favorable terms. Management believes that it will be successful in obtaining alternate sources of financing and that future cash flows from operations, the sale of the Tustin, California or Edmond, Washington offices and related EPA and Non-EPA federal contracts, and the funds available under new financing arrangements, will be sufficient to fund the Company's immediate needs for working capital. However, there can be no assurance that alternate financing sources can be successfully negotiated, which if not obtained, could have a material effect on the Company's financial position, operating activities and liquidity. The Company's financial position declined in 1999 as a result of the continued losses from operations in 1998 and 1999. The Company's working capital declined $4.3 million from $7.8 million as of December 31, 1998 to $3.5 million as of December 31, 1999. The change in working capital results from a decrease in current assets of $15.5 million compared to a decrease in current liabilities of $11.2 million. The decrease in current assets results from a continued reduction in combined receivables of $14.0 million and a decrease in other current assets of $1.5 million resulting from the collection of $1.3 million on the sale of WQM. The decrease in current liabilities results primarily from a reduction of cash overdrafts, accounts payable, taxes payable and accrued liabilities of $10.3 million and the reduction of short-term debt of $.9 million. The Company's total obligations decreased by $11.3 million from $19.1 million at December 31, 1998 to $7.8 million at December 31, 1999. However, the Company's shareholders equity declined by $5.1 million as a result of the redemption of the convertible preferred stock for $1.9 million and the $3.2 million loss for the year. The Company has continued to reduce its combined receivables by $14.0 22 24 million, from $21.9 million or 120 days sales outstanding at December 31, 1998 to $7.9 million or 66 days sales outstanding at December 31, 1999. The Company's cash and cash equivalents increased $480,000, from $25,000 at December 31, 1998 to $505,000 at December 31, 1999. The increase in cash and cash equivalents results from cash provided from operating activities and investing activities of $5.6 million and $0.3 million, respectively. The cash provided by operating and investing activities is offset by cash used in financing activities of $5.4 million. Cash provided by operating activities of $5.6 million results primarily from a decrease in combined receivables of $14.0 million. This increase in cash is offset by a reduction of accounts payable and accrued expenses of $8.4 million. Cash provided by investing activities of $0.3 million results from the receipt of $1.2 million additional proceeds on the sale of WQM offset by $0.9 million in net equipment additions during 1999. Cash used in financing activities of $5.4 million results primarily from a payment of $1.9 million for the redemption of the Company's preferred stock (see also Note K to the Company's Consolidated Financial Statements), a reduction of $1.8 million in the Company's cash overdraft and payments on the Company's debt of $1.7 million. DEBT FINANCING. Beginning in January 1995, the Company borrowed funds from related parties. As of January 1999, all funds had been repaid, and the Company does not anticipate borrowing from these sources in the future. In January 2000, the Company satisfied its repayment terms with the National Bank of Canada, which has now released all claims against the Company. The Company is currently exploring new financing arrangements. However, due to the recent EPA Suspension and continued Office of Inspector General's investigation, the Company can give no assurance that it will be able to obtain financing at favorable terms. The Company has also financed vehicles and equipment using long term capital leases from various entities. As of December 31, 1999, the combined balance due on these leases was $0.3 million. In June 1999, the Company financed its insurance premiums over the next two years by issuing a subordinated note, with monthly payments of $41,374 through June 2000, changing to $10,021 thereafter until maturity. The note pays interest of 6.55% and matures on April 1, 2002. EQUITY FINANCING. In connection with the Company's initial public offering in July 1995, the Company issued 120,000 warrants to the underwriters as part of the Underwriters Agreement. Each warrant is convertible into one share of Common Stock at an exercise price of $6.00 subject to certain purchase price adjustments. The warrants may be exercised in whole or in part at any time until the expiration date of July 25, 2000. All of the warrants remain outstanding at December 31, 1999. In December, 1996, the Company commenced a Private Placement Offering of Common Stock. This offering was completed in January 1997, and resulted in the issuance of 0.7 million shares with net proceeds to the Company totaling $2.0 million. The shares issued pursuant to this offering were classified as "restricted securities" as such term is defined in Rule 144 of the Securities Act of 1933. The Company completed an S-3 registration of these shares for resale which was effective January 7, 1998. In conjunction with the offering, warrants for an additional 72,925 shares of Common Stock were issued as partial compensation for underwriting services. These warrants are exercisable at a price of $3.60 per share for five years from the date of the offering. In August 1998, the Company completed a private financing, raising $1.9 million of net proceeds in a placement of convertible preferred stock and warrants. The preferred shares could be converted into shares of the Company's common stock at a 15 percent discount to the price of the common shares at the time of conversion with a maximum conversion price of $3.35. An aggregate of three-year warrants to 23 25 purchase 35,000 shares of the Company's common stock at a price of $3.00 per share was also issued. A total of 430 shares of the preferred securities were converted into 472,803 shares of common stock by the holders. In January 1999, the Company redeemed the remaining 1,570 preferred shares for $1.9 million in cash. The warrants issued remain outstanding at December 31, 1999. In December 1998, the Company sold all of the outstanding stock of WQM for $12.5 million to AquaSource Services and Technologies, Inc. On the date of closing, $11.3 million was paid in cash and another $1.3 million was received in January 1999. CAPITAL COMMITMENTS. The Company has entered into leases for its existing facilities with such leases expiring at various dates through 2004. Monthly rentals currently are approximately $33,689 in the aggregate. Management anticipates some capital expenditures in 2000 which will be funded from working capital, term loans and equipment leases. COMMONS STOCK DIVIDEND POLICY. Since the capitalization of the Company in 1995, the Company has not paid, and does not currently intend to pay in the foreseeable future, cash dividends on its Common Stock. Future earnings, if any, are expected to be retained for the development of the business of the Company. Year 2000 Compliance A comprehensive, company-wide, Year 2000 program was initiated in late 1998 to identify and remediate potential Year 2000 problems. The Year 2000 program was implemented over several stages which included assessment, testing, renovation and validation. The Company incurred approximately $350,000 during 1999, which of approximately $250,000 was capitalized for the purchase of new software and equipment. Future spending for remaining system remediation and implementation is currently estimated to be about $25,000. As of the date of this report, the Company has experienced no significant problems related to the Year 2000 conversion. After system verification and testing, all computerized information and project control systems are operating normally. The performance of EPA and non-EPA customers and critical suppliers continues without notable change. Production and business activities are normal at all locations. The Company also has not received any material complaint regarding any Year 2000 issue related to its services. However, the Company cannot provide assurance that problems will not arise. The Company continues to monitor the status of its operations, suppliers and customers to ensure no significant interruptions. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not Applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. Please see pages F-1 through F-27. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. 24 26 PART III ITEM 10, 11, 12 AND 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT; EXECUTIVE COMPENSATION; SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT; AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The information required by these Items is incorporated herein by reference to the Company's definitive Proxy Statement relating to the Annual Meeting of Shareholders to be held June 1, 2000. 25 27 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) 1. The following financial statements are filed herewith:
- -------------------------------------------------------------- --------------- PAGES - -------------------------------------------------------------- --------------- Report of Independent Certified Public Accountants F-1 - F-2 - -------------------------------------------------------------- --------------- Consolidated Balance Sheets F-3 - F-4 - -------------------------------------------------------------- --------------- Consolidated Statements of Operations F-5 - -------------------------------------------------------------- --------------- Consolidated Statements of Stockholders' Equity F-6 - -------------------------------------------------------------- --------------- Consolidated Statements of Cash Flows F-7 - F-8 - -------------------------------------------------------------- --------------- Notes to Consolidated Financial Statements F-9 - F-27 - -------------------------------------------------------------- ---------------
2. Schedules have been omitted because they are not applicable, are not required or the information required to be set forth therein is included in the Consolidated Financial Statements or notes thereto. 3. Exhibits. The following exhibits are filed herewith:
EXHIBIT NUMBER DESCRIPTION LOCATION - ------------ -------------------------------------------------- --------------------------------------------- 3.1 Amended and Restated Articles of Incorporation Incorporated by reference to Exhibit 3.1 to the Company's Form SB-2 Registration Statement No. 33-91602 3.2 Bylaws Incorporated by reference to Exhibit 3.2 to the Company's Form SB-2 Registration Statement No. 33-91602 10.1 Incentive Stock Option Plan Incorporated by reference to Exhibit 10.1 to the Company's Form SB-2 Registration Statement No. 33-91602 10.2 Form of Incentive Stock Option Agreement Incorporated by reference to Exhibit 10.2 to the Company's Form SB-2 Registration Statement No. 33-91602 10.3 Loan Documents Between National Bank of Canada and Incorporated by reference to the Company Exhibit 10.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997. 10.4 Amendment to Loan and Security Agreement and Loan Incorporated by reference to Documents between National Bank of Canada Exhibit 10.4 to the Company's and the Registrant Annual Report on Form 10-K for the year ended December 31, 1998. 10..5 Second Amendment to Loan and Security Agreement and Incorporated by reference to Loan Documents between National Bank of Canada Exhibit 10.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998.
26 28
EXHIBIT NUMBER DESCRIPTION LOCATION 10.6 Third Amendment to Loan and Security Incorporated by reference to Agreement and Loan Documents between Exhibit 10.6 to the Company's National Bank of Canada and the Registrant Annual Report on Form 10-K for the year ended December 31, 1998. 10.7 Stock Purchase Agreement with AquaSource Services Incorporated by reference to Exhibit 10.1 and Technologies, Inc. to the Company's report on Form 8K dated December 17, 1998. 10.8 Administrative Agreement between United States Incorporated by reference to Exhibit 10.1 Environmental Protection Agency and the Registrant to Company's Form 10-Q for the nine months ended September 30, 1999. 10.9 Seventh Amendment to Loan and Security Incorporated by reference to Exhibit 10.2 Agreement and Loan Documents between to Company's Form 10-Q for the nine National Bank of Canada and the Registrant months ended September 30, 1999. 10.10 Ninth Amendment to Loan and Security Incorporated by reference to Exhibit 10.3 Agreement and Loan Documents between to Company's Form 10-Q for the nine months National Bank of Canada and the Registrant ended September 30, 1999. 10.11 Eleventh Amendment to Loan and Security Agreement Incorporated by reference to Exhibit 10.4 and Loan Documents between to Company's Form 10-Q for the nine National Bank of Canada and the Registrant months ended September 30, 1999. 10.12 Thirteenth Amendment to Loan and Security Incorporated by reference to Exhibit Agreement and Loan Documents between 10.5 to Company's Form 10-Q for the National Bank of Canada and the Registrant nine months ended September 30, 1999. 10.13 Fourteenth Amendment to Loan and Security Incorporated by reference to Exhibit Agreement and Loan Documents between 10.6 to Company's Form 10-Q for the National Bank of Canada and the Registrant nine months ended September 30, 1999. 10.14 Sixteenth Amendment to Loan and Security Agreement Filed herewith electronically and Loan Documents between National Bank of Canada and the Registrant 10.15 Asset Purchase and Assignment Agreement by and Filed herewith electronically between the Company and IT Corporation 10.16 Asset Purchase and Assignment Agreement by and Filed herewith electronically between the Company and CAPE Environmental Management, Inc. 10.17 Lease Agreement by and between the Company and Sky Filed herewith electronically Harbor Associates Limited Partnership 21 Subsidiaries of the Registrant Filed herewith electronically 23 Consent of Grant Thornton LLP Filed herewith electronically
27 29
EXHIBIT NUMBER DESCRIPTION LOCATION 27 Financial Data Schedule Filed herewith electronically
(b) Reports on Form 8-K. None. 28 30 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. CET ENVIRONMENTAL SERVICES, INC. Dated: March 24, 2000 By /s/ Steven H. Davis ------------------- Steven H. Davis President and Chief Executive Officer Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the date indicated.
Signature Capacity Date --------- -------- ---- /s/ Steven H. Davis President, March 24, 2000 - ------------------------------------- Chief Executive Officer, Steven H. Davis Secretary and Director /s/ Douglas W. Cotton Executive Vice President March 24, 2000 - ------------------------------------- and Director Douglas W. Cotton /s/ Craig C. Barto Director March 24, 2000 - ------------------------------------- Craig C. Barto /s/ George Pratt Director March 24, 2000 - ------------------------------------- George Pratt /s/ Dale W. Bleck Interim Chief Financial Officer March 24, 2000 - ------------------------------------- and Assistant Secretary Dale W. Bleck
29 31 CET ENVIRONMENTAL SERVICES, INC. FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS December 31, 1999 and 1998 F-1 32 [GRANT THORNTON LETTERHEAD] REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors Environmental Services, Inc. We have audited the accompanying consolidated balance sheets of CET Environmental Services, Inc. as of December 31, 1999, and 1998, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above, present fairly, in all material respects, the consolidated financial position of CET Environmental Services, Inc. as of December 31, 1999, and 1998, and the consolidated results of its operations and its cash flows for each of the three years in the period then ended, in conformity with generally accepted accounting principles. /s/ GRANT THORNTON LLP Denver, Colorado March 1, 2000 F-2 33 CET ENVIRONMENTAL SERVICES, INC. BALANCE SHEETS December 31, ASSETS
1999 1998 ------------ ------------ CURRENT ASSETS Cash $ 504,583 $ 25,192 Accounts receivable, less allowance for doubtful accounts; $359,648 in 1999 and $721,857 in 1998 6,086,086 11,781,212 Contracts in process less allowance for doubtful accounts of $118,907 in 1999 and $284,128 in 1998 1,770,954 10,154,501 Retention receivable 318,883 663,998 Income tax receivable 90,542 -- Due from related party 104,036 124,036 Other receivables 1,612,962 3,371,828 Inventories 73,601 267,491 Prepaid expenses 570,532 281,935 ------------ ------------ Total current assets 11,132,179 26,670,193 ------------ ------------ EQUIPMENT AND IMPROVEMENTS Field equipment 3,059,206 3,752,213 Vehicles 890,193 2,009,267 Furniture & fixtures 84,543 100,237 Office equipment 815,278 495,307 Leasehold improvements 49,861 6,300 ------------ ------------ 4,899,081 6,363,324 Less allowance for depreciation and amortization (2,262,736) (2,883,021) ------------ ------------ Equipment and improvements - net 2,636,345 3,480,303 DEPOSITS 36,656 51,318 ------------ ------------ $ 13,805,180 $ 30,201,814 ============ ============
The accompanying notes are an integral part of these statements. F-3 34 CET ENVIRONMENTAL SERVICES, INC. BALANCE SHEETS December 31, LIABILITIES AND STOCKHOLDERS' EQUITY
1999 1998 ------------ ------------ CURRENT LIABILITIES Cash overdraft $ 118,348 $ 1,936,741 Accounts payable 4,959,733 11,383,109 Accrued expenses 586,612 709,580 Accrued contract costs 364,573 1,456,850 Accrued payroll and benefits 361,443 846,184 Current obligations under capital leases 119,091 316,798 Income taxes payable -- 158,958 Current portion of long-term debt 290,982 986,405 Line of credit 818,152 1,039,925 ------------ ------------ Total current liabilities 7,618,934 18,834,550 OBLIGATIONS UNDER CAPITAL LEASES 25,669 250,784 LONG-TERM DEBT 153,127 -- COMMITMENTS AND CONTINGENT LIABILITIES STOCKHOLDERS' EQUITY Common stock (no par value) - authorized 20,000,000 shares; 6,284,288 and 6,129,271 shares issued and outstanding at December 31, 1999 and 1998, respectively 8,671,261 8,539,716 4% convertible preferred stock (no par value) - authorized 5,000,000 shares; -0- and 1,710 shares issued and outstanding at December 31, 1999 and 1998, respectively -- 1,589,102 Paid-in capital 104,786 574,629 Retained earnings (accumulated deficit) (2,768,597) 413,033 ------------ ------------ Total stockholders' equity 6,007,450 11,116,480 ------------ ------------ $ 13,805,180 $ 30,201,814 ============ ============
The accompanying notes are an integral part of these statements. F-4 35 CET ENVIRONMENTAL SERVICES, INC. STATEMENTS OF OPERATIONS Years ended December 31,
1999 1998 1997 ------------ ------------ ------------ PROJECT REVENUE $ 43,189,319 $ 66,497,282 $ 54,169,753 PROJECT COSTS Direct 33,909,701 58,298,144 43,286,506 Indirect 6,219,975 6,902,927 5,645,781 ------------ ------------ ------------ 40,129,676 65,201,071 48,932,287 ------------ ------------ ------------ Gross profit 3,059,643 1,296,211 5,237,466 ------------ ------------ ------------ OTHER OPERATING EXPENSES Selling 1,403,149 1,989,584 2,070,130 General and administrative 3,529,675 7,535,966 3,044,045 Restructuring expense 857,469 -- -- ------------ ------------ ------------ 5,790,293 9,525,550 5,114,175 ------------ ------------ ------------ Operating income (loss) (2,730,650) (8,229,339) 123,291 ------------ ------------ ------------ OTHER INCOME (EXPENSE) Loss on sale of equipment (89,167) -- -- Gain on sale of subsidiary -- 10,154,028 -- Interest expense, net (475,504) (892,213) (704,575) Other income (expense) 118,564 (310,722) 120,446 ------------ ------------ ------------ (446,107) 8,951,093 (584,129) ------------ ------------ ------------ Income (loss) before taxes on income (3,176,757) 721,754 (460,838) (Benefit) taxes on income -- 183,276 (113,547) ------------ ------------ ------------ NET INCOME (LOSS) $ (3,176,757) $ 538,478 $ (347,291) ============ ============ ============ Weighted average number of shares outstanding 6,282,346 5,828,537 5,785,264 Earnings (loss) per common share $ (0.51) $ 0.09 $ (0.06) ============ ============ ============ Earnings (loss) per common share-- assuming dilution $ (0.51) $ 0.09 $ (0.06) ============ ============ ============
The accompanying notes are an integral part of these statements. F-5 36 CET ENVIRONMENTAL SERVICES, INC. STATEMENTS OF STOCKHOLDERS' EQUITY Years ended December 31, 1999, 1998 and 1997
Retained Common stock Preferred stock earnings Total ----------------------- --------------------- Paid-in (accumulated stockholders' Shares Amount Shares Amount capital deficit) equity --------- ----------- ------ ----------- --------- ------------ ------------ Balance at January 1, 1997 5,066,537 $ 6,165,977 -- $ -- $ 555,530 $ 252,466 $ 6,973,973 Shares issued in private placement 729,248 2,035,662 -- -- -- -- 2,035,662 Exercise of stock options 9,700 33,950 -- -- -- -- 33,950 Issuance of stock options at exercise price below market value -- -- -- -- 12,423 -- 12,423 ------------ Net (loss) for the year -- -- -- -- -- (347,291) (347,291) --------- ----------- ------ ----------- --------- ------------ ------------ Balance at December 31, 1997 5,805,485 8,235,589 -- -- 567,953 (94,825) 8,708,717 Exercise of stock options and other 6,000 14,000 -- -- 6,676 -- 20,676 Issuance of preferred stock -- -- 2,000 1,879,229 -- -- 1,879,229 Conversion of preferred stock 317,786 290,127 (290) (290,127) -- -- -- Dividends on preferred stock -- -- -- -- -- (30,620) (30,620) Net income for the year -- -- -- -- -- 538,478 538,478 --------- ----------- ------ ----------- --------- ------------ ------------ Balance at December 31, 1998 6,129,271 8,539,716 1,710 1,589,102 574,629 413,033 11,116,480 Conversion of preferred stock 155,017 131,545 (140) (131,545) -- -- -- Redemption of preferred stock -- -- (1,570) (1,457,557) (469,843) -- (1,927,400) Dividends on preferred stock -- -- -- -- -- (4,873) (4,873) Net (loss) for the year -- -- -- -- -- (3,176,757) (3,176,757) --------- ----------- ------ ----------- --------- ------------ ------------ Balance at December 31, 1999 6,284,288 $ 8,671,261 -- $ -- $ 104,786 $ (2,768,597) $ 6,007,450 ========= =========== ====== =========== ========= ============ ============
The accompanying notes are an integral part of these statements. F-6 37 CET ENVIRONMENTAL SERVICES, INC. STATEMENTS OF CASH FLOWS Years ended December 31,
1999 1998 1997 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (3,176,757) $ 538,478 $ (347,291) Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 989,732 1,453,900 1,573,085 Gain on sale of subsidiary -- (10,154,028) -- Restructuring charge 390,324 -- -- Provision for bad debts (527,430) 333,268 104,010 Loss on disposal of equipment 89,167 216,007 -- Employee stock option plan -- 6,676 12,423 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable 6,057,335 (3,348,937) (2,692,133) Decrease (increase) in contracts in process 8,548,768 2,905,590 (6,687,357) Decrease (increase) in income tax, retention and other receivables 1,040,654 (1,942,137) 1,037,665 Decrease (increase) in prepaid expenses 347,112 (370,848) 47,686 Decrease (increase) in inventory and deposits 88,159 403,074 (421,828) Increase (decrease) in accounts payable (6,423,376) 3,152,811 1,215,834 Increase (decrease) in accrued expenses and income taxes (1,858,944) 619,832 2,199,847 ------------ ------------ ------------ Net cash provided by (used in) operating activities 5,564,744 (6,186,314) (3,958,059) ------------ ------------ ------------ INVESTING ACTIVITIES: Purchase of equipment (1,190,209) (1,381,135) (462,947) Proceeds from sale of equipment 251,649 -- -- Proceeds from sale of subsidiary 1,250,000 11,250,000 -- Net purchase of subsidiary -- (803,845) (186,798) ------------ ------------ ------------ Net cash provided by (used in) investing activities 311,440 9,065,020 (649,745) ------------ ------------ ------------ FINANCING ACTIVITIES: Bank overdraft (1,818,393) 1,936,741 -- Proceeds from issuance of long-term debt -- -- 1,286,476 Payments on long-term debt (1,178,005) (754,877) (1,475,158) Payments on capital leases (266,349) (411,359) (327,230) Net (payments) proceeds from credit line loan (221,773) (5,158,706) 1,997,981 Payment of dividends on preferred stock (4,873) (30,620) -- Proceeds from issuance of preferred stock -- 1,879,229 2,035,662 Proceeds from exercise of stock options -- 14,000 33,950 Proceeds from loans from shareholders -- 500,000 -- Payments on loans from shareholders -- (500,000) (545,000) Net payments from related party 20,000 -- 58,000 Preferred stock redemption (1,927,400) -- --
The accompanying notes are an integral part of these statements. F-7 38 CET ENVIRONMENTAL SERVICES, INC. STATEMENTS OF CASH FLOWS Years ended December 31,
1999 1998 1997 ------------ ------------ ------------ Payments on subordinated notes payable $ -- $ (671,800) $ -- ------------ ------------ ------------ Net cash provided by (used in) financing activities (5,396,793) (3,197,392) 3,064,681 ------------ ------------ ------------ INCREASE (DECREASE) IN CASH 479,391 (318,686) (1,543,123) Cash at beginning of year 25,192 343,878 1,887,001 ------------ ------------ ------------ Cash at end of year $ 504,583 $ 25,192 $ 343,878 ============ ============ ============ Supplemental disclosures of cash flow information: Cash paid during the year Interest $ 482,707 $ 1,060,211 $ 717,980 Income taxes -- -- -- Noncash investing and financing activities: Issuance of note payable for financing of insurance premiums $ 635,709 $ 485,818 $ 301,965 ============ ============ ============ Conversion of preferred stock to common $ 131,546 $ 290,127 $ -- ============ ============ ============ Transfer of CIP from deposits to fixed assets $ -- $ 368,452 $ -- ============ ============ ============ Return of leased equipment $ 215,820 $ -- $ -- ============ ============ ============
The accompanying notes are an integral part of these statements. F-8 39 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS December 31 1999, 1998 and 1997 NOTE A - ORGANIZATION AND DESCRIPTION OF COMPANY CET Environmental Services, Inc. (the Company) was incorporated on February 9, 1988 under the laws of the State of California. On November 29, 1991, Environmental Operations, Inc., purchased 100% of the Company's outstanding stock from Consolidated Environmental Technologies, Inc. In August 1992, Environmental Operations, Inc. was merged into CET Environmental Services, Inc. In August 1997, the Company acquired all of the outstanding stock of Water Quality Management Corporation (WQM). WQM was operated as a wholly owned subsidiary of the Company. WQM was sold in December 1998 (see Note E). In December 1999, the Company formed a wholly owned subsidiary, Cleanwater Contracting, Inc. (Cleanwater). Cleanwater had no activity for 1999. The Company provides a variety of consulting and technical services to resolve environmental and health risk problems in the air, water and soil. The Company has developed a broad range of expertise in non-proprietary technology-based environmental remediation and water treatment techniques for both the public and private sectors throughout North America and the Trust Territory of the Pacific Islands. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash For purposes of the statement of cash flows, the Company considers all highly liquid cash investments with an original maturity of three months or less to be cash. Contracts A majority of the Company's revenue is generated from time-and-material contracts whereby the Company provides services, as prescribed under the various contracts, for a specified fixed hourly rate for each type of labor hour and receives reimbursement for material, inventories and subcontractor costs. Many of the contracts also have a fixed mark-up to be applied to material, inventories and subcontract costs. In addition, many of the time and material contracts have a stated maximum contract price, which cannot be exceeded without an authorized change order. Revenue is recorded on contracts based upon the labor hours and costs incurred. Provision for losses on uncompleted contracts are made in the period in which such losses are determined. Claims are recorded in revenue when received. F-9 40 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Contracts (Continued) Contracts in process consist of the accumulated unbilled labor at contracted rates, material, subcontractor costs and other direct and indirect job costs and award fees related to projects in process. Inventories Inventories consist of various supplies and materials used in the performance of the services related to the Company's projects and are stated at the lower of cost or market. Equipment and Improvements Equipment and improvements are recorded at cost. Depreciation and amortization are provided on a straight-line method over the estimated useful lives of the respective assets, usually between three to seven years. Leasehold improvements are amortized over the lives of the respective leases or the service lives of the improvements, whichever is shorter. Income Taxes The Company accounts for income taxes on the liability method, which requires that deferred tax assets and liabilities be recorded for expense and income items that are recognized in different periods for financial and income tax reporting purposes. Estimated Fair Value Information Statement of Financial Accounting Standards (SFAS) No. 107, Disclosure about Fair Value of Financial Instruments, requires disclosure of the estimated fair value of an entity's financial instrument assets and liabilities, as defined, regardless of whether recognized in the financial statements of the reporting entity. The fair value information does not purport to represent the aggregate net fair value of the Company. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Cash and other receivables: The carrying amount approximates fair value due to the short-term maturity. Due from related party: The carrying amount approximates the fair value because it is due on demand. F-10 41 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Estimated Fair Value Information (Continued) Note Payable - Line of Credit: The carrying amount approximates fair value as the line of credit has a variable interest rate which is considered to approximate the market rate. Long-Term Debt / Obligations Under Capital Leases: The carrying value approximates fair value as the interest rate at December 31, 1999 and 1998 is considered to approximate the market rate. Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Impairment of Long-lived Assets In March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards 121, Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed of (SFAS 121). SFAS 121 requires that long-lived assets and certain identifiable intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected future cash flows (undiscounted and without interest) is less than the carrying amount of the asset, an impairment loss is recognized. Measurement of that loss would be based on the fair value of the asset. SFAS 121 also generally requires that long-lived assets and certain identifiable intangibles to be disposed of be reported at the lower of the carrying amount or the fair value, less cost to sell. SFAS 121 is effective for the Company's 1997 fiscal year-end. Any impairment provisions recognized in accordance with SFAS 121 are permanent and may not be restored in the future. No impairment expense was recognized in the years ended December 31, 1999, 1998 and 1997. Earnings per Share The Financial Accounting Standards Board recently issued Statement of Financial Accounting Standards No. 128, Earnings Per Share (SFAS 128). SFAS 128 requires the presentation of basic earnings per share (EPS) and, for companies with potentially dilutive securities such as convertible debt, options and warrants, diluted EPS. F-11 42 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Earnings per Share (Continued) The following table sets forth the computation of basic and diluted earnings per share (in thousands):
1999 1998 1997 ------- ------- ------- Numerator Net income (loss) $(3,177) $ 539 $ (347) Preferred stock dividends (5) (31) -- ------- ------- ------- Numerator for basic earnings per share - income available to common stockholders (3,182) 508 (347) Effect of dilutive securities: Preferred stock dividends -- -- -- ------- ------- ------- Numerator for diluted earnings per share - income available to common stockholders after assumed conversions $(3,182) $ 508 $ (347) ======= ======= ======= Denominator: Denominator for basic earnings per share - weighted average shares outstanding 6,282 5,829 5,785 Effect of dilutive securities: Warrants -- 24 -- Convertible preferred stock -- -- -- Stock options -- 22 -- ------- ------- ------- Dilutive potential common shares -- 46 -- Denominator for diluted earnings per share - adjusted weighted average share and assumed conversion 6,282 5,875 5,785 ======= ======= ======= Basic earnings (loss) per share $ (0.51) $ 0.09 $ (0.06) ======= ======= ======= Diluted earnings (loss) per share $ (0.51) $ 0.09 $ (0.06) ======= ======= =======
F-12 43 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In 1999 and 1997, basic earnings per share data was computed by dividing net loss, by weighted average number of common shares outstanding during the period. Diluted earnings per share computations do not give effect to potentially dilutive securities including stock options and warrants as their effect would have been anti-dilutive. In 1998, basic earnings per share data was computed by dividing net income, less preferred stock dividends, by the weighted average number of common shares outstanding during the period. Diluted earnings per share were adjusted for the assumed conversion of potentially dilutive securities including stock options and warrants to purchase common stock. However, dilutive earnings per share computation does not give effect to the assumed conversion of convertible preferred stock as its effect would have been anti-dilutive. Reclassifications Certain financial statement reclassifications have been made in 1998 and 1997 to conform to presentations used in 1999. NOTE C - EPA SUSPENSION AND SUBSEQUENT LIFTING OF SUSPENSION On August 10, 1999, the Company received a notice of suspension, pending further review, from the Environmental Protection Agency (EPA). The suspension resulted from EPA allegations that the Company engaged in intentional misconduct with respect to billing for services provided under various EPA contracts. Under the suspension, the Company was prohibited from receiving additional government contracts under the provisions of 48 C.F.R. Subpart 9.4 of the Federal Acquisitions Regulations. The suspension did however allow the Company to continue performance on existing government contracts. In November 1999, following consideration of certain information provided by the Company to the EPA, the EPA's suspension was terminated and an Administrative Agreement (Administrative Agreement) between the EPA and the Company was executed. Upon execution of the Administrative Agreement, the Company became immediately eligible to bid for, receive, and perform any federal contract or subcontract, or participate in any assistance, loan or benefit without restriction. In the Administrative Agreement, the Company agreed to cooperate in full with further investigations into the EPA allegations including access to records, availability of Company personnel, certain reporting requirements, audit of EPA billing prior to submission and certain restrictions of Company assets without notification to the EPA. In addition, the Administrative Agreement provides for a financial reserve of $700,000. Management has been advised that this reserve relates to the resolution of claims filed against the F-13 44 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE C - EPA SUSPENSION AND SUBSEQUENT LIFTING OF SUSPENSION (CONTINUED) Company related to the Company's Subcontractor Agreement with Environmental Chemical Corporation (ECC) in which work was performed under an EPA contract. The financial reserve shall be established by funds withheld by the EPA from current and future EPA invoices, estimated base fees and determined award fees. The Company had accrued sufficient reserves for these claims at December 31, 1998, in accordance with normal operating procedures of the Subcontractor Agreement for work performed on the EPA contract during 1998 (see Note R). In certain circumstances of non-compliance, the EPA has the right under the Administrative Agreement to terminate the agreement and reinstate the Company's suspension. In addition, as defined in the Administrative Agreement, in the case of misconduct by the Company during the EPA's continued investigation, the EPA may immediately terminate EPA contracts, subcontracts or further award fees. EPA revenue represents approximately 60%, 50% and 39%, respectively, of the Company's revenue for the years ended December 31, 1999, 1998 and 1997. Following the notice of suspension, the Company initiated a Restructuring Plan, which downsized its operations as a decline in revenues occurred. The Restructuring Plan includes the sale, downsizing and closure of certain regional offices. Following completion of the Restructuring Plan, the Company will maintain offices in Denver, Colorado, Edmond, Washington, Tustin, California and San Antonio, Texas. After review of available information and consultation with its legal counsel, management believes that the allegations brought against the Company did not warrant suspension. Additionally management intends to cooperate in full but also vigorously defend itself in the EPA's further investigation into the allegations. However, there can be no assurance that further suspension will not occur or that the Company will prevail in this matter. If further suspension occurs, it will have a material effect on the Company's financial position, results of operations and liquidity. NOTE D - RESTRUCTURING In August 1999, following the EPA suspension discussed in Note C, the Company initiated a Restructuring Plan to reduce operating costs and gain efficiencies through the sale, downsizing and closure of regional offices. Under the Restructuring Plan, the Company sold substantially all its assets in the Mobile and Jackson regions and closed its regional offices located in New Orleans and Houston. The Company recorded a restructuring charge of $857,469 in September 1999, consisting of facility reduction costs and asset disposals of $390,324, costs of $226,599 to fulfill and buy out existing lease commitments and personnel reduction costs of $240,546. F-14 45 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE E - SALE OF SUBSIDIARY Effective December 1, 1998, the Company sold all of the outstanding shares of its subsidiary, Water Quality Management Corporation (WQM) for a sale price of $12.5 million plus an adjustment for net working capital of WQM at November 30, 1998. The Company recorded a gain on the sale of $10.2 million in 1998. The Company received $11.3 million at the date of sale and in the first quarter of 1999 received an additional $1.25 million. As of December 31, 1999, the Company has included in other receivables approximately $1.5 million remaining from amounts due on the sale of WQM. See Note S. NOTE F - PENDING ASSET DISPOSITIONS In October 1999, the Company entered into an Asset Purchase and Assignment Agreement (the Purchase Agreement) with IT Corporation to sell or assign substantially all of the assets in the Company's Seattle Regional office for sales price of $1.3 million. The Purchase Agreement provides for the assignment of the Company's remaining EPA contract dated January 9, 1997 (the EPA Contract), the sale of certain assets, the assumption of certain liabilities and obligations used in, directly associated with and necessary in the performance of the EPA Contract. Closing of the Purchase Agreement is contingent upon the execution of a novation agreement by and between the Company, IT Corporation and the EPA consenting to the assignment of the EPA Contract. Upon novation of the EPA contract, CET would receive no further EPA revenue. However, there can be no assurance that approval of the novation will be received from the EPA or that the subsequent closing of the Purchase Agreement will occur. In December 1999, the Company entered into an Asset Purchase Agreement (the CAPE Purchase Agreement) with Cape Environmental Management, Inc. to sell or assign substantially all of the assets in the Company's Tustin, California operations for a sales price of $2.1 million. The CAPE Purchase Agreement provides for the assignment of certain Federal and Commercial contracts, the sale of certain assets and assumption of certain liabilities directly associated with the performance of the contracts. NOTE G - SIGNIFICANT CUSTOMERS A significant portion of the Company's business is from contracts with the EPA. A new contract was awarded by the EPA in January 1997, with estimated maximum revenue of $292 million over five years. As of December 31 1999 and 1998, the net balance of accounts receivable from the EPA was $2,393,956 and $8,359,389, respectively. Revenue from the EPA in 1999, 1998, and 1997 F-15 46 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE G - SIGNIFICANT CUSTOMERS (CONTINUED) amounted to approximately $26 million, $30 million, and $21 million, or 60%, 50% and 39% of annual gross revenues, respectively. The Company also performs work for the U.S. Army Corps of Engineers and other governmental agencies that accounted for 8%, 10% and 7% of revenue in 1999, 1998, and 1997, respectively. In August of 1999, the Company secured a new commercial account, which accounted for 5% of revenue in 1999. Contracts in process consist of the following at December 31,:
1999 1998 ----------- ----------- Government - EPA contracts $ 1,543,442 $ 1,971,002 Non-EPA contracts 227,512 8,183,499 ----------- ----------- Total $ 1,770,954 $10,154,501 =========== ===========
The EPA awards the Company an award fee for work performed based upon a percentage of sub-contract and material costs incurred plus a percentage of program management fees billed. NOTE H - OTHER EQUIPMENT DISPOSALS Additional equipment dispositions and write-offs, not related to the Restructuring Plan noted in Note D above, consisted of $23,810 of net equipment disposals for cash proceeds of $2,254. The Company recorded a loss of $21,556 on the disposals plus an additional loss of $67,611 for other equipment write-offs. NOTE I - CAPITAL LEASES Vehicles and equipment recorded under capital leases consist of the following at December 31:
1999 1998 ----------- ----------- Vehicles $ 668,053 $ 1,363,960 Equipment 32,736 202,123 ----------- ----------- 700,789 1,566,083 Less accumulated depreciation (501,934) (751,693) ----------- ----------- Total $ 198,855 $ 814,390 =========== ===========
F-16 47 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE I - CAPITAL LEASES (CONTINUED) The following is a schedule by year of the future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of December 31, 1999: 2000 $ 135,707 2001 29,273 --------- Total minimum lease payments 164,980 Less amounts representing estimated executory costs (taxes) (10,195) --------- Net minimum lease payments 154,785 Less amount representing interest (10,025) --------- Present value of net minimum lease payments $ 144,760 ========= Current portion $ 119,091 Non-current portion 25,669 --------- $ 144,760 =========
NOTE J - RELATED PARTY TRANSACTIONS The Company, from time to time, borrows funds on a short-term basis from affiliates of the Company or from a trust fund of a relative of the President. In 1997, the Company borrowed $671,800, from relatives of Steven H. Davis, President, pursuant to one-year subordinated notes, which bear interest at the rate of 10% per annum. The Company repaid these notes in December 1998. Interest expense attributable to these related party borrowings amounted to $-0-, $95,761, and $73,544 for 1999, 1998, and 1997, respectively. A director and 11.5% owner of the Company is a 50% owner in Signal Hill Petroleum, Inc., Paramount Petroleum Corp. and Fletcher Oil. The Company provided services to these companies during the years ended December 31, 1999, 1998, and 1997 for fees amounting to approximately $39,003, $273,000, and $835,000, respectively. In 1997, the Company made advances to a former officer and director of the Company. The balance due was $104,036 and $124,036 at December 31, 1999 and 1998, respectively. Interest is payable monthly at 10% per annum, and principal is due on demand. F-17 48 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE K - LINE OF CREDIT AND LONG-TERM DEBT In May 1997, the Company entered into a financing agreement (the Agreement) with the National Bank of Canada. The Agreement provided a line of credit up to $9 million, including a $500,000 stand-by letter of credit to the Company based upon a percentage (80%) of eligible receivables (as defined in the loan agreement). In addition, the Company borrowed $1 million from the Bank under a term loan. Originally, interest under the Agreement and the term loan was payable monthly at the Bank's Reference Rate plus .25%. In January 1999, the Company reduced the maximum available under this financing Agreement to $7.5 million comprised of a line of credit of $6.75 million and an equipment term loan of $750,000. The Agreement had an expiration date of May 30, 1999 upon which amounts outstanding under the line of credit and term loan were due and payable. Pursuant to subsequent amendments to the Agreement, the maturity date of the Agreement was extended to January 28, 2000 combined with certain repayments due weekly until maturity. As of December 31, 1999, the Company's remaining debt under its Agreement with National Bank of Canada consisted of $818,152 outstanding under its line of credit. Beginning September 1, 1999 interest is payable under the Agreement at Bank's Reference Rate plus 2% (10.5% at December 31, 1999). On January 27, 2000, the Company completed the terms of repayment under the Agreement. The National Bank of Canada has now released all claims against the Company. Long-term debt consists of the following at December 31:
1999 1998 ---- ---- Note payable for annual insurance premium, interest at 6.25%, with monthly payments of $46,989 due June 30, 1999 $ -- $236,405 Note payable for annual insurance premium, interest at 6.55%, with monthly payments of $41,374 through June 2000, changing to $10,021 thereafter until maturity, balance due April 1, 2002 444,109 --
F-18 49 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE K - LINE OF CREDIT AND LONG-TERM DEBT (CONTINUED)
1999 1998 -------- -------- Note payable to a bank, collateralized by equipment, payable in monthly installments of $16,667 including interest at 9%, balance due May 30, 1999 -- 750,000 -------- -------- 444,109 986,405 Less current portion 290,982 986,405 -------- -------- $153,127 $ -- ======== ========
NOTE L - STOCKHOLDERS' EQUITY In connection with the Company's initial public offering in July 1995, the Company issued 120,000 warrants to the underwriters as part of the Underwriters Agreement. Each warrant is convertible into one share of Common Stock at an exercise price of $6.00 subject to certain purchase price adjustments. The warrants may be issued in whole or in part at any time until the expiration date of July 25, 2000. All the warrants remain outstanding at December 31, 1999. In January 1997, the Company completed a private offering of 729,248 shares of its common stock. The net proceeds to the Company from this offering were approximately $2,035,000. In connection with this offering, the Company issued warrants to the representatives of the underwriters in this offering to collectively purchase up to 10% of the number of shares sold in the offering of the Company's common stock. The purchase price of such warrants was $100, and the exercise price under such warrants is $3.60 per share. The 72,925 warrants issued may be exercised in whole or in part at any time or from time to time until the expiration date of December 31, 2001. The Company also issued warrants to purchase 100,000 shares of common stock at $4.25 per share to a management services firm as consideration for its assistance on the private offering. The warrants could be exercised from July 1, 1998 through December 31, 1999. These warrants were considered stock issuance costs, with a value of approximately $235,000 based on the fair value at the grant date as required by Financial Accounting Standards 123. There were no conversions, and the warrants expired in full on December 31, 1999. F-19 50 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE L - STOCKHOLDERS' EQUITY (CONTINUED) In July 1998, the Company completed a private placement of 2,000 shares of 4% convertible preferred stock (the Preferred Stock). The net proceeds were approximately $1,879,000. The Preferred Stock was convertible into shares of common stock based on the stated value of $1,000 per share of Preferred Stock divided by conversion price on the conversion date. The conversion price was equal to 85% of the lowest closing price of the common stock during the six days immediately preceding the conversion date, not to exceed $3.35. A total of 290 shares of the Preferred Stock were converted into 317,786 shares of common stock during 1998, and a total of 140 shares of Preferred Stock were converted into 155,017 shares of common stock in 1999. The holders of 4% convertible preferred stock were entitled to receive dividends when declared by the Board of Directors, payable in cash or common stock of $40 per share. Such dividends were payable in quarterly installments on March 31, June 30, September 30 and December 31 of each year commencing September 30, 1998. In connection with this offering, the Company issued warrants to the representatives of the underwriters in this offering to purchase up to 35,000 shares of the Company's common stock at $3.00 per share. The warrants may be exercised during the period commencing July 24, 1999 and ending on December 31, 2001. In January 1999, the Company redeemed the remaining shares of Preferred Stock for $1,927,400 plus $4,873 of unpaid dividends through the date of redemption. The warrants issued in connection with the preferred stock remain outstanding. NOTE M - PROFIT SHARING AND 401(K) PLAN The Company maintains a Profit Sharing and a 401(k) Plan covering certain qualified employees, which includes employer participation in accordance with the provisions of Section 401(k) of the Internal Revenue Code. The Plan allows participants to make pretax contributions and the Company is required to match 25% of the first 6% of all elective deferrals. The profit sharing portion of the Plan is discretionary and noncontributory. All amounts contributed to the plan are deposited into a trust fund administered by an independent trustee. F-20 51 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE M - PROFIT SHARING AND 401(K) PLAN (CONTINUED) The Company's matching 401(k) contributions required by the 401(k) plan were $79,289, $82,103, and $65,206 for the years ended December 31, 1999, 1998, and 1997, respectively. The Company has not made any discretionary contributions under the profit sharing portion of the Plan. NOTE N - STOCK OPTIONS On March 1, 1995, the Company adopted an Incentive Stock Option Plan (the Plan) for key personnel. A total of 550,000 shares of the Company's common stock are reserved for issuance pursuant to the exercise of stock options (the Options) which may be granted to full-time employees, including officers and directors who are also employees of the Company. The Plan is administered by the Board of Directors. In addition to determining who will be granted Options, the Board of Directors has the authority and discretion to determine when Options will be granted and the number of Options to be granted. The Board of Directors may grant Options intended to qualify for special treatment under the Internal Revenue Code of 1986, as amended (Incentive Stock Options) and may determine when each Option becomes exercisable, the duration of the exercise period for Options and the form of the instruments evidencing Options granted under the Plan. The maximum aggregate fair market value (determined as of the date of grant) of the shares as to which the Incentive Stock Options become exercisable for the first time during any calendar year may not exceed $100,000. The Plan provides that the purchase price per share for each Incentive Stock Option on the date of grant may not be less than 100 percent of the fair market value of the Company's common stock on the date of grant. However, any Option granted under the Plan to a person owning more than 10 percent of the Company's common stock shall be at a price of at least 110 percent of such fair market value. The Plan is accounted for under APB Opinion 25 and related interpretations. The Options generally have a term of 10 years when issued and vest over three to five years. Had compensation cost for the Plan been determined based on the fair value of the Options at the grant date consistent with the method of Statement of Financial Accounting Standards 123, Accounting for Stock-Based Compensation, the Company's net income (loss) and earnings (loss) per common share would have been: F-21 52 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE N - STOCK OPTIONS (CONTINUED)
1999 1998 1997 ------------- ------------- ------------- Net income (loss) As reported $ (3,176,757) $ 538,478 $ (347,291) Pro forma (3,236,694) 454,233 (495,586) Earnings (loss) per common share As reported $ (.51) $ 0.09 $ (0.06) Pro forma (.52) 0.08 (0.09)
The fair value of each option grant is estimated on the date of grant using the Black-Scholes options-pricing model with the following weighted-average assumptions for grants used in 1999, 1998 and 1997: no expected dividends; expected volatility of 74.5%; risk-free interest rate of 6.0% to 8%; and expected lives of 10 years.
Average price Shares per share -------- ------------- Outstanding at January 1, 1997 214,000 $5.60 Granted 96,900 7.00 Exercised (9,700) 3.50 Canceled (70,400) 9.04 -------- ----- Outstanding at December 31, 1997 230,800 5.10 -------- ----- Total exercisable at December 31, 1997 80,375 $4.27 ======== ===== Outstanding at January 1, 1998 230,800 $5.10 Granted -- -- Exercised (4,000) 3.50 Canceled (114,700) 4.45 -------- ----- Outstanding at December 31, 1998 112,100 5.08 -------- ----- Total exercisable at December 31, 1998 51,950 $4.75 ======== =====
F-22 53 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE N - STOCK OPTIONS (CONTINUED)
Average price Shares per share -------- ------------- Outstanding at January 1, 1999 112,100 $5.08 Granted 220,500 1.70 Exercised -- -- Canceled (138,000) 4.10 -------- ----- Outstanding at December 31, 1999 194,600 1.98 -------- ----- Total exercisable at December 31, 1999 56,800 $2.46 ======== =====
Weighted average Range Options Proceeds exercise price ----- ------- -------- -------------- Exercisable at December 31, 1999 $1.31 - 3.50 56,800 $128,255 $2.46
The following information applies to options outstanding at December 31, 1999:
Weighted average Range of Options Weighted average Remaining exercisable prices outstanding exercise price contractual life - ------------------ ----------- ------------------- ---------------- $1.31 - 3.50 194,600 $ 1.98 7.9 years
In May 1995, options for 181,000 shares of common stock were granted under the Plan of which options for 90,500 shares will vest only upon the occurrence of certain circumstances. On December 31, 1995, 13,500 of such remaining options were granted as events upon which these options were contingent occurred. The Company recorded compensation expense of $-0-, $6,676, and $12,423 in 1999, 1998, and 1997, respectively, relating to these options. Compensation expense of $3,172 will be recorded in future periods as these options vest over a five-year period commencing December 31, 1996. F-23 54 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE O - TAXES ON INCOME The provision (benefit) for taxes on income includes the following for the year ended December 31:
1999 1998 1997 --------- --------- --------- CURRENT Federal $ -- $ 183,276 $ (20,342) State -- -- -- --------- --------- --------- -- 183,276 (20,342) --------- --------- --------- DEFERRED Federal $ -- $ -- $ (79,650) State -- -- (13,555) --------- --------- --------- -- -- (93,205) --------- --------- --------- Total $ -- $ 183,276 $(113,547) ========= ========= =========
A reconciliation between the expected federal income tax expense computed by applying the Federal statutory rate to income before income taxes and the actual provision (benefit) for taxes on income for the year ended December 31, is as follows:
1999 1998 1997 ----------- ----------- ----------- Provision (benefit) for income taxes at statutory rate $(1,112,000) $ 281,484 $ (180,000) Change in valuation reserve 764,000 (1,016,400) 102,134 Use of operating loss carry forwards -- 907,700 -- Stock options 1,000 2,700 6,900 Other 26,000 32,200 13,342 Change in prior year estimate 321,000 (24,408) (55,923) ----------- ----------- ----------- $ -- $ 183,276 $ (113,547) =========== =========== ===========
F-24 55 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE O - TAXES ON INCOME (CONTINUED) Deferred tax assets and liabilities consist of the following at December 31:
1999 1998 ----------- ----------- Alternative minimum tax credit $ -- $ 202,000 Deferred gain on sale (519,900) (1,000,900) Accrued salary expense -- 211,900 Allowance for doubtful accounts 187,500 377,200 Other reserves 264,000 243,100 NOL carryforward 1,184,000 -- Other (189,000) 128,800 ----------- ----------- 926,100 162,100 Valuation reserve (926,100) (162,100) ----------- ----------- $ -- $ -- =========== ===========
Realization of the deferred tax asset depends on achieving future taxable income. The Company incurred losses in recent years and does not consider it likely that the Company will realize the benefit of the deferred tax asset and, accordingly, has recorded a valuation allowance equal to the deferred tax asset. NOTE P - LEASE COMMITMENTS The Company is obligated under certain operating leases for its facilities. The leases expire at various dates through 2004, with appropriate rentals as set forth below. Some leases also provide for payments of taxes and certain common area costs and expenses. The following is a summary at December 31, 1999, of the future minimum rents due under noncancelable operating leases:
Year ending December 31, 2000 $ 431,669 2001 307,009 2002 176,485 2003 143,320 2004 48,106 ---------- Total $1,106,589 ==========
Total rent expense under operating leases for the years ended December 31, 1999, 1998, and 1997, was approximately $670,179, $839,514 and $723,900, respectively. F-25 56 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE Q - DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS All of the Company's financial instruments are held for purposes other than trading. The carrying amounts in the table below are the amounts at which the financial instruments are reported in the financial statements. The estimated fair values of the Company's financial instruments at December 31, 1999, and 1998, are as follows:
1999 Carrying amount Estimated fair value ---- --------------- -------------------- Cash $ 504,583 $ 504,583 Due from related party 104,036 104,036 Other receivables 1,612,962 1,612,962 Note payable - line of credit 818,152 818,152, Long-term debt 444,109 444,109 Capitalized lease obligations 144,760 144,760
1998 Carrying amount Estimated fair value ---- --------------- -------------------- Cash $ 25,192 $ 25,192 Due from related party 124,036 124,036 Other receivables 3,371,828 3,371,828 Note payable - line of credit 1,039,925 1,039,925 Long-term debt 986,405 986,405 Capitalized lease obligations 567,582 567,582
NOTE R - CONTINGENCIES On February 13, 1998, the Company filed suit in the United States District Court for the District of Oregon against Road Runner Oil, Inc. and Bernard J. Roscoe, alleging breach of contract for non-payment of services performed by the Company at an oil field in Utah. The amount of unpaid invoices, including interest and collection costs, is approximately $2.1 million. The Default Judgments against Road Runner have been awarded in the Tribal Court and Utah state court, and foreclosure proceedings and corresponding asset investigation are in progress. The Company wrote off this account receivable in 1998. In 1998, Environmental Chemical Corporation (ECC) filed for arbitration against the Company for various claims related to the Company's Subcontractor Agreement under an F-26 57 CET ENVIRONMENTAL SERVICES, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31 1999, 1998 and 1997 NOTE R - CONTINGENCIES (CONTINUED) EPA contract. As discussed in Note C, in November 1999, the Company executed an Administrative Agreement, which provides for a financial reserve of $700,000. Management has been advised that this reserve relates to the resolution of the claims filed by ECC. The financial reserve has been established by funds withheld by the EPA from current and future EPA invoices, estimated base fee and determined award fees. The Company is party to various legal actions arising out of the normal course of its business. Management believes that the ultimate resolution of such actions, except as previously disclosed, will not have a material adverse effect on the Company's financial position, results of operations and liquidity of the Company. NOTE S - SUBSEQUENT EVENTS On February 22, 2000, AquaSource and the Company signed a Settlement and Mutual Release Agreement. The Settlement Agreement states that AquaSource will pay the Company approximately $500,000 and release all claims is has against the approximately $698,000 of retention related to a certain project that was completed by the Company. The Company has agreed to indemnify AquaSource on certain projects that have been completed by the Company, which were transferred to AquaSource as part of the sale of WQM. In addition, the Company retained $219,000 for certain amounts collected on behalf of WQM. In February 2000, the Company closed its Richmond, California office and transferred field equipment, office equipment and other assets to the Company's other locations, primarily to a project located near Hercules, California. In March 2000, the Company received approximately $36,000 on a note receivable from a related party. F-27 58 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION LOCATION - --------------- -------------------------------------------------- --------------------------------------------- 3.1 Amended and Restated Articles of Incorporation Incorporated by reference to Exhibit 3.1 to the Company's Form SB-2 Registration Statement No. 33-91602 3.2 Bylaws Incorporated by reference to Exhibit 3.2 to the Company's Form SB-2 Registration Statement No. 33-91602 10.1 Incentive Stock Option Plan Incorporated by reference to Exhibit 10.1 to the Company's Form SB-2 Registration Statement No. 33-91602 10.2 Form of Incentive Stock Option Agreement Incorporated by reference to Exhibit 10.2 to the Company's Form SB-2 Registration Statement No. 33-91602 10.3 Loan Documents Between National Bank of Incorporated by reference to Canada and the Company Exhibit 10.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997. 10.4 Amendment to Loan and Security Agreement and Loan Incorporated by reference to Documents between National Bank of Canada Exhibit 10.4 to the Company's and the Registrant Annual Report on Form 10-K for the year ended December 31, 1998. 10..5 Second Amendment to Loan and Security Agreement Incorporated by reference to and Loan Documents between Exhibit 10.4 to the Company's National Bank of Canada Annual Report on Form 10-K for the year ended December 31, 1998.
59
EXHIBIT NUMBER DESCRIPTION LOCATION - --------------- -------------------------------------------------- --------------------------------------------- 10.6 Third Amendment to Loan and Security Incorporated by reference to Agreement and Loan Documents between Exhibit 10.6 to the Company's National Bank of Canada and the Registrant Annual Report on Form 10-K for the year ended December 31, 1998. 10.7 Stock Purchase Agreement with AquaSource Incorporated by reference to Exhibit 10.1 Services and Technologies, Inc. to the Company's report on Form 8K dated December 17, 1998. 10.8 Administrative Agreement between United States Incorporated by reference to Exhibit 10.1 Environmental Protection Agency and the to Company's Form 10-Q for the nine Registrant months ended September 30, 1999. 10.9 Seventh Amendment to Loan and Security Incorporated by reference to Exhibit 10.2 Agreement and Loan Documents between to Company's Form 10-Q for the nine National Bank of Canada and the Registrant months ended September 30, 1999. 10.10 Ninth Amendment to Loan and Security Incorporated by reference to Exhibit 10.3 Agreement and Loan Documents between to Company's Form 10-Q for the nine National Bank of Canada and the Registrant months ended September 30, 1999. 10.11 Eleventh Amendment to Loan and Security Incorporated by reference to Exhibit 10.4 months and Loan Documents between to Company's Form 10-Q for the nine National Bank of Canada and the Registrant months ended September 30, 1999. 10.12 Thirteenth Amendment to Loan and Security Incorporated by reference to Exhibit 10.5 Agreement and Loan Documents between to Company's Form 10-Q for the National Bank of Canada and the Registrant nine months ended September 30, 1999. 10.13 Fourteenth Amendment to Loan and Security Incorporated by reference to Exhibit 10.6 Agreement and Loan Documents between to Company's Form 10-Q for the National Bank of Canada and the Registrant nine months ended September 30, 1999. 10.14 Sixteenth Amendment to Loan and Security Filed herewith electronically Agreement and Loan Documents between National Bank of Canada and the Registrant 10.15 Asset Purchase and Assignment Agreement by Filed herewith electronically and between the Company and IT Corporation 10.16 Asset Purchase and Assignment Agreement by Filed herewith electronically and between the Company and CAPE Environmental Management, Inc. 10.17 Lease Agreement by and between the Company Filed herewith electronically and Sky Harbor Associates Limited Partnership 21 Subsidiaries of the Registrant Filed herewith electronically 23 Consent of Grant Thornton LLP Filed herewith electronically
60
EXHIBIT DESCRIPTION LOCATION NUMBER - --------------- -------------------------------------------------- --------------------------------------------- 27 Financial Data Schedule Filed herewith electronically
EX-10.14 2 16TH AMENDMENT TO LOAN AGREEMENT 1 SIXTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND LOAN DOCUMENTS THIS SIXTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND LOAN DOCUMENTS (this "Amendment"), dated as of December 29, 1999, is between NATIONAL BANK OF CANADA, a Canadian chartered bank ("Lender"), and CET ENVIRONMENTAL SERVICES, INC., a California corporation ("Borrower"). Recitals A. Lender and Borrower entered into a Loan and Security Agreement dated May 29, 1997, as amended by the first through fifteenth amendments (as amended, the "Loan Agreement"). Defined terms used herein and not defined herein shall have the meaning set forth in the Loan Agreement (as amended). B. The Loans are secured by the Collateral. C. Under the Fourteenth and Fifteenth Amendments to Loan Agreement, Borrower was required to make a payment on December 26, 1999 in connection with a permanent reduction in the Maximum Loan Availability. Borrower has failed to make such payment and such failure constitutes an Event of Default (the "Payment Default"). E. Borrower has requested that Lender waive the Payment Default and modify the Set Reduction Amount and extend the Maturity Date and Lender has agreed to do so subject to the terms and conditions set forth herein. Agreement IN CONSIDERATION of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Borrower agree as follows: 1. Waiver of Payment Default. Subject to Borrower's performance of all of the obligations hereunder and under the Loan Agreement, including without limitation, the payment of all amounts due under the Loan Agreement, including without limitation the amounts described in paragraph 2(c) below, Lender agrees to waive the Payment Default; on the conditions that: (a) if Borrower fails to perform any of its obligations, Lender's waiver shall be null and void and of no force and effect whatsoever; (b) Lender is not waiving any other defaults or Events of Default that may have occurred or may hereinafter occur, and (c) Lender's waiver of the Payment Default or any other defaults or failure to or delay in exercising any rights or remedies shall not be deemed a waiver of any subsequent Event of Default or a waiver of its right to execute its rights or remedies at any time. 2 2. Loan Amount Modification. (a) Section 1 of the Loan Agreement is hereby amended by amending and restating Section 1(u) of the Loan Agreement to read as follows: 1(u) "Maximum Loan Availability" shall mean the lesser of (a) $l,500,000 minus the Required Reductions or (b) the Revolving Loan Availability, minus (a) the aggregate undrawn face amount of all Letters of Credit and (b) the aggregate amount of all Revolver Reductions. (b) Section 1 of the Loan Agreement is hereby amended by amending and restating Section 1(hh) of the Loan Agreement (added pursuant to the Fourteenth Amendment) to read as follows: 1(hh) "Required Reductions" shall mean the sum of (a) the Set Reduction Amount, plus (b) the Collection Reduction Amount. (c) Section 1 of the Loan Agreement is hereby further amended by amending and restating Section 1 (ii) of the Loan Agreement (added pursuant to the Fourteenth Amendment) to read as follows: 1(ii) "Set Reduction Amount" shall mean the following amounts commencing on the initial dates and continuing during the periods opposite such figures: ------------------------------------- ---------- December 29, 1999 through $250,000 January 6, 2000 ------------------------------------- ---------- January 7, 2000 through $750,000 January 13, 2000 ------------------------------------- ---------- January 14, 2000 through $1,000,000 January 20, 2000 ------------------------------------- ---------- January 21, 2000 through $1,300,000 January 27, 2000 ------------------------------------- ----------
(c) Section 1 of the Loan Agreement is hereby further amended by amending and restating Section 1(jj) of the Loan Agreement (added pursuant to the Fourteenth Amendment) to read as follows: -2- 3 1(jj) "Collection Reduction Amount" shall mean an amount equal to 20% of the amount of Accounts collected or payments received on Accounts from December 29, 1999 up to and including the business days prior to the date such amount is determined. (d) Borrower acknowledges that the purpose of the Required Reductions and Revolving Reductions is to cause the Revolving Loan to be fully repaid on or before January 28, 2000. Accordingly, the definition of "Maturity Date" set forth in Section 1(t) of the Loan Agreement is amended in its entity to read as follows: "Maturity Date" shall mean the earlier of (a) the date the Liabilities are accelerated pursuant to Section 14 or (b) January 28, 2000. (c) Borrower acknowledges that on each date that there is a decrease in the Maximum Loan Availability as a result of an increase in the Set Reduction Amount, the Collection Reduction Amount or the Revolver Reduction Amount, Borrower must repay the amount by which the outstanding amount of the Revolving Loan exceeds the revised Maximum Loan Availability, including without limitation as a result of the increases in the Set Reduction Amount which takes place on December 30, 1999, January 7, 2000, January 14, 2000, and January 21, 2000, and acknowledges that payments are due on such dates. (d) Borrower agrees that the Borrower's failure to pay any amounts due under the Loan Agreement, including without limitation, any amounts described in paragraph 2(c) above shall constitute an Event of Default under the Loan Agreement and Lender shall be entitled to exercise all remedies in connection therewith. 3. Assignment of Claims. As a condition of Lender's waiver of the Defaults, Borrower agrees, immediately upon request of Lender to execute all assignments, confirmations and other agreements necessary to comply with the Assignment of Claims Act with respect to Contract numbers DACA45-97-D0022, F04699-D-0024, and F41624-97-D-8010 and any other contracts requested by Lender. 4. Loan Documents. a. Lender and Borrower agree that any and all notes or other documents executed in connection with the Loans (collectively, the "Loan Documents") are hereby amended to reflect the amendments set forth herein and that no further amendments to any Loan Documents are required to reflect the foregoing. -3- 4 b. All references in any document to the Loan Agreement or any other Loan Document shall refer to the Loan Agreement or such Loan Document as amended pursuant to this Amendment. 5. Amendment Fee. As a condition to Lender's performing its obligations under this Amendment, Borrower shall pay to Lender an amendment fee equal to $15,000 payable immediately upon the execution of this Amendment. Such amendment fee shall be fully earned as of the date hereof, but $10,000 of such fee will be refunded to Borrower upon payment in full of the Loan and all other amounts due Lender on or prior to January 28, 2000. 6. Representations and Warranties. Borrower hereby certifies to the Lender that as of the date of this Amendment (taking into consideration the transactions contemplated by this Amendment), all of Borrower's representations and warranties contained in the Loan Agreement and all Loan Documents are true, accurate and complete in all material respects, and no Event of Default (other than the Defaults) or event that with notice or the passage of time or both would constitute an Event of Default has occurred under the Loan Agreement or any Loan Document. Without limiting the generality of the foregoing, Borrower represents and warrants that the execution and delivery of this Amendment has been authorized by all necessary action on the part of Borrower, that the person executing this Amendment on behalf of Borrower is duly authorized to do so and that this Amendment constitutes the legal, valid, binding and enforceable obligation of Borrower. 7. Additional Documents. Borrower shall execute and deliver to Lender at any time and from time to time such additional amendments to the Loan Agreement and the Loan Documents as the Lender may request to confirm and carry out the transactions contemplated hereby or to confirm, correct and clarify the security for the Loan. 8. Continuation of the Loan Agreement, Etc. Except as specified in this Amendment, the provisions of the Loan Agreement and the Loan Documents (as previously amended) shall remain in full force and effect, and if there is a conflict between the terms of this Amendment and those of the Loan Agreement or the Loan Documents (as previously amended), the terms of this Amendment shall control. 9. Miscellaneous. a. This Amendment shall be governed by and construed under the laws of the State of Colorado and shall be binding upon and inure to the benefit of the parties hereto and their successors and permissible assigns. b This Amendment may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. -4- 5 c. This Amendment and all documents to be executed and delivered hereunder may be delivered in the form of a facsimile copy, subsequently confirmed by delivery of the originally executed document. d. This Amendment constitutes the entire agreement between Borrower and the Lender concerning the subject matter of this Amendment and supercedes the Forbearance Letter, which Forbearance Letter is no longer of any force or effect. This Amendment may not be amended or modified orally, but only by a written agreement executed by Borrower and the Lender and designated as an amendment or modification of the Loan Agreement as amended by this Amendment. EXECUTED as of the date first set forth above. BORROWER CET ENVIRONMENTAL SERVICES, INC., a California corporation By: /s/ DALE W. BLECK -------------------------------------- Name: Dale W. Bleck ------------------------------------ Title: CFO ----------------------------------- LENDER: NATIONAL BANK OF CANADA, a Canadian chartered bank By: -------------------------------------- Allen C. Balk Vice President By: -------------------------------------- Name: --------------------------------- Title: -------------------------------- -5- EX-10.15 3 ASSET PURCHASE AND ASSIGNMENT AGREEMENT 1 ASSET PURCHASE AND ASSIGNMENT AGREEMENT DATED AS OF OCTOBER 21, 1999 BY AND AMONG CET ENVIRONMENTAL SERVICES, INC. AND IT CORPORATION 2 ASSET PURCHASE AND ASSIGNMENT AGREEMENT, dated as of October 21, 1999, by and among CET ENVIRONMENTAL SERVICES, INC., a California corporation ("CET") ("Seller"), and IT CORPORATION, a California corporation ("Purchaser"). WITNESSETH WHEREAS, the Seller is in the business of providing environmental remediation services and related services to public and private customers (the "Business"); WHEREAS, the Seller desires to sell and assign to Purchaser, and Purchaser desires to purchase and assume from the Seller, certain of the assets associated with the Business, upon the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Assets, Contracts and Rights to be Acquired. Subject to the terms and conditions herein set forth, at the closing (as hereinafter defined in Section 3.B), Seller agrees to sell, assign, transfer and convey to Purchaser, free and clear of all liens, claims rights, interests, charges, pledges and encumbrances (collectively, "Liens") of every kind, nature and description, and Purchaser agrees to purchase, acquire and assume from Seller as of the Closing (but subject to satisfaction of the Condition Precedent, as hereinafter defined) all right, title and interest of Seller in and to the following assets, contracts and rights used in or pertaining to part of the Business: A. Contract 68-W7-0016 (effective January 9, 1997) with the United States Environmental Protection Agency ("EPA") related to the provisions of Emergency and Rapid Response Services for Regions 6, 8 and 9 of the EPA, together with applicable delivery orders, purchase orders, and other agreements, if any, entered into in the ordinary course in connection with the performance of the work under such contracts and listed on Schedule "1-A." and copies of which have or shall be delivered to the Purchaser on or before the Closing (collectively, the "EPA Contracts") including the right to Gross Revenues thereunder from the date of closing; B. The right of Purchaser to enter into a subcontract with Seller to perform on behalf of Seller the work remaining under Delivery 2 3 Order 01-10-016 of U.S. EPA Contract 68-S7-000l should Purchaser so elect at the time of Closing. C. Sellers' owned machinery, equipment, tools, uniforms, protective gear, office furniture and equipment, wherever located, used in connection with and necessary for the performance of the EPA Contracts, a schedule of which is annexed hereto as Schedule "1.C." (the "EPA Contract Equipment"); D. Except as set forth in Section 2 below, (i) To the extent assignable, any and all rights of Seller to seek indemnification, reimbursement, contribution, insurance for or other recourse against third parties (including insurers), with respect to any environmental, products, workers compensation or other liability relating to or arising from the performance by the Seller or their subcontractors of the EPA Contracts prior to the Closing or, the ownership, possession, use or operation of any Acquired Asset (including, any damage thereto) (collectively, the "Insurance and Indemnity Rights"); (ii) All unliquidated and liquidated claims and causes of action of every kind and description which Seller may have against any third party arising out of, in connection with, or relating to any item included within the definition of Acquired Assets for damages actually suffered by, or claims brought against, Purchaser at or after the Closing notwithstanding when the event giving rise to such damages or claims occurred (including any damage to any of the Acquired Assets) (collectively, the "Claim Rights"); (iii) To the extent transferable, all governmental permits, licenses and other related agreements or instruments held by Seller to which Seller is a party, in each case which are material to, or are used or materially useful in, the ownership or operation of the Acquired Assets; E. Certain ancillary assets needed in connection with or, necessary for the performance of the EPA Contracts, and other similar assets used in the performance of the EPA Contracts, a schedule of which is annexed hereto as Schedule "1.E." (the "Ancillary Assets"). Purchaser agrees to provide Seller reasonable access to such assets in connection with performance of its obligations relating to the EPA Contracts and the other assets transferred; and 3 4 F. The right to assume upon closing (as defined in Section 3.B) the lease for Seller's facility at 170 West Dayton, Edmonds, Washington annexed at Schedule 1.F hereto. The assets, contracts and rights to be sold and assigned by Seller to Purchaser pursuant to this Section 1 are hereinafter collectively referred to as the "Acquired Assets." 2. Excluded Assets. Except for the Acquired Assets set forth in Section 1 above or as otherwise specifically provided for herein, Purchaser shall not purchase, assume, acquire, or otherwise obtain rights in and to any other assets of the Seller, including, without limitation: A. Any and all of Seller's other machinery, equipment, inventory, tools, uniforms, protective gear, office furniture and equipment, real property, patents, trade names, and general intangibles, wherever located, not described in Section 1, specifically equipment used by Seller's offices in Regions 6, 8, and 9; and B. All cash, funds in accounts, security deposits, revenues and receivables, including, without limitation, any unbilled receivables due from the EPA under the EPA Contracts for any work performed, services rendered or expenses or costs incurred up to and including, the day of the Closing together with claims, refunds, reimbursements or credits under other contracts (the "Seller Receivables"); and C. Any premium refunds or credits owed under the Seller's insurance or indemnity policies or any tax refunds owed to the Seller whether or not related to the EPA Contracts. In addition, Seller shall retain any Insurance and Indemnity Rights and/or Claim Rights which the Seller needs or requires, or are materially useful, in (a) recovering, collecting, receiving or obtaining reimbursement from or by the EPA or any third party for expenses incurred prior to the Closing by Seller related to the Acquired Assets, (b) collection of Seller Receivables, but only to the extent so needed, required or materially useful, or (c) defending and/or paying and/or satisfying any Non-Assumed Liability Claim (defined in Section 3.D. below) or other liability. The excluded assets, contracts and rights set forth in this Section 2 are hereinafter collectively referred to as the "Excluded Assets." The Parties acknowledge that the EPA may make payments to Purchaser or Seller to which the other Party is entitled. In such case, the party receiving the payment shall hold in trust the portion 4 5 of such payment properly payable to the other party and shall promptly forward such sums to the party entitled thereto. 3. Acquisition of Acquired Assets and Acquired Liabilities; Retention of Liabilities by Seller. A. At the Closing, Seller and Purchaser shall execute: (i) A Bill of Sale, Assignment and Assumption Agreement for the Acquired Assets, substantially in the form annexed hereto as Schedule "3.A.(i)" (ii) Such other instruments of transfer as Purchaser may reasonably deem necessary to vest in Purchaser sufficient title to the Acquired Assets free and clear of Liens. B. Closing. The closing of this transaction (the "Closing") shall occur not more than five (5) business days after receipt by the Parties of written notification from the EPA of the approval of the Novation of EPA Contract 68-W7-0016, or at such other date, time and place as may be mutually agreed upon by the parties hereto (the "Closing Date") at the offices of the IT Corporation, Englewood, CO. The parties hereto agree that time is of the essence with respect to the Closing. C. Assumed Obligations. Purchaser shall not assume or become liable for the payment of any debts, liabilities, obligations, setoffs, defenses, losses, wages, employee benefits, COBRA payments, claims, if any, under the Workers Adjustment, Retraining and Notification Act, 29 U.S.C. Section 2101, et seq. or other applicable law, benefit plans, 401k pension plans or collective bargaining agreements (collectively, "Workers' Claims"), accounts payable, bank indebtedness, mortgages, warranties, fines, penalties, or any other obligations of the Seller or any affiliate of the Seller, whether the same are known or unknown, now existing or hereafter arising of whatever nature or character, whether absolute or contingent, liquidated or disputed, except for certain liabilities arising with respect to the EPA Contracts and described on the Schedule of Assumed Obligations annexed hereto as Schedule "3.C." (the "Assumed Liabilities"). D. Seller shall indemnify and defend Purchaser against all claims (each, a "Non-Assumed Liability Claim") for liabilities or obligations that are not Assumed Liabilities, including, without limitation, Workers' Claims, claims, set-offs or offsets by the EPA under the EPA Contracts relating to work performed by Seller 5 6 prior to the Closing Date, or claims by third parties or creditors of Seller relating to the conduct by Seller of their business prior to Closing, in accordance with the following procedures: (i) In the event a Non-Assumed Liability Claim is asserted against Purchaser, Purchaser shall notify Seller, in writing, as soon as practicable after discovery of such Non-Assumed Liability Claim, specifying in reasonable detail the nature of the claim and the amount sought. The Seller shall have the right to assume or direct, through counsel of their own choosing, the defense, prosecution or settlement of any Non-Assumed Liability Claim promptly upon written notice to Purchaser, at their sole cost and expense. If the seller elects to assume the defense of any Non-Assumed Liability Claim, Seller shall keep Purchaser informed as to the status of such litigation or other action and shall not settle such Non-Assumed Liability Claim in a manner which would impose any material burden or obligation on Purchaser without the consent of Purchaser, which consent shall not be unreasonably withheld. The Purchaser may, at its own expense, retain separate counsel to participate in such defense. Purchaser shall provide Seller with such access to its records and personnel relating to any such Non-Assumed as is necessary to defend such Non-Assumed Liability Claim during normal business hours and shall otherwise cooperate with the Seller in the defense or settlement thereof. Prior to resolution of the Non-Assumed Liability Claim, Purchaser shall not pay, or permit to be paid, or seek to offset, reserve for, setoff, deduct or seek a credit against the Payment for all or any part of the Non-Assumed Liability Claim, unless the Seller consents in writing to such payment. If the Seller fails to defend, or if after commencing or undertaking any such defense, the Seller fails to prosecute or withdraws from such defense, the Purchaser shall have the right to defend such claim and to be reimbursed its defense costs (including reasonable counsel fees and expenses) related thereto by Seller, provided that Purchaser shall use its best efforts to settle such claim for the lowest amount possible, and provided that Purchaser shall not be obligated to enter into a settlement pursuant to which it will be required to perform material nonmonetary obligations. Purchaser shall (a) give the Seller prompt written notice (i) of a proposed settlement offer made by the other party, prior to acceptance of such offer or (ii) of an offer Purchaser proposes to make, prior to making such offer, and (b) 6 7 request that the Seller consent thereto, which consent shall not be unreasonably withheld. In the event the Seller is unwilling to approve such proposed settlement, the Seller shall have the right to assume or reassume said defense. In the event that Seller neither approves the proposed settlement or assumes or reassumes the defense, Purchaser shall have the right to pay such Non-Assumed Liability Claim at the settled amount and recover the amount of such payment from Seller in accordance with the terms of this Agreement. Any judgment entered against the Purchaser on a Non-Assumed Liability Claim after compliance with this subsection will be fully reimbursed by Seller. (ii) In the event that the EPA notifies Purchaser that an audit reveals an overpayment to Seller for work performed or expenses incurred prior to Closing and demands repayment of such amounts or offsets such amounts against payments owed to Purchaser pursuant to the EPA Contracts, Purchaser shall notify Seller of such Non-Assumed Liability Claim as soon as practicable after Purchaser receives notice of such Non-Assumed Liability Claim. The Seller shall have the right to negotiate with the EPA or to participate in applicable dispute resolution mechanisms, at their sole cost and expense. Purchaser shall not pay the EPA for such Non-Assumed Liability Claim without the consent of Seller, unless the failure to pay such Non-Assumed Liability Claim will subject the Purchaser to penalties or affect its ability to bid on or obtain other government contracts or orders, in which case the Purchaser may recover the amount paid by it with respect to such Non-Assumed Liability Claim from Seller. In the event that Seller cannot resolve such Non-Assumed Liability Claim within thirty (30) days after the EPA has withheld, offset or set funds with respect to such Non-Assumed Liability Claim from funds payable to the Purchaser, the Purchaser may recover such withheld, offset or set-off amount from Seller in accordance with this Agreement. 4. Purchase Price and Terms. A. As consideration for the sale, assignment and delivery of the Acquired Assets by Seller, Purchaser shall assume the Assumed Liabilities and pay to Seller the following amount (collectively, the "Purchase Price"): 7 8 (i) At Closing, One Million, Three Hundred Thousand Dollars ($1,300,000) in cash, paid by wire transfer, bank transfer or bank or cashier's check (the "Payment"); 5. Office Leases and Other EPA Contract Equipment. A. Seller will obtain necessary written consent of the Landlord of the Edmonds Washington lease and pay any charges of the Landlord related to obtaining such consent to Purchaser's assumption of that lease. B. In the event the Purchaser and the Seller jointly determine, after the date of this Agreement, that the Seller owns any machinery, equipment, tools, uniforms, protective gear, office furniture or equipment, that is not listed as EPA Contract Equipment on Schedule 1.C. annexed hereto, but is used in connection with or is necessary for the performance of the EPA Contracts and is not otherwise required by the Seller in their Business (the "Unscheduled EPA Contract Equipment"), Purchaser shall have the right, but not the obligation, for a period of thirty (30) days after the Closing (which period may be extended upon the written consent of the Seller) to purchase, free and clear of any and all Liens, for cash, or as otherwise mutually agreed, any such Unscheduled EPA Contract Equipment at a mutually agreeable price. C. Purchaser shall be entitled to use, in connection with its performance of the EPA contracts, Sellers' management information system computer facilities located at Englewood, CO and any related software, from and after the Closing, without charge, as long thereafter as the system and computer are operated by the Seller; provided, however, that such access shall be limited to read only information and delivery order specific data directly related to the EPA Contracts. Notwithstanding the preceding sentence, Seller shall give Purchaser prompt notice upon learning that such facility will become unavailable and shall cooperate with Purchaser to ensure continued availability of all data on such system. 6. Leased Equipment Used to Perform the EPA Contracts. A. By notice to Seller up to 30 days after the Closing, Purchaser shall have the option, but not the obligation, to the extent assumable, to elect to assume any or all of Sellers' lease obligations for leased equipment used to perform any jobs or work orders under the EPA Contracts being performed at the time of the Closing, all of which 8 9 leases, and the periodic rental obligations thereunder, are described on Schedule "6.A." annexed hereto (the "EPA Leased Equipment Leases"). Seller shall take all reasonably necessary action to assume and assign the EPA Leased Equipment Leases, to include satisfying any cure obligations. 7. Transfer Taxes. A. All sales or transfer taxes, if any, including, but not limited to, document recording fees, sales and excise taxes, arising out of or in connection with the consummation of the transactions contemplated hereby shall be paid by the Purchaser. 8. Allocation of Purchase Price. A. The parties agree to allocate the aggregate consideration received by Sellers with respect to the acquired assets in accordance with Section 1060 of the Internal Revenue Service Code, as mutually agreed. Subject to the requirements of any applicable tax law or election, all such mutually agreed to allocation shall be used by each party in preparing any filings required pursuant to Section 1060 of the Code or any similar provisions of state or local law and all relevant Income Tax Returns. 9. Employees. A. Seller and Purchaser agree to reasonably cooperate regarding communications made to the employees of the Seller concerning the transactions contemplated by this Agreement, understanding that Purchaser may wish to contact those employees of the Seller that Purchaser desires to hire or to whom it wishes to offer employment. Notwithstanding the foregoing, Purchaser shall have no obligation to hire or offer to hire any employee of the Seller. With respect to any employee of the Seller, Purchaser shall have no liability for any wages, severance benefits, vacation benefits, COBRA, pension, Workers' Claim, or 401k obligation, collective bargaining agreements or any other benefits owed by the Seller to such employee. 10. Conditions Precedent. A. All obligations of the Purchaser under this Agreement are subject to the fulfillment of each of the following conditions prior to or at the Closing, any of which conditions may be waived by the Purchaser prior to or at the Closing: 9 10 (i) Representations and Warranties. All of the representations, warranties and certifications of the Seller contained in this Agreement shall be true, correct and complete in all material respects on the Closing Date as though all such representations, warranties and certifications were made and given on and as of the Closing Date. (ii) Performance by the Seller. Seller shall have performed and complied with all covenants, agreements and conditions required to be performed or complied with by them pursuant to this Agreement prior to or at the Closing. (iii) No Restraint on Transactions. There shall be no effective injunction, judgment, decree, restraining order or order of any nature issued against Seller or Purchaser by a court or government agency of competent jurisdiction which shall direct that this Agreement, or any of the transactions contemplated by this Agreement not be consummated as herein or therein provided, nor shall any litigation or other proceeding seeking to enjoin the Closing or any of the transactions contemplated by this Agreement have been instituted or threatened by any Federal, state or local governmental agency of department. No request for voluntary postponement of the Closing Date shall have been received by any party to this Agreement from any Federal, state or local governmental agency or department. (iv) No Material Adverse Change. Since September 23, 1999 there shall not have been any material adverse change in the condition of the Acquired Assets that is material in the context of this transaction. (v) Novation Approval. The effectiveness of the sale and assignment of the acquired assets, the assumption by Purchaser of the Assumed Liabilities, and all other transactions contemplated by this Agreement shall be subject to the condition that the EPA shall have consented in writing to the assignment or novation from Seller to Purchaser of the EPA Contract 68-W7-0016 by November 30, 1999. (vi) Other Consents. The Purchaser or Seller shall have obtained such other consents, estoppels and authorizations, in form and substance satisfactory to the Purchaser, as shall 10 11 be reasonably necessary in order for the transactions contemplated by this Agreement to be consummated, including, without limitation, the consents of any secured Parties or creditors. B. All obligations of the Seller under this Agreement are subject to the fulfillment of each of the following conditions prior to or at the Closing, any of which conditions may be waived by the Seller prior to or at the Closing: (i) The representations, warranties and certifications of Purchaser contained in this Agreement shall be true, correct and complete in all material respects on the Closing Date as though all such representations, warranties and certifications were made and given on and as of the Closing Date. 11. Representations of Sellers. A. Seller hereby represents and warrants to the Purchaser as follows: (i) Organization. CET is a corporation duly organized, validly existing and in good standing under the laws of its respective state of incorporation and has all requisite power and authority, corporate or otherwise, to carry on and conduct its business as now being conducted and to own or lease its properties and assets. (ii) Authorization. Seller has the right, power and capacity to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary action on the part of Seller's Board of Directors and this Agreement and validly executed and delivered by Sellers and constitute Seller's legal, valid and binding obligation, enforceable in accordance with its terms. (iii) Ownership of Acquired Assets. (x) To the best of the knowledge, information and belief of the officers of Seller, the Schedules referenced in Schedules 1.A, 1.C. and 1.E hereof set forth a complete and accurate list and description of 11 12 Acquired Assets that are being sold or assigned to Purchaser; (y) Seller has good and valid title to and owns all of the Acquired Assets being sold to Purchaser hereunder, including all rights under the EPA Contracts and the Ancillary Assets. (iv) No Brokerage. No finder or broker was consulted by Seller or was involved in the sale and assignment transactions contemplated by this Agreement or has any other basis upon which to claim a fee or commission, except Seller retained a broker, Sanders Morris & Mundy, and will be solely responsible for paying all fees or commissions. (v) Compliance with Law. Seller has not received any notice of, and has no actual knowledge of, any claimed violation with respect to any law, ordinance, regulation or court order applicable to the Acquired Assets which remains uncured, except as disclosed to in this Agreement and applicable Schedules thereto. (vi) Labor Matters. Seller is not a party to, or bound by, any collective bargaining agreements, and no representation question exists with respect to Seller's employees except as set forth on Schedule 11.A.(vi). Seller is not subject to any liabilities to its employees under the Worker Adjustment and Retraining Notification Act (the "WARN Act"), 29 U.S.C. Section 2101 et. seq. (vii) Permits. Schedule 11.A.(vii) sets forth a true, correct and complete list of all licenses and permits in connection with the performance of the EPA Contracts (the "Permits") including, without limitation, those issued or required under Environmental Laws (as hereinafter defined) and those relating to the occupancy or use of the Edmonds Office issued to or held by Sellers, except for those the absence of which would not have any material adverse effect on the assets, business, financial condition, results of operations or future prospects of the Seller taken as a whole. Such listed Permits are the only Permits that are required for the Seller to perform the EPA Contracts, except for those the absence of which would not have any material adverse effect on the assets, business, financial condition, results of operations or future prospects of Seller 12 13 in the performance of the EPA Contracts. Each such Permit is in full force and effect and, to the knowledge of Seller, no suspension or cancellation of such Permit is threatened and there is no reasonable basis for believing that any such Permit will not be renewable upon expiration. Except as set forth in Schedule 11.A.(viii), each such Permit is assignable by the Seller to the Purchaser without the consent or approval of any party and will continue in full force and effect following the Closing except to the extent such Permit is not assignable or assumable by law. To the extent a Permit is assignable, Seller agrees to assist in the assignment of such Permit by Purchaser. (viii) Environmental Matters. (a) Except as set forth in Schedule 11.A.(viii)(a), Seller has complied in all material respects with all applicable Environmental Laws (as defined below) in performing the EPA Contracts. There is no pending or, to the knowledge of Seller, threatened civil or criminal litigation, written notice of violation, formal administrative proceeding, or investigation, inquiry or information request by any Governmental Entity, relating to any Environmental Law involving the EPA Contracts. For purposes of this Agreement, "Environmental Law" means any federal, state or local law, statute, rule or regulation or the common law relating to the environment or occupational health and safety, including, without limitation, any statute, regulation or order pertaining to (i) treatment, storage, disposal, generation and transportation of industrial, toxic or hazardous substances or solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release or threatened release into the environment of industrial, toxic or hazardous substances, or solid or hazardous waste, including, without limitation, emissions, discharges, injections, spills, escapes or dumping of pollutants, contaminants or chemicals; (v) the protection of wildlife, marine sanctuaries and wetlands, including, without limitation, all endangered and threatened species; (vi) storage tanks, vessels and containers; (vii) underground and other storage tanks or vessels, abandoned, disposed or discarded barrels, containers and other closed receptacles; 13 14 (viii) health and safety of employees and other persons; and (ix) manufacture, processing, use, distribution, treatment, storage, disposal, transportation or handling of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or oil or petroleum products or solid or hazardous waste. As used herein, the terms "release" and "environment" shall have the meaning set forth in the federal Comprehensive Environmental Compensation, Liability and Response Act of 1980 ("CERCLA"). (b) Except as set forth in Schedule 11.A.(viii)(b), there have been no releases of any Materials of Environmental Concern (as defined below) into the environmental at any parcel of real property or any facility used in the performance of the EPA Contracts formerly or currently owned, operated or controlled by the Seller. With respect to any such releases of Materials of Environmental Concern, Seller has given all required notices to Governmental Entities (true, correct and complete copies of which have been previously provided to the Purchaser). Seller is not aware of any releases of Materials of Environmental Concern at parcels of real property or facilities used in the performance of the EPA Contracts owned, operated or controlled by Seller. For purposes of this Agreement, "Materials of Environmental Concern" means any chemicals, pollutants or contaminants, hazardous substances (as such term is defined under CERCLA), solid wastes and hazardous wastes (as such terms are defined under the Federal Resources Conservation and Recovery Act), toxic materials, oil or petroleum and petroleum products. (c) Schedule 11.A.(viii)(c) sets forth a true, correct and complete list of all environmental reports, investigations and audits (whether conducted by or on behalf of the Seller or a third party, and whether done at the initiative of the Sellers or directed by a Governmental Entity or other third party) issued or conducted during the past five years relating to the Edmonds Office. True, correct and complete copies of each such report, or the results of each such investigation or audit, which are in the possession, 14 15 or control of Seller, have previously been provided to the Purchaser. (d) Schedule 11.A.(viii)(d) sets forth a true, correct and complete list of all of the solid and hazardous waste transporters and treatment, storage and disposal facilities used in the performance of the EPA Contracts that have been owned or operated by Seller since September 23, 1999. Seller is not aware of any material environmental liability against Seller with respect to any such transporter or facility. (ix) Government Contracts. Except as disclosed in Schedule 11.A.(ix), Sellers have not been suspended or debarred from bidding on contracts or subcontracts with any governmental entity; no such suspension or debarment has been initiated or, to the knowledge of Sellers, threatened; and the consummation of the transactions contemplated by this Agreement will not result in any such suspension or debarment of any Seller or the Purchaser (assuming that no such suspension or debarment will result solely from the identity of the Purchaser). The Sellers have not been or are not now being audited or investigated relative to the EPA Contracts by the United States Government Accounting Office, the United States Department of Defense or any of its agencies, the Defense Contract Audit Agency, the United States Department of Justice, the Inspector General of any United States governmental entity, or any prime contractor with a governmental entity; nor, to the knowledge of the Sellers, has any such audit or investigation been threatened except with respect to the Government Contract Suspension referenced in Schedule 11.A.(ix). Except as disclosed in Schedule 11.A.(ix), to the knowledge of the Sellers, there is no valid basis for (a) the suspension or debarment of the Sellers from bidding on contracts or subcontracts with any Governmental Entity or (b) any claim pursuant to an audit or investigation by any of the entities named in the previous sentence with respect to the EPA Contracts. Seller is not a party to any agreement, contract or commitment, which requires such any Seller to obtain or maintain a security clearance with any Governmental Entity. 12. Price Adjustment for Acquired Assets. To the extent it is discovered prior to transfer of title or ownership to Purchaser that any Acquired Assets 15 16 listed on the Schedules annexed hereto are not owned by the Sellers as of the Closing or Sellers are otherwise unable to transfer to Purchaser title to such Acquired Assets, free and clear of Liens, Seller shall retain such asset and Purchaser shall be entitled to a credit against the payment on the value of such asset. 13. Representations of Purchaser. A. Purchaser hereby represents and warrants to the Sellers as follows: (i) Organization. Purchaser is a corporation, duly organized, validly existing and in good standing under the laws of the state of California and has all requisite power and authority, corporate or otherwise, to carry on and conduct its business as now being conducted and to own or lease its properties and assets. (ii) Authorization. Purchaser has the right, power and capacity to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, have been duly and validly executed and delivered by Purchaser and constitute Purchaser's legal, valid and binding obligation, enforceable in accordance with its terms. (iii) Qualification. As of the Closing, Purchaser (x) (1) has performed services for the EPA within the past two (2) years, and (2) has not had a contract with the EPA or a contractor of the EPA be terminated for cause within the past five (5) years, or (y) is unaware of any reason why the EPA would not approve an assignment (or novation) of the EPA Contracts to Purchaser. (iv) No Brokerage. No broker was involved in the sale and assignment transactions contemplated by the Agreement. 14. Warranties by Seller. Purchaser acknowledges that Seller is making no express or implied warranty or representation as to condition, merchantability or suitability as to any of the Acquired Assets and that Purchaser takes the Acquired Assets of Sellers "as is" and "where is"; provided, however, that Purchaser shall not be obligated to take title to: 16 17 (a) contaminated EPA Contract Equipment not located on an active EPA Contract job site, unless Sellers agree to cause or pay for the decontamination of same; or (b) any EPA Contract Equipment which is incapable of being used for the original purpose for which it was intended. 15. Cooperation. A. Prior to Closing, Seller and Purchaser agree to cooperate in all material respects with each other to afford access to their respective personnel and representatives, and they shall provide such information concerning the Business, the EPA Contracts and any Acquired Assets that may be reasonably requested by the other party. B. Purchaser agrees to cooperate and assist, without charge, with any reasonable request by Seller to provide at Seller's expense, copies of records, documents or other information needed in connection with an audit or examination by the EPA, other government agency or third party and not otherwise, whether formal or informal, of any jobs or work performed or invoices rendered by the Sellers prior to closing. C. Sellers and Purchaser shall cooperate and assist each other in attempting to obtain the approval of the novation of the EPA contracts from the EPA and all other consents or approvals required hereunder. 16. Records Maintenance. From and after the date of this Agreement, the parties shall preserve all books, records, and other documents, materials, and information relevant to the representations, warranties, and covenants set forth in this Agreement for a period of six years following the date of this Agreement or for such larger period as the rights of the parties hereunder may exist. 17. Notices. All notices, requests, demands and other communications provided for by this Agreement shall be in writing and transmitted by facsimile or delivered in person, or mailed by registered or certified mail, postage prepaid, addressed to the parties, at the following address or to such changed address as such party may have fixed for such notices. Any notice to change of address shall be effective only upon receipt. All notices given by facsimile transmissions shall be deemed given on the date of delivery; all notice given by registered or certified mail shall be deemed given on the date placed in the mail. 17 18 If to Seller: CET Environmental Services Inc. 7032 S. Revere Parkway Englewood, CO 80112 Attention: Steven H. Davis Telephone: 720/875-9115 Facsimile: 720/875-9114 If to Purchaser: IT Corporation 2790 Mosside Boulevard Monroeville, PA 15146-2792 Attention: Paul C. Smith, Esq. Telephone: 412/372-7701 Facsimile: 412/858-3997 18. Noncompetition. Seller agrees that it will not seek, either directly or indirectly, as a prime contractor or subcontractor, to obtain contract or subcontract awards for the performance of emergency and rapid response service with the U.S. Environmental Protection Agency for a period of five (5) years from the date of this Agreement. 19. Entire Agreement. This Agreement, including the Schedules hereto, sets forth the entire agreement and understanding between and among the parties as to the subject matter hereof and merges and supersedes all prior discussions, arrangements and understandings of every kind and nature between them, and no party hereto shall be bound by any condition, definition, warranty or representation other than as expressly provided for in this Agreement or as may be on a date subsequent to the date hereof duly set forth in writing signed by an authorized officer of the party to be charged, and this Agreement may not discharged except by performance in accordance with its terms or by a writing signed by an authorized officer of the party to be charged. 20. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction, as to such jurisdiction, shall be ineffective to the extent of such invalidity or unenforceability, without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. 21. Dispute Resolution and Arbitration. In the event that any dispute arises between the parties pertaining to the subject matter of this Agreement, and the parties, through the senior management of Seller and Purchaser, are unable to resolve such dispute within a reasonable time through 18 19 negotiations and mediation efforts by senior executives of both parties, such dispute shall be resolved as set forth in this Section 21. (a) The procedures of this Section 21 may be initiated by a written notice ("Dispute Notice") given by one party ("Claimant") to the other, but not before thirty (30) days have passed during which the parties have been unable to reach a resolution as described above. The Dispute Notice shall be accompanied by (i) a statement of the Claimant describing the dispute in reasonable detail and (ii) documentation, if any, supporting the Claimant's position on the dispute. Within twenty (20) days after the other party's ("Respondent") receipt of the Dispute Notice and accompanying materials, the parties shall submit the dispute to binding arbitration in the Colorado area under the commercial rules of the American Arbitration Association. (b) Any award arising out of arbitration (i) shall be binding and conclusive upon the parties; (ii) shall be limited to a holding for or against a party, and affording such monetary remedy as is deemed equitable, just and within the scope of this Agreement; (iii) may not include special, incidental, consequential or punitive damages; (iv) may in appropriate circumstances include injunctive relief; and (v) may be entered in court in accordance with the United States Arbitration Act. (c) The arbitrator may not limit, expand or otherwise modify the terms of this Agreement. (d) The laws of the State of California shall apply to any mediation, arbitration, or litigation arising under this Agreement. (e) Each party shall bear its own expenses incurred in any mediation, arbitration or litigation, but any expenses related to the compensation and the costs of any mediator or arbitrator shall be borne equally by the parties to the dispute. (f) A request by a party to a court for interim measures necessary to preserve a party's rights and remedies for resolution pursuant to this Section 21 shall not be deemed a waiver of the agreement to arbitrate. (g) The parties, their representatives, other participants and the mediator or arbitrator shall hold the existence, content and result of arbitration in confidence. (h) Any claim by Purchaser for indemnity or reimbursement from Seller for a "Non-Assumed Liability Claim" under Section 3.D need not be 19 20 first submitted to arbitration under this Article 21, but Purchaser may instead elect to proceed directly under Section 22. 22. Jurisdiction; Court Proceedings; Waiver of Jury Trial. Subject to the provisions of Section 21, any suit, action or proceeding against any party to this Agreement arising out of or relating to this Agreement shall be brought in any Federal or state court located in the State of California or Colorado and each of the parties hereby submits to the exclusive jurisdiction of such courts for the purpose of any such suit, action or proceeding. A final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. To the extent that service of process by mail is permitted by Applicable Law, each party irrevocably consents to the service of process in any such suit, action or proceeding in such courts by the mailing of such process by registered or certified mail, postage prepaid, at its address for notices provided for herein. Each party irrevocably agrees not to assert (a) any objection which it may ever have to the laying of venue of any such suit, action or proceeding in any Federal or state court located in the Commonwealth of Pennsylvania and (b) any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Each party waives any right to a trial by jury, to the extent lawful. 23. Non-Assignment of EPA Contracts. On and after the Closing, Purchaser shall not assign, transfer or novate its interest in and to the EPA Contracts without the prior written consent of the Seller; provided, however, that the Purchaser may assign the EPA Contracts to an affiliate or subsidiary or to a purchaser as part of a sale of the Purchaser to a third party, subject to the terms and conditions contained herein. This section shall survive the Closing. 24. Sections 3.C, 3.D, 5, 8, 9, 12, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 23 shall survive the Closing. 25. Counterparts. This Agreement may be signed in two counterparts, each of which shall be treated as an original, but which when taken together, shall constitute one and the same instrument. [This space is intentionally left blank.] 20 21 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed in their respective names by their respective duly authorized officers or representatives on the day and year first above written. CET Environmental Services, Inc. By: ------------------------------------- Name: Steven H. Davis ----------------------------------- Title: President ---------------------------------- IT Corporation By: /s/ BENJAMIN J. KOSEK ------------------------------------- Name: Benjamin J. Kosek ----------------------------------- Title: Vice President ---------------------------------- 21 22 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed in their respective names by their respective duly authorized officers or representatives on the day and year first above written. CET Environmental Services, Inc. BY: /s/ STEVEN H. DAVIS ------------------------------------- NAME: Steven H. Davis ----------------------------------- TITLE: President ---------------------------------- IT Corporation By: ------------------------------------- Name: ----------------------------------- Title: ---------------------------------- 21 23 SCHEDULE 1.A EPA CONTRACT 1. Contract 68-W-0016 (effective January 9, 1997), with the EPA related to the provisions of Emergency and Rapid Response Services for Regions 6, 8 and 9 of the EPA, and the following delivery orders attached hereto. 22 24 HARBOR SQUARE OFFICE 1. PARTIES: This Lease, dated for reference purposes only November 24, 1997, is made by and between HARBOR SQUARE ASSOCIATES (hereinafter called "Landlord") and CET ENVIRONMENTAL SERVICES, INC. a California Corporation (hereinafter called "Tenant"). 2. PREMISES: Landlord hereby leases to Tenant and Tenant hereby leases from Landlord that certain space (hereinafter called "Premises"), containing approximately 6,920 square feet of floor area, being Suite 106 A AND 203 in Building 5, located at 170 West Dayton, Edmonds, Snohomish County, Washington. The approximate dimensions of said Premises are delineated in Exhibit "A" and Exhibit "A-2" attached hereto and are located on property more particularly described on Exhibit "A-1" attached hereto. Said Lease is subject to the terms, covenants and conditions herein set forth and the Tenant covenants as a material part of the consideration for this Lease to keep and perform each and all of said terms, covenants and conditions by it to be kept and performed. 3. USE: Tenant shall use the Premises for GENERAL OFFICE and shall not use or permit the Premises to be used for any other purposes without the prior written consent of Landlord. 4. TERM: Lease Term shall be THREE (3) FULL YEARS. In the event the Premises are complete, the term of this Lease shall commence as of APRIL 1, 1998. This Lease shall commence as of the date hereof and shall continue thereafter during the Lease Term specified herein above, unless sooner terminated as hereinafter provided in this Lease. Said Lease Term shall be computed from the first day of January of the year following the date when the obligation to pay any rental under this Lease first arises. The Lease shall terminate on MARCH 31, 2001. * Unless extended as provided in Addendum 1 attached hereto. In the event the Premises are not presently complete, Landlord agrees to deliver to Tenant, and Tenant agrees to accept from Landlord possession of the Premises forthwith upon substantial completion of the Premises as described in Exhibit "B" attached hereto and incorporated herein by reference. Landlord agrees that it will, at its sole cost and expense as soon as is reasonably possible after the execution of this Lease commence and pursue to completion the improvements to be erected by Landlord to the extent shown on the attached Exhibit "B" labeled "Description of Landlord's Work and Tenant's Work". The term "Substantial Completion of the Premises" is defined as the date on which Landlord, its Agent or its Project Architect notifies Tenant in writing that the Premises are substantially complete to the extent of Landlord's Work specified in Exhibit "B" hereof, with the exception of such work as Landlord cannot complete until Tenant performs necessary portions of its work. Tenant shall commence the installation of fixtures, equipment and any of Tenant's work as set forth in said Exhibit "B" promptly upon substantial completion of Landlord's Work in the Premises and shall diligently prosecute such installation to completion, and shall open the Premises for business not later than the date specified for commencement of Monthly Base Rent in Article 5 hereof. 25 5. MONTHLY BASE RENT: Tenant agrees to pay to Landlord as Rent, without notice or demand, the monthly sum of EIGHT THOUSAND AND SEVENTY THREE AND 00/100's ($8,073.00) DOLLARS commencing APRIL 1,1998 and a like sum, in advance, on or before the first day of each and every successive calendar month thereafter during the term hereof, except that the first month's rent and deposit referred to in Paragraph 6 herein, shall be paid upon the execution hereof. Rent for any period during the term hereof which is for less than one (1) month shall be a pro-rated portion of the monthly installment herein, based upon a thirty (30) day month. Said rental shall be paid to Landlord without deduction or offset, in lawful money of the United States of America, at such place as Landlord may from time to time designate in writing. 5A. The Monthly Base Rent shall be subject to increase on each annual anniversary of the commencement of the term of this Lease. The base for computing the increase is the Consumer Price Index all Urban Consumers U.S. City Average (1982-84) = 100), published by the United States Department of Labor, Bureau of Labor Statistics ("Index"), which is in effect on the ninetieth (90th) day preceding the date of the commencement of the term ("Beginning Index"). The Index published and in effect on the ninetieth (90th) day preceding each anniversary of the commencement of the term of this Lease ("Extension Index") is to be used in determine the amount of the increase from one year to the next. Beginning with the rent due on and after the first anniversary of the commencement of the term of this Lease, and on and after each subsequent anniversary, the Base Monthly Rent shall be increased to equal the product achieved by multiplying the initial full base monthly rent due with respect to the month immediately preceding such anniversary date by a fraction. On the first anniversary of the Commencement Date, the numerator of the fraction will be the Extension Index and the denominator will be the Beginning Index. On the second and any subsequent anniversaries of the Commencement Date, the numerator of the fraction will be the current Extension Index and the denominator will be the Extension Index used to calculate the previous year's rental increase. If there is a decline from one lease year to the next in the Extension Index, the monthly rent due during the subsequent lease year shall equal the monthly rent due during the then present lease year. Notwithstanding anything contained herein to the contrary, in no event shall base rent increase more than 4% on each adjustment date. If the Index is changed so that the base year differs from that in effect when the term commences, the Index shall be converted in accordance with the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics. If the Index is discontinued or revised during the term, such other government index or computation with which it is replaced shall be used in order to obtain substantially the same result as would be obtained if the Index had not been discontinued or revised. 6. SECURITY DEPOSIT: Tenant shall deposit with Landlord the sum of EIGHT THOUSAND EIGHT HUNDRED AND SEVENTY FOUR AND 57/100'S ($8,874.57) DOLLARS. Said sum shall be held by Landlord as security for the faithful performance by Tenant of all the terms, covenants and conditions of this Lease to be kept and performed by Tenant hereof. If Tenant defaults with respect to any provision of this Lease including but not limited to the provisions relating to the payment of rent, Landlord may (but shall not be required to) use, apply or retain all or any part of this security deposit for the payment of any rent or any other sum of default, or for the payment of any amount which Landlord may spend or become obligated to spend by reason of Tenant's default, or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's default. If any portion of said deposit is so used or applied Tenant shall, within five (5) days written demand therefore, deposit cash with Landlord in an amount sufficient to restore the security deposit to its original amount and Tenant's failure to do so shall be a default under this Lease. Landlord shall not be required to keep this security deposit separate from its general funds, and Tenant shall not be entitled to interest on such deposit. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the security deposit or any balance thereof shall be returned to Tenant (or, at Landlord's option, to the last assignee of Tenant's interest hereunder) within the ten (10) days following expiration of 2 26 the Lease term. In the event of termination of Landlord's interest in this Lease, Landlord shall transfer said deposit to Landlord's successor in interest. 7. ADDITIONAL CHARGES: I. In addition to the Minimum Rent provided in Article 5 above, Tenant shall pay to Landlord the following items, hereinafter called "Adjustments" Payment for the Adjustments will commence MARCH 1, 1998. Base year 1997 cost per square foot of $1.39 or $644.96 per month. The Adjustments are as follows: (a) All real estate taxes and insurance premiums on the Premises, including land, building and improvements thereon. Said real estate taxes shall include all real estate taxes and assessments that are levied upon and/or assessed against the Premises. Said insurance shall include all insurance premiums for fire, extended coverage, liability, and any other insurance that Landlord deems necessary on the Premises. Said taxes and insurance premiums for the purpose of this provision shall be reasonably apportioned in accordance with the total floor area of the Premises as it relates to the total rentable floor area of the building or buildings of which the Premises are a part, (provided, however, that if any tenants in said building or buildings pay taxes directly to any taxing authority or carry their own insurance, as may be provided in their lease, their square footage shall not be deemed a part of the floor area). Any additional amount in insurance premium in excess of the norm for the building or buildings due to the specific nature of Tenant's business, shall be borne by the Tenant. (b) That percent of the total cost of the following items as Tenant's total floor area bears to the total floor area of the building which is from time to time completed as of the first day of each calendar quarter. Tenant's proportionate share (23.65%) of the total cost of the following items: (i) All real estate taxes including assessments, all insurance costs, and all costs to maintain, repair or replace common areas, parking lots, sidewalks, driveways, and other areas used in common by the tenants of the Building. (ii) All costs to supervise and administer said common areas, parking lots, sidewalks, driveways, and other areas used in common by the tenants or occupants of the Building. Said costs shall include such fees as may be paid to a third party in connection with same and shall in any event include a fee to Landlord to supervise and administer same in an amount equal to ten (10%) percent of the total costs of (I) above. (iii) Any parking charges, utilities surcharges, or any other costs levied, assessed, imposed by or at the direction of or resulting from statutes or regulations or interpretations thereof, promulgated by any governmental authority in connection with the use or occupancy of the Premises or the parking facilities serving the Premises. (iv) All rental taxes (other than Federal or State income taxes) levied by any law, statute or ordinance presently in effect or enacted during the term of this Lease. II. Upon commencement of rental Landlord shall submit to Tenant a statement of the anticipated monthly Adjustments for the period between such commencement and the following January and Tenant shall pay same and all subsequent monthly payments in advance on the first day of each month. Tenant shall continue to make said monthly payments until notified by Landlord of a change thereof. By March 1 of each year, Landlord shall endeavor to give Tenant a statement showing the total actual Adjustments for the Building for the prior calendar year and Tenant's allocable share thereof, prorated from the commencement of payment for Adjustments. In the event the total of the monthly payments which Tenant has made for the prior calendar year are less than the actual share of such Adjustments, then Tenant shall pay the difference in a lump sum within ten (10) days after receipt of such statement from Landlord and shall concurrently pay the 3 27 difference between the monthly payments made in the then-current calendar year and the amount of monthly payments which are then calculated as monthly Adjustments based on the prior year's experience. Any overpayment by Tenant shall be credited towards the monthly Adjustments next coming due. The actual Adjustments for the prior year shall be used for purposes of calculating the anticipated monthly Adjustments for the then-current year with the actual determination of such Adjustments after each calendar year as above provided; excepting that in any year in which resurfacing is contemplated, Landlord shall be permitted to include the anticipated cost of same as part of the estimated monthly Adjustments. Even though the term has expired and Tenant has vacated the premises, when the final determination is made of Tenant's share of said Adjustments for the year in which this Lease terminates, Tenant shall immediately pay any increase due over the estimated Adjustments previously paid and, conversely, any overpayment made shall be immediately rebated by Landlord to Tenant. 8. USES PROHIBITED: Tenant shall not do or permit anything to be done in or about the Premises nor bring or keep anything therein which will in any way increase the existing rate of or affect any fire or other insurance upon the Building or any of its contents, or cause a cancellation of any insurance policy covering said Building or any part thereof or any of its contents. Tenant shall not do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other tenants or occupants of the Building or injure or annoy them or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall not commit or allow to be committed any waste in or upon the Premises. 9. COMPLIANCE WITH THE LAW: Tenant shall not use the Premises, or permit anything to be done in or about the Premises, which will in any way conflict with any law, statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force an with the requirements of any board of fire underwriters or other similar bodies now or hereafter constituted relating to or affecting the condition, use or occupancy of the Premises, excluding structural changes not related to or affected by Tenant's Improvements or acts. The judgment of any court of competent jurisdiction or the admission of Tenant in any action against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any law, statute, ordinance or governmental rule, regulation or requirement, shall be conclusive of that fact as between the Landlord and Tenant. 10. ALTERATIONS AND ADDITIONS: Tenant shall not make or allow to be made any alterations, additions or improvements to or of the Premises or any part thereof without the written consent of Landlord, and any alterations, additions or improvements to or of said Premises, including, but not limited to, wall covering, paneling and built-in cabinet work, but excepting movable furniture and trade fixtures, shall at once become a part of the realty and belong to the Landlord and shall be surrendered with the Premises. In the event Landlord consents to the making of any alterations, additions or improvements to the Premises by Tenant, the same shall be made by Tenant at Tenant's sole cost and expense and any structural work shall be done by a contractor licensed and bonded by the State of Washington. Upon the expiration or sooner termination of the term hereof, Tenant shall, upon written demand by Landlord, given at least thirty (30) days prior to the end of the term at Tenant's sole cost and expense, forthwith and with all due diligence remove any alternations additions or improvements made by Tenant, designated by Landlord to be removed, and Tenant shall, forthwith and with all due diligence, at its sole cost and expense, repair any damage to the premises caused by such removal. 11. REPAIRS: Notwithstanding the provisions of Article 10 hereinabove, Landlord shall repair and maintain the structural portions of the Building including the exterior walls and roof, unless such maintenance and repairs are caused in part or in whole by the act, neglect, fault or omission of any duty by the Tenant, its agents, servants, employees, 4 28 invitees, or any damage caused by breaking and entering, in which case Tenant shall pay to Landlord the reasonable cost of such maintenance and repairs. Landlord shall not be liable for any failure to make any such repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such repairs or maintenance is given to Landlord by Tenant. Except as provided in Article 25 hereof, there shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant's business arising from the making of any repairs, alterations or improvements in or to any portion of the Building or the Premises or in or to fixtures, appurtenances and equipment therein, Tenant waives the right to make repairs at Landlord's expense under any law, statute or ordinance now or hereafter in effect. By entry hereunder, Tenant accepts the Premises as being in good and sanitary order, condition and repair. Tenant shall keep, maintain and preserve the Premises in first class condition and repair, and shall, when and if needed, at Tenant's sole cost and expense, make all repairs to the Premises and every part thereof. Tenant shall upon the expiration or sooner termination of the term hereof, surrender the Premises to Landlord in the same condition as when received, usual and ordinary wear and tear excepted. Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof. The parties hereto affirm that Landlord has made no representations to Tenant respecting the condition of the Premises, the Building, the Project or the Common Area except as specifically herein set forth. 12. LIENS: Tenant shall keep the Premises and the property in which the Premises are situated from any liens arising out of any work performed, materials furnished or obligations incurred by Tenant, Landlord may require, at Landlord's sole option, that Tenant shall provide to Landlord, at Tenant's sole cost and expense, a lien and completion bond in an amount equal to one and one-half (1 1/2) times the estimated cost of any improvements, additions, or alterations in the Premises which the Tenant desires to make, to insure Landlord against any liability for mechanics' and materialmen's liens and to insure completion of the work. 13. ASSIGNMENT AND SUBLETTING: Tenant shall not either voluntarily, or by operation of law, assign, transfer, mortgage, pledge hypothecate or encumber this Lease or any interest therein, and shall not sublet the said Premises or any part thereof, or any right or privilege appurtenant thereto, or allow any other person (the employees agents, servants and invitees of Tenant excepted) to occupy or use the said Premises, or any portion thereof, without the written consent of Landlord first had and obtained. A consent to one assignment, subletting, occupation or use by any other person shall not be deemed to be a consent to any subsequent assignment, subletting, occupation or use by another person. Consent to any such assignment or subletting shall in no way relieve Tenant of any liability under this Lease. Any such assignment or subletting without such consent shall be void, and shall, at the option of the Landlord constitute a default under the terms of this Lease. In the event that Landlord shall consent to a sublease or assignment hereunder, Tenant shall pay Landlord Five Hundred and no/l00s ($500.00) Dollars, incurred in connection with the processing of documents necessary to giving of such consent. 14. HOLD HARMLESS: Tenant shall indemnify and hold harmless Landlord against and from any and all claims arising from Tenant's use of the Premises or from the conduct of its business or from any activity, work, or other things done, permitted or suffered by the Tenant or about the Premises, and shall further indemnify and hold harmless Landlord against and from any and all claims arising from any breach of default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease, or arising from any act or negligence of the Tenant, or any officer, agent, employee, guest, or invitee of Tenant, and from all costs, attorney's fees, and liabilities incurred in or about the defense of any such claim or any action or preceding brought thereon and in case any action or proceeding be brought against Landlord by reason of such claim, Tenant upon notice from 5 29 Landlord shall defend the same at Tenant's expense by counsel reasonably satisfactory to Landlord, Tenant as a material part of the consideration to Landlord hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises, from any cause other than Landlord's negligence, and Tenant hereby waives all claims in respect thereof against Landlord. Landlord or its agents shall not be liable for any loss or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any part of the Building or from the pipes, appliances, or plumbing works therein or from the roof, street or subsurface or from any other place resulting from dampness or any other cause whatsoever, unless caused by or due to the negligence of Landlord, its agents, servants or employees, Landlord or its agents shall not be liable for interference with the light, air, or for any latent defect in the Premises. Tenant shall give prompt notice to Landlord in case of casualty or accidents in the Premises. Neither Landlord nor any partner, director, officer, agent or employee of Landlord shall be liable to Tenant or its partners, directors, officers, contractors, agents, employees, invitees, sublessees or licensees, for any loss, injury or damage to Tenant or to any other person, or to its or their property, irrespective of the cause of such injury, damage or loss, unless solely caused by or solely resulting from the gross negligence or willful misconduct of Landlord or its employees in the operation or maintenance of the Premises, the Building, or the Project without contributory negligence on the part of Tenant or any of its sublessees or licensees or its or their employees, agents or contractors, or any other lessees or occupants of the Building or Project. Further, neither Landlord nor any partner, director, officer, agent or employee of Landlord shall be liable (I) for any such damage caused by other lessees or persons in or about the Building or Project, or caused by quasi-public work; or (ii) for consequential damages arising out of any loss of the use of the Premises of any equipment or facilities therein by Tenant or any person claiming through or under Tenant. 15. SUBROGATION: As long as their respective insurers so permit, Landlord and Tenant hereby mutually waive their respective rights of recovery against each other for any loss insured by fire, extended coverage and other property insurance policies existing for the benefit of the respective parties. Each party shall apply to their insurers to obtain said waivers. Each party shall obtain any special endorsements, if required by their insurer to evidence compliance with the aforementioned waiver. 16. LIABILITY INSURANCE: 16A Tenant shall, during the term hereof and any other period of occupancy, at its sole cost and expense, keep in full force and effect the following insurance: 1. Standard form property insurance insuring against the perils of fire, extended coverage, vandalism, malicious mischief, special extended coverage ("All Risk") and sprinkler leakage. This insurance policy shall be upon all property owned by Tenant, for which Tenant is legally liable or that was installed at Tenant's expense, and which is located in the Project including, without limitation, furniture, fittings, installations, fixtures (other than Tenant Improvements installed by Landlord), and any other personal property, in an amount not less than ninety percent (90%) of the full replacement cost thereof. In the event that there shall be a dispute as to the amount which comprises full replacement cost, the decision of Landlord or any mortgagees of Landlord shall be conclusive. This insurance policy shall also be upon direct or indirect loss of Tenant's earnings attributable to Tenant's inability to use fully or obtain access to the Premises, Building or Project in an amount as will property reimburse Tenant. Such policy shall name Landlord and any mortgagees of Landlord as insured parties, as their respective interest may appear. 6 30 2. Comprehensive General Liability Insurance insuring Tenant against any liability arising out of the lease, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be in the amount of $1,000,000 Combined Single Limit for injury to or death of one or more persons in an occurrence, and for damage to tangible property (including loss of use) in an occurrence, with such liability amount to be adjusted from year to year to reflect increases in the Consumer Price Index. The policy shall insure the hazards of the Premises and Tenant's Operations thereon, independent contractors, contractual liability (covering the indemnity contained in Paragraph 20 hereof and shall (a) name Landlord as an additional insured, (b) contain a cross liability provision and (c) contain a provision that the insurance provided the Landlord hereunder shall be primary and non-contributing with any other insurance available to the Landlord. 3. Workers' Compensation and Employer's Liability insurance (as required by state law). 4. Any other form or forms of insurance as Tenant or Landlord or any mortgagees of Landlord may reasonably require from time to time in form, in amounts and for insurance risks against which a prudent tenant would protect itself. 16B All policies shall be written in a form satisfactory to Landlord and shall be taken out with insurance companies holding a General Policyholders Rating of "A" and a Financial Rating of "X" or better, as set forth in the most current issue of Best's Insurance Reports. Within ten (10) days after the execution of this Lease, Tenant shall deliver to Landlord copies of policies or certificates evidencing the existence of the amounts and forms of coverage satisfactory to Landlord. No such policy shall be cancelable or reducible in coverage except after thirty (30) days' prior written notice to Landlord. Tenant shall, within ten (10) days prior to the expiration of such policies, furnish Landlord with renewals or "binders" thereof, or Landlord may order such insurance and charge the cost thereof to Tenant as additional rent. If Landlord obtains any insurance that is the responsibility of Tenant under this Paragraph, Landlord shall deliver to Tenant a written statement setting forth the cost of any such insurance and showing in reasonable detail the manner in which it has been computed. 17. UTILITIES: Tenant shall pay for all water, gas, heat, light, power, sewer charges, telephone service and all other services and utilities supplied to the Premises, together with any taxes thereon. If any such services are not separately metered to tenant, Tenant shall pay to Landlord a reasonable proportion to be determined by Landlord of all charges jointly metered with other premises. 18. PERSONAL PROPERTY TAXES: Tenant shall pay, or cause to be paid, before delinquency any and all taxes levied or assessed and which become payable during the term hereof upon all Tenant's leasehold improvements, equipment, furniture, fixtures, and any other personal property located in the Premises. In the Event any or all of the Tenant's leasehold improvements equipment, furniture, fixtures and other personal property shall be assessed and taxed with the real property. Tenant shall pay to Landlord its share of such taxes within ten (10) days after delivery to Tenant by Landlord of a statement in writing setting forth the amount of such taxes applicable to Tenant's property. 19. RULES AND REGULATIONS: Tenant shall faithfully observe and comply with the rules and regulations that Landlord shall from time to time promulgate and/or modify. The rules and regulations shall be binding upon the Tenant upon delivery of a copy of them to Tenant. Landlord shall not be responsible to Tenant for the nonperformance of any said rules and regulations by any other tenants or occupants. 20. HOLDING OVER: If Tenant remains in possession of the Premises or any part thereof with the express written consent of Landlord, such occupancy shall be a tenancy from month to month at a rental in the amount of 150% the last Monthly Minimum Rent, 7 31 plus all other charges payable hereunder, and upon all the terms hereof applicable to a month to month tenancy. 21. ENTRY BY LANDLORD: Landlord reserves, and shall at any and all times have the right to enter the Premises to inspect the same, to submit said Premises to prospective purchasers or tenants, to post notices of non-responsibility, to repair the Premises and any portion of the Building of which the Premises are a part that Landlord may deem necessary or desirable, without abatement of rent, and may for that purpose erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed, always providing that the entrance to the Premises shall not be blocked thereby, and further providing that the business of the Tenant shall not be interfered with unreasonably. Tenant hereby waives any claim for damages or for any injury or inconvenience or interference with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby, unless caused by Landlord negligence. For each of the aforesaid purposes, Landlord shall at all times have and retain a key with which to unlock all of the doors in, upon and about the Premises, excluding Tenant's vaults, safes and files, and Landlord shall have the right to use any and all means which Landlord may deem proper to open said doors in an emergency in order to obtain entry to the Premises without liability to Tenant except for any failure to exercise due care for Tenant's property and any entry to the Premises obtained by Landlord by any of said means, or otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant from the Premises or any portion thereof. 22. TENANT'S DEFAULT: The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Tenant. 22A. The vacating or abandonment of the Premises by Tenant. 22B. The failure by Tenant to make any payment of rent or any other payment required to be made by Tenant hereunder, as and when due, where such failure shall continue for a period of five 5) days after verbal or written notice thereof by Landlord to Tenant. 22C. The failure by Tenant to observe or perform any of the covenants, conditions, or provisions of this Lease to be observed or performed by the Tenant, other than described in Article 22B above, where such failure shall continue for a period of thirty (30) days after written notice hereof by Landlord to Tenant; provided, however, that if the nature of Tenant's default is such that more than thirty (30) days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within said thirty (30) days period and thereafter diligently prosecutes such cure to completion. 22D. The making by Tenant of any general assignment or general arrangement for the benefit of creditors; or the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt, or a petition or reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days; or the appointment of a trustee or a receiver to take possession of substantially all of Tenants assets located at the Premises or of Tenants interest in this Lease, where possession is not restored to Tenant within thirty (30) days; or the attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where such seizure is not discharged in thirty (30) days. 23. REMEDIES IN DEFAULT: In the event of any such default or breach by Tenant, Landlord may at any time thereafter, with or without notice or demand and without 8 32 limiting Landlord in the exercise of a right or remedy which Landlord may have by reason of such default or breach; 23A. Terminate Tenant's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Tenant shall immediately surrender possession of the Premises to Landlord. In such event Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant's default including, but not limited to; the cost of recovering possession of the Premises; expenses of reletting, including necessary renovation and alteration of the Premises; reasonable attorney's fees; the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent and other charges and Adjustments called for herein for the balance of the term after the time of such award exceeds the amount of such loss for the same period that Tenant proves could be reasonably avoided; and that portion of any leasing commission paid by Landlord and applicable to the unexpired term of this Lease. Unpaid installments of rent or other sums shall bear interest from the date due at the rate of twelve (12%) percent per annum; or, 23B. Maintain Tenant's right to possession in which case this Lease shall continue in effect whether or not Tenant shall have abandoned the Premises. In such event Landlord shall be entitled to enforce all of Landlord's rights and remedies under this Lease, including the right to recover the rent and any other charges and Adjustments as may become due hereunder; or 23C. Pursue any other remedy now or hereafter available to Landlord under the laws or judicial decisions of the State in which the Premises are located. 24. DEFAULT BY LANDLORD: Landlord shall not be in default unless Landlord fails to perform obligations required of Landlord within a reasonable time, but in no event later than thirty (30) days after the receipt of written notice of default by Landlord and by the holder of any first mortgage or deed of trust covering the Premises whose name and address shall have theretofore been furnished to Tenant in writing, specifying wherein Landlord has failed to perform such obligation, provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for performance then Landlord shall not be in default if Landlord commences performance within such thirty (30) days period and thereafter diligently prosecutes the same to completion. In no event shall Tenant have the right to terminate this Lease as a result of Landlord's default and Tenant's remedies shall be limited to damages and/or an injunction. 25. RECONSTRUCTION: In the event the Premises are damaged by fire or other perils covered by extended coverage insurance, Landlord agrees to forthwith repair same, and this Lease shall remain in full force and effect, except that Tenant shall be entitled to a proportionate reduction of the Minimum Rent from the date of damage and while such repairs are being made, such proportionate reduction to be based upon the extent to which the damage and making of such repairs shall reasonably interfere with the business carried on by the Tenant in the Premises. If the damage is due to the fault or neglect of Tenant or its employees, there shall be no abatement of rent. In the event the Premises are damaged as a result of any cause other than the perils covered by fire and extended coverage insurance, then Landlord shall forthwith repair the same, provided the extent of the destruction be less than ten (10%) percent of the then full replacement cost of the premises. In the event the destruction of the Premises is to an extent of ten (10%) percent or more of the full replacement cost then Landlord shall have the option; (1) to repair or restore such damage, this Lease continuing in full force and effect, but the Monthly Base Rent to be proportionately reduced as hereinabove in this Article provided; or (2) give notice to Tenant at any time within sixty (60) days after such damage, terminating this Lease as of the date specified in such notice, which date shall be no more than thirty (30) days after the giving of such notice. In the event of giving such 9 33 notice, this Lease shall expire and all interest of the Tenant in the Premises shall terminate on the date so specified in such notice and the Monthly Base Rent, reduced by as proportionate reduction, based upon the extent, if any, to which such damage interfered with the business carried on by the Tenant in the Premises, shall be paid up to date of said such termination. Notwithstanding anything to the contrary contained in this Article, Landlord shall not have any obligation whatsoever to repair, reconstruct or restore the Premises when the damage resulting from any casualty covered under this Article occurs during the last twenty-four months of the term of this Lease or any extension thereof. Landlord shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of any leasehold improvements, fixtures, or other personal property of Tenant. 26. EMINENT DOMAIN: If more than twenty-five (25%) percent of the Premises shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain, either party hereto shall have the right, at its option, within sixty (60) days after said taking, to terminate this Lease upon thirty (30) days written notice. If either less than or more than 25% of the Premises are taken (and neither party elects to terminate as herein provided), the Monthly Base Rent thereafter to be paid shall be equitably reduced. If any part of the Building other than the Premise may be so taken or appropriated, Landlord shall within sixty (60) days of said taking have the right at its option to terminate this Lease upon written notice to Tenant. In the event of any taking or appropriation whatsoever, Landlord shall be entitled to any and all awards and/or settlements which may be given and Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease. 27. TENANT'S STATEMENT: Tenant shall at any time and from time to time upon not less than five (5) days prior written notice from Landlord execute, acknowledge and deliver to Landlord, and to any Lender of Landlord, a statement in writing (a) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect), and the date to which the rental and other charges are paid in advance, if any, and (b) acknowledging that there are not, to Tenant's knowledge, any incurred defaults on the part of the Landlord hereunder, or specifying such defaults if any are claimed, and (c) setting forth the date of commencement of rents and expiration of the term hereof. Any such statement may be relied upon by any prospective purchaser or encumbrance of all or any portion of the real property of which the Premises are a part. 28. PARKING AND COMMON AREAS: Landlord covenants that common and parking areas shall be at all times available for the non-exclusive use of Tenant during the full term of this Lease or any extension term hereof, provided that the condemnation or other taking by any public authority, or sale in lieu of condemnation, of any or all of such common and parking areas shall not constitute a violation of this covenant. Landlord reserves the right to change the entrances, exits, traffic lanes and the boundaries and locations of such parking area or areas. 28A. Prior to the date of Tenant's opening for business in the Premises, Landlord shall cause said common and parking area of areas to be graded, surfaced, marked and landscaped at no expense to Tenant. 28B. The Landlord shall keep said automobile parking and common areas in a neat, clean and orderly condition, and shall repair any damage to the facilities thereof. 28C. Tenant, for the use and benefit of Tenant, its agents, employees, customers, licensees and sub-tenants, shall have the non-exclusive right in common with Landlord, and other present and future owners, tenants and their agents, employees, customers, licensees and sub-tenants, to use said common and parking areas during 10 34 the entire term of this Lease, or any extension thereof, for ingress and egress, and automobile parking. 28D. The Tenant, in the use of said common and parking areas, agrees to comply with such reasonable rules, regulations and charges for parking as the Landlord may adopt from time to time for the orderly and proper operation of said common and parking area. Such rules may include but shall not be limited to the following; (1) The restricting of employee parking to a limited, designated area or areas; and (2) The regulation of the removal, storage and disposal of Tenant's refuse and other rubbish at the sole cost and cost and expense of Tenant. 29. AUTHORITY OF PARTIES: 29A. Corporate Authority. If Tenant is a corporation, each individual executing this Lease on behalf of said corporation represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation, in accordance with a duly adopted resolution of the board of directors of said corporation, a copy of which is attached hereto, in accordance with the bylaws of said corporation, and that this Lease is binding upon said corporation in accordance with its terms. 29B. Limited Partnerships. If the Landlord herein is a limited partnership, it is understood and agreed that any claims by Tenant on Landlord shall be limited to the assets of the limited partnership, and furthermore, Tenant expressly waives any and all rights to proceed against the individual partners, or the officers, directors or shareholders of any corporate partner, except to the extent of their interest in said limited partnership. 30. SIGNS: No sign, picture, advertisement or notice shall be displayed, inscribed, painted or affixed to any of the glass or woodwork of the premises hereby demised, except such as shall be approved by the Landlord in writing, and shall be painted by a sign painter designated by the Landlord, no signs or devices shall be hung on or placed against the windows of said premises nor on the exterior wall of the building. (See Sign Criteria attached.) 31. DISPLAYS: The Tenant may not display or sell merchandise or allow grocery carts or other similar devices within the control of Tenant to be stored or to remain outside the defined exterior walls and permanent doorways of the Premises. Tenant further agrees not to install any exterior lighting, amplifiers or similar devices or use in or about the Premises any advertising medium which may be heard or seen outside the Premises, such as flashing lights, searchlights, loudspeakers, phonographs or radio broadcasts. 32. AUCTIONS: Tenant shall not conduct or permit to be conducted any sale by auction in, upon or from the Premises, whether said auction be voluntary, involuntary, pursuant to any assignment for the payment of creditors or pursuant to any bankruptcy or other insolvency proceeding. 33. HOURS OF BUSINESS: Not applicable to this Lease. 34. LIMITATION ON LIABILITY: In consideration of the benefits accruing hereunder, Tenant and all successors and assigns covenant and agree that, in the event of any actual or alleged failure, breach or default hereunder by Landlord: 34A The sole and exclusive remedy shall be against the Landlord's interest in the Project; 34B No partner of Landlord shall be sued or named as a party in any suite or action (except as may be necessary to secure jurisdiction of the partnership); 11 35 34C No service of process shall be made against any partner of Landlord (except as may be necessary to secure jurisdiction of the partnership); 34D No judgment will be taken against any partner of Landlord; 34E Any judgment taken against any partner of Landlord may be vacated and set aside at any time nunc pro tunc; 34F No writ of execution will ever be levied against the assets of any partner of Landlord; 34G The obligations of Landlord under this Lease do not constitute personal obligations of the individual partners, directors, officers or shareholders of Landlord, and Tenant shall not seek recourse against the individual partners, directors, officers or shareholders of Landlord or any of their personal assets for satisfaction of any liability in respect to this Lease; 34H These covenants and agreements are enforceable both by Landlord and also by any partner of Landlord. 35. MODIFICATION FOR LENDER: If in connection with obtaining construction, interim or permanent financing for the Project the lender shall request reasonable modifications in this Lease as a condition to such financing, Tenant will not unreasonably withhold, delay or defer its consent thereto, provided that such modifications do not increase the obligations of Tenant hereunder or materially adversely affect the leasehold interest hereby created or Tenant's rights hereunder. 36. HAZARDOUS SUBSTANCES: 36A Presence and Use of Hazardous Substances. Tenant shall not, without Landlord's prior written consent, keep on or around the Premises, Common Areas or Building, for use, disposal, treatment, generation, storage or sale, any substances, wastes or materials, designated as, or containing components designated as hazardous dangerous toxic or harmful and/or which are subject to regulation by any federal, state or local law, regulation, statute or ordinance (collectively referred to as "Hazardous Substances"). 36B Cleanup Costs. Default and Indemnification. 1. Tenant shall be fully and completely liable to Landlord for any and all cleanup costs, and any and all other charges, fees, penalties (civil and criminal) imposed by any governmental authority with respect to Tenant's use, disposal, transportation, generation and/or sale of Hazardous Substances, in or about the Premises, Common Areas, or Building. 2. Tenant shall indemnify, defend and save Landlord harmless from any and all of the costs, fees, penalties and charges assessed against or imposed upon Landlord (as well as Landlord's attorneys' fees and costs) as a result of Tenant's use, disposal, transportation, generation and/or sale of Hazardous Substances. 3. Upon Tenant's default in addition to the rights and remedies set forth elsewhere in this Lease, Landlord shall be entitled to the following rights and remedies: a. At Landlord's option, to terminate this Lease immediately; and/or b. To recover any and all damages associated with the default, including, but not limited to cleanup costs and charges, civil and criminal penalties and fees, loss of business and sales by Landlord and other tenants of the Building, any and all damages and claims asserted by third parties and Landlord's attorneys' fees and costs. 12 36 37. GENERAL PROVISIONS: (i) Plats and Riders. Clauses, plats, riders and addendum's, if any affixed to this Lease are a part hereof. (ii) Waiver. The waiver by Landlord of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition herein contained. The subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of any preceding default by Tenant of any term, covenant or condition of this Lease, other than the failure of the Tenant to pay the particular rental so accepted, regardless of Landlord's knowledge of such preceding default at the time of the acceptance of such rent. (iii) Joint Obligation. If there be more than one Tenant the obligations hereunder imposed shall be joint and several. (iv) Marginal Headings. The marginal headings and article titles to the articles of this Lease are not a part of the Lease and shall have no effect upon the construction or interpretation of any part thereof. (v) Time. Time is of the essence of this Lease and each and all of its provisions in which performance is a factor. (vi) Successors and Assigns. The covenants and conditions herein contained, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of the parties hereto. (vii) Recordation. Neither Landlord nor Tenant shall record this Lease, but a short form memorandum hereof may be recorded at the request of Landlord. (viii) Quiet Possession. Upon Tenant paying the rent reserved hereunder and observing and performing all of the covenants, conditions and provisions on Tenant's part to be observed and performed hereunder, Tenant shall have quiet possession of the Premises for the entire term hereof, subject to all the provisions of this Lease. Tenant has satisfied himself of and hereby accepts the building's method of construction for sound deadening. Any additional requirements for sound deadening shall be borne at the sole expense of the Tenant. (ix) Late Charges. Tenant hereby acknowledges that late payment by Tenant to Landlord of rent or other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Landlord by terms of any mortgage of trust deed covering the Premises. Accordingly, if any installment of rent or any sum due from Tenant shall not be received by Landlord or Landlord's designee within ten (10) days after the amount is due, then Tenant shall pay to Landlord a late charge equal to ten (10%) percent of such overdue amount, plus any attorney's fees incurred by Landlord by reason of Tenant's failure to pay rent and/or other charges when due hereunder. The parties hereby agree that such late charges represent a fair and reasonable estimate of the cost that Landlord will incur by reason of the late payment by Tenant. Acceptance of such late charges by the Landlord shall in no event constitute a waiver of tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder. (x) Prior Agreements. This Lease contains all of the agreement of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreements or understanding pertaining to any such matters shall be effective for any purpose. No provision of this Lease may be amended or added to except by an agreement in writing 13 37 signed by the parties hereto or their respective successors in interest. This Lease shall not be effective or binding on any party until fully executed by both parties hereto. (xi) Inability to Perform. This Lease and the obligations of the Tenant hereunder shall not be affected or impaired because the Landlord is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such inability or delay is caused by reason of strike, labor troubles, acts of God, or any other cause beyond the reasonable control of the Landlord. (xii) Partial Invalidity. Any provision of this Lease which shall prove to be invalid, void, or illegal shall in no way affect, impair or invalidate any other provision hereof and such other provision shall remain in full force and effect. (xiii) Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. (xiv) Choice of Law. This Lease shall be governed by the laws of the State in which the Premises are located. (xv) Attorney's Fees. In the event of any action or proceeding brought by either party against the other under this Lease the prevailing party shall be entitled to recover for the fees of its attorney in such action or proceeding, including costs of appeal, if any, in such amount as the court may judge reasonable as attorney's fees. In addition, should it be necessary for Landlord to employ legal counsel to enforce any of the provisions herein contained, Tenant agrees to pay all attorney's fees and court costs reasonably incurred. (xvi) Sale of Premises by Landlord. In the event of any sale of the Premises by Landlord, Landlord shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission occurring after the consummation of such sale; and the purchaser, at such sale or any subsequent sale of the Premises shall be deemed, without any further agreement between the parties or their successors in interest or between the parties and any such purchaser, to have assumed and agreed to carry out any and all of the covenants and obligations of the Landlord under this Lease. (xvii) Subordination, Attornment. Upon request of the Landlord, Tenant will, in writing, subordinate its rights hereunder to the lien of any mortgage or deed of trust to any bank, insurance company or other lending institution, now or hereafter in force against the Premises, and to all advances made or hereafter to be made upon the security thereof. In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the Landlord covering the Premises, the Tenant shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Landlord under this Lease. The provisions of this Article to the contrary notwithstanding and so long as Tenant is not in default hereunder, this Lease shall remain in full force and effect for the full term hereof. (xviii) Notices. All notices and demands which may or are to be required or permitted to be given by either party on the other hereunder shall be in writing. All notices and demands by the Landlord to the Tenant shall be sent by United States Mail, postage prepaid, addressed to the Tenant at the Premises, and to the address herein below, or to such other place as Tenant may from time to time designate in a notice to the Landlord. All notices and demands by the Tenant to the Landlord shall be sent by United States Mail postage prepaid, addressed to the Landlord at the address set forth herein, and to such other person or place as the Landlord may from time to time designate in a notice to the Tenant. 14 38 To Landlord At: 120 W. DAYTON, SUITE B/6, EDMONDS, WASHINGTON 98020 To Tenant At: 170 W. DAYTON, SUITE 106 A, EDMONDS, WASHINGTON 98020 38. BROKERS. Tenant warrants that it has had no dealings with any real estate broker or agents in connection with the negotiation of this Lease, excepting only NONE and it knows of no other real estate broker or agent who is entitled to a commission in connection with Lease. 39. This Lease is subject to final approval of the lending institution financing this project. If this Lease has been filled in, it has been prepared for submission to your attorney for his approval. No representation or recommendation has been made by the real estate broker or its agents or employees as to the legal sufficiency, legal effect or tax consequences of this Lease or the transactions relating thereto. LANDLORD: HARBOR SQUARE ASSOCIATES By: /s/ DICK BESELIN --------------------------------------- Dick Beselin, Managing General Partner TENANT: By: /s/ JOHN G.L. HOPKINS ---------------------------------------- John G.L. Hopkins, Senior Vice President CET Environmental Services, Inc. 39 STATE OF WASHINGTON ) ) ss. COUNTY OF ) On this 10th day of December, 1997, before me, the undersigned, a Notary Public in and for the State of Washington, duly commissioned and sworn, personally appeared Dick Beselin, to me known to be the Managing General Partner, of the company that executed the foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned and on oath stated that he was authorized to execute the said instrument and that the seal affixed is the seal of said company. Witness my hand and official seal hereto affixed the day and year first above written. [NOTARY PUBLIC SEAL] /s/ JANICE CONNER ---------------------------------- NOTARY PUBLIC in and for the State of Washington, residing at EDMONDS ---------------------------------- My commission expires: 11/9/99 --------- STATE OF WASHINGTON ) ) ss. COUNTY OF SNOHOMISH ) On this 2nd day of December, 199_, before me, a Notary Public in and for the State of Washington, duly commissioned and sworn, personally appeared John G. L. Hopkins, to me known to be the individual names in and who executed the foregoing instrument, and acknowledged to me that he/she signed the same as his/her free and voluntary act and deed for the uses and purposes therein mentioned. WITNESS MY HAND AND OFFICIAL SEAL the day and year first above written. [NOTARY PUBLIC SEAL] /s/ SUSAN BESELIN ---------------------------------- NOTARY PUBLIC in and for the State of Washington, residing at EDMONDS ---------------------------------- My commission expires: 6/15/99 ---------- 16 40 EXHIBIT "C" HARBOR SQUARE BUSINESS PARK RULES AND REGULATIONS Tenant shall faithfully observe and comply with the rules and regulations that Landlord shall from time to time promulgate and/or modify. The rules and regulations shall be binding upon the Tenant. Landlord shall not be responsible to Tenant for the nonperformance of any said rules and regulations by any other tenants or occupants. The Tenant, in the use of said common and parking areas, agrees to comply with such reasonable rules, regulations for the parking as the Landlord may adopt from time to time for the orderly and proper operation of said common and parking areas. Such rules may include but shall not be limited to the restricting of employee parking to a limited, designated area or areas. The following rules and regulations are now in effect: 1. Tenant parking is on a non-exclusive, first-come-first-serve basis within the designated areas and is intended for vehicles used to commute to and from work. Storage of vehicles or the display of vehicles, such as "for sale", is not permitted. Company vans or cars used in the daily operation of tenant's business may remain on the premises overnight. Any parking of vehicles other than what is described above must have Landlord's approval. Vehicles not conforming with the above will be towed at the owner's expense. 2. All loading and unloading of goods shall be done only at such times, in the areas, and through the entrances designated for such purposes by Landlord. 3. All garbage and refuse shall be kept in the kind of container specified by Landlord, and shall be placed outside of the Leases Premises prepared for collection in the manner and at the times and places specified by Landlord. If Landlord shall provide or designate a service for picking up refuse and garbage, Tenant shall use same at Tenant's cost. Tenant shall pay the cost of removal of any of Tenant's refuse or rubbish. 4. No aerial shall be erected on the roof or exterior walls of the Leased Premises or on the grounds, without in each instance, the written consent of Landlord. Any aerial so installed without such written consent shall be subject to removal without notice at any time. 5. No loud speakers, televisions, phonographs, radios, or other devices shall be used in a manner so as to be heard or seen outside of the Leased Premises without the prior written consent of Landlord. 6. If the Leased Premises are equipped with heating facilities separate from those in the remainder of the building, Tenant shall keep the Leased Premises at a temperature sufficiently high to prevent freezing of water pipes and fixtures. 7. The exterior areas immediately adjoining the Leased Premises shall be kept clean and free from snow, ice, dirt and rubbish by Tenant to the satisfaction of Landlord, and Tenant shall not place or permit any obstruction or merchandise in such areas. 8. The plumbing facilities shall not be used for any other purpose than that for which they are constructed, and no foreign substance of any kind shall be thrown therein, and the expense of any breakage, stoppage, or damage resulting from a violation of this provision shall be borne by Tenant who shall, or whose employees, agents or invitees shall have caused it. 9. Tenant shall use at Tenant's cost such pest extermination contractor as Landlord may direct and at such intervals as Landlord may require. 17 41 10. Tenant shall not burn any trash or garbage of any kind in or about the Leased Premises. 11. Tenant shall not make noises, cause disturbances, or create odors which may be offensive to other tenants of the building or their officers employees agents, servants, customers or invitees. 12. Tenant shall not allow for the operation of a day care facility within the Premises. 13. Tenant, employees or invitees shall not smoke in the premises. 18 42 EXHIBIT "A" HARBOR SQUARE BUSINESS PARK [FIRST FLOOR PLAN] 43 EXHIBIT "B" HARBOR SQUARE BUSINESS PARK Description of Landlord's Work and Tenant's Work Tenant: CET ENVIRONMENTAL SERVICES, INC. 170 W. Dayton, 106 B-D Edmonds, WA 98020 DESCRIPTION OF LANDLORD'S WORK Premises: As is in the enclosed space, with the exception of: 1. Over Head door to be re-installed. Exterior: 1. Landlord shall provide for a fenced area with one (1) roller gate immediately adjacent to the warehouse as shown on "Exhibit D - Yard". 44 EXHIBIT "D-YARD" HARBOR SQUARE BUSINESS PARK [FLOOR PLAN] 45 EXHIBIT "A-1" HARBOR SQUARE BUSINESS PARK Building 5 That portion of Government Lot 3, Section 23, Township 27 North, Range 3 East, V.M., described as Parcel 5, in Snohomish County, Washington, together with easements, covenants and restrictions of record. 22 46 ADDENDUM 1 Tenant shall have three (3) successive options to extend the term of this lease upon the same terms and conditions as contained in the Lease dated November 24, 1997 for an additional period of one (1) year each commencing upon the expiration of the preceeding term, provided that Tenant is not in material default in the performance of any condition of the Lease at the time of the exercise of the option or at the time of commencement of the option term. The option may be exercised only by Tenant delivering written notice thereof to Landlord not less than six (6) months prior to the expiration of the original Lease term, the terms and conditions of the Lease shall remain the same except for the amount of minimum rent, which amount shall be negotiated and agreed upon by both parties at least four (4) months prior to commencement date of the option term. In the event that minimum rent is not agreed upon by that time, this option becomes null and void. Upon exercise of the option and upon agreement of the amount of minimum rent per the above, the Lease shall be deemed extended without execution of any further lease or other instrument. Together with the payment of minimum rent due for the first month of the option term, Tenant shall deposit with Landlord any additional amount necessary so that the amount of security deposit held by Landlord equals the amount of the then-current minimum rent. 23 47 HARBOR SQUARE SIGN CRITERIA BUILDING 5, 170 W. DAYTON A. One copy of layout and shop drawings are to be submitted to the Lessor for approval before fabrication and prior to submission to the City. B. An approved drawing will be required before installation of sign is permitted. Signs built without approval or contrary to corrections on approved drawing will be altered to conform with these standards at the expense of the Lessee. C. No flashing or animated signs will be permitted. D. No exposed electrical tubing or "cross-over" will be permitted. E. No projections above or below the sign panel designated area will be permitted. F. For the ground floor, the following types of signs are acceptable: channel letters, foam letters. Second floor signage is generally not permitted. G. All lettering shall be restricted to the sign area. See subsequent sheets for maximum letter heights and allowable locations. H. Window signs shall be for tenant identification only and shall be fold leaf or similar lettering (see Sheet 2). I Symbols, spacing and colors are subject to the Lessor's written approval. J. After approval by Lessor, a sign must be submitted to and approved by the Architectural Design Board of the City of Edmonds. 48 TEMPORARY SIGNS: All temporary signs, which have been pre-approved by Landlord and meet the City of Edmonds sign code, require a refundable deposit of $100. Temporary signs include, but are not limited to, banners and posters. All temporary signs shall be removed after fourteen (14) days, unless Tenant has received prior approval from Landlord for a longer placement. Any signs left up longer than what Landlord has approved shall be removed by Landlord and Tenant shall forfeit the entire deposit. Signs shall not be installed in such a manner that the building shell is penetrated. In the event that this should occur, Tenant shall also pay the cost the repair such penetrations in addition to the amount initially deposited. Signs which have been placed without Landlord's prior written approval shall be removed at the sole expense of Tenant including, but not limited to, any repairs resulting from sign placement and removal. Sandwich style signs are to be placed only on the grassy areas as outlined on the attached site plan and must be to announce special events only (e.g., special displays, sales, etc.) and cannot be left out for more than fourteen (14) days in a row and are to be removed each night. Only one sandwich sign at a time can be placed on each of the grassy areas as outlined on the attached site plan. These signs must also conform to the size, colors, etc. as allowed by the current City of Edmonds codes. 49 [HARBOR SQUARE LETTERHEAD] HARBOR SQUARE SIGN CRITERIA A. INSTALLATION: 1. TENANTS SHALL PAY FOR THE INSTALLATION AND MAINTENANCE OF ALL SIGNS. THE OWNER WILL PROVIDE PRIMARY ELECTRICAL SERVICE TERMINATING AT THE POINT SHOWN ON THE CONSTRUCTION DRAWINGS. THE TENANT SHALL PROVIDE ALL OTHER INSTALLATION, INCLUDING FINAL CONNECTION, TRANSFORMERS AND ALL OTHER LABOR AND MATERIALS FOR SIGN INSTALLATION. B. EXCEPTIONS: 1. EXCEPTIONS TO THESE STANDARDS SHALL BE REVIEWED BY THE LESSOR, AND ACCORDINGLY, THE DEVELOPER WILL RETAIN FULL RIGHTS OF APPROVAL ON ANY SIGNS USED IN HARBOR SQUARE. [DRAWING] C. STOREFRONT/WINDOWS: 1. THE TENANT IS ALLOWED TO USE UP TO 144 SQ. IN. OF GOLD LEAF OR DECAL APPLICATION LETTERING, NOT TO EXCEED 2". 2. ALL NUMBERS AND DECAL LETTERS SHALL BE "MICRO-STYLE BOLD". OTHER TYPE FACES ARE SUBJECT TO APPROVAL BY LESSOR. -2- 50 [HARBOR SQUARE LETTERHEAD] HARBOR SQUARE SIGN CRITERIA A. ILLUMINATED SIGN CAN: 1. FROM SIDEWALL TO SIDEWALL OF TENANT SPACE, APPROVED PLASTIC PANELS AND SIGNS SHALL BE LIMITED AS FOLLOWS: a. They shall not exceed 20 percent of the wall area. b. They shall be located a minimum distance of 18" from adjacent tenants. c. They shall not exceed a height of 18". d. All edges and the back shall be fully encased in metal. 2. SIGN SHALL BE ATTACHED DIRECTLY TO WALL. THE BOTTOM OF PROJECTING SIGN SHALL BE AT 8' - 0" MINIMUM. 3. SUGGESTED TYPE FACE IS "MICROSTYLE BOLD", OTHER FACES SUBJECT TO PRIOR APPROVAL BY LESSOR. [DRAWING] ANODIZED ALUMINUM SIGN [DRAWING] CAN, TO MATCH STOREFRONT. SEMI-OPAQUE BACKGROUND COLOR SUBJECT TO LESSOR'S APPROVAL. TRANSLUCENT LETTERS, COLOR SUBJECT TO LESSOR'S APPROVAL. 430 WA. COOLWHITE LAMPS, 7" O.C. -3- 51 [SITE PLAN] [HARBOR SQUARE LOGO] HARBOR SQUARE ASSOCIATES EDMONDS, WA 98020 52 SCHEDULE 1.C. EPA CONTRACT EQUIPMENT SEE ATTACHED SCHEDULE AND INCLUDING SELLERS OFFICE FURNITURE AND MISCELLANEOUS EQUIPMENT AND SUPPLIES LOCATED IN THE EDMUNDS, WA LEASED FACILITY. 23 53
ID SERIAL MAKE & MODEL AP VENDOR FAACCT BOOK_BASIS - ---- ----------------- --------------------------------- ------------------------ -------- ----------- S100 1FTJX35G4RKB31487 94 F350 1 TON EXT CAB COURTESY 0172-002 $ 13,385.85 S101 1FTJX35GTEB64213 96 F350 1 TON EXT CAB ASSOCIATES LEASING 0172-002 $ 20,732.00 S102 2FDKF3852LCA91856 90 F350 1 TON FLATBED BILLPIE FORD 0171-002 $ 24,961.97 S103 [ILLEGIBLE] 95 CHEVY ASSOCIATES LEASING 0172-002 $ 22,743.53 S104 [ILLEGIBLE] 92 F250 1 TON BOX TRUCK ENTERPRISE 0172-002 $ 21,580.68 S105 1FTJW35SF9SEA71446 95 F350 1 TON CREW CAB ASSOCIATES LEASING 0172-002 $ 25,780.00 S106 [ILLEGIBLE] KOMATSU 5000LB INDUSTRIAL FORKLIFT HERTZ 0171-002 $ 13,000.03 S107 [ILLEGIBLE] 98 YAMAHA 386CC 4X4 ATV CANTON FARM EQUIPMENT 0171-002 $ 5,295.00 S108 3B7KC23C7SM172833 95 BR2500 RAM ASSOCIATES LEASING 0172-002 $ 27,315.00 S200 [ILLEGIBLE] 28' 1985 FRUEHAUF VAN FRUEHAUF 0170-002 $[ILLEGIBLE] S202 16VAX1213N1A21011 92 BIG TEX UTILITY TRAILER HARRIS TRAILER SALES 0170-002 $ 777.56 S205 FRTO11702 32' SEMI TRAILER FRUEHAUF 0170-002 $ 3,843.00 S207 FRTO11708 32' SEMI TRAILER FRUEHAUF 0170-002 $ 3,843.00 S208 107101E 74 GINDY DRY VAN FRUEHAUF 0170-002 $ 6,774.12 S209 HAZDECON MODEL #R-MDF4LP HAZDECON 0170-002 $ 26,930.00 S210 983110 8'X20' DECON TRAILER HAZCO/CENTRAL INDUSTRIES 0170-002 $ 2,164.00 S300 GC02-2471827 2' TRASH PUMP HONDA 0170-002 $ 1,136.10 S301 234-76104-01 3' TRASH PUMP MULTIQUIP 0170-002 $ 1,555.13 S302 WAF1009366 3' TRASH PUMP HONDA 0170-002 $ 1,295.00 S304 [ILLEGIBLE] 2' SUBMERSIBLE PUMP TEEL SYSTEMS 0170-002 $ 1,487.58 S307 08-9527 PUMP ME/PAPB/TF/FTF/PTS WAGNER PROCESS/WILDEN 0170-002 $ 2,587.69 S308 PUMP WIMB/TO/TF/TF/AT ARGO/WILDEN 0170-002 $ 985.00 S309 PUMP WIM1STOTFTFAT ARGO/WILDEN 0170-002 $ 1,543.00 S310 PUMP WIMB/ST/FT/TF/ST ARGO/WILDEN 0170-002 $ 2,090.00 S311 PUMP WIMB/ST/FT/TF/ST ARGO/WILDEN 0170-002 $ 2,093.00 S313 PUMP M8-WIM ARGO/WILDEN 0170-002 $ 1,170.00 S314 PUMP M8-WIM ARGO/WILDEN 0170-002 $ 985.00 S317 15-5003 MIS-00-BN-BN-BN PHOENIX PUMPS/WILDEN 0170-002 $ 1,232,62 S318 [ILLEGIBLE] MASTERFLEX 12VDC COLE-PARMER/REDI-FLO 0170-002 $ 2,369.38 S319 110 VOLT FUEL PUMP REBEL OIL 0170-002 $ 466.94 S321 PUMP PCISP2GVPNC ARGO 0170-002 $ 946.25 S323 3'DD ALUMINUM PUMP HERTZ/WILDEN 0170-002 $ 1,357.38 S324 CA9105 CA9115 TELESCOPIC SHOWER SAFETY ENVIRONMENTAL 0170-002 $ 899.71 S329 LUTZ PUMP RYAN HERCO 0170-002 $ 1,325.87 S400 1119596 93 HONDA GENERATOR [ILLEGIBLE] HILLSBORO HONDA 0170-002 $ 2,150.00 S500A HIP AIR PACK CASCADE/MSA 0170-002 $ 1,748.89 S500B HIP AIR PACK CASCADE/MSA 0170-002 $ 1,748.89 S500C HIP AIR PACK CASCADE/MSA 0170-002 $ 1,748.89 S500D HIP AIR PACK CASCADE/MSA 0170-002 $ 1,748.89 S502A HIP AIR PACK HAZCO/MSA 0170-002 $ 1,582.73 S502B HIP AIR PACK HAZCO/MSA 0170-002 $ 1,582.73 S502C HIP AIR PACK HAZCO/MSA 0170-002 $ 1,582.73 S503A HIP AIR PACK HAZCO/CASCADE 0170-002 $ 1,359.04 S503B HIP AIR PACK HAZCO/CASCADE 0170-002 $ 1,359.04 S503C HIP AIR PACK HAZCO/CASCADE 0170-002 $ 1,359.04 S503D HIP AIR PACK HAZCO/CASCADE 0170-002 $ 1,359.04 S504A HIP AIR PACK CASCADE/MSA 0170-002 $ 1,487.58 S504B HIP AIR PACK CASCADE/MSA 0170-002 $ 1,487.58 S504C HIP AIR PACK CASCADE/MSA 0170-002 $ 1,487.58 S505A HIP AIR PACK CASCADE/MSA 0170-002 $ 1,437.50
ID SEP-99 DEP EXP-99 ACCUM 99 NBV - ---- ----------- ----------- ----------- ----------- S100 (17.19) 897.51 13,368.61 17.19 S101 345.53 3,109.00 14,627.58 6,104.42 S102 0.00 0.00 24,961.97 0.00 S103 379.05 3,411.53 20,456.54 2,288.99 S104 359.88 3,237.10 20,693.47 [ILLEGIBLE] S105 429.57 [ILLEGIBLE] [ILLEGIBLE] 4,640.91 S106 216.67 1,950.00 4,554.45 8,435.58 S107 58.25 794.25 [ILLEGIBLE] 3,674.14 S108 455.25 4,097.25 24,052.38 3,282.63 S200 104.45 940.02 3,874.96 2,391.82 S202 28.87 15.98 777.58 0.00 S205 (14.94) 79.00 3,843.01 0.00 S207 (14.94) 79.00 3,843.01 0.00 S208 112.90 1,016.12 4,22.53 2,551,59 S209 345.00 3,105.00 16,215.00 12,765.00 S210 0.00 0.00 [ILLEGIBLE] (0.00 S300 13.53 121.73 885.60 270.50 S301 0.00 82.69 1,565.13 (0.00 S302 0.00 23.74 1,295,00 (0.00 S304 0.00 0.00 1,487.58 0.00 S307 30.57 275.11 911.94 1,555.75 S308 0.00 0.00 917.47 67.53 S309 0.00 0.00 1,543.00 (0.00 S310 0.00 0.00 2,090.00 (0.00 S311 0.00 0.00 2,093.00 0.00 S313 13.93 125.36 998.21 171.79 S314 0.00 0.00 985.00 0.00 S317 14.67 132.07 555.17 577.45 S318 28.21 253.66 2,309.21 80.17 S319 5.80 52.17 373.90 113.04 S321 11.25 101.38 836.61 109.64 S323 16.16 145.43 324.28 1,033.12 S324 10.71 96.40 770.82 128.89 S329 22.10 154.68 154.68 1,171.19 S400 25.60 230.36 1,611.51 508.49 S500A 20.82 187.38 796.72 952.17 S500B 20.82 187.38 796.72 952.17 S500C 20.82 187.38 796.72 952.17 S500D 20.82 187.38 796.72 952.17 S502A 18.84 169.58 1,069.60 513.13 S502B 18.84 169.58 1,069.60 513.13 S502C 18.84 169.58 1,069.60 513.13 S503A 16.18 145.61 837.54 521.50 S503B 16.18 145.61 837.54 521.50 S503C 16.18 145.61 837.54 521.50 S503D 16.18 145.61 837.54 521.50 S504A 0.00 0.00 1,487.58 0.00 S504B 0.00 0.00 1,487.58 0.00 S504C 0.00 0.00 1,487.58 0.00 S505A 19.49 175.45 1,595.91 41.59
Page 1 of 6 54
ID SERIAL MAKE & MODEL AP VENDOR FAACCT -- ------ ------------ --------- ------ S505B HIP AIR PACK CASCADE/MSA 0170-002 S505C HIP AIR PACK CASCADE/MSA 0170-002 S505D HIP AIR PACK CASCADE/MSA 0170-002 S506 HIP AIR PACK MSA/SCBA 0170-002 S507 HIP AIR PACK MSA/SCBA 0170-002 S701 VAC-U-MAX 55 GAL OPEN TOP VACU-MAX 0170-002 S702 VAC-U-MAX CLN/U55 VACU-MAX 0170-002 S703 VAC-U-MAX CLN/U55 VACU-MAX 0170-002 S704 ASBESTOS VAC HACO 0170-002 S705 ASBESTOS VAC HACO 0170-002 S706 CA102ASB-12P PULLMAN HOLT 12 GAL VACUUM SAFETY ENVIRONMENTAL 0170-002 S707 CA102ASB-12P PULLMAN HOLT 12 GAL VACUUM SAFETY ENVIRONMENTAL 0170-002 S708 CA102ASB-12P PULLMAN HOLT 12 GAL VACUUM SAFETY ENVIRONMENTAL 0170-002 S709 CA102ASB-12P PULLMAN HOLT 12 GAL VACUUM SAFETY ENVIRONMENTAL 0170-002 S710 NILFISK WET/DRY MERCURY VAC HAZCO 0170-002 S711 NILFISK WET/DRY MERCURY VAC HAZCO 0170-002 S712 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S713 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S714 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S715 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S716 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S717 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S722 AIRSTRIPPER, SHALLOW TRAY AIR STRIP 0170-002 S724 CONCRETE VIBRATOR W/MOTOR LONE STAR NORTHWEST 0170-002 S725 FIRE SAFETY CABINET C&H DISTRIBUTORS 0170-002 S726 FIRE SAFETY CABINET C&H DISTRIBUTORS 0170-002 S734 1/2" PNEUMATIC DRILL GRAINGER 0170-002 S738 B190 PNEUMATIC DRUM DEHEADER GA W/3517 WIZARD DRUM TOOL 0170-002 S739 TC16116 BROOKS ($443,811) TARMAC 0170-002 S740 PD390-3953 3000 PSI GENERATOR PRESSURE WASHER LANDA 0170-002 S741 10074 SUPER PROLINE DRUM CRUSHER 10-20/70 DRUMBEATERS OF AMERICA 0170-002 S749 PH 3000 HYDRALIC SHEAR CODE 3 RES Q 0170-002 S752 DE4800/FR1210 105 GAL TANK W/FUEL PUMP ACE TANK & EQUIP 0170-002 S756 HAZCAT KIT W/SENS. PUMP & TUBES HAZTECH SYSTEMS 0170-002 S758 26083 BURIED PIPE & CABLE DETECTOR MCMASTER CARR SUPPLY 0170-002 S759 933113 LASER PRO SHOT L1AS OPTICO FIELD EQUIPMENT & S 0170-002 S761 K01B1 EXPLOSIMETER MODEL #1314SMPN GASTECH 0170-002 S763 580A-2521B-219 PHOTOIONIZATION DETECTOR MODEL #58 ENVIRONMENTAL INSTRUMEN 0170-002 S764 590A-24612-217 PHOTOIONIZATION DETECTOR MODEL #58 ENVIRONMENTAL INSTRUMEN 0170-002 S765 15326 100 FT WATER LEVEL INDICATOR SINCO/SLOPE INDICATOR COM 0170-002 S770 MARK 4 DUST FOGGER SYSTEM TORGERSON MACHINERY 0170-002 S771 SPACE RECOVERY UNIT ARAMSCO 0170-002 S773 063415 AUTO LEVEL W/TRIPOD CONTRACTORS WAREHOUSE 0170-002 S774 B0210 PCB SOIL TEST ANALYZER ENSYS 0170-002 S777 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S778 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S779 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S780 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S781 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S782 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002
ID BOOK_BASIS SEP-99 DEP EXP-99 ACCUM-99 NBV -- ---------- ------ ---------- -------- --- S505B $ 1,637.50 19.49 175.45 1,593.31 44.18 S505C $ 1,637.50 19.49 175.45 1,593.31 44.19 S505D $ 1,637.50 19.49 175.45 1,593.31 44.19 S506 $ 2,694.50 0.00 192.48 2,694.75 0.00 S507 $ 2,694.50 0.00 0.00 2,694.75 0.00 S701 $ 1,345.85 18.02 144.20 254.22 1,091.63 S702 $ 954.55 0.00 0.00 954.56 (0.00) S703 $ 954.55 0.00 0.00 954.56 (0.00) S704 $ 1,300.00 15.48 139.29 513.29 785.71 S705 $ 1,300.00 15.48 139.29 513.29 785.71 S706 $ 624.06 7.43 66.87 522.79 101.29 S707 $ 624.06 7.43 66.87 534.68 89.40 S708 $ 624.06 7.43 66.87 534.68 89.40 S709 $ 624.06 7.43 66.87 534.68 89.40 S710 $ 4,072.38 48.48 436.33 1,016.48 3,055.90 S711 $ 4,072.38 48.48 436.33 1,165.77 2,905.61 S712 $ 808.13 9.62 86.59 692.36 115.77 S713 $ 808.13 9.62 86.59 692.36 115.77 S714 $ 808.13 9.62 86.59 692.36 115.77 S715 $ 808.13 9.62 86.59 692.36 115.77 S716 $ 808.13 9.62 86.59 692.36 115.77 S717 $ 808.13 9.62 86.59 692.36 115.77 S722 $ 13,096.00 155.93 1,403.36 5,145.64 7,952.36 S724 $ 948.00 11.29 101.57 714.39 233.61 S725 $ 794.68 9.48 85.14 530.73 263.95 S726 $ 795.00 9.46 85.18 659.86 135.34 S734 $ 651.72 7.76 69.83 606.01 43.71 S738 $ 3,005.60 0.00 146.70 3,005.60 (0.00) S739 $443,611.00 5,283.46 47,551.18 65,239.69 358,571.11 S740 $ 10,641.03 0.00 0.00 10,641.03 (0.00) S741 $ 45,774.30 544.93 4,904.38 25,339.34 20,434.96 S749 $ 6,330.43 75.36 576.26 3,197.87 3,132.58 S752 $ 689.55 8.21 73.66 307.29 382.26 S756 $ 3,007.30 35.80 322.21 1,661.18 1,345.12 S758 $ 674.04 8.02 72.22 430.37 243.67 S759 $ 3,315.60 39.47 355.24 1,518.33 1,797.27 S761 $ 2,324.15 0.00 0.00 2,324.15 0.00 S763 $ 4,885.00 56.15 523.39 1,093.31 3,791.68 S764 $ 4,925.00 58.63 527.68 1,102.28 3,822.74 S765 $ 680.00 8.10 72.66 152.19 527.81 S770 $ 2,291.36 27.28 245.51 1,382.10 909.28 S771 $ 2,675.88 31.86 286.70 2,056.62 619.06 S773 $ 864.86 0.00 51.48 664.68 0.00 S774 $ 1,261.50 15.26 137.30 1,000.79 280.71 S777 $ 1,118.89 13.32 119.88 388.06 730.83 S778 $ 1,118.89 13.32 119.88 388.06 730.83 S779 $ 1,118.89 13.32 119.88 388.06 730.83 S780 $ 1,118.89 13.32 119.88 388.06 730.83 S781 $ 1,118.89 13.32 119.88 388.06 730.83 S782 $ 1,118.89 13.32 119.88 388.06 730.83
PAGE 2 OF 6 55
ID SERIAL MAKE & MODEL AP VENDOR FAACCT -- ------ ------------ --------- ------ S783 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S784 DATA LOGGER TRANSDUCER 0170-002 S785 VAPOR EXT/GROUND WATER UNIT 0170-002 S786 WATER TREATMENT VESSELS CAMERON-YAKIMA 0170-002 S787 WATER TREATMENT VESSELS CAMERON-YAKIMA 0170-002 S788 WATER TREATMENT VESSELS CAMERON-YAKIMA 0170-002 S789 WAREHOUSE SECURITY GATE ECONOMY FENCE CENTER 0170-002 S790 BASIC SOIL AUGER KIT NORTHWEST PUMP & EQUIPM 0170-002 S791 000945 CONNEX BOX INSTANT SPACE 0170-002 S792 1000LB VAPOR PHASE CARBON VESSELS SUN-AG 0170-002 S794 202-2226 THERMO ANEMOMETER GRAINGER 0170-002 S795 59261 1000LB PORTABLE BALANCE SCALE CASCO 0170-002 S796 DCR-205-15 DRUM TIPPER 55 GAL/ 180 DEGREE CLARKLIFT OF SAN DIEGO 0170-002 S797 GREASE BARREL CHASSIS PUMP SPOKANE PUMP/LINCOLN 0170-002 S798 202-2226 THERMO ANEMOMETER GRAINGER 0170-002 S799 DESORBER UNIT REBUILD TARMAC 0170-002 S800 X7329576-1 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S801 X7328877-1 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S802 X7328876-1 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S803 X7311417 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S806 87142380 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S807 87141412 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S808 97278138 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S809 18504350 305 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S810 67041818 225 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S811 67041551 225 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S812 11651633 205 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S813 10628342 205 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S814 12895459 205 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S818 12895318 205 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S819 83443183 P100 DESK TOP COMPUTER INTEL/COMPUSAVE 0176-002 S820 83442978 P100 DESK TOP COMPUTER INTEL/COMPUSAVE 0176-002 S821 83443180 P100 DESK TOP COMPUTER INTEL/COMPUSAVE 0176-002 S822 6694685 105 CS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S824 6694770 105 CS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S825 12688656 205 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S826 200 MMX NOTEBOOK TOSHIBA/COMPUTER CITY 0176-002 S827 INTER-TEL AXXESS PHONE SYSTEM TERRA COMMUNICATIONS 0176-002 S828 77085756 225 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S829 95120264 TOSHIBA FAX MACHINE KELLY BUSINESS MACHINES 0176-002 S830 IBM-THINKPAD PACIFIC BUSINESS SYSTEMS 0176-002 S831 IBM-THINKPAD PACIFIC BUSINESS SYSTEMS 0176-002 S832 IBM-THINKPAD PACIFIC BUSINESS SYSTEMS 0176-002 S833 IBM-THINKPAD PACIFIC BUSINESS SYSTEMS 0176-002 S834 IBM-THINKPAD PACIFIC BUSINESS SYSTEMS 0176-002 S836 USKB123324 HEWLETT 4SI PRINTER HEWLETT PACKARD 0176-002 S837 USHC038184 HEWLETT 4SI PRINTER HEWLETT PACKARD 0176-002 S838 JPT001439 HP LASER 5SI HEWLETT PACKARD 0176-002 S839 JP6K048433 HP LASER 5SI HEWLETT PACKARD 0176-002 S841 601908 P-133 COMPUTER COMPUTER CITY 0176-002 ID BOOK_BASIS SEP-99 DEP EXP-99 ACCUM-99 NBV -- ---------- ------ ---------- -------- --- S783 $ 1,118.89 13.32 19.88 388.06 730.83 S784 $ 3,023.65 36.00 323.96 2,813.67 209.98 S785 $ 48,210.30 585.84 572.53 41,857.61 7,342.49 S786 $ 2,841.66 33.83 304.46 2,238.12 805.54 S787 $ 2,841.66 33.83 304.46 2,238.12 805.54 S788 $ 2,841.66 33.83 304.46 2,238.12 805.54 S789 $ 1,081.35 12.87 115.88 821.72 159.83 S790 $ 779.00 9.27 83.46 884.00 115.00 S791 $ 2,950.00 18.73 283.29 2,850.00 0.00 S792 $ 8,120.00 98.87 870.00 7,250.00 870.00 S794 $ 592.50 6.70 60.27 107.81 454.68 S795 $ 575.00 2.26 52.48 575.00 0.00 S796 $ 883.44 10.28 92.51 792.17 71.27 S797 $ 759.46 9.04 81.37 850.65 108.80 S798 $ 582.50 6.70 90.27 107.81 454.89 S799 $ 334,952.00 3,987.64 35,868.79 35,88.79 299,073.21 S800 $ 2,563.31 42.72 364.50 900.01 1,663.30 S801 $ 2,563.31 42.72 364.50 900.01 1,663.30 S802 $ 2,563.31 42.72 364.50 900.01 1,663.30 S803 $ 2,434.90 40.58 365.24 848.90 1,588.10 S806 $ 2,610.00 43.50 391.50 1,025.16 1,584.85 S807 $ 2,610.02 43.50 391.50 1,025.16 1,584.85 S808 $ 2,455.62 40.93 368.34 839.98 1,515.88 S809 $ 1,988.28 32.80 295.24 825.48 1,342.80 S810 $ 2,980.47 43.17 388.57 1,070.73 1,519.74 S811 $ 2,782.42 48.37 417.36 1,255.18 1,527.24 S812 $ 2,824.73 43.75 393.71 971.15 1,853,58 S813 $ 2,227.09 37.12 564.08 1,374.61 852.48 S814 $ 1,878.71 31.31 281.81 994.67 884.04 S818 $ 2,034.88 33.91 305.23 1,048.48 958.38 S819 $ 856.85 14.28 128.53 255.83 601.23 S820 $ 856.85 14.28 128.53 255.83 601.23 S821 $ 856.85 14.28 128.53 255.83 601.22 S822 $ 2,126.55 35.44 318.98 1,349.18 777.37 S824 $ 3,143.42 52.39 471.51 2,107.84 1,035.58 S825 $ 2,217.89 38.96 332.68 1,175.48 1,042.41 S826 $ 1,976.96 32.95 296.54 571.12 1,405.64 S827 $ 32,736.89 389.71 3,507.42 8,808.05 24,655.84 S828 $ 2,889.62 48.33 434.94 1,254.89 1,644.73 S829 $ 2,850.00 44.17 397.50 1,938.92 711.08 S830 $ 2,604.00 43.40 390.60 585.85 2,038,35 S831 $ 2,604.23 43.40 390.63 585.70 2,038.53 S832 $ 1,372.70 22.88 205.91 298.18 1,074.52 S833 $ 1,372.00 22.87 205.80 298.03 1,073.97 S834 $ 1,372.00 22.87 205.80 298.03 1,073.97 S836 $ 1,406.52 0.00 0.00 1,406.52 (0.00) S837 $ 1,433.83 23.88 215.01 959.74 474.89 S838 $ 1,498.67 0.00 0.00 4,496.67 (0.00) S839 $ 1,447.84 24.13 217.18 1,321.56 126.28 S841 $ 1,778.81 29.65 266.82 935.85 842.98
PAGE 3 OF 6 56
ID SERIAL MAKE & MODEL AP VENDOR FAACCT - ------ ---------------- ------------------- ----------------------- ------------------ S842 500268 P-90 COMPUTER COMPUTER CITY 0176-002 S843 601907 P-133 COMPUTER COMPUTER CITY 0176-002 S844 M949502099 P-133 COMPUTER COMPUTER CITY 0176-002 S845 509131 P-100 COMPUTER COMPUTER CITY 0176-002 S646 P-133 COMPUTER COMPUTER CITY 0176-002 S647 M49502096 P-133 COMPUTER COMPUTER CITY 0176-002 S648 500267 P-90 COMPUTER COMPUTER CITY 0176-002 S849 P-133 COMPUTER COMPUTER CITY 0176-002 S850 601909 P-133 COMPUTER COMPUTER CITY 0176-002 S851 601909 P-133 COMPUTER COMPUTER CITY 0176-002 S852 62026088 ALDER S10 TYPEWRITER FIRSTLINE OFFICE 0175-002 S855 P-90 PCL ELSA FILE SERVER COMPUTER REPAIR, INC 0176-002 S858 CET COMPANY SIGN JIM MANNING & ASSOC. 0175-002 S862 MAGNA SHELL DESK PANEL CRAWFORD 0175-002 S863 42" HDN LATERAL FILE CABINET CRAWFORD 0175-002 S864 42" HDN LATERAL FILE CABINET CRAWFORD 0175-002 S865 1700CU OFFICE SAFE SOURCE 100 0175-002 S866 AUDIO VISUAL BOARD3076 CRAWFORD 0175-002 S867 Y8215376A NOTEBOOK COMPUTER TOSHIBA 0176-002 S868 Y8214843A NOTEBOOK COMPUTER TOSHIBA 0176-002 S869 Y8202213A NOTEBOOK COMPUTER TOSHIBA 0176-002 S892 500256 P-90 COMPUTER COMPUTER 0176-002 S902 174DVJ2978 GP300 RADIO MOTOROLA 0170-002 S907 174FVJ6950 GP300 RADIO MOTOROLA 0170-002 S909 174FVJ5926 GP300 RADIO MOTOROLA 0170-002 S910 174FVJ6928 GP300 RADIO MOTOROLA 0170-002 S911 174FVJ3215 GP300 RADIO MOTOROLA 0170-002 S914 174FWN1115 GP300 RADIO MOTOROLA 0170-002 S915 174FWND942 GP300 RADIO MOTOROLA 0170-002 S916 174FWLD223 GP300 RADIO MOTOROLA 0170-002 S918 174FWDL211 GP300 RADIO MOTOROLA 0170-002 S919 174FWN1146 GP300 RADIO MOTOROLA 0170-002 S921 174FWN1152 GP300 RADIO MOTOROLA 0170-002 S922 174FWN1145 GP300 RADIO MOTOROLA 0170-002 S935 174FLWD204 GP300 RADIO MOTOROLA 0170-002 S936 174FWN1118 GP300 RADIO MOTOROLA 0170-002 S937 174FWN1144 GP300 RADIO MOTOROLA 0170-002 P100 1FTDF1727VKB15641 97 F150 FORD 0172-002 P102 1FTJW36F3VEAS1658 97 F350 FORD 0172-002 P105 2FDLFH47MOMCADS 91 F450 FLAT BED FORD 0171-002 P111 WC619386 28'x8' RESPONSE TRAILER WELLS CARGO 0170-002 P200 15HP OUTBOARD MOTOR JOHNSON 0170-002 P201 15HP OUTBOARD MOTOR EVINRUDE 0170-002 P202 SYL492206896 SKIFF & TRAILER STEVENS MARINE/SYLVAN 0170-002 P203 SMK820288191 SKIFF & TRAILER SMOKER CRAFT 0170-002 P300 M-4 PUMP WILDEN 0170-002 P301 M-15 PUMP WILDEN 0170-002 P302 M-15 PUMP WILDEN 0170-002 P303 M-15 PUMP WILDEN 0170-002 P304 M-15 PUMP WILDEN 0170-002 ID BOOK BASIS SEP-99 DEP EXP-99 ACCUM-99 NBV - ------ ---------------- ------------- ----------------- ---------------- ---------- S842 4,028.30 67.14 604.25 3,403.91 624.39 S843 1,778.81 29.65 266.82 935.85 842.96 S864 1,991.96 33.20 298.79 1,660.27 131.69 S865 2,207.22 36.79 331.08 1,530.34 676.88 S646 1,372.71 22.68 205.91 624.58 748.13 S647 1,947.65 32.46 292.15 1,818.89 128.76 S648 2,948.14 49.14 442.22 2,491.16 456.95 S849 1,372.70 22.88 205.91 824.58 748.12 S850 1,566.74 26.11 235.01 824.28 742.46 S851 1,566.74 26.11 235.01 824.28 742.48 S852 700.70 0.00 0.00 700.70 (0.00) S855 20,060.98 343.35 3,009.14 18,951.51 3,109.45 S858 3,080.65 36.68 330.09 2,013.56 1,067.29 S862 503.13 5.88 53.91 309.27 193.88 S863 615.95 7.33 65.93 380.57 235.35 S864 635.78 7.57 68.12 102.43 533.35 S865 773.63 9.21 82.89 597.11 178.52 S866 938.88 10.82 97.38 558.87 350.21 S867 1,303.17 21.72 173.78 173.76 1,129.41 S868 1,303.17 21.72 173.78 173.75 1,129.41 S869 1,303.18 21.72 173.76 173.75 1,129.41 S892 4,028.30 67.14 604.25 3,403.91 624.39 S902 1,074.58 12.79 115.13 650.72 423.86 S907 939.33 11.18 100.64 558.82 370.51 S909 939.33 11.16 100.64 161.77 777.56 S910 939.33 11.18 100.64 568.82 370.51 S911 939.33 11.18 100.64 568.82 370.51 S914 1,064.05 12.67 114.01 497.40 568.65 S915 1,064.05 12.67 114.01 497.40 568.65 S916 1,064.05 12.67 114.01 497.40 568.65 S918 888.60 10.55 94.99 414.45 472.15 S919 888.60 10.55 94.99 414.45 472.15 S921 888.60 10.55 94.99 414.45 472.15 S922 888.60 10.55 94.99 414.45 472.15 S935 1,064.05 12.67 114.01 497.40 568.65 S936 888.60 10.55 94.99 414.45 472.15 S937 1,064.05 12.67 114.01 497.40 568.65 P100 16,511.56 275.19 2,476.73 7,430.20 9,081.36 P102 27,599.40 459.99 4,139.91 17,510.29 10,089.11 P105 22,000.00 966.67 3,300.00 21,095.58 904.44 P111 10,526.00 175.43 1,578.90 6,549.51 3,978.49 P200 1,800.00 15.00 135.00 589.50 1,210.50 P201 1,799.00 14.99 134.83 546.20 1,250.80 P202 2,059.00 34.32 308.85 1,254.85 804.15 P203 2,500.00 41.67 375.00 1,209,72 1,290.26 P300 800.00 7.14 64.29 526.90 73.10 P301 1,500.00 17.86 160.71 1,027.38 472.62 P302 1,500.00 17.86 160.71 1,027.38 472.62 P303 1,500.00 17.86 160.71 1,027.38 472.62 P304 1,500.00 17.86 160.71 1,027.38 472.62
Page 4 of 6 57
ID SERIAL MAKE & MODEL AP VENDOR FAACCT BOOK_BASIS SEP-99 DEP EXP-99 - ---- ------------ ---------------------------------- --------------------- -------- ----------- ------ ----------- P305 M-4 PUMP WILDEN 0170-002 $ 600.00 7.14 64.28 P306 9201 FLOTO PUMP WATERIOUS 0170-002 $ 1,500.00 17.95 150.71 P307 169322 VAC-U-MAX CLOSED TOP VACUMAX 0170-002 $ 900.00 10.71 96.43 P400 1457476 2.2 KW-GENERATOR DAYTON 0170-002 $ 500.00 5.95 53.57 P403 EA7-1134068 EM50005 GENERATOR HONDA 0170-002 $ 2,399.00 28.58 257.04 P404 12018 AIR COMPRESSOR SULLIVAN 0170-002 $ 15,000.00 178.57 1,607.14 P500 ALT285194358 IASA SCBA ULTRALITE 0170-002 $ 1,900.00 22.52 203.57 P501 ALT285155242 MSA SCBA ULTRALITE 0170-002 $ 1,900.00 22.62 203.57 P502 ALT295194296 MSA SCBA ULTRALITE 0170-002 $ 1,900.00 22.62 203.57 P508 HIP AIR PACK MSA 0170-002 $ 1,000.00 11.90 107.14 P509 HIP AIR PACK MSA 0170-002 $ 1,000.00 11.90 107.14 P510 ALT285224729 MSA SCBA ULTRALITE 0170-002 $ 1,900.00 22.62 203.57 P511 TP705-1727 BIO SYSTEM BIO SYSTEMS 0170-002 $ 1,000.00 23.51 214.29 P512 TP806-2229 BIO SYSTEM BIO SYSTEMS 0170-002 $ 2,000.00 23.81 214.29 P513 M003-2933 BIO SYSTEM BIO SYSTEMS 0170-002 $ 2,000.00 23.81 214.29 P600 400 OIL CONTAINMENT BOOM AMERICAN SEA CURTAIN 0170-002 $ 4,475.00 53.27 479.46 P708 9108143008 LEL METER INDUSTRIAL SCIENTIFIC 0170-002 $ 1,100.00 13.10 117.66 P714 2400 FAST TANK TENYERS 0170-002 $ 3,150.00 37.50 337.50 P720 COPPUS BLOWER COPPUS 0170-002 $ 1,500.00 17.56 180.71 P721 COPPUS BLOWER COPPUS 0170-002 $ 2,934.00 34.94 314.45 P722 WD796-6101 ALPHA 3100 OILWATER SEPARATOR LANDA 0170-002 $ 8,835.50 81.38 732.38 P723 VB564034 WELDING MACHINE MILLER 0170-002 $ 500.00 5.95 53.57 P724 07921174 CONFINED SPACE SYSTEM MODEL #K1550 0170-002 $ 3,100.00 36.90 332.14 P725 WRENCH SET/TOOLS CRAFTSMAN 0170-002 $ 510.24 6.07 54.67 P730 54699V FALL PROTECTION & RETRIEVE MILLER 0170-002 $ 2,200.00 25.19 235.71 P731 CC0243 LASER TRANSIT 0170-002 $ 895.00 10.65 95.89 P732 973500003 HEPA VAC EUROCLEAN 0170-002 $ 1,225.00 14.56 131.25 P733 9735000032 HEPA VAC EUROCLEAN 0170-002 $ 1,225.00 20.42 183.75 P734 973500006 HEPA VAC EUROCLEAN 0170-002 $ 1,225.00 14.58 131.25 P735 973500005 HEPA VAC EUROCLEAN 0170-002 $ 1,225.00 14.58 131.25 P737 903046013 LEL METER INDUSTRIAL SCIENTIFIC 0170-002 $ 500.00 5.95 53.57 P738 53625V FALL PROTECTION/BLOCK MILLER 0170-002 $ 1,474.85 17.56 158.02 P739 SOIL SAMPLER BORE KIT ARTS MANUFACTURING 0170-002 $ 1,000.00 11.90 107.14 P740 TK-02 VAC-U-MAX CLOSED TOP DRUM VAC-U-MAX 0170-002 $ 1,000.00 11.90 107.14 P741 55D-D61 VAC-U-MAX OPEN TOP DRUM VAC-U-MAX 0170-002 $ 1,000.00 11.90 107.14 P743 FILTER PRESS ELMCO 0170-002 $ 2,000.00 23.61 214.29 P744 EXPLOSION PROOF LIGHTS 0170-002 $ 900.00 10.71 96.43 P745 HAZCAT KIT HAZTECH 0170-002 $ 2,713.23 32.30 290.70 P746 38511847X7 CHAIN SAW STILH 0170-002 $ 446.90 5.32 47.88 P802 D75453111 LAPTOP TOSHIBA 0176-002 $ 2,009.57 33.50 301.48 P804 COMPUTER GATEWAY 0176-002 $ 2,590.00 0.00 56.79 P807 11BHNTZ TYPEWRITER IBM 0170-002 $ 575.00 9.58 89.25 P808 AUTOMATED PHONE SYSTEM SAMSUNG 0175-002 $ 13,774.32 153.96 1,475.82 P809 435 CDS LAPTOP TOSHIBA 0176-002 $ 1,585.95 26.43 237.89 P908 CELL PHONE MOTOROLA 0170-002 $ 500.00 0.00 0.00 P909 CELL PHONE MOTOROLA 0170-002 $ 500.00 0.00 0.00 P910 CELL PHONE MOTOROLA 0170-002 $ 500.00 0.00 211.11 P911 CELL PHONE MOTOROLA 0170-002 $ 500.00 0.00 211.11 P912 CELL PHONE MOTOROLA 0170-002 $ 500.00 0.00 211.11 OFFICE FILES DELATTE METALS 0174-002 $ 785.94 9.38 46.78 ID ACCUM-99 NBV - ---- ---------- --------- P305 410.95 189.05 P306 882.74 617.25 P307 616.43 283.57 P400 439.08 60.91 P403 1,041.47 1,357.53 P404 10,273.81 4,725.19 P500 1,164.88 735.12 P501 1,301.35 596.65 P502 1,301.35 596.65 P508 684.92 315.08 P509 684.92 315.08 P510 1,301.35 698.65 P511 1,369.84 630.16 P512 1,368.54 630.16 P513 1,389.54 630.16 P600 1,930.29 2,544.71 P708 753.41 346.59 P714 2,583.75 568.25 P720 1,027.38 472.52 P721 1,541.99 1,392.91 P722 2,948.49 3,887.01 P723 342.46 157.54 P724 2,123.25 876.75 P725 220.09 290.15 P730 516.83 1,665.17 P731 222.68 872.32 P732 312.57 912.43 P733 437.60 787.40 P734 312.57 912.43 P735 312.57 912.43 P737 342.48 157.54 P738 1,010.16 464.89 P739 684.92 315.08 P740 215.87 784.13 P741 215.87 784.13 P743 1,060.16 819.84 P744 618.43 283.57 P745 812.89 1,900.34 P746 194.01 252.89 P802 1,258.40 751.47 P804 2,690.00 (1.00) P807 345.32 229.58 P808 3,312.40 10,481.92 P809 728.95 857.29 P908 500.00 0.00 P909 500.00 0.00 P910 500.00 0.00 P911 500.00 0.00 P912 500.00 0.00 48.78 739.18
Page 5 of 6 58
ID SERIAL MAKE & MODEL AP VENDOR FAACCT -- ------ ------------ --------- ------ TOSHIBA ANDREA LINDQUIST 0176-002 TOSHIBA LAURIE TEUN 0176-002 TOSHIBA BRYAN CHERNICK 0176-002 HP LASER JET 5SI COMPUTERS & APPLICATIONS 0176-002 15 HP 3 PHASE MOTOR DAVIS PUMP & ELECTRIC 0170-002 PH METER PROBE/RECEPTACLE TBI BAILEY 0170-002 101165 DIGITEC PRINT MOUNTAIN PACIFIC MACHINE 0170-002 TOSHIBA CAROL TIERNEY 0176-002 TOSHIBA LAURIE TEUN 0176-002
ID BOOK_BASIS SEP-99 DEP EXP-99 ACCUM-99 NBV -- ---------- ------ ---------- -------- --- $ 800.00 13.33 105.67 105.67 693.33 $ 1,521.45 25.36 177.50 177.50 1,343.96 $ 790.20 13.17 52.68 52.68 737.52 $ 2,334.84 38.91 116.74 116.74 2,218.10 $ 694.02 11.57 23.13 23.13 670.89 $ 1,237.14 20.82 41.24 41.24 1,195.90 $ 2,197.25 36.62 73.24 73.24 2,124.01 $ 1,646.17 30.77 61.54 61.54 1,784.53 $ 1,751.75 29.20 58.39 58.39 1,593.36 $ 1,663,351.18 $ 20,257.41 $ 183,975.96 $ 697,014.67 $ 868,346.51
FURNITURE AND EQUIPMENT Page 6 of 6 59 SCHEDULE 1.E. ANCILLARY ASSETS Ancillary Assets as defined in the Asset Purchase and Assignment Agreement shall mean and include all documents, books and records, instruments, databases, stationary, preprinted forms, programs, records, intangibles, consultants' reports and memoranda, customer, vendor and supplier lists, trade secrets and other proprietary or confidential information, work files and work products necessary for closing out delivery orders, telephone numbers and other assets of Seller, in each case which relate solely or primarily to the Acquired Assets or are used solely or primarily with Acquired Assets or are used solely or primarily in the performance of the EPA Contracts. Ancillary Assets shall not include any EPA Contract Equipment or Excluded Assets. 24 60 SCHEDULE 3.C SCHEDULE OF ASSUMED LIABILITIES The only liabilities of Sellers that Purchaser shall be obligated to assume are as follows: (1) The direct obligations of Sellers under the EPA Contracts relating to performance after the Closing Date; and (2) Obligations and liabilities of Sellers, whether to the EPA or third parties that can be reasonably and foreseeably implied from the terms of the EPA Contracts or the Federal Acquisition Regulations as necessary or required in connection with the assumption, novation or performance of the EPA Contracts, from and after the Closing Date. Examples of the foregoing shall include, but are not limited to, any obligations of Sellers under the EPA Contracts to use minority or small business contractors or the requirement to lease or acquire particular items of equipment necessary to complete performance under the EPA Contracts. This does not include government or third party claims arising out of Seller's performance of the EPA contract prior to the Closing Date. (3) Seller leases at the property located at 170 West Dayton, Edmonton, WA. 25 61 SCHEDULE 1.D EDMONDS FACILITY LEASE SEE ATTACHED LEASE 26 62 JOB STATUS SUMMARY ERRS WEST CONTRACT NO. 68-W7-0016 08/01/99 THROUGH 08/31/99
- ----------------------------------------------------------------------------------------------- REGION 6 - ----------------------------------------------------------------------------------------------- D.O. - ----------------------------------------------------------------------------------------------- D.O. Project Start Completion D.O. - ----------------------------------------------------------------------------------------------- No. Name Date Date Ceiling =============================================================================================== 06-001 Shepherd Lead 02/27/97 06/05/97 300,000.00 - ----------------------------------------------------------------------------------------------- 06-002 Mylar Fire 03/26/97 04/30/97 500,000.00 - ----------------------------------------------------------------------------------------------- 06-003 Arkansas Methyl Parathion 03/31/97 08/31/98 600,000.00 - ----------------------------------------------------------------------------------------------- 06-004 Louisiana Methyl Parathion 04/11/97 01/08/99 3,025,000.00 - ----------------------------------------------------------------------------------------------- 06-005 BPS Inc., Fire 05/08/97 06/30/97 100,000.00 - ----------------------------------------------------------------------------------------------- 06-006 Victory Metals 05/16/97 11/30/97 185,000.00 - ----------------------------------------------------------------------------------------------- 06-007 Mammoth Mill 06/09/97 01/08/98 180,000.00 - ----------------------------------------------------------------------------------------------- 06-008 Gray Ag-Air Site 06/24/97 10/31/97 350,000.00 - ----------------------------------------------------------------------------------------------- 06-009 Garland Drum 06/24/97 07/31/97 25,000.00 - ----------------------------------------------------------------------------------------------- 06-010 JFK High School 06/25/97 10/31/97 100,000.00 - ----------------------------------------------------------------------------------------------- 06-011 Pontchatula Battery 07/18/97 10/15/97 120,000.00 - ----------------------------------------------------------------------------------------------- 06-012 Preplanning Region 6 03/20/98 01/08/00 55,000.00 - ----------------------------------------------------------------------------------------------- 06-013 Odessa Drum 07/18/97 01/08/98 1,000,000.00 - ----------------------------------------------------------------------------------------------- 06-014 Southern Shipbuilding 08/21/97 10/30/97 150,000.00 - ----------------------------------------------------------------------------------------------- 06-015 Mill Creek Drum 08/06/97 10/31/97 40,000.00 - ----------------------------------------------------------------------------------------------- 06-016 Hot Springs Mercury 09/10/97 10/31/97 100,000.00 - ----------------------------------------------------------------------------------------------- 06-017 Richland Oil Salvage, Inc. 09/23/97 01/08/98 400,000.00 - ----------------------------------------------------------------------------------------------- 06-018 Stephenson-Bennett Mine Site 09/30/97 02/28/99 3,843,000.00 - ----------------------------------------------------------------------------------------------- 06-019 Mesh Plastics 09/30/97 01/08/98 100,000.00 - ----------------------------------------------------------------------------------------------- 06-020 Polycycle-Tecula 10/23/97 11/30/98 20,000.00 - ----------------------------------------------------------------------------------------------- 06-021 Overholt Trucking 11/06/97 06/30/98 1,532,000.00 - ----------------------------------------------------------------------------------------------- 06-022 Anti-freeze, Inc. 12/03/97 07/31/98 600,000.00 - ----------------------------------------------------------------------------------------------- 06-023 Lake Maurapas Barge 12/02/97 06/30/98 200,000.00 - ----------------------------------------------------------------------------------------------- 06-024 Texarkana Mercury and Neon 01/06/98 07/31/98 355,000.00 - ----------------------------------------------------------------------------------------------- 06-025 Dallas Plating 01/08/98 07/31/98 263,000.00 - ----------------------------------------------------------------------------------------------- 06-026 Everman Oil Spill 02/02/98 03/31/98 50,000.00 - ----------------------------------------------------------------------------------------------- 06-027 Broussard Chemical 02/20/98 05/31/98 75,000.00 - ----------------------------------------------------------------------------------------------- 06-028 Lake Palourde Aband. Barge 02/11/98 10/31/98 175,000.00 - ----------------------------------------------------------------------------------------------- 06-029 Guthrie Oil 04/13/98 08/31/98 80,000.00 - ----------------------------------------------------------------------------------------------- 06-630 Castex Systems 03/09/98 07/31/99 1,250,000.00 - ----------------------------------------------------------------------------------------------- 06-631 Plano Mercury 03/05/98 05/30/98 50,000.00 - -----------------------------------------------------------------------------------------------
63 JOB STATUS SUMMARY ERRS WEST CONTRACT NO. 68-W7-0016 08/01/99 THROUGH 08/31/99 ============================================================================================ 06-632 11th Street Drums 04/01/98 07/31/98 110,000.00 - -------------------------------------------------------------------------------------------- 06-633 Clearwater Fluids Recycling 04/06/98 01/07/99 690,000.00 - -------------------------------------------------------------------------------------------- 06-634 Louisiana Oil Recycling, Inc. 04/10/98 01/07/99 500,000.00 - -------------------------------------------------------------------------------------------- 06-635 FM 14 Drum Site 05/14/98 09/30/98 500,000.00 - -------------------------------------------------------------------------------------------- 06-636 Penrod Drum 06/01/98 09/30/98 450,000.00 - -------------------------------------------------------------------------------------------- 06-637 Westbank Asbestos 07/10/98 09/30/98 220,000.00 - -------------------------------------------------------------------------------------------- 06-638 Mid-South Tire Fire 07/16/98 10/31/98 150,000.00 - -------------------------------------------------------------------------------------------- 06-639 Concord Operating Co. 07/27/98 10/31/98 5,000.00 - -------------------------------------------------------------------------------------------- 06-640 Bayou Sorrel Aband. Barge 07/30/98 01/08/99 300,000.00 - -------------------------------------------------------------------------------------------- 06-641 Ojo Caliente Dip Vat Site 08/07/98 11/30/98 118,000.00 - -------------------------------------------------------------------------------------------- 06-642 Hudson Oil Refinery 08/11/98 09/15/99 5,950,000.00 - -------------------------------------------------------------------------------------------- 06-643 ERI Tire Fire 08/24/98 01/08/99 500,000.00 - -------------------------------------------------------------------------------------------- 06-644 Delatte Metals 08/27/98 09/08/99 7,905,881.00 - -------------------------------------------------------------------------------------------- 06-645 Talen's Landing Bulk Plant 09/08/98 09/08/99 1,350,000.00 - -------------------------------------------------------------------------------------------- 06-646 Hastings Radiochemical Sites 09/28/98 06/30/99 1,500,000.00 - -------------------------------------------------------------------------------------------- 06-647 MDI 09/28/98 09/30/99 600,000.00 - -------------------------------------------------------------------------------------------- 06-648 Tex-Tin Site (off-site) 09/28/98 09/30/99 500,000.00 - -------------------------------------------------------------------------------------------- 06-649 State Marine Site 09/29/98 09/30/99 40,000.00 - -------------------------------------------------------------------------------------------- 06-650 Madisonville Tire/Drum Fire 10/04/98 10/04/99 65,000.00 - -------------------------------------------------------------------------------------------- 06-651 Limestone Landfill Fire 10/07/98 09/30/99 200,000.00 - -------------------------------------------------------------------------------------------- 06-652 Oilton Auto Pack Site 12/18/98 09/15/99 40,000.00 - -------------------------------------------------------------------------------------------- 06-653 R&P Electroplating 01/06/99 09/30/99 900,000.00 - -------------------------------------------------------------------------------------------- 06-654 Production Gauging Services, Inc. 01/07/99 04/30/99 250,000.00 - -------------------------------------------------------------------------------------------- 06-655 Leachville Metal Plating Site 02/25/99 12/31/99 175,000.00 - -------------------------------------------------------------------------------------------- 06-656 Hudson Oil Refinery II 03/26/99 01/08/00 900,000.00 - -------------------------------------------------------------------------------------------- 06-657 Sulfur Molten Tank Fire 04/08/99 05/09/99 200,000.00 - -------------------------------------------------------------------------------------------- 06-658 O'Neil Tank Battery 04/26/99 08/30/99 150,000.00 - -------------------------------------------------------------------------------------------- 06-659 Tiger Pass 05/10/99 01/08/00 950,000.00 - -------------------------------------------------------------------------------------------- 06-660 W. Duet No. 1 Well Gas Blowout 05/14/99 06/30/99 1,400,000.00 - -------------------------------------------------------------------------------------------- 06-661 HHW, OK Tornadoes 05/18/99 09/30/99 50,000.00 - -------------------------------------------------------------------------------------------- 06-662 The Chemical House 05/24/99 09/30/99 200,000.00 - -------------------------------------------------------------------------------------------- 06-663 OK Tornado II 06/01/99 01/08/00 425,000.00 - -------------------------------------------------------------------------------------------- 06-664 Rockwall Mercury 06/16/99 10/31/99 100,000.00 - -------------------------------------------------------------------------------------------- 06-665 Ruston Foundary 06/28/99 08/31/99 40,000.00 - -------------------------------------------------------------------------------------------- 06-666 Exxon Houston Ship Channel 06/28/99 07/31/99 8,000.00 ============================================================================================
64 JOB STATUS SUMMARY ERRS WEST CONTRACT NO. 68-W7-0016 08/01/99 THROUGH 08/31/99 =============================================================================================== 06-667 Arabi Mercury Spill 07/09/99 10/31/99 50,000.00 - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- 08-001 Spring Creek Oil Spill 02/28/97 07/09/97 10,000.00 - ----------------------------------------------------------------------------------------------- 08-002 Oklahoma City Bomb. / G7 Conf. 03/10/97 07/01/98 22,000.00 - ----------------------------------------------------------------------------------------------- 08-003 Aspen Park Solvents 03/10/97 01/08/00 105,000.00 - ----------------------------------------------------------------------------------------------- 08-004 Lovell Refining 03/10/97 09/30/99 298,720.00 - ----------------------------------------------------------------------------------------------- 08-005 Industrial Chrome Plating 03/13/97 01/08/98 300,000.00 - ----------------------------------------------------------------------------------------------- 08-006 York Street Drums 03/12/97 06/01/97 7,500.00 - ----------------------------------------------------------------------------------------------- 08-007 Twins Inn Site 03/27/97 01/08/99 14,500.00 - ----------------------------------------------------------------------------------------------- 08-008 Roxborough Mercury Site 04/01/97 07/01/97 5,000.00 - ----------------------------------------------------------------------------------------------- 08-009 Red River of North Dakota 04/24/97 01/08/98 3,250,000.00 - ----------------------------------------------------------------------------------------------- 08-010 Allison Street Drum Site 06/02/97 09/01/97 10,000.00 - ----------------------------------------------------------------------------------------------- 08-011 Red Water Mine Site 06/13/97 10/31/98 245,000.00 - ----------------------------------------------------------------------------------------------- 08-012 Ramp Industries 06/19/97 01/08/98 80,000.00 - ----------------------------------------------------------------------------------------------- 08-013 Badger Mercury Site 06/25/97 11/30/97 18,500.00 - ----------------------------------------------------------------------------------------------- 08-014 Flathead Lake Boat Site 07/04/97 07/31/97 5,000.00 - ----------------------------------------------------------------------------------------------- 08-015 Reclaim Barrel Site 07/18/97 05/01/98 64,000.00 - ----------------------------------------------------------------------------------------------- 08-016 Towaac Day Care Center 08/05/97 10/30/97 3,000.00 - ----------------------------------------------------------------------------------------------- 08-017 Upper AR River / Leadville 09/22/97 01/08/00 500,000.00 - ----------------------------------------------------------------------------------------------- 08-018 Manville Pesticide Site 09/25/97 09/30/98 390,000.00 - ----------------------------------------------------------------------------------------------- 08-019 Ute Tribe Chemical Site 10/16/97 04/01/98 35,000.00 - ----------------------------------------------------------------------------------------------- 08-020 Bull Oil Site 10/28/97 04/01/98 72,000.00 - ----------------------------------------------------------------------------------------------- 08-021 Wounded Knee Sew. Lagoon 11/06/97 01/08/98 45,000.00 - ----------------------------------------------------------------------------------------------- 08-022 Craig Diesel Spill-Yampa River 11/07/97 01/08/98 1,000.00 - ----------------------------------------------------------------------------------------------- 08-023 32nd Street Asphalt Site 11/10/97 11/30/97 1,000.00 - ----------------------------------------------------------------------------------------------- 08-024 38th and York PCB 02/06/98 09/01/98 81,000.00 - ----------------------------------------------------------------------------------------------- 08-025 High-Tech Metals 02/19/98 08/30/98 190,000.00 - ----------------------------------------------------------------------------------------------- 08-026 Craig Mercury Site 03/20/98 08/30/98 15,000.00 - ----------------------------------------------------------------------------------------------- 08-027 Preplanning Region 8 03/30/98 01/08/00 55,000.00 - ----------------------------------------------------------------------------------------------- 08-028 Sandy Smelter 04/01/98 03/31/99 1,850,000.00 - ----------------------------------------------------------------------------------------------- 08-029 54th Street Drums 04/17/98 07/30/98 13,000.00 - ----------------------------------------------------------------------------------------------- 08-830 Leadville Drums 05/19/98 10/31/98 23,000.00 - ----------------------------------------------------------------------------------------------- 08-831 Hansen Container 05/28/98 12/31/98 22,000.00 - ----------------------------------------------------------------------------------------------- 08-832 Sheridan PCM Drum 05/22/98 12/31/98 7,000.00 - ----------------------------------------------------------------------------------------------- 08-833 Pine Ridge Pesticide Site 06/12/98 10/31/98 11,000.00 ===============================================================================================
65 JOB STATUS SUMMARY ERRS WEST CONTRACT NO. 68-W7-0016 08/01/99 THROUGH 08/31/99
======================================================================================= 08-834 58th and York 07/16/98 10/31/98 7,000.00 - --------------------------------------------------------------------------------------- 08-835 Summitville Drum 07/30/98 06/30/99 250,000.00 - --------------------------------------------------------------------------------------- 08-836 Upper Arkansas River Lagoon 07/30/98 10/31/98 24,500.00 - --------------------------------------------------------------------------------------- 08-837 Vasquez and I-70 09/22/98 06/30/99 785,000.00 - --------------------------------------------------------------------------------------- 08-838 Weld County Waste Disposal 09/25/98 10/01/99 2,195,000.00 - --------------------------------------------------------------------------------------- 08-839 Basin Tailings Site 10/08/98 06/30/99 355,000.00 - --------------------------------------------------------------------------------------- 08-840 R.J. Refinery Site 10/13/98 06/30/99 17,000.00 - --------------------------------------------------------------------------------------- 08-841 Davis Post & Pole 10/26/98 08/01/99 135,000.00 - --------------------------------------------------------------------------------------- 08-842 Santa Fe Tanker Site 12/05/98 11/01/99 20,000.00 - --------------------------------------------------------------------------------------- 08-843 Fenton Culvert 01/15/99 03/30/99 25,000.00 - --------------------------------------------------------------------------------------- 08-844 Rosebud Indian Reservation 02/05/99 04/30/99 5,000.00 - --------------------------------------------------------------------------------------- 08-845 Ute Mountain Indian Reservation 02/11/99 04/30/99 9,500.00 - --------------------------------------------------------------------------------------- 08-046 Thornton Mercury Site 03/11/99 not listed 6,500.00 - --------------------------------------------------------------------------------------- 08-847 Wade Field Services, Inc. 04/15/99 09/30/99 39,000.00 - --------------------------------------------------------------------------------------- 08-848 Pleasant View PCE Site 04/21/99 09/30/99 35,000.00 - --------------------------------------------------------------------------------------- 08-849 Manvel Pesticide Site 05/18/99 01/08/00 15,000.00 - --------------------------------------------------------------------------------------- 08-850 Monroe Chemical 05/26/99 01/08/00 100,000.00 - --------------------------------------------------------------------------------------- 08-851 Montezuma County Pesticide 06/02/99 01/08/00 13,000.00 - --------------------------------------------------------------------------------------- 08-852 Upper Ten Mile Creek 06/10/99 01/08/00 4,000,000.00 - --------------------------------------------------------------------------------------- 08-853 Kenco Refinery 06/11/99 01/08/00 24,000.00 - --------------------------------------------------------------------------------------- 08-854 Upper AR River Fluvial Tailings II 07/09/99 01/08/00 350,000.00 - --------------------------------------------------------------------------------------- 08-855 Lockwood Solvents 07/14/99 01/08/00 5,000.00 - --------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------- 09-001 Sutter County, California 01/15/97 06/30/99 200,000.00 - --------------------------------------------------------------------------------------- 09-002 San Joaquin County, California 01/15/97 06/30/97 100,000.00 - --------------------------------------------------------------------------------------- 09-003 McCormick & Baxter 03/03/97 10/31/97 455,000.00 - --------------------------------------------------------------------------------------- 09-004 Enviropur West 02/28/97 06/30/98 1,600,000.00 - --------------------------------------------------------------------------------------- 09-005 Fresno Drum 02/26/97 12/08/98 368,000.00 - --------------------------------------------------------------------------------------- 09-006 DC Metals 03/01/97 09/30/99 790,000.00 - --------------------------------------------------------------------------------------- 09-007 Del Norte 02/26/97 03/31/99 155,000.00 - --------------------------------------------------------------------------------------- 09-008 Frontier Fertilizer 02/26/97 06/30/97 35,000.00 - --------------------------------------------------------------------------------------- 09-009 Yuba County, California 02/26/97 06/30/97 75,000.00 - --------------------------------------------------------------------------------------- 09-010 Household Hazardous Waste 02/28/97 06/30/97 400,000.00 - --------------------------------------------------------------------------------------- 09-011 Moorpark Meth Lab 03/17/97 09/30/97 100,000.00 - --------------------------------------------------------------------------------------- 09-012 Proto Metals 04/07/97 07/31/97 139,000.00 =======================================================================================
66 JOB STATUS SUMMARY ERRS WEST CONTRACT NO. 68-W7-0016 08/01/99 THROUGH 08/31/99 ============================================================================================ 09-013 Geo Operator Corp. / Unit 15 04/17/97 01/08/98 1,300,000.00 - -------------------------------------------------------------------------------------------- 09-014 Republic of Palau 04/14/97 06/30/98 330,000.00 - -------------------------------------------------------------------------------------------- 09-015 American Samoa 05/01/97 08/01/97 25,000.00 - -------------------------------------------------------------------------------------------- 09-016 Freelove Meth Lab / Valleyhome 05/05/97 09/30/97 72,000.00 - -------------------------------------------------------------------------------------------- 09-017 Ocean Park Lead 05/12/97 09/30/97 60,000.00 - -------------------------------------------------------------------------------------------- 09-018 Lola and White Streets 06/20/97 07/31/97 5,000.00 - -------------------------------------------------------------------------------------------- 09-019 PEMACO 08/01/97 01/08/00 1,100,000.00 - -------------------------------------------------------------------------------------------- 09-020 South Idaho Floods 06/26/97 07/31/97 15,000.00 - -------------------------------------------------------------------------------------------- 09-021 Gentry Subdivision PCB Site 07/08/97 09/30/97 52,000.00 - -------------------------------------------------------------------------------------------- 09-022 Palermo Wells Site 07/11/97 09/30/97 50,000.00 - -------------------------------------------------------------------------------------------- 09-023 Toro Creek 07/15/97 01/08/00 340,000.00 - -------------------------------------------------------------------------------------------- 09-024 Iron Mountain Mine 08/01/97 03/31/98 600,000.00 - -------------------------------------------------------------------------------------------- 09-025 Duck Valley 09/15/97 09/30/99 24,000.00 - -------------------------------------------------------------------------------------------- 09-026 Leviathan Mine 09/24/97 09/25/98 600,000.00 - -------------------------------------------------------------------------------------------- 09-027 Byers Bomb Site 09/22/97 09/30/99 1,050,000.00 - -------------------------------------------------------------------------------------------- 09-028 Navajo Forest Products Ind. 09/24/97 09/30/98 80,000.00 - -------------------------------------------------------------------------------------------- 09-029 Bakersfield Chrome & Bumper 09/24/97 06/30/98 130,000.00 - -------------------------------------------------------------------------------------------- 09-030 Lava Cap Mine 10/15/97 12/31/98 525,000.00 - -------------------------------------------------------------------------------------------- 09-031 K&L Plating / Pearmain 09/30/97 06/30/98 600,000.00 - -------------------------------------------------------------------------------------------- 09-032 K&L Plating / 89th 10/03/97 06/30/98 500,000.00 - -------------------------------------------------------------------------------------------- 09-033 Pala Drug Lab 09/25/97 01/08/98 10,000.00 - -------------------------------------------------------------------------------------------- 09-034 Eagle 1 Mill 10/06/97 06/30/98 100,000.00 - -------------------------------------------------------------------------------------------- 09-035 Tuolumne Indian Reservation 10/10/97 01/08/98 10,000.00 - -------------------------------------------------------------------------------------------- 09-036 PRC Patterson 11/05/97 03/31/99 300,000.00 - -------------------------------------------------------------------------------------------- 09-037 West Cap 03/05/98 03/31/99 518,500.00 - -------------------------------------------------------------------------------------------- 09-938 The Syntrum Corporation 02/09/98 09/30/99 1,205,549.00 - -------------------------------------------------------------------------------------------- 09-039 Preplanning Region 9 02/12/98 01/08/00 50,000.00 - -------------------------------------------------------------------------------------------- 09-040 Bay Blvd. / Lagoon Drive 03/05/98 09/30/98 100,000.00 - -------------------------------------------------------------------------------------------- 09-041 Indian Basin Boatyard 04/09/98 09/30/98 180,000.00 - -------------------------------------------------------------------------------------------- 09-042 Gambonini Mercury Mine 04/10/98 09/30/99 2,750,000.00 - -------------------------------------------------------------------------------------------- 09-943 Alcoa Pacific 04/21/98 09/30/98 35,000.00 - -------------------------------------------------------------------------------------------- 09-944 Kingsbury Creek Mine 06/12/98 01/08/98 60,000.00 - -------------------------------------------------------------------------------------------- 09-945 Cappell Road 07/22/98 01/08/99 200,000.00 - -------------------------------------------------------------------------------------------- 09-946 Minerec Mining Chemical 09/01/98 03/31/99 150,000.00 - -------------------------------------------------------------------------------------------- 09-947 Grey Eagle Mine 09/09/98 09/30/98 1,781,655.00 ============================================================================================
67 JOB STATUS SUMMARY ERRS WEST CONTRACT NO. 68-W7-0016 08/01/99 THROUGH 08/31/99 =================================================================================== 09-948 McFarland, CA 09/17/98 09/30/99 35,000.00 - ----------------------------------------------------------------------------------- 09-949 Barona Res. Meth Drums 11/18/98 03/31/99 10,000.00 - ----------------------------------------------------------------------------------- 09-950 Wilder Ranch 11/30/98 03/31/98 250,000.00 - ----------------------------------------------------------------------------------- 09-951 Francis Plating Site 12/16/98 09/30/99 1,000,000.00 - ----------------------------------------------------------------------------------- 09-952 CRIT Parker Pesticide Site 02/20/99 09/30/99 168,500.00 - ----------------------------------------------------------------------------------- 09-953 38th Street Rad Site 03/04/99 09/30/99 50,000.00 - ----------------------------------------------------------------------------------- 09-954 Hollywood Blvd, near I-5 03/10/99 06/30/99 50,000.00 - ----------------------------------------------------------------------------------- 09-955 Hofer Property 05/04/99 01/08/00 680,000.00 - ----------------------------------------------------------------------------------- 09-956 Pala Indian Reservation 04/29/99 06/30/99 5,000.00 - ----------------------------------------------------------------------------------- 09-957 Gila River Indian Reservation 05/27/99 01/08/00 200,000.00 - ----------------------------------------------------------------------------------- 09-958 SW Photochemical 06/18/99 01/08/00 600,000.00 - ----------------------------------------------------------------------------------- 09-959 Buena Vista / Klau Mine 07/09/99 12/15/99 1,149,978.00 - ----------------------------------------------------------------------------------- 09-960 Mongmong, Guam 07/21/99 12/15/99 200,000.00 ===================================================================================
68 SCHEDULE 1.C. EPA CONTRACT EQUIPMENT SEE ATTACHED SCHEDULE AND INCLUDING SELLERS OFFICE FURNITURE AND MISCELLANEOUS EQUIPMENT AND SUPPLIES LOCATED IN THE EDMUNDS, WA LEASED FACILITY. 23 69
ID SERIAL MAKE & MODEL AP VENDOR FAACCT BOOK_BASIS - ---- ----------------- --------------------------------- ------------------------ -------- ----------- S100 1FTJX35G4RKB31487 94 F350 1 TON EXT CAB COURTESY 0172-002 $ 13,385.85 S101 1FTJX35GTEB64213 96 F350 1 TON EXT CAB ASSOCIATES LEASING 0172-002 $ 20,732.00 S102 2FDKF3852LCA91856 90 F350 1 TON FLATBED BILLPIE FORD 0171-002 $ 24,961.97 S103 [ILLEGIBLE] 95 CHEVY ASSOCIATES LEASING 0172-002 $ 22,743.53 S104 [ILLEGIBLE] 92 F250 1 TON BOX TRUCK ENTERPRISE 0172-002 $ 21,580.68 S105 1FTJW35SF9SEA71446 95 F350 1 TON CREW CAB ASSOCIATES LEASING 0172-002 $ 25,780.00 S106 [ILLEGIBLE] KOMATSU 5000LB INDUSTRIAL FORKLIFT HERTZ 0171-002 $ 13,000.03 S107 [ILLEGIBLE] 98 YAMAHA 386CC 4X4 ATV CANTON FARM EQUIPMENT 0171-002 $ 5,295.00 S108 3B7KC23C7SM172833 95 BR2500 RAM ASSOCIATES LEASING 0172-002 $ 27,315.00 S200 [ILLEGIBLE] 28' 1985 FREUHAUF VAN FRUEHAUF 0170-002 $[ILLEGIBLE] S202 16VAX1213N1A21011 92 BIG TEX UTILITY TRAILER HARRIS TRAILER SALES 0170-002 $ 777.56 S205 FRTO11702 32' SEMI TRAILER FRUEHAUF 0170-002 $ 3,843.00 S207 FRTO11708 32' SEMI TRAILER FRUEHAUF 0170-002 $ 3,843.00 S208 107101E 74 GINDY DRY VAN FRUEHAUF 0170-002 $ 6,774.12 S209 HAZDECON MODEL #R-MDF4LP HAZDECON 0170-002 $ 26,930.00 S210 983110 8'X20' DECON TRAILER HAZCO/CENTRAL INDUSTRIES 0170-002 $ 2,164.00 S300 GC02-2471827 2' TRASH PUMP HONDA 0170-002 $ 1,136.10 S301 234-76104-01 3' TRASH PUMP MULTIQUIP 0170-002 $ 1,555.13 S302 WAF1009366 3' TRASH PUMP HONDA 0170-002 $ 1,295.00 S304 [ILLEGIBLE] 2' SUBMERSIBLE PUMP TEEL SYSTEMS 0170-002 $ 1,487.58 S307 08-9527 PUMP ME/PAPB/TF/FTF/PTS WAGNER PROCESS/WILDEN 0170-002 $ 2,587.69 S308 PUMP WIMB/TO/TF/TF/AT ARGO/WILDEN 0170-002 $ 985.00 S309 PUMP WIM1STOTFTFAT ARGO/WILDEN 0170-002 $ 1,543.00 S310 PUMP WIMB/ST/FT/TF/ST ARGO/WILDEN 0170-002 $ 2,090.00 S311 PUMP WIMB/ST/FT/TF/ST ARGO/WILDEN 0170-002 $ 2,093.00 S313 PUMP M8-WIM ARGO/WILDEN 0170-002 $ 1,170.00 S314 PUMP M8-WIM ARGO/WILDEN 0170-002 $ 985.00 S317 15-5003 MIS-00-BN-BN-BN PHOENIX PUMPS/WILDEN 0170-002 $ 1,232,62 S318 [ILLEGIBLE] MASTERFLEX 12VDC COLE-PARMER/REDI-FLO 0170-002 $ 2,369.38 S319 110 VOLT FUEL PUMP REBEL OIL 0170-002 $ 466.94 S321 PUMP PCISP2GVPNC ARGO 0170-002 $ 946.25 S323 3'DD ALUMINUM PUMP HERTZ/WILDEN 0170-002 $ 1,357.38 S324 CA9105 CA9115 TELESCOPIC SHOWER SAFETY ENVIRONMENTAL 0170-002 $ 899.71 S329 LUTZ PUMP RYAN HERCO 0170-002 $ 1,325.87 S400 1119596 93 HONDA GENERATOR [ILLEGIBLE] HILLSBORO HONDA 0170-002 $ 2,150.00 S500A HIP AIR PACK CASCADE/MSA 0170-002 $ 1,748.89 S500B HIP AIR PACK CASCADE/MSA 0170-002 $ 1,748.89 S500C HIP AIR PACK CASCADE/MSA 0170-002 $ 1,748.89 S500D HIP AIR PACK CASCADE/MSA 0170-002 $ 1,748.89 S502A HIP AIR PACK HAZCO/MSA 0170-002 $ 1,582.73 S502B HIP AIR PACK HAZCO/MSA 0170-002 $ 1,582.73 S502C HIP AIR PACK HAZCO/MSA 0170-002 $ 1,582.73 S503A HIP AIR PACK HAZCO/CASCADE 0170-002 $ 1,359.04 S503B HIP AIR PACK HAZCO/CASCADE 0170-002 $ 1,359.04 S503C HIP AIR PACK HAZCO/CASCADE 0170-002 $ 1,359.04 S503D HIP AIR PACK HAZCO/CASCADE 0170-002 $ 1,359.04 S504A HIP AIR PACK CASCADE/MSA 0170-002 $ 1,487.58 S504B HIP AIR PACK CASCADE/MSA 0170-002 $ 1,487.58 S504C HIP AIR PACK CASCADE/MSA 0170-002 $ 1,487.58 S505A HIP AIR PACK CASCADE/MSA 0170-002 $ 1,437.50
ID SEP-99 DEP EXP-99 ACCUM 99 NBV - ---- ----------- ----------- ----------- ----------- S100 (17.19) 897.51 13,368.61 17.19 S101 345.53 3,109.00 14,627.58 6,104.42 S102 0.00 0.00 24,961.97 0.00 S103 379.05 3,411.53 20,456.54 2,288.99 S104 359.88 3,237.10 20,693.47 [ILLEGIBLE] S105 429.57 [ILLEGIBLE] [ILLEGIBLE] 4,640.91 S106 216.67 1,950.00 4,554.45 8,435.58 S107 58.25 794.25 [ILLEGIBLE] 3,674.14 S108 455.25 4,097.25 24,052.38 3,282.63 S200 104.45 940.02 3,874.96 2,391.82 S202 28.87 15.98 777.58 0.00 S205 (14.94) 79.00 3,843.01 0.00 S207 (14.94) 79.00 3,843.01 0.00 S208 112.90 1,016.12 4,22.53 2,551,59 S209 345.00 3,105.00 16,215.00 12,765.00 S210 0.00 0.00 [ILLEGIBLE] (0.00 S300 13.53 121.73 885.60 270.50 S301 0.00 82.69 1,565.13 (0.00 S302 0.00 23.74 1,295,00 (0.00 S304 0.00 0.00 1,487.58 0.00 S307 30.57 275.11 911.94 1,555.75 S308 0.00 0.00 917.47 67.53 S309 0.00 0.00 1,543.00 (0.00 S310 0.00 0.00 2,090.00 (0.00 S311 0.00 0.00 2,093.00 0.00 S313 13.93 125.36 998.21 171.79 S314 0.00 0.00 985.00 0.00 S317 14.67 132.07 555.17 577.45 S318 28.21 253.66 2,309.21 80.17 S319 5.80 52.17 373.90 113.04 S321 11.25 101.38 836.61 109.64 S323 16.16 145.43 324.28 1,033.12 S324 10.71 96.40 770.82 128.89 S329 22.10 154.68 154.68 1,171.19 S400 25.60 230.36 1,611.51 508.49 S500A 20.82 187.38 796.72 952.17 S500B 20.82 187.38 796.72 952.17 S500C 20.82 187.38 796.72 952.17 S500D 20.82 187.38 796.72 952.17 S502A 18.84 169.58 1,069.60 513.13 S502B 18.84 169.58 1,069.60 513.13 S502C 18.84 169.58 1,069.60 513.13 S503A 16.18 145.61 837.54 521.50 S503B 16.18 145.61 837.54 521.50 S503C 16.18 145.61 837.54 521.50 S503D 16.18 145.61 837.54 521.50 S504A 0.00 0.00 1,487.58 0.00 S504B 0.00 0.00 1,487.58 0.00 S504C 0.00 0.00 1,487.58 0.00 S505A 19.49 175.45 1,595.91 41.59
Page 1 of 6 70
ID SERIAL MAKE & MODEL AP VENDOR FAACCT -- ------ ------------ --------- ------ S505B HIP AIR PACK CASCADE/MSA 0170-002 S505C HIP AIR PACK CASCADE/MSA 0170-002 S505D HIP AIR PACK CASCADE/MSA 0170-002 S506 HIP AIR PACK MSA/SCBA 0170-002 S507 HIP AIR PACK MSA/SCBA 0170-002 S701 VAC-U-MAX 55 GAL OPEN TOP VACU-MAX 0170-002 S702 VAC-U-MAX CLN/U55 VACU-MAX 0170-002 S703 VAC-U-MAX CLN/U55 VACU-MAX 0170-002 S704 ASBESTOS VAC HACO 0170-002 S705 ASBESTOS VAC HACO 0170-002 S706 CA102ASB-12P PULLMAN HOLT 12 GAL VACUUM SAFETY ENVIRONMENTAL 0170-002 S707 CA102ASB-12P PULLMAN HOLT 12 GAL VACUUM SAFETY ENVIRONMENTAL 0170-002 S708 CA102ASB-12P PULLMAN HOLT 12 GAL VACUUM SAFETY ENVIRONMENTAL 0170-002 S709 CA102ASB-12P PULLMAN HOLT 12 GAL VACUUM SAFETY ENVIRONMENTAL 0170-002 S710 NILFISK WET/DRY MERCURY VAC HAZCO 0170-002 S711 NILFISK WET/DRY MERCURY VAC HAZCO 0170-002 S712 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S713 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S714 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S715 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S716 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S717 FA200DE NEGATIVE AIR SAFETY ENVIRONMENTAL 0170-002 S722 AIRSTRIPPER, SHALLOW TRAY AIR STRIP 0170-002 S724 CONCRETE VIBRATOR W/MOTOR LONE STAR NORTHWEST 0170-002 S725 FIRE SAFETY CABINET C&H DISTRIBUTORS 0170-002 S726 FIRE SAFETY CABINET C&H DISTRIBUTORS 0170-002 S734 1/2" PNEUMATIC DRILL GRAINGER 0170-002 S738 B190 PNEUMATIC DRUM DEHEADER GA W/3517 WIZARD DRUM TOOL 0170-002 S739 TC16116 BROOKS ($443,811) TARMAC 0170-002 S740 PD390-3953 3000 PSI GENERATOR PRESSURE WASHER LANDA 0170-002 S741 10074 SUPER PROLINE DRUM CRUSHER 10-20/70 DRUMBEATERS OF AMERICA 0170-002 S749 PH 3000 HYDRALIC SHEAR CODE 3 RES Q 0170-002 S752 DE4800/FR1210 105 GAL TANK W/FUEL PUMP ACE TANK & EQUIP 0170-002 S756 HAZCAT KIT W/SENS. PUMP & TUBES HAZTECH SYSTEMS 0170-002 S758 26083 BURIED PIPE & CABLE DETECTOR MCMASTER CARR SUPPLY 0170-002 S759 933113 LASER PRO SHOT L1AS OPTICO FIELD EQUIPMENT & S 0170-002 S761 K01B1 EXPLOSIMETER MODEL #1314SMPN GASTECH 0170-002 S763 580A-2521B-219 PHOTOIONIZATION DETECTOR MODEL #58 ENVIRONMENTAL INSTRUMEN 0170-002 S764 590A-24612-217 PHOTOIONIZATION DETECTOR MODEL #58 ENVIRONMENTAL INSTRUMEN 0170-002 S765 15326 100 FT WATER LEVEL INDICATOR SINCO/SLOPE INDICATOR COM 0170-002 S770 MARK 4 DUST FOGGER SYSTEM TORGERSON MACHINERY 0170-002 S771 SPACE RECOVERY UNIT ARAMSCO 0170-002 S773 063415 AUTO LEVEL W/TRIPOD CONTRACTORS WAREHOUSE 0170-002 S774 B0210 PCB SOIL TEST ANALYZER ENSYS 0170-002 S777 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S778 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S779 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S780 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S781 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S782 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002
ID BOOK_BASIS SEP-99 DEP EXP-99 ACCUM-99 NBV -- ---------- ------ ---------- -------- --- S505B $ 1,637.50 19.49 175.45 1,593.31 44.18 S505C $ 1,637.50 19.49 175.45 1,593.31 44.19 S505D $ 1,637.50 19.49 175.45 1,593.31 44.19 S506 $ 2,694.50 0.00 192.48 2,694.75 0.00 S507 $ 2,694.50 0.00 0.00 2,694.75 0.00 S701 $ 1,345.85 18.02 144.20 254.22 1,091.63 S702 $ 954.55 0.00 0.00 954.56 (0.00) S703 $ 954.55 0.00 0.00 954.56 (0.00) S704 $ 1,300.00 15.48 139.29 513.29 785.71 S705 $ 1,300.00 15.48 139.29 513.29 785.71 S706 $ 624.06 7.43 66.87 522.79 101.29 S707 $ 624.06 7.43 66.87 534.68 89.40 S708 $ 624.06 7.43 66.87 534.68 89.40 S709 $ 624.06 7.43 66.87 534.68 89.40 S710 $ 4,072.38 48.48 436.33 1,016.48 3,055.90 S711 $ 4,072.38 48.48 436.33 1,165.77 2,905.61 S712 $ 808.13 9.62 86.59 692.36 115.77 S713 $ 808.13 9.62 86.59 692.36 115.77 S714 $ 808.13 9.62 86.59 692.36 115.77 S715 $ 808.13 9.62 86.59 692.36 115.77 S716 $ 808.13 9.62 86.59 692.36 115.77 S717 $ 808.13 9.62 86.59 692.36 115.77 S722 $ 13,096.00 155.93 1,403.36 5,145.64 7,952.36 S724 $ 948.00 11.29 101.57 714.39 233.61 S725 $ 794.68 9.48 85.14 530.73 263.95 S726 $ 795.00 9.46 85.18 659.86 135.34 S734 $ 651.72 7.76 69.83 606.01 43.71 S738 $ 3,005.60 0.00 146.70 3,005.60 (0.00) S739 $443,611.00 5,283.46 47,551.18 65,239.69 358,571.11 S740 $ 10,641.03 0.00 0.00 10,641.03 (0.00) S741 $ 45,774.30 544.93 4,904.38 25,339.34 20,434.96 S749 $ 6,330.43 75.36 576.26 3,197.87 3,132.58 S752 $ 689.55 8.21 73.66 307.29 382.26 S756 $ 3,007.30 35.80 322.21 1,661.18 1,345.12 S758 $ 674.04 8.02 72.22 430.37 243.67 S759 $ 3,315.60 39.47 355.24 1,518.33 1,797.27 S761 $ 2,324.15 0.00 0.00 2,324.15 0.00 S763 $ 4,885.00 56.15 523.39 1,093.31 3,791.68 S764 $ 4,925.00 58.63 527.68 1,102.28 3,822.74 S765 $ 680.00 8.10 72.66 152.19 527.81 S770 $ 2,291.36 27.28 245.51 1,382.10 909.28 S771 $ 2,675.88 31.86 286.70 2,056.62 619.06 S773 $ 864.86 0.00 51.48 664.68 0.00 S774 $ 1,261.50 15.26 137.30 1,000.79 280.71 S777 $ 1,118.89 13.32 119.88 388.06 730.83 S778 $ 1,118.89 13.32 119.88 388.06 730.83 S779 $ 1,118.89 13.32 119.88 388.06 730.83 S780 $ 1,118.89 13.32 119.88 388.06 730.83 S781 $ 1,118.89 13.32 119.88 388.06 730.83 S782 $ 1,118.89 13.32 119.88 388.06 730.83
PAGE 2 OF 6 71
ID SERIAL MAKE & MODEL AP VENDOR FAACCT -- ------ ------------ --------- ------ S783 3.5 HP GAS BLOWER W/VINYL HOSE DUCT HAZCO 0170-002 S784 DATA LOGGER TRANSDUCER 0170-002 S785 VAPOR EXT/GROUND WATER UNIT 0170-002 S786 WATER TREATMENT VESSELS CAMERON-YAKIMA 0170-002 S787 WATER TREATMENT VESSELS CAMERON-YAKIMA 0170-002 S788 WATER TREATMENT VESSELS CAMERON-YAKIMA 0170-002 S789 WAREHOUSE SECURITY GATE ECONOMY FENCE CENTER 0170-002 S790 BASIC SOIL AUGER KIT NORTHWEST PUMP & EQUIPM 0170-002 S791 000945 CONNEX BOX INSTANT SPACE 0170-002 S792 1000LB VAPOR PHASE CARBON VESSELS SUN-AG 0170-002 S794 202-2226 THERMO ANEMOMETER GRAINGER 0170-002 S795 59261 1000LB PORTABLE BALANCE SCALE CASCO 0170-002 S796 DCR-205-15 DRUM TIPPER 55 GAL/ 180 DEGREE CLARKLIFT OF SAN DIEGO 0170-002 S797 GREASE BARREL CHASSIS PUMP SPOKANE PUMP/LINCOLN 0170-002 S798 202-2226 THERMO ANEMOMETER GRAINGER 0170-002 S799 DESORBER UNIT REBUILD TARMAC 0170-002 S800 X7329576-1 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S801 X7328877-1 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S802 X7328876-1 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S803 X7311417 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S806 87142380 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S807 87141412 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S808 97278138 445 CDX COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S809 18504350 305 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S810 67041818 225 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S811 67041551 225 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S812 11651633 205 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S813 10628342 205 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S814 12895459 205 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S818 12895318 205 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S819 83443183 P100 DESK TOP COMPUTER INTEL/COMPUSAVE 0176-002 S820 83442978 P100 DESK TOP COMPUTER INTEL/COMPUSAVE 0176-002 S821 83443180 P100 DESK TOP COMPUTER INTEL/COMPUSAVE 0176-002 S822 6694685 105 CS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S824 6694770 105 CS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S825 12688656 205 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S826 200 MMX NOTEBOOK TOSHIBA/COMPUTER CITY 0176-002 S827 INTER-TEL AXXESS PHONE SYSTEM TERRA COMMUNICATIONS 0176-002 S828 77085756 225 CDS COMPUTER TOSHIBA/COMPUTER CITY 0176-002 S829 95120264 TOSHIBA FAX MACHINE KELLY BUSINESS MACHINES 0176-002 S830 IBM-THINKPAD PACIFIC BUSINESS SYSTEMS 0176-002 S831 IBM-THINKPAD PACIFIC BUSINESS SYSTEMS 0176-002 S832 IBM-THINKPAD PACIFIC BUSINESS SYSTEMS 0176-002 S833 IBM-THINKPAD PACIFIC BUSINESS SYSTEMS 0176-002 S834 IBM-THINKPAD PACIFIC BUSINESS SYSTEMS 0176-002 S836 USKB123324 HEWLETT 4SI PRINTER HEWLETT PACKARD 0176-002 S837 USHC038184 HEWLETT 4SI PRINTER HEWLETT PACKARD 0176-002 S838 JPT001439 HP LASER 5SI HEWLETT PACKARD 0176-002 S839 JP6K048433 HP LASER 5SI HEWLETT PACKARD 0176-002 S841 601908 P-133 COMPUTER COMPUTER CITY 0176-002 ID BOOK_BASIS SEP-99 DEP EXP-99 ACCUM-99 NBV -- ---------- ------ ---------- -------- --- S783 $ 1,118.89 13.32 19.88 388.06 730.83 S784 $ 3,023.65 36.00 323.96 2,813.67 209.98 S785 $ 48,210.30 585.84 572.53 41,857.61 7,342.49 S786 $ 2,841.66 33.83 304.46 2,238.12 805.54 S787 $ 2,841.66 33.83 304.46 2,238.12 805.54 S788 $ 2,841.66 33.83 304.46 2,238.12 805.54 S789 $ 1,081.35 12.87 115.88 821.72 159.83 S790 $ 779.00 9.27 83.46 884.00 115.00 S791 $ 2,950.00 18.73 283.29 2,850.00 0.00 S792 $ 8,120.00 98.87 870.00 7,250.00 870.00 S794 $ 592.50 6.70 60.27 107.81 454.68 S795 $ 575.00 2.26 52.48 575.00 0.00 S796 $ 883.44 10.28 92.51 792.17 71.27 S797 $ 759.46 9.04 81.37 850.65 108.80 S798 $ 582.50 6.70 90.27 107.81 454.89 S799 $ 334,952.00 3,987.64 35,868.79 35,88.79 299,073.21 S800 $ 2,563.31 42.72 364.50 900.01 1,663.30 S801 $ 2,563.31 42.72 364.50 900.01 1,663.30 S802 $ 2,563.31 42.72 364.50 900.01 1,663.30 S803 $ 2,434.90 40.58 365.24 848.90 1,588.10 S806 $ 2,610.00 43.50 391.50 1,025.16 1,584.85 S807 $ 2,610.02 43.50 391.50 1,025.16 1,584.85 S808 $ 2,455.62 40.93 368.34 839.98 1,515.88 S809 $ 1,988.28 32.80 295.24 825.48 1,342.80 S810 $ 2,980.47 43.17 388.57 1,070.73 1,519.74 S811 $ 2,782.42 48.37 417.36 1,255.18 1,527.24 S812 $ 2,824.73 43.75 393.71 971.15 1,853,58 S813 $ 2,227.09 37.12 564.08 1,374.61 852.48 S814 $ 1,878.71 31.31 281.81 994.67 884.04 S818 $ 2,034.88 33.91 305.23 1,048.48 958.38 S819 $ 856.85 14.28 128.53 255.83 601.23 S820 $ 856.85 14.28 128.53 255.83 601.23 S821 $ 856.85 14.28 128.53 255.83 601.22 S822 $ 2,126.55 35.44 318.98 1,349.18 777.37 S824 $ 3,143.42 52.39 471.51 2,107.84 1,035.58 S825 $ 2,217.89 38.96 332.68 1,175.48 1,042.41 S826 $ 1,976.96 32.95 296.54 571.12 1,405.64 S827 $ 32,736.89 389.71 3,507.42 8,808.05 24,655.84 S828 $ 2,889.62 48.33 434.94 1,254.89 1,644.73 S829 $ 2,850.00 44.17 397.50 1,938.92 711.08 S830 $ 2,604.00 43.40 390.60 585.85 2,038,35 S831 $ 2,604.23 43.40 390.63 585.70 2,038.53 S832 $ 1,372.70 22.88 205.91 298.18 1,074.52 S833 $ 1,372.00 22.87 205.80 298.03 1,073.97 S834 $ 1,372.00 22.87 205.80 298.03 1,073.97 S836 $ 1,406.52 0.00 0.00 1,406.52 (0.00) S837 $ 1,433.83 23.88 215.01 959.74 474.89 S838 $ 1,498.67 0.00 0.00 4,496.67 (0.00) S839 $ 1,447.84 24.13 217.18 1,321.56 126.28 S841 $ 1,778.81 29.65 266.82 935.85 842.98
PAGE 3 OF 6 72
ID SERIAL MAKE & MODEL AP VENDOR FAACCT - ------ ---------------- ------------------- ----------------------- ------------------ S842 500268 P-90 COMPUTER COMPUTER CITY 0176-002 S843 601907 P-133 COMPUTER COMPUTER CITY 0176-002 S844 M949502099 P-133 COMPUTER COMPUTER CITY 0176-002 S845 509131 P-100 COMPUTER COMPUTER CITY 0176-002 S646 P-133 COMPUTER COMPUTER CITY 0176-002 S647 M49502096 P-133 COMPUTER COMPUTER CITY 0176-002 S648 500267 P-90 COMPUTER COMPUTER CITY 0176-002 S849 P-133 COMPUTER COMPUTER CITY 0176-002 S850 601909 P-133 COMPUTER COMPUTER CITY 0176-002 S851 601909 P-133 COMPUTER COMPUTER CITY 0176-002 S852 62026088 ALDER S10 TYPEWRITER FIRSTLINE OFFICE 0175-002 S855 P-90 PCL ELSA FILE SERVER COMPUTER REPAIR, INC 0176-002 S858 CET COMPANY SIGN JIM MANNING & ASSOC. 0175-002 S862 MAGNA SHELL DESK PANEL CRAWFORD 0175-002 S863 42" HDN LATERAL FILE CABINET CRAWFORD 0175-002 S864 42" HDN LATERAL FILE CABINET CRAWFORD 0175-002 S865 1700CU OFFICE SAFE SOURCE 100 0175-002 S866 AUDIO VISUAL BOARD3076 CRAWFORD 0175-002 S867 Y8215376A NOTEBOOK COMPUTER TOSHIBA 0176-002 S868 Y8214843A NOTEBOOK COMPUTER TOSHIBA 0176-002 S869 Y8202213A NOTEBOOK COMPUTER TOSHIBA 0176-002 S892 500256 P-90 COMPUTER COMPUTER 0176-002 S902 174DVJ2978 GP300 RADIO MOTOROLA 0170-002 S907 174FVJ6950 GP300 RADIO MOTOROLA 0170-002 S909 174FVJ5926 GP300 RADIO MOTOROLA 0170-002 S910 174FVJ6928 GP300 RADIO MOTOROLA 0170-002 S911 174FVJ3215 GP300 RADIO MOTOROLA 0170-002 S914 174FWN1115 GP300 RADIO MOTOROLA 0170-002 S915 174FWND942 GP300 RADIO MOTOROLA 0170-002 S916 174FWLD223 GP300 RADIO MOTOROLA 0170-002 S918 174FWDL211 GP300 RADIO MOTOROLA 0170-002 S919 174FWN1146 GP300 RADIO MOTOROLA 0170-002 S921 174FWN1152 GP300 RADIO MOTOROLA 0170-002 S922 174FWN1145 GP300 RADIO MOTOROLA 0170-002 S935 174FLWD204 GP300 RADIO MOTOROLA 0170-002 S936 174FWN1118 GP300 RADIO MOTOROLA 0170-002 S937 174FWN1144 GP300 RADIO MOTOROLA 0170-002 P100 1FTDF1727VKB15641 97 F150 FORD 0172-002 P102 1FTJW36F3VEAS1658 97 F350 FORD 0172-002 P105 2FDLFH47MOMCADS 91 F450 FLAT BED FORD 0171-002 P111 WC619386 28'x8' RESPONSE TRAILER WELLS CARGO 0170-002 P200 15HP OUTBOARD MOTOR JOHNSON 0170-002 P201 15HP OUTBOARD MOTOR EVINRUDE 0170-002 P202 SYL492206896 SKIFF & TRAILER STEVENS MARINE/SYLVAN 0170-002 P203 SMK820288191 SKIFF & TRAILER SMOKER CRAFT 0170-002 P300 M-4 PUMP WILDEN 0170-002 P301 M-15 PUMP WILDEN 0170-002 P302 M-15 PUMP WILDEN 0170-002 P303 M-15 PUMP WILDEN 0170-002 P304 M-15 PUMP WILDEN 0170-002 ID BOOK BASIS SEP-99 DEP EXP-99 ACCUM-99 NBV - ------ ---------------- ------------- ----------------- ---------------- ---------- S842 4,028.30 67.14 604.25 3,403.91 624.39 S843 1,778.81 29.65 266.82 935.85 842.96 S864 1,991.96 33.20 298.79 1,660.27 131.69 S865 2,207.22 36.79 331.08 1,530.34 676.88 S646 1,372.71 22.68 205.91 624.58 748.13 S647 1,947.65 32.46 292.15 1,818.89 128.76 S648 2,948.14 49.14 442.22 2,491.16 456.95 S849 1,372.70 22.88 205.91 824.58 748.12 S850 1,566.74 26.11 235.01 824.28 742.46 S851 1,566.74 26.11 235.01 824.28 742.48 S852 700.70 0.00 0.00 700.70 (0.00) S855 20,060.98 343.35 3,009.14 18,951.51 3,109.45 S858 3,080.65 36.68 330.09 2,013.56 1,067.29 S862 503.13 5.88 53.91 309.27 193.88 S863 615.95 7.33 65.93 380.57 235.35 S864 635.78 7.57 68.12 102.43 533.35 S865 773.63 9.21 82.89 597.11 178.52 S866 938.88 10.82 97.38 558.87 350.21 S867 1,303.17 21.72 173.78 173.76 1,129.41 S868 1,303.17 21.72 173.78 173.75 1,129.41 S869 1,303.18 21.72 173.76 173.75 1,129.41 S892 4,028.30 67.14 604.25 3,403.91 624.39 S902 1,074.58 12.79 115.13 650.72 423.86 S907 939.33 11.18 100.64 558.82 370.51 S909 939.33 11.16 100.64 161.77 777.56 S910 939.33 11.18 100.64 568.82 370.51 S911 939.33 11.18 100.64 568.82 370.51 S914 1,064.05 12.67 114.01 497.40 568.65 S915 1,064.05 12.67 114.01 497.40 568.65 S916 1,064.05 12.67 114.01 497.40 568.65 S918 888.60 10.55 94.99 414.45 472.15 S919 888.60 10.55 94.99 414.45 472.15 S921 888.60 10.55 94.99 414.45 472.15 S922 888.60 10.55 94.99 414.45 472.15 S935 1,064.05 12.67 114.01 497.40 568.65 S936 888.60 10.55 94.99 414.45 472.15 S937 1,064.05 12.67 114.01 497.40 568.65 P100 16,511.56 275.19 2,476.73 7,430.20 9,081.36 P102 27,599.40 459.99 4,139.91 17,510.29 10,089.11 P105 22,000.00 966.67 3,300.00 21,095.58 904.44 P111 10,526.00 175.43 1,578.90 6,549.51 3,978.49 P200 1,800.00 15.00 135.00 589.50 1,210.50 P201 1,799.00 14.99 134.83 546.20 1,250.80 P202 2,059.00 34.32 308.85 1,254.85 804.15 P203 2,500.00 41.67 375.00 1,209,72 1,290.26 P300 800.00 7.14 64.29 526.90 73.10 P301 1,500.00 17.86 160.71 1,027.38 472.62 P302 1,500.00 17.86 160.71 1,027.38 472.62 P303 1,500.00 17.86 160.71 1,027.38 472.62 P304 1,500.00 17.86 160.71 1,027.38 472.62
Page 4 of 6 73
ID SERIAL MAKE & MODEL AP VENDOR FAACCT BOOK_BASIS SEP-99 DEP EXP-99 - ---- ------------ ---------------------------------- --------------------- -------- ----------- ------ ----------- P305 M-4 PUMP WILDEN 0170-002 $ 600.00 7.14 64.28 P306 9201 FLOTO PUMP WATERIOUS 0170-002 $ 1,500.00 17.95 150.71 P307 169322 VAC-U-MAX CLOSED TOP VACUMAX 0170-002 $ 900.00 10.71 96.43 P400 1457476 2.2 KW-GENERATOR DAYTON 0170-002 $ 500.00 5.95 53.57 P403 EA7-1134068 EM50005 GENERATOR HONDA 0170-002 $ 2,399.00 28.58 257.04 P404 12018 AIR COMPRESSOR SULLIVAN 0170-002 $ 15,000.00 178.57 1,607.14 P500 ALT285194358 IASA SCBA ULTRALITE 0170-002 $ 1,900.00 22.52 203.57 P501 ALT285155242 MSA SCBA ULTRALITE 0170-002 $ 1,900.00 22.62 203.57 P502 ALT295194296 MSA SCBA ULTRALITE 0170-002 $ 1,900.00 22.62 203.57 P508 HIP AIR PACK MSA 0170-002 $ 1,000.00 11.90 107.14 P509 HIP AIR PACK MSA 0170-002 $ 1,000.00 11.90 107.14 P510 ALT285224729 MSA SCBA ULTRALITE 0170-002 $ 1,900.00 22.62 203.57 P511 TP705-1727 BIO SYSTEM BIO SYSTEMS 0170-002 $ 1,000.00 23.51 214.29 P512 TP806-2229 BIO SYSTEM BIO SYSTEMS 0170-002 $ 2,000.00 23.81 214.29 P513 M003-2933 BIO SYSTEM BIO SYSTEMS 0170-002 $ 2,000.00 23.81 214.29 P600 400 OIL CONTAINMENT BOOM AMERICAN SEA CURTAIN 0170-002 $ 4,475.00 53.27 479.46 P708 9108143008 LEL METER INDUSTRIAL SCIENTIFIC 0170-002 $ 1,100.00 13.10 117.66 P714 2400 FAST TANK TENYERS 0170-002 $ 3,150.00 37.50 337.50 P720 COPPUS BLOWER COPPUS 0170-002 $ 1,500.00 17.56 180.71 P721 COPPUS BLOWER COPPUS 0170-002 $ 2,934.00 34.94 314.45 P722 WD796-6101 ALPHA 3100 OILWATER SEPARATOR LANDA 0170-002 $ 8,835.50 81.38 732.38 P723 VB564034 WELDING MACHINE MILLER 0170-002 $ 500.00 5.95 53.57 P724 07921174 CONFINED SPACE SYSTEM MODEL #K1550 0170-002 $ 3,100.00 36.90 332.14 P725 WRENCH SET/TOOLS CRAFTSMAN 0170-002 $ 510.24 6.07 54.67 P730 54699V FALL PROTECTION & RETRIEVE MILLER 0170-002 $ 2,200.00 25.19 235.71 P731 CC0243 LASER TRANSIT 0170-002 $ 895.00 10.65 95.89 P732 973500003 HEPA VAC EUROCLEAN 0170-002 $ 1,225.00 14.56 131.25 P733 9735000032 HEPA VAC EUROCLEAN 0170-002 $ 1,225.00 20.42 183.75 P734 973500006 HEPA VAC EUROCLEAN 0170-002 $ 1,225.00 14.58 131.25 P735 973500005 HEPA VAC EUROCLEAN 0170-002 $ 1,225.00 14.58 131.25 P737 903046013 LEL METER INDUSTRIAL SCIENTIFIC 0170-002 $ 500.00 5.95 53.57 P738 53625V FALL PROTECTION/BLOCK MILLER 0170-002 $ 1,474.85 17.56 158.02 P739 SOIL SAMPLER BORE KIT ARTS MANUFACTURING 0170-002 $ 1,000.00 11.90 107.14 P740 TK-02 VAC-U-MAX CLOSED TOP DRUM VAC-U-MAX 0170-002 $ 1,000.00 11.90 107.14 P741 55D-D61 VAC-U-MAX OPEN TOP DRUM VAC-U-MAX 0170-002 $ 1,000.00 11.90 107.14 P743 FILTER PRESS ELMCO 0170-002 $ 2,000.00 23.61 214.29 P744 EXPLOSION PROOF LIGHTS 0170-002 $ 900.00 10.71 96.43 P745 HAZCAT KIT HAZTECH 0170-002 $ 2,713.23 32.30 290.70 P746 38511847X7 CHAIN SAW STILH 0170-002 $ 446.90 5.32 47.88 P802 D75453111 LAPTOP TOSHIBA 0176-002 $ 2,009.57 33.50 301.48 P804 COMPUTER GATEWAY 0176-002 $ 2,590.00 0.00 56.79 P807 11BHNTZ TYPEWRITER IBM 0170-002 $ 575.00 9.58 89.25 P808 AUTOMATED PHONE SYSTEM SAMSUNG 0175-002 $ 13,774.32 153.96 1,475.82 P809 435 CDS LAPTOP TOSHIBA 0176-002 $ 1,585.95 26.43 237.89 P908 CELL PHONE MOTOROLA 0170-002 $ 500.00 0.00 0.00 P909 CELL PHONE MOTOROLA 0170-002 $ 500.00 0.00 0.00 P910 CELL PHONE MOTOROLA 0170-002 $ 500.00 0.00 211.11 P911 CELL PHONE MOTOROLA 0170-002 $ 500.00 0.00 211.11 P912 CELL PHONE MOTOROLA 0170-002 $ 500.00 0.00 211.11 OFFICE FILES DELATTE METALS 0174-002 $ 785.94 9.38 46.78 ID ACCUM-99 NBV - ---- ---------- --------- P305 410.95 189.05 P306 882.74 617.25 P307 616.43 283.57 P400 439.08 60.91 P403 1,041.47 1,357.53 P404 10,273.81 4,725.19 P500 1,164.88 735.12 P501 1,301.35 596.65 P502 1,301.35 596.65 P508 684.92 315.08 P509 684.92 315.08 P510 1,301.35 698.65 P511 1,369.84 630.16 P512 1,368.54 630.16 P513 1,389.54 630.16 P600 1,930.29 2,544.71 P708 753.41 346.59 P714 2,583.75 568.25 P720 1,027.38 472.52 P721 1,541.99 1,392.91 P722 2,948.49 3,887.01 P723 342.46 157.54 P724 2,123.25 876.75 P725 220.09 290.15 P730 516.83 1,665.17 P731 222.68 872.32 P732 312.57 912.43 P733 437.60 787.40 P734 312.57 912.43 P735 312.57 912.43 P737 342.48 157.54 P738 1,010.16 464.89 P739 684.92 315.08 P740 215.87 784.13 P741 215.87 784.13 P743 1,060.16 819.84 P744 618.43 283.57 P745 812.89 1,900.34 P746 194.01 252.89 P802 1,258.40 751.47 P804 2,690.00 (1.00) P807 345.32 229.58 P808 3,312.40 10,481.92 P809 728.95 857.29 P908 500.00 0.00 P909 500.00 0.00 P910 500.00 0.00 P911 500.00 0.00 P912 500.00 0.00 48.78 739.18
Page 5 of 6 74
ID SERIAL MAKE & MODEL AP VENDOR FAACCT -- ------ ------------ --------- ------ TOSHIBA ANDREA LINDQUIST 0176-002 TOSHIBA LAURIE TEUN 0176-002 TOSHIBA BRYAN CHERNICK 0176-002 HP LASER JET 5SI COMPUTERS & APPLICATIONS 0176-002 15 HP 3 PHASE MOTOR DAVIS PUMP & ELECTRIC 0170-002 PH METER PROBE/RECEPTACLE TBI BAILEY 0170-002 101165 DIGITEC PRINT MOUNTAIN PACIFIC MACHINE 0170-002 TOSHIBA CAROL TIERNEY 0176-002 TOSHIBA LAURIE TEUN 0176-002
ID BOOK_BASIS SEP-99 DEP EXP-99 ACCUM-99 NBV -- ---------- ------ ---------- -------- --- $ 800.00 13.33 105.67 105.67 693.33 $ 1,521.45 25.36 177.50 177.50 1,343.96 $ 790.20 13.17 52.68 52.68 737.52 $ 2,334.84 38.91 116.74 116.74 2,218.10 $ 694.02 11.57 23.13 23.13 670.89 $ 1,237.14 20.82 41.24 41.24 1,195.90 $ 2,197.25 36.62 73.24 73.24 2,124.01 $ 1,646.17 30.77 61.54 61.54 1,784.53 $ 1,751.75 29.20 58.39 58.39 1,593.36 $ 1,663,351.18 $ 20,257.41 $ 183,975.96 $ 697,014.67 $ 868,346.51
FURNITURE AND EQUIPMENT Page 6 of 6 75 SCHEDULE 1.E. ANCILLARY ASSETS Ancillary Assets as defined in the Asset Purchase and Assignment Agreement shall mean and include all documents, books and records, instruments, databases, stationery, preprinted forms, programs, records, intangibles, consultants' reports and memoranda, customer, vendor and supplier lists, trade secrets and other proprietary or confidential information, work files and work products necessary for closing out delivery orders, telephone numbers and other assets of Seller, in each case which relate solely or primarily to the Acquired Assets or are used solely or primarily with Acquired Assets or are used solely or primarily in the performance of the EPA Contracts. Ancillary Assets shall not include any EPA Contract Equipment or Excluded Assets. 24 76 SCHEDULE 3.C SCHEDULE OF ASSUMED LIABILITIES The only liabilities of Sellers that Purchaser shall be obligated to assume are as follows: (1) The direct obligations of Sellers under the EPA Contracts relating to performance after the Closing Date; and (2) Obligations and liabilities of Sellers, whether to the EPA or third parties that can be reasonably and foreseeably implied from the terms of the EPA Contracts or the Federal Acquisition Regulations as necessary or required in connection with the assumption, novation or performance of the EPA Contracts, from and after the Closing Date. Examples of the foregoing shall include, but are not limited to, any obligations of Sellers under the EPA Contracts to use minority or small business contractors or the requirement to lease or acquire particular items of equipment necessary to complete performance under the EPA Contracts. This does not include government or third party claims arising out of Seller's performance of the EPA contract prior to the Closing Date. (3) Seller leases at the property located at 170 West Dayton, Edmonton, WA. 25 77 SCHEDULE 1.D EDMONDS FACILITY LEASE SEE ATTACHED LEASE 26 78 SCHEDULE 3.A.(j) BILL OF SALE, ASSIGNMENT AND ASSUMPTION CET Environmental Services, Inc., a California corporation having an address at 7032 D. Revere Parkway, Englewood, CO 80112 ("CET") (hereinafter Seller), as of the _________ day of ________________, 1999, in consideration of the sum of ONE DOLLAR ($1.00) and other good and valuable consideration paid to Sellers by IT CORPORATION, a corporation organized and existing under the laws of the State of California, having its principal office at 2790 Mosside Boulevard, Monroeville, Pennsylvania, 15146-2792 ("Purchaser"), the receipt and sufficiency of which is hereby acknowledged, hereby sells, transfers, conveys, sets over and assigns to Purchaser, it successors and assigns, the following: All Acquired Assets (as more particularly listed in the referenced Schedules to the Asset Purchase and Assignment Agreement (the "Purchase Agreement") between the parties, incorporated by reference herein and made part thereof), including: A. the EPA Contracts, as listed in the Schedule 1 A. of the Purchase Agreement; B. the EPA Contract Equipment, as listed in Schedule 1.C of the Purchase Agreement; C the Insurance and Indemnity Rights and the Claim Rights, each as described in Section 1.D of the Purchase Agreement; and D. the Ancillary Assets, as listed in Schedule 1.D of the Purchase Agreement. In consideration of the above, the Purchase hereby assumes those obligations, indebtedness and liabilities of the Seller described on Schedule 3.D to the Purchase Agreement (the "Assumed Liabilities"). Seller warrants that IT has good and marketable title to the Acquired Assets and are conveying the Acquired Assets to Purchaser free and clear of all liens, encumbrances, claims charges or other liabilities (except for the Assumed Liabilities), and agrees to execute all documents necessary or advisable to convey such title to Purchaser. Purchaser acknowledges that Sellers are making no express or implied warranty or representation as to the condition, merchantability or suitability as to any of the Acquired Assets and that Purchaser takes the Acquired Assets of Sellers "as is" and "where is"; provided, however that Purchaser shall not be obligated to take title to: A. contaminated EPA Contract Equipment not located on an active EPA Contract job site unless Seller agree to cause or pay for decontamination of same; or 27 79 B. any EPA Contract Equipment which is incapable of being used for the original purpose for which it was intended. The Seller covenants arid agrees to warrant and defend the sale, transfer or assignment of the EPA Contracts from and against all persons. The Purchaser covenants and agrees to warrant and defend the purchase, transfer, and assumption of the Assumed Liabilities, from and against all persons. All capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Purchase Agreement. IN WITNESS WHEREOF, each of the undersigned has duly executed this Bill of Sale, Assignment and Assumption on the day and year first above written. CET Environmental Services, Inc. By: ------------------------------------ Its: ----------------------------------- IT Corporation By: ------------------------------------ Its: ----------------------------------- 28 80 SCHEDULE 6.A EPA LEASED EQUIPMENT LEASES TO BE PROVIDED PRIOR TO CLOSING. 29 81 SCHEDULE 11.A (vi) LABOR MATTERS NONE 30 82 Schedule 11.A (vii) PERMITS NONE 31 83 SCHEDULE 11(viii) ENVIRONMENTAL MATTERS NONE 32 84 SCHEDULE 11.A (ix) GOVERNMENT CONTRACTS Seller is currently suspended from government contract and grant programs by the U.S. Environmental Protection Agency for the reasons set forth in the Notice of Suspension, dated August 10, 1999, from Robert F. Meumier, Debarring to the Notice of Suspension. 33 EX-10.16 4 ASSET PURCHASE AGREEMENT 1 ================================================================================ ASSET PURCHASE AGREEMENT between CAPE ENVIRONMENTAL MANAGEMENT, INC. ("Buyer") and CET ENVIRONMENTAL SERVICES, INC. ("Seller") Dated as of March 8, 2000 ================================================================================ 2 TABLE OF CONTENTS
Page ---- RECITALS ...................................................................... 1 ARTICLE I DEFINITIONS ......................................................... 1 ARTICLE II PURCHASE AND SALE OF ASSETS ........................................ 4 2.1 Purchase and Sale of Assets ......................................... 4 2.2 Excluded Assets ..................................................... 4 2.3 Accounts Receivable ................................................. 5 ARTICLE III ASSUMPTION OF LIABILITIES ......................................... 5 3.1 Assumption of Liabilities ........................................... 5 ARTICLE IV CLOSING ............................................................ 6 4.1 Purchase Price and Payment .......................................... 6 4.2 Execution ........................................................... 7 4.3 Closing ............................................................. 8 4.4 Costs ............................................................... 8 4.5 Taxes and Fees ...................................................... 8 4.6 Prorations .......................................................... 8 4.7 Loss, Destruction, Condemnation, or Damage .......................... 8 4.8 Purchase Price Adjustment ........................................... 8 4.9 Economic Closing Date ............................................... 8 ARTICLE V SELLER'S REPRESENTATIONS AND WARRANTIES ............................. 9 5.1 Corporate Organization .............................................. 9 5.2 Qualification to do Business Corporate Authority .................... 9 5.3 Conflicting Agreements, Governmental Consents ....................... 9 5.4 Actions, Suits, Proceedings ......................................... 9 5.5 Title to Equipment .................................................. 9 5.6 Brokers and Finders ................................................. 9 5.7 No Overbillings ..................................................... 9 5.8 No Unpaid Vendors ................................................... 9 ARTICLE VI BUYER'S REPRESENTATIONS AND WARRANTIES ............................. 10 6.1 Corporate Organization .............................................. 10 6.2 Qualification to do Business, Corporate Authority ................... 10 6.3 Conflicting Agreements, Governmental Consents ....................... 10 6.4 Brokers and Finders ................................................. 10 6.5 Actions, Suits, Proceedings ......................................... 10 ARTICLE VII CONDITIONS OF BUYER TO CLOSE ...................................... 10 7.1 Applicable Approvals ................................................ 10 7.2 Contract Estoppel Certificate ....................................... 10 7.3 Lease Estoppe1 Certificate .......................................... 11 7.4 Novation of Specific Contracts ...................................... 11 7.5 Non-Competition Agreement ........................................... 11 7.6 Representations and Warranties ...................................... 11 7.7 No Adverse Change ................................................... 11 7.8 Observance and Performance .......................................... 11 7.9 Officer's Certificate ............................................... 11
i 3 7.10 Copies of Documents .................................................. 11 7.11 Deliveries on or prior to the Closing ................................ 11 ARTICLE VIII CONDITIONS OF SELLER TO CLOSE ..................................... 12 8.1 Representations and Warranties ........................................ 12 8.2 Observance and Performance ............................................ 12 8.3 Officer's Certificate ................................................. 12 8.4 Notices ............................................................... 12 8.5 Regulatory Approvals .................................................. 12 8.6 Qualification To Do Business .......................................... 12 8.7 No Legal Actions ...................................................... 12 8.8 Deliveries On or Prior to the Closing ................................. 12 ARTICLE IX OPERATION OF BUSINESS PRIOR TO CLOSING; COOPERATION ................. 13 9.1 Maintenance of Business and Assets .................................... 13 9.2 Revenue, Billing, Costs ............................................... 13 9.3 No Disposition of Assets or Additional Liens .......................... 13 9.4 Consent to Assignment ................................................. 13 9.5 Cooperation ........................................................... 13 9.6 Inspection Rights ..................................................... 13 9.7 Non-Solicitation ...................................................... 14 ARTICLE X POST-CLOSING TRANSITIONAL MATTERS .................................... 14 10.1 Post-Closing Inspection Rights ........................................ 14 10.2 Receivables ........................................................... 14 10.3 Transfer of Contracts ................................................. 14 10.4 Office Space and Temporary Employment ................................. 14 10.5 Transferred Employees ................................................. 14 10.6 Further Assurances; Attorney-in-Fact .................................. 15 ARTICLE XI TERMINATION OF AGREEMENT ............................................ 15 11.1 Mutual Consent ........................................................ 15 11.2 Breach of Agreement ................................................... 15 11.3 Government Action ..................................................... 15 11.4 Buyer's Determination ................................................. 15 ARTICLE XII INDEMNIFICATION .................................................... 15 12.1 Seller's Indemnification .............................................. 15 12.2 Buyer's Indemnification ............................................... 16 12.3 Survival of Indemnification ........................................... 16 ARTICLE XIII GENERAL PROVISIONS ................................................ 16 13.1 Entire Agreement ...................................................... 16 13.2 Assignments ........................................................... 16 13.3 Severance ............................................................. 17 13.4 Successors ............................................................ 17 13.5 Headings .............................................................. 17 13.6 Counterparts .......................................................... 17 13.7 Amendments and Waiver ................................................. 17 13.8 Covenant of Further Assurances ........................................ 17 13.9 Survival of Representations and Warranties ............................ 17 13.10 Public Announcement ................................................... 17 13.11 Governing Law ......................................................... 17 13.12 Resolution of Disputes ................................................ 17
ii 4 13.13 Notices .............................................................. 18 13.14 Knowledge of the Parties ............................................. 18 EXHIBIT A (ASSET INVENTORY DETAIL) ................................................ 20 EXHIBIT B (ASSUMED CONTRACTS) ..................................................... 21 EXHIBIT C (ACCRUED VACATION) ...................................................... 22 EXHIBIT D (EMPLOYEES WITH CONTINUED EMPLOYMENT) ................................... 23 EXHIBIT E (NON-COMPETITION AGREEMENT) ............................................. 25 EXHIBIT F (BILL OF SALE) .......................................................... 26
iii 5 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of this 8th day of March, 2000, and is to become effective at 12:01 a.m. on Closing Date, by and between Cape Environmental Management, Inc., a Georgia corporation ("Buyer"), and CET Environmental Services, Inc., a California corporation ("Seller"). RECITALS WHEREAS, Seller is engaged in the business of hazardous, toxic, and radiological waste remediation, both as a prime contractor and as a subcontractor, pursuant to various contracts with governmental agencies and with private sector companies (the "Business"); WHEREAS, Seller desires to transfer to Buyer and Buyer desires to acquire from Seller, as permitted by and in accordance with applicable law, certain federal and commercial environmental remediation contracts entered into by Seller in the ordinary course of Seller's Business; and WHEREAS, Seller desires to sell and Buyer desires to purchase all those assets of Seller involved in the performance of such contracts, and to hire those employees of Seller who are involved in the performance of such contracts, on the terms and subject to the conditions of this Agreement. NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual covenants and conditions contained in this Agreement, the parties hereby agree as follows: ARTICLE I DEFINITIONS 1.1 "Affiliate" shall mean any Person which controls, is controlled by, or is under common control with a party to this Agreement whether through the ownership of voting securities or by contract or otherwise. 1.2 "Assets" shall mean the Lease, the Equipment, the Contracts and the Related Intangibles. 1.3 "Assumed Contract" shall mean a Contract actually assigned by Seller to Buyer pursuant to this Agreement. 1.4 "Assumed Lease" shall mean the Lease, once it has been actually assigned by Seller to Buyer pursuant to this Agreement. 1.5 "Assumed Liabilities" shall have the meaning assigned such term in Section 3.1. 1.6 "Bids and Proposals" shall mean all bids and proposals prepared or submitted by Seller with respect to work, projects or contracts which Seller would be prohibited from competing for under the terms of the Non-Competition Agreement. 1.7 "Books and Records" shall mean all books, records (including, but not limited to all bills, billing records, ledgers and accounts), data, plans, manuals, computer software, computer tapes, computer systems, computer disks, computer programs, source codes and object codes containing any information, pertaining directly 1 6 or indirectly to the Assets and related licenses, and all rights of Seller to retrieve data and other information pertaining directly or indirectly to the Assets from third parties, whether now existing or hereafter arising. 1.8 "Business" shall have the meaning assigned to such term in the background section. 1.9 "Buyer" shall have the meaning assigned such term in the background section. 1.10 "Closing" shall have the meaning assigned such term in Section 4.3. 1.11 "Closing Date" shall mean the date of the Closing. 1.12 "Commercial Contracts" shall mean all contracts between Seller and third parties for environmental and other services provided by Seller including, but not limited to, the contracts listed on Exhibit "B" attached hereto and made a part hereof by this reference, but not including the Government Contracts or the Excluded Contracts. 1.13 "Contracts" shall mean the Government Contracts and the Commercial Contracts. 1.14 "Covenant Payment" shall have the meaning assigned such term in Section 4.1. 1.15 [Intentionally omitted]. 1.16 "Employees" shall mean all the employees of Seller listed on Exhibit "D" attached hereto and made a part hereof. 1.17 "Encumbrances" shall mean material defects of title, such as any mortgage, pledge, lien, security interest, lease, charge, encumbrance, encroachment, covenant, condition, restriction, objection or joint ownership. 1.18 "Environmental Law" shall mean any applicable federal, state or local law, rule, order, regulation, statute or decree of any executive, legislative, regulatory, administrative, judicial or other governmental authority regulating, relating to or imposing liability or standards of conduct concerning the protection of human health or the environment which is in effect and binding upon any Company as of the Closing Date. For the sake of clarity, "Environmental Law" includes the record keeping, disclosure, notification, and reporting requirements contained in such Environmental Law respecting Hazardous Substances. 1.19 "Environmental Liabilities and Costs" shall mean all claims, losses, assessments, judgements, costs, expenses (including reasonable fees and expenses of attorneys and experts including but not limited to, those incurred in connection with the defense or prosecution of any indemnifiable claim and those incurred in connection with the enforcement of this provision), obligations, responsibilities, liabilities, debts and damages sustained by Buyer prior to any reimbursement therefor as a result of or arising from a breach by Seller of any Environmental Law. 1.20 "Equipment" shall mean all machinery, furniture, fixtures and equipment in the Tustin, California, and San Antonio, Texas, office and such equipment of Seller purchased or leased by Seller for use in the performance of its obligations under the Contracts, including generally various vehicles, environmental clean-up and technical equipment and supplies and thermal oxidizers, whether located in the Tustin, California, or San Antonio, Texas, offices, or elsewhere, including, but not limited to, all those items listed on Exhibit "A" attached hereto and made a part hereof. 1.21 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. -2- 7 1.22 "Escrow Agent" shall mean the person or entity serving as escrow agent under the Escrow Agreement. 1.23 "Escrow Agreement" shall mean the escrow agreement to be entered into at Closing for deposit and subsequent disbursement of the Holdback. 1.24 "Excluded Assets" shall have the meaning assigned such term in Section 2.2. 1.25 "Excluded Contracts" shall mean all contracts or agreements between Seller and the Federal Environmental Protection Agency or any state environmental protection agency, all existing contracts relating to water and wastewater treatment (other than groundwater remediation), the Bureau of Reclamation contract (BOA No. 98-CO-40-00lB) and all of those contracts between Seller and Remediation Financial, Inc. and its affiliates (collectively, "RFI") for remediation services at a former explosives manufacturing site in Hercules, California, and for infrastructure construction and remediation services at an old ammunitions facility located in north Los Angeles County, California contiguous to the Newhall Land & Farming developments. 1.26 "Government Contracts" shall mean all federal, state, municipal, local and other governmental contracts for environmental and other services provided by Seller including, but not limited to, the contracts listed on Exhibit "B" attached hereto and made a part hereof by this reference, but not including the Commercial Contracts or the Excluded Contracts. 1.27 "GAAP" shall mean generally accepted accounting principles. 1.28 "Goodwill" shall mean the goodwill of Seller associated with the Assumed Contracts, including, but not limited to Seller's customer and project lists (other than customer and project lists relating to Excluded Contracts or to prospective customers or projects not covered by the Non-Competition Agreement). 1.29 "Governmental Body" shall mean any domestic or foreign national, state, multi-state or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising any regulatory or taxing authority thereunder, including but not limited to any branch of the armed forces of the United States. 1.30 "Hazardous Substances" shall mean (A) any "hazardous substance" "pollutant" or "contaminant" as defined in Section 101(14) and (33) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. Section 9601(14) and (33) or 40 C.F.R. Part 302 (B) any pollutant, hazardous waste or hazardous substance as those terms are defined in and within the context used under any applicable state or local law and (C) oil as defined under the Clean Water Act Section 31l(a)(l). 1.31 "Holdback" shall have the meaning set forth in Section 4.3. 1.32 "Independent Accounting Firm" shall mean a certified public accountant or firm of certified public accountants which is sufficiently independent, under applicable rules, to render an opinion on the financial statements of either Seller or Buyer. 1.33 "Knowledge" shall have the meaning set forth in Section 13.14. 1.34 "Lease" shall mean the Commercial Office Lease between Seller, as tenant, and Johnie B. Clouse, as landlord, for 18,490 square feet located in Tustin, California, with a lease term running from April 15, 1999 to April 14, 2002. 1.35 "Material Adverse Effect" shall mean a material adverse effect on the Seller. -3- 8 1.36 "Person" shall mean any individual, corporation, limited liability company, partnership, joint venture, trust, association, unincorporated organization, other entity or Governmental Body. 1.37 "Pro Rata Share" shall mean that percentage or fraction of the Holdback or the Covenant Payment, as the case may be, as equals the percentage or fraction that the Purchase Price allocable at Closing to Assumed Contracts bears to the total Purchase Price allocable to Contracts under this Agreement. 1.38 "Purchase Price" shall have the meaning set forth in Section 4.1. 1.39 "Relate Intangibles" shall mean Bids and Proposals, Books and Records and Goodwill. 1.40 "Release" shall mean when used as a noun, any releases, spill, emission, discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration into the environment (including, without limitation, ambient air, surface water, groundwater, and surface or subsurface strata) or into or out of any property, including the movement of Hazardous Substances through or in the air, soil, surface water, groundwater or property, and when used as a verb, the occurrence of any Release. 1.41 "Seller" shall have the meaning assigned such term in the background section. 1.42 "Taxes" shall mean any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimate, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto. 1.43 "Tax Return" shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. 1.44 "Transferred Employees" shall have the meaning set forth in Section 10.5. ARTICLE II PURCHASE AND SALE OF ASSETS 2.1 Purchase and Sale of Assets. Subject to the terms and conditions of this Agreement, Seller agrees to sell, transfer, and convey to Buyer, and Buyer agrees to purchase from Seller, all or a portion of the Assets as more particularly hereinafter described. Buyer's obligation to purchase, and Seller's obligation to sell, the Assets is dependent, in part, on whether the approvals of third parties can be obtained for the assignment of each of the Contracts. It is Buyer's intention to purchase, and Seller's intention to sell, each Contract that can be assigned with all requisite approvals, together with the related Equipment. If a required approval cannot be obtained for any particular Contract, then such Contract will not be purchased and the Purchase Price will be adjusted appropriately, as described in Section 4.1. The Assets shall be transferred together with all supporting documentation, including but not limited to, backlog, including outstanding proposals, as of the Closing Date and specifically designated on Exhibit "B," the "Assumed Contracts." The supporting documentation shall include any and all accounting records and files and all other records relating to the Assumed Contracts. The Assumed Contracts will be assigned to Buyer. Seller will transfer to Buyer the Assets in accordance with this Agreement free and clear of all liens, claims, security interests, encroachments, and Encumbrances. 2.2 Excluded Assets. The following assets are excluded from the Asset purchase: (a) Cash and cash equivalents. -4- 9 (b) Excluded Contracts. If, within one year after the Closing, Seller should decide to sell or assign any of the Excluded Contracts, Buyer will have the exclusive right, for a period of not less than two weeks after receipt of written notice from Seller of its intention to sell or assign such Excluded Contract together with all supporting written data relating to such Excluded Contract, to negotiate with Seller for the purchase of such Excluded Contract in whole or in part. If Seller and Buyer are unable to agree upon a mutually satisfactory purchase arrangement for the Excluded Contract within such two-week period, or should Buyer waive its exclusive negotiating right in writing, Seller will have the right to negotiate with others for the sale or assignment of the Excluded Contract. The foregoing right of Buyer to receive notification and to negotiate with Seller for the purchase of any Excluded Contract shall not apply to any contract with the Federal Environmental Protection Agency. For purposes of this subsection 2.2(b) only, Excluded Contracts shall be deemed to include any Contract that Seller did not assign to Buyer because the requisite third party approval could not be obtained. (c) All rights of Seller to any deposits, payment or performance bonds or retainage (when released) with regard to the Assumed Contracts, with the exception of rent deposits or prepaid rent on the Assumed Lease which shall transfer to the Buyer upon closing. (d) All properly booked accounts, notes, and other receivables arising from the operation of the Business through and including the Closing. (e) All corporate charters, qualifications to conduct business as a foreign corporation, taxpayer, and other identification numbers, general ledgers, tax returns, seals, minute books, stock transfer books, and similar documents relating to the organization, maintenance, and existence of Seller. (f) All rights of Seller under this Agreement including, but not limited to, the Purchase Price. 2.3 Accounts Receivable. Buyer acknowledges that no accounts, notes, or other receivables existing at or prior to the Closing are being transferred under this Agreement, but instead such receivables shall continue to be the property of the Seller. Seller agrees to deliver to Buyer at the Closing a complete and accurate listing of all such accounts, notes and other receivables. Buyer agrees immediately to send to Seller, without set-off or contribution, any collections on such receivables received by Buyer following the Closing, unless the payer has been overbilled by Seller in which case Buyer may apply such collection to outstanding receivables owed by such payer to Buyer. In the event there is no designation by a payer making a payment to Buyer after the Closing of the specific receivable to be paid, and there exists no other reason why such payment would not be made to Seller (e.g. the payer has been over-billed by Seller) such payment shall be applied first to any outstanding receivables owed by such payer to Seller at or prior to the Closing. Otherwise, such payment shall be applied to outstanding receivables owed by such payer to Buyer. ARTICLE III ASSUMPTION OF LIABILITIES 3.1 Assumption of Liabilities. Subject to the terms and conditions of this Agreement, Buyer shall at the Closing, defined below in Section 4.3, assume and pay, perform, and discharge in accordance with their terms only the following obligations and liabilities of Seller (the "Assumed Liabilities"): (a) liabilities under the Assumed Contracts and the Assumed Lease arising after the Closing, and obligations of Seller under the Assumed Contracts and the Assumed Lease to be performed after the Closing in accordance with their respective terms or otherwise in the ordinary course of business (other than in respect of breaches, violations or defaults occurring prior to and including the Closing). -5- 10 (b) all liabilities under the Assumed Contracts which are Government Contracts arising at or before the Closing to the extent provided in any novation agreement with the U.S. government relating to such Government Contract, subject however, to Buyer's indemnification rights against Seller for liabilities arising under such Government Contracts at or before the Closing, notwithstanding this subsection. (c) any accrued and unpaid vacation obligations (including the associated payroll tax withholdings) through and including the Closing as shown on Exhibit "C" for the Transferred Employees. These liabilities will be subtracted from the Purchase Price described in section 4.1(a). The actual amount to be deducted will be determined based on accrued vacation pay information provided to Buyer by Seller at or before Closing regarding the Transferred Employees and verified by Buyer as accurate. To the extent the Assumed Liabilities include payment or performance bonds or surety bonds posted by Seller with respect to any Assumed Contracts to be acquired, or retainage payable to Seller which has yet to be paid under the Assumed Contracts, Buyer will replace the bonds as of the Closing and Buyer will pay the retainage to Seller, when, as and to the extent received by Buyer (subject to Buyer's rights of setoff and reimbursement for any liabilities of Seller under the Assumed Contracts to which such retainage relates that Buyer actually pays, performs or incurs). If any portion of the retainage is not released to Buyer because of Buyer's failure to perform in accordance with the terms of the Assumed Contracts, then Buyer will pay to Seller from Buyer's own funds the amount of such retainage so withheld. Buyer shall provide Seller with reasonable evidence of Seller's failure to perform in accordance with the Assumed Contracts before withholding any retainage from Seller. If Seller furnishes Buyer at Closing with an estoppel certificate signed by the other contract party under any Assumed Contract involving retainage which states that Seller is not in default under such Assumed Contract and that such other contract party has no then known claims or setoff rights against the retainage, it shall be presumed that Seller is entitled to receive the retainage as and when paid to Buyer, and Buyer shall have the burden of proof to overcome such presumption in any dispute or proceeding between the parties relating to the retainage. ARTICLE IV CLOSING 4.1 Purchase Price and Payment. In consideration of Seller's sale, assignment, and transfer of the Assets and its performance of all the terms, covenants, and provisions of this Agreement, Buyer shall pay to Seller at the Closing up to, but not exceeding, Two Million Dollars ($2,000,000.00) (the "Purchase Price"), subject to adjustment as hereinafter provided, payable by wire transfer, cashier's check, or immediately available funds. In consideration of Seller's execution and delivery of the non-competition agreement, Buyer shall pay to Seller at the Closing the Pro Rata Share of One Hundred Thousand Dollars ($ 100,000.00) (the "Covenant Payment"), subject to adjustment as hereinafter provided, payable by wire transfer, cashier's check or immediately available funds. The foregoing payments shall be reduced by any liabilities Buyer assumes for the vacation accrued by Seller's employees under Section 3.1(c) (including associated payroll tax liabilities) and by any adjustments required to be made pursuant to Section 4.8. The actual Purchase Price to be paid shall be the aggregate of the amounts allocated to the Assets (as set forth below) that are actually purchased by Buyer as follows: (a) The payment amount listed in this section 4.1(a) for each of the Assumed Contracts shall be due following its novation and assignment (or following its assignment in the case of Commercial Contracts) at the Closing is as follows: -6- 11
Assumed Contract Payment Amount: - ---------------- ------- ------ Worldwide Full Service Environmental Four Hundred Thousand Dollars Remedial Actions, F41624-97-D-8010 ($400,000.00) Pre-Placed Remedial Action Contract, Four Hundred Thousand Dollars (PRAC)DACA45-97-D-0022 ($400,000.00) Seattle MARC Contract, DACW67-99-D-1008: One Hundred Fifty Thousand Dollars ($150,000.00) METRIC Contract, F04699-97-D-0024 Zero Dollars ($0.00) Lasmo Oil & Gas Contract Thirty Thousand Dollars ($30,000.00) KDC-OC, LLC (Koll) Contract Thirty Thousand Dollars ($30,000.00) GATX Contract Twenty Thousand Dollars ($20,000.00) Paramount Petroleum Contract Twenty Thousand Dollars ($20,000.00) All Other Commercial Contracts and Clients Zero Dollars ($0.00) Montgomery Watson AFCEE Subcontract: Zero Dollars ($0.00) Foster Wheeler South West Division RACII Zero Dollars ($0.00) Subcontract: Stone and Webster TERC Subcontract Zero Dollars ($0.00) All other Government Contracts and Clients Zero Dollars ($0.00)
(b) The payment amount listed in this section 4.1(b) for the other Assets is as follows: Equipment Nine Hundred Thousand Dollars ($900,000.00) Related Intangibles Fifty Thousand Dollars ($50,000.00)
The Purchase Price payment due at Closing will be reduced by the accrued vacation liability as contemplated in section 3.1(c) (including the associated payroll tax withholding). The Purchase Price payment due at Closing will also be reduced by the Pro Rata Share of the Holdback as provided in Section 4.3. The Purchase Price payment due at Closing will also be reduced by the amount allocable to any Equipment not purchased by Buyer, as agreed to by Buyer and Seller. No portion of the Purchase Price is being allocated to the Assumed Lease. 4.2 Execution. Upon the finalization of this Agreement, Buyer and Seller shall simultaneously execute two originals of this Agreement and transmit to the other party via facsimile the "signature pages" of this Agreement. One original signature page of this Agreement shall then be transferred to the other party via overnight priority delivery. -7- 12 4.3 Closing. Subject to the conditions to Closing and the rights to terminate this Agreement, the Closing of the Asset purchase (the "Closing") shall take place as soon as possible following the execution of this Agreement at a mutually agreeable date and time between March 10, 2000, and March 24, 2000, subject to extension by mutual agreement of the parties. At the Closing, Buyer shall deliver a cashier's check or other immediately available funds or wire transfer funds for the Purchase Price payment to an account designated by Seller, and Seller shall transfer to Buyer the Related Intangibles, the signed Non-Competition Agreement, and the Assumed Contracts, which shall include, at a minimum, either or both of the Pre-Placed Remedial Action Contract (PRAC), DACA45-97-D-0022, and the Worldwide Full Service Environmental Remedial Actions, F41624-97-D-8010, if successfully novated. The Pro Rata Share of the sum of $250,000 (the "Holdback") shall be deducted by Buyer from the Purchase Price and deposited with the Escrow Agent under the Escrow Agreement to be held for a period of sixty (60) days after the Closing. Such amount shall be held and disbursed in accordance with the terms and conditions of the Escrow Agreement. The amount of the Holdback shall not be construed as a ceiling or limitation on Buyer's right to adjust the Purchase Price as provided in Section 4.8 of this Agreement, or as a limitation of Buyer's indemnification rights or other remedies. 4.4 Costs. Each party shall pay all of the costs and expenses incurred by it in negotiating and preparing this Agreement (and all other agreements, certificates, and documents executed in connection with this Agreement), in performing its obligations under this Agreement, and in otherwise consummating the transactions contemplated by this Agreement, including without limitation its attorneys' fees and accountants' fees. 4.5 Taxes and Fees. Seller shall be responsible for and shall pay all transfer taxes or fees related to the Asset transfer. 4.6 Prorations. On the Closing, utility charges, real and personal property taxes, and other similar obligations to third parties shall be prorated between Seller and Buyer. Property taxes shall be pro-rated based on the year these taxes are payable as determined in accordance with local law. 4.7 Loss, Destruction, Condemnation, or Damage. If, between the date of this Agreement and the Closing, the premises subject to the Lease (the "Leased Premises") or any Equipment is lost, destroyed, or condemned or suffers any material damage, Seller shall bear the risk of loss associated therewith, and Buyer shall have no further obligation to assume the Lease or purchase such Equipment, as the case may be. Notwithstanding the foregoing, Buyer and Seller may mutually agree to make an adjustment to the Purchase Price and close the purchase and sale of the Lease or such Equipment, or Buyer, at its option, may take an assignment from Seller of all insurance and/or condemnation, proceeds payable to Seller on account of such loss, destruction, condemnation, or damage and close the purchase and sale of the Lease or such Equipment in accordance with the terms and conditions of this Agreement. 4.8 Purchase Price Adjustment. The Purchase Price will not include any portions of the Purchase Price allocated to any Assets that are not transferred to Buyer at the Closing, or if such allocation has not been made, the Purchase Price shall be reduced by such amounts as the Buyer and Seller mutually agree upon. The Purchase Price and Covenant Payment will also be reduced dollar for dollar by the amount of any overpayments received by Seller under any of the Assumed Contracts and by the amount of any payments owed to unpaid vendors of Seller who have provided materials, goods or services to Seller in connection with Assumed Contracts. For purposes of this Agreement, an overpayment shall mean any amount received by Seller under an Assumed Contract that proves to be in excess of the amount that should have been received based on Seller's actual performance under the Assumed Contract through and including the date such Assumed Contract is assigned to and assumed by Buyer. The foregoing reduction of Purchase Price shall not be construed as a limitation of Buyer's rights to exercise any other remedies of Buyer under this Agreement, or otherwise available to Buyer at law or in equity. 4.9 Economic Closing Date. The date of Closing shall be the effective date for terminating Seller's accruals of income and expense and commencing Buyer's accruals of income and expense under each of the Assumed Contracts. -8- 13 ARTICLE V SELLER'S REPRESENTATIONS AND WARRANTIES Seller hereby represents and warrants to Buyer that: 5.1 Corporate Organization. Seller is a corporation duly organized and validly existing, is in good standing under the laws of its state of incorporation, and has the corporate power and authority to own its properties and carry on its business as now being conducted. True and correct copies of the articles of incorporation and bylaws of Seller have been provided to Buyer. 5.2 Qualification to do Business, Corporate Authority. Seller is duly qualified to do business and is in good standing under the laws of the State of California and has the corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement. The Seller's execution and delivery of this Agreement and the other documents contemplated by this Agreement have been duly authorized by all necessary corporate action by the board of directors and shareholders of Seller. This Agreement and all other instruments required hereby to be executed and delivered by Seller are legal, valid, and binding obligations of Seller, enforceable in accordance with their respective terms. 5.3 Conflicting Agreements, Governmental Consents. The execution and delivery of this Agreement and any other agreements to be executed and delivered pursuant to this Agreement and the consummation of the transactions contemplated by this Agreement do not and will not, with or without the giving of notice or the passage of time, conflict with, result in, or constitute a breach, default, right to accelerate, or loss of rights under, or result in the creation of any lien, charge, or encumbrance pursuant to, the terms or conditions of any of Seller's articles of incorporation or bylaws, any law, rule, regulation, statute, order, judgment, or decree or any contract, agreement, lease, license, or instrument to which Seller is a party or the Assets are bound or affected. 5.4. Actions, Suits, Proceedings. To the Seller's knowledge, there are no actions, suits, or other legal or administrative proceedings pending or threatened against Seller or any of its property in any court or before any federal, state, municipal, or other governmental agency which, (a) if decided adversely to Seller, would have a materially adverse effect upon the Business or Assets, (b) seek to restrain or prohibit the transactions contemplated by this Agreement or obtain any damages in connection therewith, or (c) in any way question the validity of this Agreement. 5.5 Title to Equipment. Other than the representation and warranty regarding ownership of and title to the Equipment, Buyer acknowledges that Seller makes no representation or warranty regarding the Equipment or its condition, and Buyer specifically agrees that it is purchasing the Equipment "AS IS AND WHERE IS," and Seller expressly disclaims any implied warranty of merchantability or fitness for a particular purpose. 5.6 Brokers and Finders. Seller has retained or engaged a broker in connection with the transactions contemplated by this Agreement, Sanders Morris Mundy, and Seller assumes full responsibility for the broker's fee. Seller has retained or engaged no other brokers, finders or financial intermediaries in connection with the transactions contemplated by this Agreement. 5.7 No Overbillings. To Seller's Knowledge, Seller has not billed or collected any amounts under the Contracts in excess of the amounts that were due and owing under such Contracts at the time of such billing or collection. 5.8 No Unpaid Vendors. To Seller's Knowledge, there are no Unpaid Vendors, except for persons who will be paid in full at Closing for any amounts then owed or who will be paid in the ordinary course of business by Seller within thirty (30) days after receipt of their invoice. -9- 14 ARTICLE VI BUYER'S REPRESENTATIONS AND WARRANTIES Buyer hereby represents and warrants to Seller: 6.1 Corporate Organization. Buyer is a corporation duly organized and validly existing, in good standing under the laws of Georgia, and has the corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement. True and correct copies of the articles of incorporation and bylaws of Buyer have been provided to Seller. 6.2 Qualification to do Business, Corporate Authority. Buyer is duly qualified to do business and is in good standing under the laws of the State of Georgia. Buyer has the corporate power to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement. The Buyer's execution and delivery of this Agreement and the other documents contemplated by this Agreement have been duly authorized by all necessary corporate action by the board of directors and shareholders of Buyer. This Agreement and all other instruments required hereby to be executed and delivered by Buyer are legal, valid, and binding obligations of Buyer, enforceable in accordance with their respective terms. 6.3 Conflicting Agreements, Governmental Consents. The execution and delivery of this Agreement and any other agreements to be executed and delivered pursuant to this Agreement and the consummation of the transactions contemplated by this Agreement do not and will not, with or without the giving of notice or the passage of time, conflict with, result in, or constitute a breach, default, right to accelerate, or loss of rights under, or result in the creation of any lien, charge, or encumbrance pursuant to, the terms or conditions of any of Buyer's articles of incorporation or bylaws, any law, rule, regulation, statute, order, judgment, or decree or any contract, agreement, lease, license, or instrument to which Buyer is a party or the Assets are bound or affected. 6.4 Brokers and Finders. Buyer has retained or engaged a mergers and acquisitions consultant in connection with the transaction contemplated by this Agreement, Earth Capital Corporation, LLC, and Buyer assumes full responsibility for the consultant's fee. Buyer has not retained or engaged any broker, finder, or other financial intermediary in connection with the transactions contemplated by this Agreement. 6.5 Actions, Suits, Proceedings. There are no actions, suits, or other legal or administrative proceedings pending or threatened against Buyer in any court or before any federal, state, municipal, or other governmental agency which, if decided adversely to Buyer, (a) may adversely prevent or in any way impair the consummation of the transactions contemplated by this Agreement, (b) seek to restrain or prohibit the transactions contemplated by this Agreement or obtain any damages in connection therewith, or (c) in any way question the validity of this Agreement. ARTICLE VII CONDITIONS OF BUYER TO CLOSE The obligation of Buyer to effect the closing of the transactions contemplated by this Agreement is subject to the satisfaction prior to or at the Closing of the following conditions: 7.1 Applicable Approvals. Buyer shall have received all applicable approvals of governmental or regulatory agencies and all other parties, if any, necessary to consummate the Asset sale and to take an assignment of the Assumed Contracts and Assumed Lease. In lieu of approval by the U.S. Environmental Protection Agency ("EPA"), Seller shall have provided Buyer with a copy of a letter dated January 11, 2000, addressed to Seller from referencing EPA Case No. 00-0077-00 and Seller, promptly after the execution of this Agreement by Buyer and Seller, shall have notified the EPA that Seller and Buyer have executed this Agreement. 7.2 Contract Estoppel Certificate. Buyer shall have received an estoppel certificate regarding each Assumed Contract executed by an authorized officer or agent of the third party or governmental agency for whom -10- 15 Seller has contracted to perform services for certifying that: (a) the Assumed Contract remains the valid, binding, and enforceable obligation of the party in accordance with its terms; (b) the party has not asserted, and there are (i) no defaults of any nature under the terms and provisions of the Assumed Contract or relating thereto, and (ii) no conditions or circumstances which would become a default thereunder or under documents relating thereto solely by the passage of time, or the service of notice, or both; and (c) all amounts owed to Seller under the Assumed Contract for work performed have been paid in full, or if not so paid, the amount then due and owing. 7.3 Lease Estoppel Certificate. Buyer shall have received an estoppel certificate with respect to the Assumed Lease executed by an authorized officer or agent of the landlord certifying that: (a) the Lease and accompanying lease agreement remain the valid, binding, and enforceable obligation of the landlord in accordance with the lease terms; (b) the landlord has not asserted, and there are (i) no defaults of any nature under the terms and provisions of the Assumed Lease or lease relating thereto, and (ii) no conditions or circumstances which would become a default thereunder or under documents relating thereto solely by the passage of time, or the service of notice, or both; and (c) all amounts owed to the landlord under the lease have been paid in full or, if not so paid, the amount then due and owing to the landlord. 7.4 Novation of Specific Contracts. Before the Closing, either the Pre-Placed Remedial Action Contract (PRAC), DACA45-97-D-0022, or the Worldwide Full Service Environmental Remedial Actions, F41624-97-D-8010, must be novated. Otherwise, at Buyer's sole election, Buyer is not obligated to purchase the Assets. 7.5 Non-Competition Agreement. Buyer shall have received an executed non-competition agreement from Seller in the form attached as Exhibit E. 7.6 Representations and Warranties. The representations and warranties of Seller contained in this Agreement shall be true and correct as of the Closing as if made on the date of the Closing. 7.7 No Adverse Change. There shall have occurred no material adverse change in the Assets as a whole or the Business or the financial condition or results of operations of Seller since the date the financial statements were provided to the Buyer up to and including the Closing. Seller covenants and agrees to notify Buyer immediately of any such material adverse change. 7.8 Observance and Performance. Seller shall have observed and performed all covenants and agreements required by this Agreement to be observed or performed by Seller on or prior to the date of Closing. 7.9 Officer's Certificate. Seller shall have delivered to Buyer a certificate of an authorized officer of Seller, dated the date of Closing, to the effects set forth in Sections 5.1, 5.2, 5.3, 5.4, 5.7 and 5.8 above. 7.10 Copies of Documents. Buyer shall have received accurate and complete copies of all documents and instruments listed in any of the exhibits to this Agreement (and of any amendments, waivers, or similar related supplementary materials). 7.11 Deliveries on or prior to the Closing. Seller shall have delivered or caused to be delivered to Buyer the following at or prior to the Closing: (a) Confirmation that all Assets defined in this Agreement and located at said facilities are in free and clear condition with instruments of titles where applicable. (b) Certified copies of resolutions adopted by the board of directors and shareholders, or governing boards of Seller, authorizing the execution of this Agreement and the sale of the Assets in accordance with the terms of this Agreement. (c) Certificate of good standing of Seller issued by the Secretary of State of incorporation within thirty days of the Closing. -11- 16 (d) the various certificates, instruments, and documents referred to in this Article VII. (e) A Bill of Sale duly executed by Seller, in the form attached as Exhibit "F." (f) An opinion from Seller's counsel confirming the accuracy and validity of the representations contained in sections 5.1, 5.2, and 5.3, and the enforceability of this Agreement. ARTICLE VIII CONDITIONS OF SELLER TO CLOSE The obligation of Seller to effect the transactions contemplated by this Agreement is subject to the satisfaction prior to or at the Closing of the following conditions: 8.1 Representations and Warranties. The representations and warranties of Buyer contained in this Agreement shall be true and correct as of the Closing as if made on the date of the Closing. 8.2 Observance and Performance. Buyer shall have observed and performed all covenants and agreements required by this Agreement to be observed or performed by Buyer on or prior to or at the Closing. 8.3 Officer's Certificate. Buyer shall have delivered to Seller a certificate of a responsible officer of Buyer dated the date of Closing to the effects set forth in Sections 6.1, 6.2 and 6.3 above. 8.4 Notices. Buyer shall have made all filings and registrations with all federal, state, and local governmental agencies or authorities required to be made by Buyer in connection with the execution and delivery and consummation of the transactions contemplated by this Agreement. 8.5 Regulatory Approvals. At Seller's expense, Buyer shall have received all authorizations, consents, and approvals of governments and governmental agencies required in connection with the purchase and sale contemplated by this Agreement, subject to Section 7.4 above. 8.6 Qualification To Do Business. Buyer or its subsidiary shall be qualified to do business as a foreign corporation in the states in which the Assets are located. 8.7 No Legal Actions. No court or governmental authority of competent jurisdiction shall have issued an order restraining, enjoining, or otherwise prohibiting the consummation of the transactions contemplated by this Agreement, and no person, entity, or governmental agency shall have instituted an action or proceeding which shall not have been previously dismissed seeking to restrain, enjoin, or prohibit the consummation of the transactions contemplated by this Agreement. 8.8 Deliveries On or Prior to the Closing. Buyer shall have delivered or caused to be delivered to Seller the following at or prior to Closing: (a) Payment of the Purchase Price payment. (b) Certified copies of resolutions adopted by the board of directors and shareholders, or governing boards of Buyer, authorizing the execution of this Agreement and the purchase of the Assets in accordance with the terms of this Agreement. (c) Certificate of good standing of Buyer issued by the Secretary of State of incorporation within thirty days of the Closing. -12- 17 ARTICLE IX OPERATION OF BUSINESS PRIOR TO CLOSING; COOPERATION Seller agrees that, except with the prior written consent of Buyer, from the date of this Agreement to and including the Closing: 9.1 Maintenance of Business and Assets. Seller will use reasonable efforts to preserve the business organization of the Business, keep available the services of key employees on terms no less favorable to Seller than those on which such employees are presently employed, and use reasonable efforts to preserve for Buyer the good will of suppliers, customers, and others having business relationships with the Business. Seller will maintain its books and records during such period in accordance with GAAP and in compliance with the Federal Acquisition Regulations. Seller will maintain all tangible Assets in good order and repair, ordinary wear and tear excepted. 9.2 Revenue, Billing, Costs. Seller will recognize revenue and produce billings and incur all associated costs for each Assumed Contract and new contracts up to and including the date such contract is assumed by Buyer. Revenue and billing of a project will be based on the percentage of completion accounting method which, in turn, is based on incurred costs recorded in Seller's accounting system as a percentage of the true estimated cost at completion of the project. Seller will be responsible for all direct, indirect, payroll, sales and other operating expenses through and including the date such contract is assumed by Buyer. These costs will include costs from expense reports as well as any prorations of normal indirect expenses. These costs will also include all transportation and disposal costs for removal and disposal of hazardous and non-hazardous wastes generated in conjunction with performance of the contracts and production of revenues through and including the date such contract is assumed by Buyer. All costs, billing, and revenue for the Assumed Contracts and new contracts occurring after the date such Contract is assumed by Buyer will be the responsibility of the Buyer. Seller will be responsible for all project costs relating to Contracts that are not Assumed Contracts. 9.3 No Disposition of Assets or Additional Liens. Seller will not sell, transfer, dispose of or abandon any portion of the Assets, except in the ordinary course of business and consistent with past practice. Seller will not permit any of the Assets to become subject to any mortgage, lien, claim or Encumbrance. 9.4 Consent to Assignment. Seller agrees to use all reasonable efforts (but shall not be obligated to make any payment) to obtain the consents to assign the Assumed Lease and Assumed Contracts to Buyer. 9.5 Cooperation. Seller will furnish to Buyer all information concerning Seller, the Business and the Assets required for inclusion in any statement or application made by Buyer to any governmental body in connection with the transactions contemplated by this Agreement. Without limiting the foregoing sentence, Seller will cooperate with Buyer in good faith to obtain all consents and approvals required from governmental and regulatory authorities and private third parties necessary to consummate the transactions contemplated hereby and enable the Buyer thereafter to carry on the Business without material disruption. 9.6 Inspection Rights. Seller will permit employees and agents of Buyer during normal business hours and on reasonable notice to Seller to inspect the Assets and to inspect all contracts, agreements, other documents and records reflecting or reasonably relating to the Assets or the Business. Seller will further permit Buyer the right to inspect Seller's offices and facilities to assure that all wastes, both hazardous and non-hazardous, have been removed from the facilities and disposed of at the Seller's cost. All waste discovered during this inspection will be disposed of before the Closing. Buyer's inspections will be conducted in a manner that will not interfere with Seller's normal business operations. All information and records obtained by Buyer pursuant to this Section shall be maintained as confidential and shall not be disclosed to any third party without the consent of Seller. Buyer shall be obligated to maintain as confidential any information obtained from Seller. The obligations of confidentiality arising under this Section shall survive the termination or abandonment of this Agreement. Seller also agrees to furnish to Buyer, as and when available, all billing files and billing correspondence (including, but not limited to, detailed ledger accounts) relating to the Contracts and all work orders under the Contracts with respect to all monthly billing periods from and after December, 1999 through and including the Closing. Seller also agrees to -13- 18 furnish such information to Buyer, upon Buyer's request, with respect to past billing periods for completed work or orders under the Contracts. 9.7 Non-Solicitation. Seller agrees that it will not enter into or conduct any discussions with any other prospective purchaser of Seller's stock or Assets through and including the date of the Closing, except with Buyer's express written consent. Seller shall cause any agents, brokers, or finders that Seller employed to refrain from soliciting prospective purchasers for Seller's stock or Assets. ARTICLE X POST-CLOSING TRANSITIONAL MATTERS 10.1 Post Closing Inspection Rights. Buyer agrees that all books, records, documents, and other materials delivered to Buyer by Seller pursuant to the provisions of this Agreement shall be open for inspection by representatives of Seller at any time during regular business hours on or prior to the first anniversary of the Closing, and that Seller during such period at its expense may make such excerpts therefrom as it may deem desirable. Seller agrees that all documents, records, and other materials retained by Seller that are related to the Assets or the Business shall be open for inspection by representatives of Buyer at any time during regular business hours on or prior to the first anniversary of the Closing, and that during this period Buyer may make such excerpts therefrom at its expense as it may deem desirable. Thereafter, each party shall offer to the other an opportunity to copy any such documents and materials prior to the destruction of the documents and materials. If either party has a reasonable and legitimate need to inspect or copy the books, records or other documents of the other party after the first anniversary of the Closing with respect to a matter arising under the Assumed Contracts, and makes a request to do so, the parties agree to cooperate in good faith to permit such inspection and copying at the expense of the requesting party. 10.2 Receivables. Buyer agrees to assist Seller in the collection of outstanding accounts receivable. After the Closing, Buyer will provide Seller with access to personnel having knowledge of projects and information contained in project files including proposals, documentation, and all other information required for Seller to collect outstanding accounts receivable for these projects. 10.3 Transfer of Contracts. Seller agrees to assist Buyer in providing all necessary documentation and assistance required to transfer all Seller's contracts or documents related to this Agreement to Buyer's name as reasonably deemed necessary by Buyer. 10.4 Office Space and Temporary Employment. At no charge to Buyer, Seller will provide office space in Seller's Denver, Colorado office on a temporary basis for up to ten employees whom Buyer will hire to enable Buyer to fulfill its obligations under the Assumed Contracts. At no charge to Seller, Buyer will make space available to Seller in the Tustin, California office, on a temporary basis, for one employee whom Seller will retain to enable Seller to fulfill its obligations under the Excluded Contracts. The obligations of both parties under this provision shall terminate at the earlier of: (i) June 30, 2000, and (ii) the date on which either party ceases to use the other's office. 10.5 Transferred Employees. Buyer shall offer employment to each of the Employees listed on Exhibit "D". Each employee may then decide whether to accept and continue employment with Buyer. All Employees who accept employment with Buyer are defined as the "Transferred Employees." Seller will be responsible for all its accrued payroll costs through and including the Closing. Buyer shall become responsible for the payroll costs, which first accrue with respect to the Transferred Employees after the Closing. Seller covenants and agrees not to offer pay increases, benefits or other inducements to any of the Employees listed on Exhibit "D" to encourage them to remain in Seller's employment, and not to otherwise interfere with Buyer's efforts to hire such Employees. Notwithstanding the foregoing, both Buyer and Seller shall have the right to employ any Employee designated as "casual" from time to time as and when needed. -14- 19 10.6 Further Assurances: Attorney-in-Fact. The following provisions relating to further assurances and attorney-in-fact are a part of this Agreement. (a) Further Assurances. At any time, and from time to time, upon request of Buyer, Seller will make, execute and deliver, or will cause to be made, executed or delivered, to Buyer or to Buyer's designee, and, when requested by Buyer, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Buyer may deem appropriate, any and all such bills of sale, assignments, acknowledgements, consents, instruments of transfer and further assurance, certificates, and other documents as may, in the sole opinion of Buyer, be necessary or desirable in order to effectuate, complete, perfect, continue or preserve (a) the sale, assignment and transfer by Seller to Buyer of the Assets under this Agreement, or (b) to meet the requirements of any third party, including but not limited to any third party under the Assumed Contracts who has requested Seller's execution or delivery of any such document in connection with the novation, assignment or assumption of the Assumed Contract. (b) Attorney-in-Fact. If Seller fails to do any of the things referred to in the preceding paragraph, Buyer may do so for and in the name of Seller. For such purposes, Seller hereby irrevocably appoints Buyer as Seller's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Buyer's sole opinion, to accomplish the matters referred to in the preceding paragraph. ARTICLE XI TERMINATION OF AGREEMENT This Agreement may be terminated at any time prior to and including the Closing: 11.1 Mutual Consent. By mutual consent of Buyer and Seller. 11.2 Breach of Agreement. By Buyer giving written notice to Seller if Seller is in breach, or by Seller giving written notice to Buyer if Buyer is in breach, in any material respect of any representation, warranty, or covenant contained in this Agreement. 11.3 Government Action. By Buyer or Seller if any court of competent jurisdiction in the United States or other United States governmental body shall have issued an order, decree, or ruling or taken any other action restraining, enjoining, or otherwise prohibiting the consummation of the transactions contemplated by this Agreement and such order, decree, ruling, or other action shall have become final and non-appealable. 11.4 Buyer's Determination. By Buyer if, in its sole good faith discretion, it determines that the acquisition of Seller's Assets is not commercially feasible because Seller cannot obtain all the necessary consents or novations to permit the assignment of the Lease or the Contracts to Buyer, or that consummating the transaction would subject Buyer to material and adverse liabilities that outweigh the benefits of the transaction to Buyer. ARTICLE XII INDEMNIFICATION 12.1 Seller's Indemnification. Seller agrees to indemnify and hold Buyer and its officers, directors, stockholders, and assignees harmless from and against any and all liabilities, damages, losses, costs, and expenses whatsoever arising out of or resulting from: (a) any breach of any warranty, agreement, covenant, or representation made in this Agreement by Seller. -15- 20 (b) any lien, charge, claim, or Encumbrance of any nature whatsoever against any of the Assets. (c) ownership and operation of the Business and the Assets on or prior to and including the Closing (including without limitation any actions, suits, or claims of any nature arising from such ownership, operation, or participation). (d) any and all Taxes, interest, and penalties, of any kind arising at any time from (1) ownership and operation of the Business and the Assets on or prior to the Closing and (2) any transfer, payment or other transaction described in this Agreement, including without limitation any and all Taxes, interest, and penalties payable with respect to any proceeds, gain, or income realized by Seller. (e) any of Seller's liabilities or obligations other than the Assumed Liabilities (excluding from the Assumed Liabilities, for this purpose, Seller's liabilities and obligations under the Government Contracts). (f) any Environmental Liabilities and Costs. (g) any actions, suits, proceedings, demands, judgments, costs, legal fees, and other expenses incident to any of the foregoing. 12.2 Buyer's Indemnification. Buyer agrees to indemnify and hold harmless Seller from and against any and all liabilities, damages, losses, costs, and expenses whatsoever arising out of or resulting from: (a) any breach of any warranty, agreement, covenant, or representation made in this Agreement by Buyer. (b) ownership and operation of the Business and the Assets after the Closing (including without limitation any actions, suits, or claims of any nature arising from such ownership or operation). (c) any Assumed Liabilities (other than Assumed Liabilities under the Government Contracts). (d) any actions, suits, proceedings, demands, judgments, costs, legal fees, and other expenses incident to any of the foregoing. 12.3 Survival of Indemnification. Except as hereinafter expressly provided to the contrary, the obligations of Seller and Buyer to indemnify and hold each other harmless shall survive until the expiration of the applicable limitation period imposed by law for the bringing of claims based on indemnification, and thereafter all representations and warranties of Seller and Buyer under this Agreement shall be extinguished and such indemnification obligation shall expire. No claim for the recovery of damages based on the indemnification obligation arising under this Agreement may be asserted after the expiration of the foregoing survival period; provided, however, that claims first asserted in writing within such period shall not be barred. ARTICLE XIII GENERAL PROVISIONS 13.1 Entire Agreement. This Agreement contains the entire understanding and agreement between the parties and supersedes all prior negotiations, understandings, and agreements between the parties. 13.2 Assignments. No party to the Agreement shall assign the Agreement without written consent of the other parties. -16- 21 13.3 Severance. If any term of this Agreement shall be invalid or unenforceable, the remainder of this Agreement and any other application of such terms shall not be affected. 13.4 Successors. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties. 13.5 Headings. The headings of this Agreement are for purposes of reference only and shall not limit or define the meaning. 13.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which is an original, but all of which shall constitute one instrument. 13.7 Amendments and Waiver. This Agreement may be amended, waived, or terminated only by an instrument in writing signed by all the parties. 13.8 Covenant of Further Assurances. From time to time after the Closing, at the request of Buyer and without further consideration, Seller will execute and deliver such other instruments of transfer and take such other actions as Buyer may reasonably require to transfer the Assets to, and vest title of the Assets in, Buyer, and to put Buyer in possession of the Assets. 13.9 Survival of Representations and Warranties. All representations and warranties contained in this Agreement, and all other written representations and warranties of Buyer and Seller contained in the instruments executed in connection with the consummation of the transactions provided for in this Agreement, shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement until the expiration of the applicable limitation period imposed by law for the bringing of claims based on such representations and warranties. 13.10 Public Announcement. Any and all public announcements of any kind or nature whatsoever concerning the transactions contemplated by this Agreement made by Buyer or Seller before, on, or after the Closing shall require the prior written approval of the other party if the name Or identity of such party is disclosed in such announcement. 13.11 Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Georgia, including for the purpose of choice of law, as though all acts and omissions related to this Agreement occurred in the State of Georgia. 13.12 Resolution of Disputes. (a) Notice of Dispute: Negotiated Settlement. The parties recognize that a bone fide dispute as to certain matters may from time to time arise after the Closing that relates to a party's rights or obligations under this Agreement. In such instance, any party may, by written notice to the other party, have such dispute referred to their respective employees designated below or their successors, for attempted resolution by good faith negotiations within 30 days after such notice is received. Such designated employees are as follows: Seller: Steven H. Davis, President--CET Environmental Services, Inc. Buyer: Fernando J. Rios; President--Cape Environmental Management, Inc. Any settlement reached by the parties under this Section shall not be binding until reduced to writing and signed by the above specified employees of Buyer and Seller. -17- 22 When reduced to writing, such settlement agreement shall supersede all other agreements, written or oral, to the extent such agreements specifically pertain to the matters so settled. If the designated employees are unable to resolve such dispute within such 30-day period, the dispute may be settled by decision of a court of law in the State of Georgia. (b) Dispute Resolution. Except as provided above in section 13.12(a), any controversy or claim arising out of or relating to this Agreement (except fraud or intentional misrepresentation), including disputes relating to its formation, or the breach thereof, which are brought by Seller, shall be settled by binding arbitration in Atlanta, Georgia, and any disputes relating to its formation, or the breach thereof, which are brought by Buyer shall be settled by binding arbitration in Denver, Colorado, in each case at a time and location designated by the arbitrator, but not exceeding 90 days after a demand for arbitration has been made. Arbitration shall be conducted by the American Arbitration Association in accordance with its Rules of Commercial Arbitration, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. The arbitrator shall be a retired state or federal judge or any attorney who has practiced business litigation for at least 10 years and is familiar with the environmental remediation industry. Arbitration will be conducted pursuant to the provisions of this Agreement and the Commercial Arbitration Rules of the American Arbitration Association. Limited civil discovery shall be permitted for the production of documents and taking of depositions. Exemplary damages shall not be awarded in any such arbitration proceeding. Unresolved discovery disputes may be brought to the attention of, and may be decided by, the arbitrator. Each party shall pay its own costs and expenses of the arbitration. 13.13 Notices. All notices given pursuant to this Agreement shall be effective on receipt, shall be in writing, and shall be hand delivered, delivered overnight, or sent by registered mail, postage prepaid, addressed as follows (or to another address or person as a party may specify on notice to the other): (a) If to the Buyer: President Cape Environmental Management, Inc. 2302 Parklake Drive, Suite 200 Atlanta, Georgia 30345-2907 with a copy to: Charles B. Roberts, Esq. McGuire Woods Battle & Boothe LLP Suite 2200, Marquis Two Tower 285 Peachtree Center Ave., NE Atlanta, Georgia 30303-1234 (b) If to the Seller: President GET Environmental Services, Inc. 7032 South Revere Parkway Englewood, Colorado 80112 with a copy to: William J. Campbell, Esq. Faegre & Benson LLP 2500 Republic Plaza 370 17th Street Denver, Colorado 80202 13.14 Knowledge of the Parties. Where any representation or warranty contained in this Agreement is expressly qualified by reference to the knowledge of any of the parties, each of the parties acknowledges and confirms that, as to the matters that are the subject of such representations and warranties, such party has made all -18- 23 appropriate inquiries of officers and appropriate additional executives of such party (and inquiries of such other individuals as, based on the results of the inquiries and knowledge of such party's officers and other appropriate executives, a reasonable person would deem prudent) and, when the results of such inquiries indicated it to be prudent, each of the parties has reviewed all appropriate books and records of such party. The terms "knowledge" shall not mean, require, or imply that the representing party has made any further investigation or inquiry. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their duly authorized officers as of the date and year first written above. Signed, acknowledged and delivered BUYER: as to Buyer in the presence of: ----- CAPE ENVIRONMENTAL MANAGEMENT, INC. /s/ [ILLEGIBLE] - ------------------------------------------- Notary Public Notary Public, Fulton County, Georgia. [SEAL] My Commission Expires August 1, 2000. By: /s/ FERNANDO J. RIOS --------------------------------- Print Name: FERNANDO J. RIOS ------------------------- /s/ [ILLEGIBLE] Title: PRESIDENT - ------------------------------------------- ----------------------------- Unofficial Witness Signed, acknowledged and delivered SELLER: as to Seller in the presence of: ------ CET ENVIRONMENTAL SERVICES, INC. /s/ PATRICIA S. BEDINGFIELD - ------------------------------------------- Notary Public Commission Expires [SEAL] 10-16-02 By: /s/ STEVEN H. DAVIS -------------------------------- Print Name: Steven H. Davis ------------------------ /s/ [ILLEGIBLE] Title: President - ------------------------------------------- ----------------------------- Unofficial Witness
-19- 24 EXHIBIT A (ASSET INVENTORY DETAIL) See Attached. -20- 25 15 Pages EXHIBIT A
=================================================================================================================================== GRP PG # QTY. ITEM NO. CODE DESCRIPTION LOCATION COMMENTS - ----------------------------------------------------------------------------------------------------------------------------------- 7 11 MISC 1188LA 10 #3 MONTEREY SAND 100# - ----------------------------------------------------------------------------------------------------------------------------------- 33 11 4 10 1 1/2" CLOTH DISCHARGE HOSE - ----------------------------------------------------------------------------------------------------------------------------------- 6 38 MISC 1023LA 10 1 1/2" X 6" BRASS SLEEVES W/CAPS - ----------------------------------------------------------------------------------------------------------------------------------- 6 34 MISC 1020LA 10 1 LITER AMBER BOTTLES - ----------------------------------------------------------------------------------------------------------------------------------- 6 44 MISC 1120LA 10 1 LITER TEDLAR BAGS - ----------------------------------------------------------------------------------------------------------------------------------- 36 4 1 10 1/2" CHAIN 40 FT. - ----------------------------------------------------------------------------------------------------------------------------------- 7 24 MISC 1240LA 10 1/2" POLY TRUCK ROPE - ----------------------------------------------------------------------------------------------------------------------------------- 7 26 MISC 1242LA 10 1/4" POLY ROPE - ----------------------------------------------------------------------------------------------------------------------------------- 12 8 1 T723 10 1000 CFM UNIT - STEALTH FC-1000 #00396 Solutia - ----------------------------------------------------------------------------------------------------------------------------------- 1 6 1 10 12 VOLT PUMP - ----------------------------------------------------------------------------------------------------------------------------------- 33 10 4 10 2 1/2" CLOTH DISCHARGE HOSE - ----------------------------------------------------------------------------------------------------------------------------------- 32 5 3 10 2" SUBMERSIBLE PUMPS - ----------------------------------------------------------------------------------------------------------------------------------- 8 21 MISC 1207LA 10 2" WELL CAP THREADED - ----------------------------------------------------------------------------------------------------------------------------------- 6 40 MISC 1118LA 10 2" X 3" BRASS SLEEVES W/CAPS - ----------------------------------------------------------------------------------------------------------------------------------- 6 39 MISC 1024LA 10 2" X 6" BRASS SLEEVES W/CAPS - ----------------------------------------------------------------------------------------------------------------------------------- 8 17 MISC 1203LA 10 2"X10' WELL BLANK - ----------------------------------------------------------------------------------------------------------------------------------- 8 16 MISC 1202LA 10 2"X10' WELL SCREEN - ----------------------------------------------------------------------------------------------------------------------------------- 8 15 MISC 1201LA 10 2"X20' WELL BLANK - ----------------------------------------------------------------------------------------------------------------------------------- 8 14 MISC 1200LA 10 2"X20' WELL SCREEN - ----------------------------------------------------------------------------------------------------------------------------------- 8 19 MISC 1205LA 10 2"X5' WELL BLANK - ----------------------------------------------------------------------------------------------------------------------------------- 8 18 MISC 1204LA 10 2"X5' WELL SCREEN - ----------------------------------------------------------------------------------------------------------------------------------- 32 2 3 10 3 1/4" DIAPHRAGM PUMPS - ----------------------------------------------------------------------------------------------------------------------------------- 6 43 MISC 1119LA 10 3 OR 5 LITER TEDLAR BAGS - ----------------------------------------------------------------------------------------------------------------------------------- 32 13 1 10 3 PHASE CONVERTER - ----------------------------------------------------------------------------------------------------------------------------------- 36 2 1 10 3/4" POLY ROPE 200 FT. - ----------------------------------------------------------------------------------------------------------------------------------- 36 3 1 10 3/8" CHAIN 150 FT. - ----------------------------------------------------------------------------------------------------------------------------------- 7 25 MISC 1241LA 10 3/8" MANILLA ROPE - ----------------------------------------------------------------------------------------------------------------------------------- 12 3 1 10 300 CFM AIR EXCHANGE #5509-46L2EB5434 - ----------------------------------------------------------------------------------------------------------------------------------- 8 20 MISC 1206LA 10 4" WELL CAP THREADED - ----------------------------------------------------------------------------------------------------------------------------------- 8 11 MISC 1197LA 10 4"X10" WELL BLANK - ----------------------------------------------------------------------------------------------------------------------------------- 8 10 MISC 1196LA 10 4"X10" WELL SCREEN - ----------------------------------------------------------------------------------------------------------------------------------- 8 9 MISC 1195LA 10 4"X20" WELL BLANK - ----------------------------------------------------------------------------------------------------------------------------------- 8 8 MISC 1194LA 10 4"X20" WELL SCREEN - ----------------------------------------------------------------------------------------------------------------------------------- 8 13 MISC 1199LA 10 4"X5' WELL BLANK - ----------------------------------------------------------------------------------------------------------------------------------- 8 12 MISC 1198LA 10 4"X5' WELL SCREEN - ----------------------------------------------------------------------------------------------------------------------------------- 6 35 MISC 1117LA 10 40 ML VOA'S - ----------------------------------------------------------------------------------------------------------------------------------- 4 33 22 1217LA 10 55 GAL POLY DRUM C/T - ----------------------------------------------------------------------------------------------------------------------------------- 35 19 1 10 580A OVM - ----------------------------------------------------------------------------------------------------------------------------------- 4 32 3 1216LA 10 85 GAL STEEL OVERPAK - ----------------------------------------------------------------------------------------------------------------------------------- 33 13 1 10 ACME MOTOR DIESEL E-1501 GENERATOR - ----------------------------------------------------------------------------------------------------------------------------------- 32 23 2 10 ACTIVATED CARBON CANISTERS LG - ----------------------------------------------------------------------------------------------------------------------------------- 32 21 2 10 ACTIVATED CARBON CANISTERS SM - ----------------------------------------------------------------------------------------------------------------------------------- 32 24 2 10 ACTIVATED CARBON CANISTERS XL - ----------------------------------------------------------------------------------------------------------------------------------- 35 29 1 10 AIR DRIVEN PRODUCT RECOVERY PUMPS - ----------------------------------------------------------------------------------------------------------------------------------- 12 7 1 10 AIR SPARE BLOWER - STEALTH - ----------------------------------------------------------------------------------------------------------------------------------- 32 32 1 10 AIRLINE PALLET - ----------------------------------------------------------------------------------------------------------------------------------- 2 21 1 T712 10 ALLADIN 1222 W/T104 - ----------------------------------------------------------------------------------------------------------------------------------- 1 1 1 T300 10 ALPHA 1 - PERSONNEL MONITORING PUMP - ----------------------------------------------------------------------------------------------------------------------------------- 1 2 1 T301 10 ALPHA 1 - PERSONNEL MONITORING PUMP - ----------------------------------------------------------------------------------------------------------------------------------- 2 23 1 T715 10 Alpheus Co2 DEMO CASE W/NOZZLES - ----------------------------------------------------------------------------------------------------------------------------------- 2 22 1 T714 10 Alpheus Co2 MINI BLAST IN WOOD CRATE - ----------------------------------------------------------------------------------------------------------------------------------- 32 25 1 10 AMERICAN COMPRESSOR COMP BLOWER #930588BE (BIG) - ----------------------------------------------------------------------------------------------------------------------------------- 1 35 1 10 AMETEK MARK-3 AUDIO DOSIMETER - ----------------------------------------------------------------------------------------------------------------------------------- 37 6 1 10 ASBESTOS VAC NIKRO - ----------------------------------------------------------------------------------------------------------------------------------- 7 40 MISC 1303LA 10 ASPHALT PATCH - ----------------------------------------------------------------------------------------------------------------------------------- 32 22 2 10 BAG FILTERS - ----------------------------------------------------------------------------------------------------------------------------------- 3 7 17 T1006 10 BARRICADES W/FLASHER - ----------------------------------------------------------------------------------------------------------------------------------- 34 15 1 10 BATTERY CHARGER ENGINE STARTER PRO SERIES - ----------------------------------------------------------------------------------------------------------------------------------- 32 29 1 10 BLOWER (MEDIUM) - ----------------------------------------------------------------------------------------------------------------------------------- 35 18 MISC MISC 10 BLUE GAS SHELF & PH SUPPLIES - ----------------------------------------------------------------------------------------------------------------------------------- 2 17 1 10 BRIGGS & STRATTON ON A TRUCK - ----------------------------------------------------------------------------------------------------------------------------------- 35 20 2 10 CALIBRATION KITS - ----------------------------------------------------------------------------------------------------------------------------------- 12 6 1 10 CARBON FILTRATION UNIT - ----------------------------------------------------------------------------------------------------------------------------------- CATALYTIC COMBUSTING UNIT - 2000 CFM CHLORONATED WESTERN FUEL OIL 12 1 1 10 HYDROCARBON UNIT W/SCRUBBER TOWER JOB SITE - ----------------------------------------------------------------------------------------------------------------------------------- 2 24 1 10 CIASONS 2hsp 23 gal - ----------------------------------------------------------------------------------------------------------------------------------- 2 26 1 10 COLEMAN 3.5hsp 20 gal - ----------------------------------------------------------------------------------------------------------------------------------- 7 41 2 BOX 1304LA 10 COLIWASAS - ----------------------------------------------------------------------------------------------------------------------------------- 32 11 1 10 COMPRESSOR ELECTRIC LARGE UPRIGHT CAST IRON SERIES - ----------------------------------------------------------------------------------------------------------------------------------- 7 47 MISC 350021 10 COMPRESSOR OIL - ----------------------------------------------------------------------------------------------------------------------------------- 35 27 20 10 CONCRETE TOOLS - ----------------------------------------------------------------------------------------------------------------------------------- 1 29 2 T704 10 CONDUCTIVITY METER - 1 GOOD, 1 BAD - ----------------------------------------------------------------------------------------------------------------------------------- 3 11 31 T1010 10 CONES - ----------------------------------------------------------------------------------------------------------------------------------- 32 9 1 10 CONTROL BOX & 1 1/2" SUBMERSIBLE PUMP ===================================================================================================================================
1 26 EXHIBIT A ---------
GRP. PG. # QTY. ITEM NO. CODE DESCRIPTION LOCATION COMMENTS - --------------------------------------------------------------------------------------------------------------------------- 6 42 23 1034LA 10 COOLERS - --------------------------------------------------------------------------------------------------------------------------- 32 17 1 10 CREEPER - --------------------------------------------------------------------------------------------------------------------------- 35 25 1 10 CROWN GAS MONITOR - --------------------------------------------------------------------------------------------------------------------------- 3 16 MISC 10 DAVIT ARM WITH 100' WINCH 3 TRIPEDS, 2 WINCHES - --------------------------------------------------------------------------------------------------------------------------- 32 31 1 10 DECON SHOWER - --------------------------------------------------------------------------------------------------------------------------- 3 9 10 T1008 10 DELINEATORS W/STANDS - --------------------------------------------------------------------------------------------------------------------------- 33 34 5 10 DIAPHRAM PUMPS 1" - --------------------------------------------------------------------------------------------------------------------------- 1 5 1 10 DRAEGER PUMP (indicator tubes extra) - --------------------------------------------------------------------------------------------------------------------------- 4 34 3 1268LA 10 DRUM DOLLY - --------------------------------------------------------------------------------------------------------------------------- 4 35 5 1269LA 10 DRUM LIFTER - FORKLIFT APPLICATION - --------------------------------------------------------------------------------------------------------------------------- 33 19 1 10 DRUM STAND - --------------------------------------------------------------------------------------------------------------------------- 4 25 8 1079LA 10 DRUMS-17-E-55M STEEL C/T - --------------------------------------------------------------------------------------------------------------------------- 4 26 6 1080LA 10 DRUMS-17-H-55M STEEL O/T - --------------------------------------------------------------------------------------------------------------------------- 4 23 3 1067LA 10 DRUMS-85 GAL POLY OVERPACKED - --------------------------------------------------------------------------------------------------------------------------- 5 2 1 P001 10 ELECTRIC HAND PUMP W/50FT. EXTENSION & HOLDING D - --------------------------------------------------------------------------------------------------------------------------- 1 7 1 10 ELECTRIC VACUUM PUMP BROKE - --------------------------------------------------------------------------------------------------------------------------- 32 6 1 10 ELECTRICAL MOTOR - --------------------------------------------------------------------------------------------------------------------------- 7 1 MISC 1136LA 10 ELECTRICAL TAPE - --------------------------------------------------------------------------------------------------------------------------- 1 36 1 10 ELECTRONIC DCL - 400 LOCATOR METAL DETECTOR - --------------------------------------------------------------------------------------------------------------------------- 32 10 1 10 ETICATORS - --------------------------------------------------------------------------------------------------------------------------- 1 8 1 T701 10 FID - OVA 108 FIELD - --------------------------------------------------------------------------------------------------------------------------- 1 9 1 T705 10 FID/PID-TVA 1000 FIELD - --------------------------------------------------------------------------------------------------------------------------- 36 21 1 10 FIRE EXTINGUISHER - --------------------------------------------------------------------------------------------------------------------------- 34 17 24 10 FIRE EXTINGUISHERS - --------------------------------------------------------------------------------------------------------------------------- 7 23 MISC 1238LA 10 FIRST AID KIT - --------------------------------------------------------------------------------------------------------------------------- 33 27 MISC 10 FLAMMABLE CABINETS - --------------------------------------------------------------------------------------------------------------------------- 34 5 5 10 GANG BOXES - --------------------------------------------------------------------------------------------------------------------------- 33 28 12 10 GAS CANS - --------------------------------------------------------------------------------------------------------------------------- 33 12 1 10 GENERATORS 8HP TUCUSCO - --------------------------------------------------------------------------------------------------------------------------- 7 20 MISC 1211LA 10 GLASS SAMPLE JAR 4 oz - --------------------------------------------------------------------------------------------------------------------------- 7 21 MISC 1212LA 10 GLASS SAMPLE JAR 8 oz - --------------------------------------------------------------------------------------------------------------------------- 2 3 1 10 HAND AUGER AND 2" SOIL DRIVE SAMPLING KIT - --------------------------------------------------------------------------------------------------------------------------- 37 3 4 10 HAZCAT KITS - --------------------------------------------------------------------------------------------------------------------------- 34 4 1 10 HEPA VAC MODEL 86 #085361 - --------------------------------------------------------------------------------------------------------------------------- 1 32 1 T722 10 HF SCIENTIFIC TURBIDIMETER DRT-15CE FIELD - --------------------------------------------------------------------------------------------------------------------------- 1 30 1 10 HYDAC PH/CONDUCTIVITY METER - --------------------------------------------------------------------------------------------------------------------------- 1 31 1 10 HYDAC PH/CONDUCTIVITY METER FIELD - --------------------------------------------------------------------------------------------------------------------------- 1 3 1 10 KURZ FLOWMETER - --------------------------------------------------------------------------------------------------------------------------- 1 33 1 10 LAMOTTE TURBIDIMETER - --------------------------------------------------------------------------------------------------------------------------- 7 46 MISC 350011 10 LAMSON GREASE 5.5 oz TUBE - --------------------------------------------------------------------------------------------------------------------------- 1 20 1 10 LANDTECH GA90 FIELD - --------------------------------------------------------------------------------------------------------------------------- 3 18 MISC 10 LANYARD 6' ON JOBS - --------------------------------------------------------------------------------------------------------------------------- 6 45 MISC 1014LA 10 LARGE TREATABILITY BINS - --------------------------------------------------------------------------------------------------------------------------- 1 19 1 10 LEL-MSA 261 COMBUSTABLE GAS FIELD - --------------------------------------------------------------------------------------------------------------------------- 1 17 1 T70B 10 LEL-MSA 360 CARBON MONOXIDE HAZCO - --------------------------------------------------------------------------------------------------------------------------- 1 18 1 10 LEL-MSA 361 HYDROGEN SULPHIDE BROKE - --------------------------------------------------------------------------------------------------------------------------- 1 14 1 10 LEL-MSA PASSPORT PERSONAL ALARM - --------------------------------------------------------------------------------------------------------------------------- 1 15 1 10 LEL-MSA PASSPORT PERSONAL ALARM HAZ - --------------------------------------------------------------------------------------------------------------------------- 1 16 1 10 LEL-MSA PASSPORT PERSONAL ALARM BROKE - --------------------------------------------------------------------------------------------------------------------------- 3 19 MISC 10 LIFELINE 25' ON JOBS - --------------------------------------------------------------------------------------------------------------------------- 35 14 2 10 LOCK OUT/TAG OUT KITS - --------------------------------------------------------------------------------------------------------------------------- 2 1 22 10 MAGNEHELIC GAUGES - --------------------------------------------------------------------------------------------------------------------------- 3 13 2 T1012 10 MAGNETIC YELLOW CAUTION LIGHTS IN TOOL ROOM - --------------------------------------------------------------------------------------------------------------------------- 7 44 MISC 351021 10 MARKING PAINT - --------------------------------------------------------------------------------------------------------------------------- 6 49 MISC 1123LA 10 MASTER LOCKS - --------------------------------------------------------------------------------------------------------------------------- 6 46 MISC 1015LA 10 MEDIUM TREATABILITY BINS - --------------------------------------------------------------------------------------------------------------------------- 3 22 1 10 MIKASA JUMPING JACK FIELD - --------------------------------------------------------------------------------------------------------------------------- 33 20 1 10 MILLERMATIC 250 WELDER MILLER - --------------------------------------------------------------------------------------------------------------------------- 32 16 MISC 10 MISC STEEL PIPE 1" - 4" - --------------------------------------------------------------------------------------------------------------------------- 32 30 MISC 10 MISC. 6" VALVES - --------------------------------------------------------------------------------------------------------------------------- 35 26 MISC 10 MISC. BLACK PIPE - --------------------------------------------------------------------------------------------------------------------------- 32 3 MISC 10 MISC. RETOX PARTS - --------------------------------------------------------------------------------------------------------------------------- 35 23 6 10 MISC. TEST KITS - --------------------------------------------------------------------------------------------------------------------------- 32 14 1 10 MOELLER CONTROL UNIT - --------------------------------------------------------------------------------------------------------------------------- 33 21 1 10 NEBRASKA WELDER MILLER - --------------------------------------------------------------------------------------------------------------------------- 35 11 8 10 NOMEX - --------------------------------------------------------------------------------------------------------------------------- 2 4 1 10 NORTON PRESSURIZED BAILER SYSTEM - --------------------------------------------------------------------------------------------------------------------------- 33 31 9 10 OIL WATER SEPARATOR - --------------------------------------------------------------------------------------------------------------------------- 12 4 1 10 OIL WATER SEPARATOR UNIT - GOLDEN EAGLE - --------------------------------------------------------------------------------------------------------------------------- 1 21 1 T707 10 OIL/WATER INTERFACE PROBE - ORS 100' HAZCO - --------------------------------------------------------------------------------------------------------------------------- 1 22 1 T709 10 OIL/WATER INTERFACE PROBE - ORS 100' - --------------------------------------------------------------------------------------------------------------------------- 1 23 1 T703 10 OIL/WATER INTERFACE PROBE - SOLINIST 100' - --------------------------------------------------------------------------------------------------------------------------- 32 33 1 10 PALLET OF ELECTRICAL WIRING - --------------------------------------------------------------------------------------------------------------------------- 32 34 2 10 PALLETS OF PUMP HOSE DISCHARGE HOSE - --------------------------------------------------------------------------------------------------------------------------- 37 5 8 10 PCB TEST KITS - --------------------------------------------------------------------------------------------------------------------------- 4 38 1 T726 10 PEGO CARBON UNIT 200 CFM CA543725 - ---------------------------------------------------------------------------------------------------------------------------
2 27 15 Pages EXHIBIT A
Grp. Pg # Qty Item No. Code Description Location Comments - --- ---- ----- -------- --- ------------------------------------------------------- -------- --------- 1 28 2 10 PH METER JUNK 1 13 1 10 PID - MSA OVM GAS CORDER 1 11 1 10 PID - MSA PASSPORT IN FIELD 1 12 1 10 PID - MSA PASSPORT AT HAXCO 1 10 1 1702 10 PID - OVM 580B 3 30 1 10 PIPE CABLE LOCATOR AND TRACER 3 29 2 10 PIPE STAND 35 30 1 10 PIPE THREADER KIT 36 1 4 10 PLASTIC STORAGE BINS 34 22 MISC 10 PLUMB SAMPLES STAINLESS STEEL LIQUID 32 35 MISC 10 POLY CONTAMINATE SNAPS 7 18 MISC 1209LA 10 POLY SAMPLE JAR 16 oz 7 19 MISC 1210LA 10 POLY SAMPLE JAR 32 oz 7 17 MISC 1208LA 10 POLY SAMPLE JAR 8 oz 35 24 1 10 PORTABLE GAS MONITOR EXOLOX50 33 33 1 10 PUMP 33 32 9 10 PUMP METERS GASBOY 9 20 MISC MISC 10 PVC SUPPLIES, VARIOUS SIZES, LENGTHS, PIECES, ETC. 35 21 1 10 QUALITATIVE FIT TEST 32 18 2 10 RAMPS 35 17 10 10 REGULATORS FOR GAS METERS 34 14 MISC 10 RESPIRATORY CARTRIDGES FOR PAPR 8 3 MISC 1262LA 10 SAFETY FENCE 3 17 3 10 SCBA W/3 SPARE BOTTLES 6 48 MISC 1122LA 10 SHELL VIALS 34 16 2 10 SMALL FLAM CABINETS 2 20 1 1713 10 SOUIX 150-C 2 25 1 10 SPEEDAIRE 2hsp 20 gal 34 20 15 10 STAINLESS STEEL CAGES 2" X 2" 34 19 53 10 STAINLESS STEEL CAGES 2" X 4" 34 18 100 10 STAINLESS STELL CAGES 2" X 6" 5 3 3 P1007 10 SUBMERSIBLE PUMP (CENTRIFUGAL) 32 4 1 10 SUBMERSIBLE PUMPS 1 1/2" 35 22 1 10 SULFATE TEST KIT 37 4 1 10 TEAC SAMPLING PUMP 1 34 1 10 TLC METER - YSI 3000 33 26 4 10 TOW HITCHES 3 10 6 T1009 10 TRAFFIC SIGNS 36 32 5 10 TRAFFIC TRIANGLES 3 12 4 T1011 10 TRENCH PLATE 4" X4" 1 4 1 T701 10 TSI VELOCITY METER IN FIELD 7 5 MISC 11820LA 10 TSP 32 15 1 10 UPRIGHT PIPE RACK 7 14 6 1191LA 10 VISQUEEN 10 MIL 20x100 7 13 2 1190LA 10 VISQUEEN 6 MIL 20X100 7 10 MISC 1187LA 10 VOLCLAY TABLETS 50# 1 25 1 1721 10 WATER LEVEL INDICATOR - SLOPE 100' FIELD 1 26 1 10 WATER LEVEL INDICATOR - SLOPE 100' 1 24 1 10 WATER LEVEL INDICATOR - SOLONIST 150' (MAYBE 200') WHT VAN 32 1 5 10 WATER METERS 32 19 4 10 WELL SAMPLING REELS 12 2 1 10 WHITE HORSE 3000 CFM STRAIGHT HYDROCARBON 1998 CATOX-3000 #2190198 5 7 2 P1001 10 WILDEN DBL DIAPHRAGM PUMP 3" 8 4 MISC 1263LA 10 WIRE BRUSH 7 43 MISC 351011 10 WOOD LATHE 1 27 1 10 YSI DISSOLVED 02 METER 2 19 1 11 COLEMAN POWERMATE 7000 (ON DEVELOPMENT RIG) 2 18 1 T400 11 HONDA EB6500sx (SHOWS ON DEVELOPMENT RIG) W/T 104 11 1 1 11 PERMITTED EQUIPMENT - PEGO # 1 LIC #IEC9266 6/99 10 1 1 11 PERMITTED EQUIPMENT - RETOX #1 VIN #1M9FM1931K1261021 LIC# IBN5048 10 2 1 11 PERMITTED EQUIPMENT - RETOX #2 VIN #1M9FM1938L1261051 LIC# ICE7793 10 3 1 11 PERMITTED EQUIPMENT - RETOX #3 VIN #1M9FM1933L1261054 LIC# ICM6685 10 4 1 11 PERMITTED EQUIPMENT - RETOX #4 VIN #1M9FM1935L1261055 LIC# 1CM6721 10 5 1 11 PERMITTED EQUIPMENT - RETOX #6 VIN #1M9FM1931L1261053 LIC# ICM6748 10 6 1 11 PERMITTED EQUIPMENT - RETOX #7 VIN #1M9FM1935L1261085 LIC# ICU1853 10 7 1 11 PERMITTED EQUIPMENT - RETOX #8 VIN #1M9FM1932M1261130 LIC# ICY7788 10 8 1 11 PERMITTED EQUIPMENT - STEALTH BOBCAT VIN #CA723711 LIC# SE436284
3 28 15 Pages EXHIBIT A
GRP PG # QTY ITEM NO. CODE DESCRIPTION LOCATION COMMENTS - --- ---- --- -------- ------ --------------------------------------------------------- -------- -------- 10 9 1 11 #9513900279 33 4 4 12 10' HIGH X 6' SHELVING 2 27 5 T900 12 2 WAY RADIO W/HEADSETS 34 13 1 12 5' LADDER 32 26 4 12 6' FOLDING TABLE 32 27 1 12 8' FOLDING TABLE 33 1 1 12 8 X 4' TABLE 3 23 1 12 BOSCH ELECTRIC JACK HAMMER 2 29 2 12 CAMCORDER 2 28 1 12 CAMERA POLAROID JOB PRO 35 9 2 12 CAMERAS 36 28 1 12 CHAIR 33 2 4 12 CHAIRS 3 28 2 12 CUT OFF SAW - PARTNER K650 MARK II 1 HERE, 1 IN FIELD 3 27 2 12 ELECTRIC CHOPSAW 1 HERE, 1 IN FIELD 32 28 6 12 FOLDING CHAIRS 36 27 1 12 LADDER 34 10 1 P710 12 LANDA PRESSURE WASHER TRAILER MOUNTED PGHW53500 1 P713 12 LANDA PRESSURE WASHER TRAILER MOUNTED PO9968804 35 15 1 12 LOT OF METAL SHELVING 3 24 1 12 MILWAUKEE ELECTRIC ROTARY HAMMER ON JOB 3 25 6 12 MILWAUKEE SAWSALL 4 HERE, 2 ON JOBS 3 1 17 T901 12 NEXTEL PHONES W/BATTERIES & CHARGERS 34 12 MISC 12 OXYCETELYNE GAUGES, HOSES, ALMOST TORCH 36 31 6 12 PAR RESPIRATORS 3 26 1 12 SKILSAW 35 4 2 12 SMALL STORAGE BINS 32 20 1 12 SPEEDAIRE COMPRESSORS 33 7 8 12 STANDS FOR LARGER BARRICADES 36 24 1 12 STORAGE LADDER 36 25 12 12 STORAGE SHELVES 3 31 5 12 SURVEYING EQUIPMENT (TRANSIT & ROD) 3 HERE, 2 ON JOBS 33 5 1 12 TABLE 34 9 1 12 THE S.A.V.E. SYSTEM (SOIL VAPOR EXTRACTION BURNING UNIT) 35 5 1 12 TOOL BOX & MISC TOOLS 3 14 3 12 WET/DRY VACUUM 2 HERE, 1 ON JOB 35 12 1 13 10' HIGH SHELVING 19 31 1 13 10X6 CUBE WORK STA ROOM 19 19 32 1 13 10X6 CUBE WORK STA ROOM 19 19 18 1 13 10X6 WORK STA ROOM 19 19 2 1 13 10X6 WORK STA CUBE ROOM 19 19 3 1 13 10X6 WORK STA CUBE ROOM 19 19 6 1 13 10X6 WORK STA CUBE ROOM 19 19 13 1 13 10X6 WORK STA CUBE ROOM 19 20 1 1 13 10X6 WORK STA CUBES ROOM 19 36 29 1 13 11 DRAWER MAP FILER 17 31 1 13 15" FAN ROOM 10 14 16 1 13 2 DRAWER FILE UPSTAIRS 19 14 1 13 2 DRAWER FILE CAB ROOM 19 19 15 1 13 2 DRAWER FILE CAB ROOM 19 18 11 1 13 2 DRAWER FILE CAB. ROOM 12 24 11 1 13 2 DRAWER FILE CABINET #11 30 20 1 13 2 DRAWER FILE CABINET #23 30 16 1 13 2 DRAWER FILE CABINET OAK #22 36 8 7 13 2 DRAWER FILE CABINETS 20 21 1 13 2 DRAWER FILE HORIZ ROOM 1 20 27 1 13 2 DRAWER HORIZ FILE ROOM 21 16 34 2 13 D DRAWER HORIZ FILES ROOM 7 27 24 1 13 2 DRAWER HORIZONTAL FILE CABINET #20 22 6 1 13 2 DRAWER HORIZONTAL FILING CABINET #3 25 28 1 13 2 DRAWER HORIZONTAL FILING CABINET #13 15 7 1 13 2 HOLE PUNCH ROOM 1 15 30 1 13 2 HOLE PUNCH ROOM 2 24 22 1 13 2 HOLE PUNCH #11 16 2 3 13 2 SHELF BOOK CASES ROOM 2 21 25 1 13 20" WALL MOUNTED MARKER BOARD CONF. ROOM 14 6 1 13 2X10 WORK STA CUBE 19 22 3 2 13 3 BOOKSHELVES 6' HIGH OAK #3 15 29 1 13 3 HOLE PUNCH ROOM 2 16 10 1 13 3 HOLE PUNCH ROOM 5 24 24 1 13 3 HOLE PUNCH #11 25 1 1 13 3 HOLE PUNCH #11 25 15 1 13 3 HOLE PUNCH #13 29 17 1 13 3 HOLE PUNCH #20 30 13 1 13 3 HOLE PUNCH #22 36 13 1 13 3 HOLE PUNCH
4 29 15 Pages EXHIBIT A
Grp. Pg # Qty Item No. Code Description Location Comments - --- ---- ----- -------- --- ------------------------------------------------------- -------- --------- 15 5 1 13 3 HOLE PUNCH - MASTER PRODUCTS ROOM 1 20 29 1 13 3 HOLD PUNCH (ADJ) ROLODEX ROOM 21 20 28 1 13 3 SHELF BOOK CASE (WOOD) ROOM 21 24 28 1 13 3X5' BULLETIN BOARD #11 25 6 1 13 3X5' BULLETIN BOARD #11 25 29 1 13 3X5' BULLETIN BOARD #13 26 1 2 13 3X5' BULLETIN BOARD #14 28 23 1 13 3X5' BULLETIN BOARD #20 30 17 1 13 3X5' BULLETIN BOARD #22 31 10 1 13 3X5' BULLETIN BOARD #23 14 17 1 13 4 DRAWER FILE UPSTAIRS 16 35 1 13 4 DRAWER FILE ROOM 7 19 25 1 13 4 DRAWER FILE ROOM 19 23 11 1 13 4 DRAWER FILE CABINET #8 24 10 1 13 4 DRAWER FILE CABINET #11 24 32 1 13 4 DRAWER FILE CABINET #11 26 14 1 13 4 DRAWER FILE CABINET #18 27 34 1 13 4 DRAWER FILE CABINET #20 28 26 1 13 4 DRAWER FILE CABINET #20 34 26 1 13 4 DRAWER FILE CABINET 22 11 1 13 4 DRAWER FILE CABINET CENTURY #4 26 23 2 13 4 DRAWER FILE CABINETS #18 36 5 10 13 4 DRAWER FILE CABINETS 15 1 2 13 4 DRAWER FILE CABS ROOM 1 20 20 1 13 4 DRAWER FILE HORIZ ROOM 21 17 30 2 13 4 DRAWER FILES ROOM 10 20 26 2 13 4 DRAWER FILES ROOM 21 22 5 1 13 4 DRAWER FILING CABINET #3 28 10 1 13 4 DRAWER FILING CABINET #20 24 20 4 13 4 DRAWER FILING CABINETS PREMIER #11 36 6 14 13 4 DRAWER HORIZ FILE CABINETS 22 21 1 13 4 DRAWER HORIZONTAL FILE CABINET #6 24 8 1 13 4' HIGH BOOKCASE #9 23 19 4 13 4' LONG X 10' HIGH BOOKCASES HALLWAY 27 10 2 13 4' LONG X 6' HIGH BOOKCASES #18 15 4 1 13 4 SLOT HANGING LETTER FILE ROOM 1 22 20 1 13 4X3 BULLETIN BOARD #4 22 9 1 13 4X4 WALL MOUNTED MARKERBOARD #3 24 29 2 13 4X6'HIGH BOOKCASES #11 22 14 1 13 4X7 DESK #4 28 1 1 13 5' HIGH BY 4' LONG BOOKCASE #20 28 28 1 13 5' HIGH X 4' BOOKCASE #20 28 11 1 13 5' HIGH X 5' LONG BOOKCASE #20 23 6 1 13 5' HORIZONTAL FILE CABINET #8 17 13 1 13 5 SHELF BOOK CASE (METAL) ROOM 7 19 26 1 13 5 SHELF BOOK CASE (WOOD) ROOM 19 14 9 1 13 5 SHELF BOOK CASE METAL 23 16 6 2 13 5 SHELF BOOK CASES ROOM 5 17 29 2 13 5 SHELF BOOK CASES ROOM 10 17 1 2 13 5 SHELF BOOK CASES (WOOD) ROOM 7 15 13 2 13 5 SHELF BOOK SHELVES ROOM 1 15 2 1 13 5 SLOT LETTER FILE ROOM 1 24 30 1 13 5X5' HIGH BOOKCASE #11 16 20 1 13 5X6 FREESTANDING CUBE SECTION ROOM 7 21 33 1 13 6' CABINET CONF. ROOM 22 4 1 13 6' HIGH 5 BOOKSHELVES #3 23 10 1 13 6' HIGH BOOKSHELF #8 22 27 2 13 6' HIGH X 4' LONG BOOKSHELVES #6 25 8 2 13 6' HIGH X 5' BOOKCASES #13 15 24 1 13 6 SLOT LETTER FILE ROOM 1 21 12 1 13 6' TABLE RECEPTION 22 15 1 13 6' TABLE GOES WITH DESK HAS DRAWERS #4 21 26 1 13 6' WALL MOUNTED MARKER BOARD W/DOORS CONF. ROOM 30 3 1 13 6X4' L-SHAPED DESK #22 20 18 1 13 6X6 CUBE ROOM 21 14 3 1 13 6X6 WORK STA CUBE 21 20 10 1 13 6X6 WORK STA CUBE ROOM 21 20 33 1 13 6X6 WORK STA CUBE ROOM 21 29 31 8 13 6X8' CUBICLE WORKSTATIONS #20 31 9 5 13 6X8' CUBICLE WORKSTATIONS #23 20 24 1 13 6X8 WORK STA CUBE ROOM 21 14 10 8 13 6X8 WORK STA CUBES UPSTAIRS 15 3 1 13 7 SLOT LETTER FILE ROOM 1 22 24 1 13 7X7 L-SHAPED DESK #6 26 11 1 13 8X4' MAIL ORGANIZER STEEL #14 24 31 2 13 BASIC OFFICE DESK #11
5 30 EXHIBIT A
Grp. Pg # Qty Item No. Code Description Location Comments - --- ---- ----- -------- --- ------------------------------------------------------- -------- --------- 21 28 1 13 BLUE CHAIR - OFFICE MASTER CONF. ROOM 29 15 1 13 BOOKCASE 5' HIGH X 3' #20 34 25 1 13 BOOKSHELF 22 18 1 13 BOOKSHELF 6'HIGH X 4' LONG #4 14 5 1 13 BULL BOARD 21 16 33 1 13 BULL BOARD ROOM 7 17 2 1 13 BULL BOARD ROOM 7 17 28 1 13 BULL BOARD ROOM 7 15 25 1 13 BULLETIN BOARD (GRAY) ROOM 1 23 23 1 13 BULLETIN BOARD 3X5 #17 35 13 2 13 CABINETS 29 11 1 13 CHAIR #29 21 2 4 13 CHAIRS RECEPTION 22 25 2 13 CHAIRS #6 23 5 3 13 CHAIRS #8 36 10 2 13 CHAIRS 22 1 2 13 CHAIRS - PURPLE & BLACK #3 22 12 2 13 CHAIRS - PURPLE & BLACK #4 28 31 1 13 CLIPBOARD #20 24 19 7 13 CLIPBOARDS #11 26 13 40 13 COFFEE CUPS #14 26 5 1 13 COFFEE MACHINE NEWCO #14 28 33 1 13 COFFEE WARMER SALTON #20 14 19 7 13 CONF. CHAIRS (CLOTH) UPSTAIRS 21 23 11 13 CONFERENCE CHAIRS CONF. ROOM 21 22 1 13 CONFERENCE TABLE 15'X6' CONF. ROOM 23 4 2 13 CUBICLE DESKS #8 26 15 4 13 CUBICLE DESKS #18 31 3 1 13 DATE STAMP #23 21 1 2 13 DATE STAMPS RECEPTOIN 36 11 1 13 DESK 15 22 1 13 DESK LAMP ROOM 1 17 11 1 13 DESK LAMP ROOM 7 18 2 1 13 DESK LAMP ROOM 10 28 2 1 13 DESK LAMP #20 28 12 1 13 DESK LAMP #20 24 14 1 13 DESK ORGANIZER #11 25 13 1 13 DESK ORGANIZER #13 26 27 1 13 DESK ORGANIZER #18 27 9 1 13 DESK ORGANIZER #18 27 33 1 13 DESK ORGANIZER #20 28 22 1 13 DESK ORGANIZER #20 29 1 1 13 DESK ORGANIZER #20 33 6 1 13 DESK ORGANIZER 25 11 1 13 DESK TABLE #13 17 15 1 13 DESK TOP LETTER FILE ROOM 7 19 19 9 13 DESK TOP LETTER FILES ROOM 19 16 19 4 13 DESK TOP LETTER FILES ROOM 5 17 12 2 13 DESK TOP LETTER FILES ROOM 7 29 7 1 13 DESKTOP ORGANIZER #20 30 4 1 13 DESKTOP ORGANIZER #22 30 23 1 13 DESKTOP ORGANIZER #23 31 2 1 13 DESKTOP ORGANIZER #23 26 4 1 13 DISHWASHER GE 530 #14 34 23 1 13 DRAFTING TABLE 16 17 1 13 ELEC. PENCIL SHARPENER ROOM 5 23 3 1 13 END TABLE #8 26 28 1 13 END TABLE #18 27 6 1 13 END TABLE #18 22 19 1 13 END TABLE WITH DOOR #4 14 21 2 13 ERASE BOARDS (DRY MARK) UPSTAIRS 16 23 2 13 EXEC. CHAIRS ROOM 7 21 31 1 13 EXPO DRY ERASE SYSTEM - SANFORD CONF. ROOM 23 2 1 13 FILE CABINET HDN #8 31 12 1 13 FIRE EXTINGUISHER AMEREX #24 23 20 1 13 FIRE EXTINGUISHER AMEREX A500 #MZ-038580 HALLWAY 26 6 1 13 FIRE EXTINGUISHER AMEREX A500 MC-302992 #14 26 9 1 13 FIRST AID KIT #14 29 6 1 13 FLASHLIGHT #20 30 14 1 13 FLAT HOLE #22 26 12 1 13 FLOWER POT #14 24 12 1 13 FOLDING CHAIR #11 24 13 1 13 FOLDING COMPUTER TABLE #11 24 7 1 13 FOLDING TABLE #17 24 18 1 13 FOLDING TABLE #11 36 26 1 13 FOLDING TABLE
6 31 EXHIBIT A
GRP. PG # QTY ITEM NO. CODE DESCRIPTION LOCATION COMMENTS - --- ---- ----- -------- --- ------------------------------------------------------- -------- --------- 36 9 3 13 FOLDING TABLES 32 12 1 13 FOOD ONLY REFRIGERATOR 31 24 1 13 FOOT STEP #24 34 29 1 13 GREY DESK 34 24 1 13 GREY SHELF 14 12 1 13 GUEST CHAIR UPSTAIRS 15 33 2 13 GUEST CHAIRS ROOM 2 17 34 2 13 GUEST CHAIRS ROOM 10 16 7 2 13 GUEST CHAIRS (LEATHER) ROOM 5 36 18 1 13 HEAVY DUTY HOLE PUNCH 23 30 1 13 HEAVY DUTY UTILITY SCALE PELOUZE 100 LB P1085 #17 23 27 1 13 HOLE PUNCH - GBC #MHD1600 #17 14 14 4 13 HORIZ 2 DRAWER FILES UPSTAIRS 15 10 1 13 HORIZ FILE 2-DRAWER ROOM 1 15 11 1 13 HORIZ FILE 2-DRAWER ROOM 1 15 12 1 13 HORIZ FILE 2-DRAWER ROOM 1 21 10 1 13 HORIZ FILE CABINET 2 DRAWER 3 1/2' RECEPTION 15 31 1 13 HORIZONTAL FILE 2-DRAWER ROOM 2 16 5 2 13 HORIZONTAL FILE CABS 4-DRAWER ROOM 5 21 20 3 13 IN/OUT BOARD RECEPTION 33 23 2 13 LAB REFRIGERATORS 21 14 1 13 LABEL IT EZ LABEL PRINTER CASIO KL-8100 RECEPTION 33 22 1 13 LABORATORY MICROWAVE 16 21 4 13 LARGE WOOD SEC DESKS ROOM 7 23 7 1 13 LEATHER CHAIR #8 15 16 5 13 LETTER TRAYS ROOM 1 18 33 1 13 LIGHTED VIEWING TABLE ROOM 12 21 6 1 13 L-SHAPED RECEPTION DESK 6X6 RECEPTION 23 26 1 13 MAIL ORGANIZER 4X6' STEEL #17 16 32 1 13 METAL 8 COMPARTMENT LETTER FILE ROOM 7 36 7 4 13 METAL CABINETS 36 23 1 13 METAL CART 36 12 1 13 MICROWAVE 26 7 1 13 MICROWAVE PANASONIC #14 15 8 1 13 OFFICE CHAIR ROOM 1 21 11 1 13 OFFICE CHAIR RECEPTION 22 2 1 13 OFFICE CHAIR #3 22 13 1 13 OFFICE CHAIR #4 25 10 1 13 OFFICE DESK #13 22 7 1 13 OFFICE DESK L-SHAPED 8X8 #3 35 6 1 13 PAPER CUTTER 36 20 1 13 PAPER CUTTER 18 32 1 13 PAPER CUTTER (SMALL) ROOM 12 24 4 1 13 PENCIL SHARPENER - ROYAL #17 30 9 1 13 PENCIL SHARPENER - ROYAL POWERPOINT #22 22 8 1 13 PLANT #3 22 22 1 13 PLANT #6 23 9 1 13 PLANT #8 28 27 1 13 PLANT #20 30 2 1 13 PLANT #22 21 5 3 13 PLANTS RECEPTION 28 9 1 13 PLASTIC CRATE #20 24 33 4 13 PLASTIC CRATES #11 24 23 1 13 PLASTIC DESK ORGANIZER #11 25 4 2 13 PLASTIC DESK ORGANIZERS #11 29 20 1 13 PLASTIC STORAGE CONTAINER #20 23 32 1 13 POSTAGE METER PITNEY BOWES A900 #8118608 #17 29 25 1 13 PRINTER STAND #20 24 1 1 13 PRINTER TAPE FED EX POWERSHIP #17 21 4 1 13 RECEPTION TABLE RECEPTION 26 3 1 13 REFRIGERATOR WHIRLPOOL #14 19 1 1 13 ROLLING FILE ROOM 19 17 10 1 13 ROLODEX ROOM 7 19 22 1 13 ROLODEX ROOM 19 30 7 1 13 ROLODEX #22 31 8 1 13 ROLODEX #23 14 2 1 13 SEC CHAIR 21 14 4 1 13 SEC CHAIR 21 15 9 1 13 SEC CHAIR ROOM 1 19 7 1 13 SEC CHAIR ROOM 19 19 16 1 13 SEC CHAIR ROOM 19 19 24 1 13 SEC CHAIR ROOM 19 19 34 1 13 SEC CHAIR ROOM 19 20 7 1 13 SEC CHAIR ROOM 21 20 16 1 13 SEC CHAIR ROOM 21 20 25 1 13 SEC CHAIR ROOM 21
7 32 EXHIBIT A
GRP. PG # QTY ITEM NO. CODE DESCRIPTION LOCATION COMMENTS - --- ---- ----- -------- ---- ------------------------------------------------------- -------- --------- 20 30 1 13 SEC CHAIR ROOM 21 15 32 1 13 SEC CHAIR W/ROLLERS ROOM 2 14 11 8 13 SEC CHAIRS UPSTAIRS 16 22 2 13 SEC CHAIRS ROOM 7 15 14 1 13 SEC DESKS ROOM 1 15 34 1 13 SEC DESK (WOOD) ROOM 2 17 33 1 13 SEC CHAIR ROOM 10 18 13 2 13 SEC CHAIRS ROOM 12 19 4 2 13 SEC CHAIRS ROOM 19 16 18 1 13 SEC. EXEC. CHAIR LEATHER ROOM 5 28 29 1 13 SENSAPHONE PHONETICS 839-BA-00886 #20 20 22 1 13 SHARP CALCULATOR EL21926 ROOM 21 23 24 1 13 SHREDDER SHREDEX CROCODILE C-1000 #822952 #17 29 26 1 13 SMALL DESK #20 21 19 1 13 SPACE HEATER 1500 WTS LAKEWOOD 711 RECEPTION 36 30 1 13 SPACE HEATER RIVAL TITAN 29 8 1 13 SPACEMAKER PORTABLE FILES ROGERS #20 16 1 1 13 STAPLER ROOM 2 16 15 1 13 STAPLER ROOM 5 17 9 1 13 STAPLER ROOM 7 25 2 1 13 STAPLER #11 25 14 1 13 STAPLER #13 27 8 1 13 STAPLER #18 28 19 1 13 STAPLER #20 28 35 1 13 STAPLER #20 29 13 1 13 STAPLER #20 29 21 1 13 STAPLER #20 30 5 1 13 STAPLER #22 30 31 1 13 STAPLER #23 15 6 1 13 STAPLER - GBC BATES ROOM 1 21 21 1 13 STAPLER & TAPE DISPENSER RECEPTION 23 1 1 13 STAPLER & TAPE DISPENSER #8 15 17 1 13 STAPLER HD - ROSETEC RT 250 ROOM 1 24 25 1 13 STAPLER SWINGLINE #11 26 25 1 13 STAPLER SWINGLINE #18 28 3 1 13 STAPLER SWINGLINE #20 17 27 2 13 STAPLERS ROOM 7 24 5 3 13 STAPLERS #17 26 16 4 13 STAPLERS #18 29 27 3 13 STAPLERS #20 36 19 11 13 STAPLERS 25 5 1 13 STEP STOOL #11 22 23 1 13 SWIVEL CHAIR #6 23 8 1 13 SWIVEL CHAIR #8 26 22 1 13 SWIVEL CHAIR #18 27 23 1 13 SWIVEL CHAIR #20 28 5 1 13 SWIVEL CHAIR #20 28 13 1 13 SWIVEL CHAIR #20 28 30 1 13 SWIVEL CHAIR #20 29 22 1 13 SWIVEL CHAIR #20 30 24 1 13 SWIVEL CHAIR #23 31 5 1 13 SWIVEL CHAIR #23 31 11 1 13 SWIVEL CHAIR #24 35 1 1 13 SWIVEL CHAIR SUPPLY HUT 36 22 1 13 SWIVEL CHAIR 23 29 2 13 SWIVEL CHAIRS #17 24 21 2 13 SWIVEL CHAIRS #11 27 1 2 13 SWIVEL CHAIRS #18 27 31 2 13 SWIVEL CHAIRS #20 30 28 2 13 SWIVEL CHAIRS #23 25 9 1 13 SWIVEL OFFICE CHAIR #13 30 15 1 13 SWIVEL OFFICE CHAIR #22 22 26 1 13 TABLE (SIZE OF CARDBOARD TABLE) #6 31 25 2 13 TABLES #24 36 14 1 13 TABLETOP FOLDERS PITNEY BOWES 1820 0412293 #0412293 14 13 1 13 TALL BOOKCASE UPSTAIRS 16 16 1 13 TAPE DISPENSER ROOM 5 16 28 1 13 TAPE DISPENSER ROOM 7 17 14 1 13 TAPE DISPENSER ROOM 7 17 26 2 13 TAPE DISPENSER ROOM 7 24 26 1 13 TAPE DISPENSER #11 25 17 1 13 TAPE DISPENSER #13 26 26 1 13 TAPE DISPENSER #18 27 5 1 13 TAPE DISPENSER #18 27 29 1 13 TAPE DISPENSER #20 28 4 1 13 TAPE DISPENSER #20
8 33 EXHIBIT A
GRP. PG # QTY ITEM NO. CODE DESCRIPTION LOCATION COMMENTS - --- ---- ----- -------- ---- ------------------------------------------------------- -------- --------- 28 18 1 13 TAPE DISPENSER #20 28 32 1 13 TAPE DISPENSER #20 30 6 1 13 TAPE DISPENSER #22 30 33 1 13 TAPE DISPENSER #23 36 17 18 13 TAPE DISPENSER 24 6 3 13 TAPE DISPENSERS #17 29 28 2 13 TAPE DISPENSERS #20 24 3 3 13 TAPE GUNS #17 26 8 1 13 TOASTER OVEN BLACK & DECKER SPACEMAKER #14 28 21 1 13 TOSHIBA PHONE EKT6520-SD #20 26 10 2 13 TRASH CANS #14 14 20 1 13 TRIPOD DISPLAY BOARD UPSTAIRS 21 34 1 13 TV STAND CONF. ROOM 30 21 1 13 TYPEWRITER STAND #23 VELOBIND PRESENTATION SYSTEMS - GENERAL BINDING CORP 23 25 1 13 470KN #GB06497 #17 35 2 1 13 VISITING CHAIR 25 7 2 13 VISITING CHAIRS #13 30 1 2 13 VISITING CHAIRS #22 21 27 1 13 WALL CLOCK EMPIRE 102183 CONF. ROOM 23 21 1 13 WATER COOLER HALLWAY 26 2 1 13 WATER COOLER #97117121 #14 23 31 1 13 WEIGHT CLASSIFIER PITNEY BOWES #17 14 18 1 13 WOOD CONF. TABLE UPSTAIRS 14 7 1 13 WOOD DESK 23 16 8 1 13 WOOD DESK (REGULAR) ROOM 5 16 9 1 13 WOOD DESK (SMALL) ROOM 5 17 32 2 13 WOOD SEC. DESKS ROOM 10 32 8 4 14 1 1/2" BLOWERS 37 2 1 14 1" IMPACT WRENCH AIR 36 34 1 14 AIR CHISEL 36 35 1 14 ATLAS NIBLER AIR DRIVEN 32 7 2 14 BLOWERS 2" 35 33 3 14 DROP CORDS 33 9 2 14 DRUM VACS 37 1 1 14 EMPTY TOOLBOX 35 32 1 14 EXPLOSION LIGHTS DROP CORD 35 28 5 14 FENCE POST POUNDERS 35 8 2 14 FLASHLIGHTS 33 15 1 14 HYDRAULIC AUGER LITTLE BEAVER 33 24 MISC 14 HYDRAULIC JACKS MISC. 33 17 8 14 JACKSTANDS 4 2 1 14 LADDER - 10' STEP 4 1 1 14 LADDER - 12' STEP 4 4 5 14 LADDER - 16' EXTENSION 4 3 1 14 LADDER - 20' EXTENSION 3 32 4 14 LADDER - 8' STEP 35 3 1 14 MATIKA DRILL 33 8 1 14 MANUAL HAND PUMP 55 GAL DRUM 36 33 MISC 14 MISC. HAND TOOLS 30 18 1 14 PICK AXE #22 4 18 MISC 14 ASSORTED 4 6 MISC 14 SHOVELS, RAKES, BROOMS - ASSORTED 35 16 1 14 SKIL 6" BENCH GRINDER 35 7 1 14 SKIL CORDLESS DRILL 4 14 MISC 14 ASSORTED 35 31 1 14 TRIPOD VICE 33 30 1 14 VACUUM PUMP BECKER PUMP 4 5 4 14 WHEEL BARROW 33 25 4 14 WRENCHES 5 15 MISC MISC 15 BOOTIES - ALL TYPES 6 14 MISC MISC 15 CARTRIDGES - ALL TYPES 5 18 MISC MISC 15 COVERALLS - ALL TYPES 6 1 MISC MISC 15 GLOVES - ALL TYPES 5 10 MISC MISC 15 LEVEL A & B PROTECTIVE GEAR LEVEL C PROTECTIVE GEAR (INCLUDES TYVEK, BOOTS, HARD HATS, GOGGLES (OR EQUIVALENT), NITRILE GLOVES, DISPOSABLE GLOVE LINERS, AIR PURIFYING RESPIRATORS 5 11 MISC MISC 15 (APR) W/CARTRIDGES AND EAR PLUGS) LEVEL D PROTECTIVE GEAR (INCLUDES ALL OF THE ABOVE 5 12 MISC MISC 15 EXCEPT APR'S) 5 17 5 1239LA 15 PVC STEEL TOES BOOTS 5 34 MISC MISC 15 RAINGEAR - ASSORTED 6 23 2 1111LA 15 RESPIRATOR - 1/2 FACE 6 25 9 1112LA 15 RESPIRATOR - FULL FACE 6 20 7 1109LA 15 RESPIRATOR LENS COVER
9 34 15 Pages EXHIBIT A
GRP PG # QTY. ITEM NO. CODE DESCRIPTION LOCATION COMMENTS - --- ---- ----- -------- --- ------------------------------------------- -------- --------- 5 30 MISC MISC 15 TYVEK -ALL SIZES 5 39 MISC 1151LA 15 WORK VEST 15 19 1 16 12 DIGIT CALC W/TAPE SHARP EL21976II ROOM 1 31 1 1 16 12" X 12" SPEAKER #23 40 11 1 16 14" SVGA MONITOR #TBD STORAGE 40 12 1 16 14" SVGA MONITOR #TBD STORAGE 40 13 1 16 14" SVGA MONITOR #TBD STORAGE 40 14 1 16 14" SVGA MONITOR #TBD STORAGE 40 15 1 16 14" SVGA MONITOR #TBD STORAGE 40 16 1 16 14" SVGA MONITOR #TBD STORAGE 40 17 1 16 14" SVGA MONITOR #TBD STORAGE 40 4 1 16 19" MONITOR HP ULTRA VGA 1600 #JP54317593 GIS/CADD 16 25 1 16 40X MAX COMPUTER ROOM 7 27 22 1 16 586-100/16/1000 #504008 #20 27 20 1 16 586-100/16/833 PROSYSTEMS 08521 #20 27 21 1 16 586-150/16/1585 #AZ01 #20 17 17 1 16 ACER MONITOR ROOM 7 22 28 1 16 A-MATIC MOUSE 921678011 #6 31 20 1 16 BACKUP TAPE HP SURE STORE TAPE 5000 #24 20 34 1 16 CALCULATOR ROOM 21 21 13 1 16 CALCULATOR CASIO DL-220 #1232539 RECEPTION 14 1 1 16 CALCULATOR SHARP EL1197GII 21 20 32 1 16 CANNON P120DH CALCULATOR ROOM 21 34 30 1 16 CASIO CALCULATOR 20 9 1 16 CASIO CALCULATOR HD DL22OR ROOM 21 31 26 1 16 CD PLAYER TEAC PD-D860 #24 40 2 1 16 CD-ROM WRITER MICRONET MCDPRO/ADD #K507209 GIS/CADD 17 3 1 16 CMAX COMPUTER W/ZIP ROOM 7 15 21 1 16 COMP.MOITOR - SCEPTRE ROOM 1 17 16 1 16 COMPUTER ROOM 7 17 23 1 16 COMPUTER ROOM 7 19 27 1 16 COMPUTER ROOM 19 38 1 1 16 COMPUTER COOPER, MONICA INT 56K; 44XCDROM; INT 100MB ZIP 38 3 1 16 COMPUTER GLAZER, DEAN NIC 38 4 1 16 COMPUTER IKEMOTO, RICK 32X CD-R0M 14.4 INT MODEM; 8X CD-ROM; 38 5 1 16 COMPUTER OPEN SLOW ON NETWORK 38 6 1 16 COMPUTER SMITH, MARY PAT 8X CD-ROM, INT 28.8 MODEM 38 7 1 16 COMPUTER FILE SERVER EXT HP 5000 TAPE BACKUP & CD ROM 38 8 1 16 COMPUTER NUSENOW, MATT ROM 38 9 1 16 COMPUTER NUSENOW, MATT 14.4 INT. MODEM 38 10 1 16 COMPUTER PO STATION PANASONIC KX P2135 DOT MATRIX PRINTER 38 11 1 16 COMPUTER MASSOUD, RAY 38 12 1 16 COMPUTER EDMUND, BILL 14.4 INT. MODEM 38 13 1 16 COMPUTER OPEN 14.4 INT. MODEM 38 14 1 16 COMPUTER ISLAS, MICHELLE 56K INT. MODEM 38 15 1 16 COMPUTER OPEN FORMER FOSTER 38 16 1 16 COMPUTER SALCEDO, VICTOR 461 MB IN BAD SECTORS 38 17 1 16 COMPUTER OPEN FORMER NAFARRETE 38 18 1 16 COMPUTER RECEPTIONIST 56K INT MODEM 38 19 1 16 COMPUTER INTERNET 33.6 EXTERNAL MODEM LOST CONNECTION; MISSING 38 20 1 16 COMPUTER GIS LINK TO DATABASE 38 21 1 16 COMPUTER SCANNER SCANNER, WRITEABLE CD-ROM 38 22 1 16 COMPUTER BEDOY, DARRYL 28.8 INT. MODEM, CD-ROM4X4 38 23 1 16 COMPUTER OPEN FORMER JOHSON STATION 38 24 1 16 COMPUTER COTTON, MAUREEN 28.8 INT MODEM 38 25 1 16 COMPUTER MUNOZ, LAURA 28.8 INT MODEM 38 26 1 16 COMPUTER OPEN FORMER MARKET 38 27 1 16 COMPUTER MARKETING EXT. HP SCANJETT II; 40X CDROM 38 28 1 16 COMPUTER GILBERT, KEITH 33.6 EXT. MODEM, CD-ROM 38 29 1 16 COMPUTER OPEN 14.4 INT. MODEM, CD-ROM 38 30 1 16 COMPUTER SONES,PAUL 28.8 INT. MODEM, CD-ROM 38 31 1 16 COMPUTER DADPOUR, BRUCE 14.4 EXT. MODEM, CD-ROM 38 32 1 16 COMPUTER ENGINEERING 14.4 INT. MODEM W/DIRECTSOFT 38 33 1 16 COMPUTER MANNING, BRIAN PORTABLE09-WINBOOK, DOCKING STATION PORTABLE 11 - WINBOOK, HAS BOOT PROBLEMS; UNABLE 38 34 1 16 COMPUTER PORTABLE11 TO READ A: DRIVE; DS2 38 35 1 16 COMPUTER ALBERTSON, MIKE PORTABLE08-WINBOOK, DOCKING STATION 38 36 1 16 COMPUTER PORTABLE05 PORTABLE05 - WINBOOK; PLC5; DS1 38 37 1 16 COMPUTER BEDOY, DAYRRL PORTABLE02 - TOSHIBA 38 38 1 16 COMPUTER MANNING, BRIAN PORTABLE04 - WINBOOK; TIMBERLINE; DS1 38 39 1 16 COMPUTER STAND BY UPSTAIRS 38 40 1 16 COMPUTER FORMER SERVER FORMER FILE SERVER 38 41 1 16 COMPUTER PCANYWHERE 33.6 EXT. MODEM 38 42 1 16 COMPUTER STAND BY UPSTAIRS, 14.4 INT. MODEM DOS 6.22
10 35 15 Pages EXHIBIT A
==================================================================================================================================== GRP PG # QTY. ITEM NO. CODE DESCRIPTION LOCATION COMMENTS - ------------------------------------------------------------------------------------------------------------------------------------ 38 43 1 16 COMPUTER STAND BY FORMER MILLER STATION - ------------------------------------------------------------------------------------------------------------------------------------ 38 44 1 16 COMPUTER STAND BY UPSTAIRS, DOS 5.0 - ------------------------------------------------------------------------------------------------------------------------------------ 38 45 1 16 COMPUTER STAND BY UPSTAIRS, EISA, SCSI, DOS 5.0 - ------------------------------------------------------------------------------------------------------------------------------------ 38 46 1 16 COMPUTER SURPLUS - ------------------------------------------------------------------------------------------------------------------------------------ UPSTAIRS, MAY NEED NEW 38 47 1 16 COMPUTER STAND BY HARD DRIVE - ------------------------------------------------------------------------------------------------------------------------------------ PORTABLE07 - WINBOOK, ENG 38 48 1 16 COMPUTER PORTABLE07 SYSTEM PROGRAMS; DS2 - ------------------------------------------------------------------------------------------------------------------------------------ PORTABLE03 - WINBOOK, MONOCHROME, POWER FAILURE - 38 49 1 16 COMPUTER PORTABLE03 DO NOT USE - ------------------------------------------------------------------------------------------------------------------------------------ 38 50 1 16 COMPUTER SURPLUS - ------------------------------------------------------------------------------------------------------------------------------------ 38 51 1 16 COMPUTER SURPLUS - ------------------------------------------------------------------------------------------------------------------------------------ 38 52 1 16 COMPUTER SURPLUS - ------------------------------------------------------------------------------------------------------------------------------------ 38 53 1 16 COMPUTER SURPLUS - ------------------------------------------------------------------------------------------------------------------------------------ 38 54 1 16 COMPUTER SURPLUS - ------------------------------------------------------------------------------------------------------------------------------------ 38 55 1 16 COMPUTER SMITH, KEVIN - ------------------------------------------------------------------------------------------------------------------------------------ 38 56 1 16 COMPUTER SURPLUS - ------------------------------------------------------------------------------------------------------------------------------------ 38 57 1 16 COMPUTER LAB CHROMATOGRAM - ------------------------------------------------------------------------------------------------------------------------------------ 18 21 1 16 COMPUTER - PENTIUM ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 18 28 1 16 COMPUTER - PENTIUM ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 18 9 1 16 COMPUTER (SERVER) FIERY 2X6 ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 28 17 1 16 COMPUTER SPEAKERS HI-TEX CP-18 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 40 5 1 16 CONCENTRATOR HUB SYNOPTICS LATTIS HUB 280 # TBD FILE SERVER - ------------------------------------------------------------------------------------------------------------------------------------ 40 6 1 16 CONCENTRATOR HUB SYNOPTICS LATTIS HUB 280 # TBD FILE SERVER - ------------------------------------------------------------------------------------------------------------------------------------ 40 7 1 16 CONCENTRATOR HUB SYNOPTICS LATTIS HUB 280 # TBD FILE SERVER - ------------------------------------------------------------------------------------------------------------------------------------ 40 8 1 16 CONCENTRATOR HUB SYNOPTICS LATTIS HUB 280 # TBD FILE SERVER - ------------------------------------------------------------------------------------------------------------------------------------ 40 9 1 16 CONCENTRATOR HUB SYNOPTICS LATTIS HUB 280 # TBD FILE SERVER - ------------------------------------------------------------------------------------------------------------------------------------ 29 30 1 16 COPIER XEROX 230ST #20 - ------------------------------------------------------------------------------------------------------------------------------------ 23 22 1 16 COPIER XEROX 5895 #17 - ------------------------------------------------------------------------------------------------------------------------------------ 18 35 1 16 COPY MACHINE HP DESK JET 1200C/PS ROOM 19 - ------------------------------------------------------------------------------------------------------------------------------------ 14 8 1 16 COPY MACHINE SHARP SF-7750 23 - ------------------------------------------------------------------------------------------------------------------------------------ 18 34 3 16 COPY MACHINES HP LASER JET 4 PLUS ROOM 19 - ------------------------------------------------------------------------------------------------------------------------------------ 23 35 1 16 CPU UNIT #17 - ------------------------------------------------------------------------------------------------------------------------------------ 22 31 1 16 CPU UNIT #0101432X5 #6 - ------------------------------------------------------------------------------------------------------------------------------------ 21 18 1 16 CPU UNIT 08606 PROSYSTEMS RECEPTION - ------------------------------------------------------------------------------------------------------------------------------------ 26 19 1 16 CPU UNIT 1994 #0901286X4 #18 - ------------------------------------------------------------------------------------------------------------------------------------ 27 17 1 16 CPU UNIT 33/4/209 #0101051X4 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 27 18 1 16 CPU UNIT 33/4/333 #0501183X4 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 27 16 1 16 CPU UNIT 33/8/333 #0501188X4 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 25 24 1 16 CPU UNIT 486 #13 - ------------------------------------------------------------------------------------------------------------------------------------ 27 13 1 16 CPU UNIT 486-33/4/209 #0101052X4 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 27 15 1 16 CPU UNIT 486-33/4/532 #0101053X4 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 27 12 1 16 CPU UNIT 486-33/8/209 #1479 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 27 11 1 16 CPU UNIT 486-66 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 27 14 1 16 CPU UNIT 486-66/43/C:831 #0301167X4 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 29 16 1 16 CPU UNIT 586 PROSYSTEMS #20 - ------------------------------------------------------------------------------------------------------------------------------------ 29 5 1 16 CPU UNIT 586/100 PROSYSTEMS #20 - ------------------------------------------------------------------------------------------------------------------------------------ 26 34 1 16 CPU UNIT 586-100/9/640 MACRO TECHNOLOGIES #18 - ------------------------------------------------------------------------------------------------------------------------------------ 31 7 1 16 CPU UNIT 586-90/16/1800 #23 - ------------------------------------------------------------------------------------------------------------------------------------ 31 19 1 16 CPU UNIT ALPHA MICROSYSTEMS #24 - ------------------------------------------------------------------------------------------------------------------------------------ 23 17 1 16 CPU UNIT AMERICAN SYSTEC PENTIUM ASC078 #016925 #8 - ------------------------------------------------------------------------------------------------------------------------------------ 28 25 1 16 CPU UNIT MAGITRONIC #20 - ------------------------------------------------------------------------------------------------------------------------------------ 29 19 1 16 CPU UNIT PENTIUM #20 - ------------------------------------------------------------------------------------------------------------------------------------ 31 18 1 16 CPU UNIT STRATEGY VOICE PROCESSING #24 - ------------------------------------------------------------------------------------------------------------------------------------ 24 2 1 16 DOT MATRIZ PRINTER #17 - ------------------------------------------------------------------------------------------------------------------------------------ 18 31 1 16 ELEC. DRAWING BOARD ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 21 32 1 16 ELECTAGRAPHIC III PLUS PROJECTOR - KODAK #A-615015 CONF. ROOM - ------------------------------------------------------------------------------------------------------------------------------------ 18 19 1 16 ELECTRONIC DRAWING TABLET HURTA XGT ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 26 29 1 16 ELETRONIC TYPEWRITER IBM WHEELWRITER 3 #18 - ------------------------------------------------------------------------------------------------------------------------------------ 21 9 1 16 ELETRONIC TYPEWRITER IBM WHEELWRITER SERIES II #102126 RECEPTION - ------------------------------------------------------------------------------------------------------------------------------------ 30 22 1 16 ELECTRONIC TYPEWRITER SILVER REED EZ50 #23 - ------------------------------------------------------------------------------------------------------------------------------------ 16 29 1 16 EVERVIEW MONITOR ROOM 7 - ------------------------------------------------------------------------------------------------------------------------------------ 18 26 1 16 EXTERNAL CD DRIVE MICRONET MASTER CD 4X ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 18 18 1 16 EXTERNAL POWER CONVERTER ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 20 15 1 16 FAX MODEM - US ROBOTICS 33.6 ROOM 21 - ------------------------------------------------------------------------------------------------------------------------------------ 31 21 1 16 FILE SERVER AIR PROVESIA #24 - ------------------------------------------------------------------------------------------------------------------------------------ 31 22 1 16 FILE SERVER AIR PROVESIA #24 - ------------------------------------------------------------------------------------------------------------------------------------ 27 19 1 16 FILE SERVER COLORADO 350 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 18 25 1 16 FLAT TOP SCANNER - MICROTEK SCANMAKER III ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 18 14 1 16 HP COMPUTER VECTA XU ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 17 19 1 16 HP COPIER LASERJET 4 PLUS ROOM 7 - ------------------------------------------------------------------------------------------------------------------------------------ 18 10 1 16 HP DESIGN JET 650C COPY MACHINE ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 16 4 1 16 KEYBOARD ROOM 2 - ------------------------------------------------------------------------------------------------------------------------------------ 17 4 1 16 KEYBOARD ROOM 7 - ------------------------------------------------------------------------------------------------------------------------------------ 17 6 1 16 KEYBOARD ROOM 7 - ------------------------------------------------------------------------------------------------------------------------------------ 18 4 1 16 KEYBOARD ROOM 10 - ------------------------------------------------------------------------------------------------------------------------------------ 18 15 1 16 KEYBOARD ROOM 12 ====================================================================================================================================
11 36 15 Pages EXHIBIT A
==================================================================================================================================== GRP Pg # QTY. ITEM NO. CODE DESCRIPTION LOCATION COMMENTS - ------------------------------------------------------------------------------------------------------------------------------------ 18 22 1 16 KEYBOARD ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 18 29 1 16 KEYBOARD ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 19 10 1 16 KEYBOARD ROOM 19 - ------------------------------------------------------------------------------------------------------------------------------------ 19 29 1 16 KEYBOARD ROOM 19 - ------------------------------------------------------------------------------------------------------------------------------------ 20 4 1 16 KEYBOARD ROOM 21 - ------------------------------------------------------------------------------------------------------------------------------------ 20 13 1 16 KEYBOARD ROOM 21 - ------------------------------------------------------------------------------------------------------------------------------------ 25 19 1 16 KEYBOARD #13 - ------------------------------------------------------------------------------------------------------------------------------------ 27 28 1 16 KEYBOARD #20 - ------------------------------------------------------------------------------------------------------------------------------------ 23 33 1 16 KEYBOARD - FEDEX POWERSHIP #17 - ------------------------------------------------------------------------------------------------------------------------------------ 25 25 1 16 KEYBOARD #00078804 #13 - ------------------------------------------------------------------------------------------------------------------------------------ 31 16 1 16 KEYBOARD #C950538907 #24 - ------------------------------------------------------------------------------------------------------------------------------------ 31 15 1 16 KEYBOARD #J964115316 #24 - ------------------------------------------------------------------------------------------------------------------------------------ 30 10 1 16 KEYBOARD #J964134511 #22 - ------------------------------------------------------------------------------------------------------------------------------------ 23 18 1 16 KEYBOARD #K743807292 #8 - ------------------------------------------------------------------------------------------------------------------------------------ 29 3 1 16 KEYBOARD #T202050941 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 31 23 1 16 KEYBOARD AIR PROVEISIA #24 - ------------------------------------------------------------------------------------------------------------------------------------ 22 29 1 16 KEYBOARD CE C66134117 #6 - ------------------------------------------------------------------------------------------------------------------------------------ 28 14 1 16 KEYBOARD FKB4600 #H2108149 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 24 16 1 16 KEYBOARD LITE ON SK300RN #C941219519 #11 - ------------------------------------------------------------------------------------------------------------------------------------ 29 10 1 16 KEYBOARD NEC 855501162M #20 - ------------------------------------------------------------------------------------------------------------------------------------ 21 17 1 16 KEYBOARD NMB TECHNOLOGIES MODEL RT8255CWT #B2150582 RECEPTION - ------------------------------------------------------------------------------------------------------------------------------------ 26 33 1 16 KEYBOARD RT82555 #B2151202 #18 - ------------------------------------------------------------------------------------------------------------------------------------ 26 21 1 16 KEYBOARD RT8255C+ #A1652381 #18 - ------------------------------------------------------------------------------------------------------------------------------------ 31 6 1 16 KEYBOARD RT8255CWT #B2151253 #23 - ------------------------------------------------------------------------------------------------------------------------------------ 28 8 1 16 KEYBOARD SK-3000RN #C941219565 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 15 23 1 16 KEYBOARD W/MOUSE ROOM 1 - ------------------------------------------------------------------------------------------------------------------------------------ 16 12 1 16 KEYBOARD W/MOUSE ROOM 5 - ------------------------------------------------------------------------------------------------------------------------------------ 17 18 1 16 KEYBOARD W/MOUSE ROOM 7 - ------------------------------------------------------------------------------------------------------------------------------------ 17 24 1 16 KEYBOARD W/MOUSE ROOM 7 - ------------------------------------------------------------------------------------------------------------------------------------ 19 35 1 16 KEYBOARDS ROOM 19 - ------------------------------------------------------------------------------------------------------------------------------------ 20 35 1 16 LAPTOP W/DISK DRIVE (WINBOOK XP) ROOM 21 - ------------------------------------------------------------------------------------------------------------------------------------ 25 12 1 16 LAPTOP COMPUTER WINBOOK XP ANL-4 #10AUA00693 #13 - ------------------------------------------------------------------------------------------------------------------------------------ 25 22 1 16 LAPTOP HOLDER ASE TECHNOLOGIES D2 #13 - ------------------------------------------------------------------------------------------------------------------------------------ 27 27 1 16 LAPTOP HOLDER ASE TECHNOLOGIES D3I #1195410110 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 30 12 1 16 LAPTOP HOLDER ASE TECHNOLOGY #22 - ------------------------------------------------------------------------------------------------------------------------------------ 25 21 1 16 LAPTOP WINBOOK XP5 ANL-4 #13 - ------------------------------------------------------------------------------------------------------------------------------------ 18 12 1 16 LARGE WORK STATION - 3 WALLS ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 21 16 1 16 LOGITECH MOUSE LZA50414146 RECEPTION - ------------------------------------------------------------------------------------------------------------------------------------ 18 3 1 16 MAGITRONIC COMPUTER ROOM 10 - ------------------------------------------------------------------------------------------------------------------------------------ 16 30 1 16 MICROSOFT KEYBOARD ROOM 7 - ------------------------------------------------------------------------------------------------------------------------------------ 23 15 1 16 MICROSOFT MOUSE #05936610 #8 - ------------------------------------------------------------------------------------------------------------------------------------ 28 24 1 16 MODEM US ROBOTICS SPORTSTER 33.6 #20 - ------------------------------------------------------------------------------------------------------------------------------------ MODEM US ROBOTICS SPORTSTER 33.6 FAX MODEM 25 23 1 16 #0008390262024123 #13 - ------------------------------------------------------------------------------------------------------------------------------------ 17 25 1 16 MONITOR ROOM 7 - ------------------------------------------------------------------------------------------------------------------------------------ 18 6 1 16 MONITOR ROOM 10 - ------------------------------------------------------------------------------------------------------------------------------------ 18 24 1 16 MONITOR ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 23 34 1 16 MONITOR #17 - ------------------------------------------------------------------------------------------------------------------------------------ 19 12 1 16 MONITOR - ORCHESTRA TRUMPET 14" ROOM 19 - ------------------------------------------------------------------------------------------------------------------------------------ 16 13 1 16 MONITOR - SOCOS ROOM 5 - ------------------------------------------------------------------------------------------------------------------------------------ 29 2 1 16 MONITOR 14" 1987 ARCUS DCM-1589 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 27 3 1 16 MONITOR 14" 1991 AAMAZING CM8428SX # 10704066 #18 - ------------------------------------------------------------------------------------------------------------------------------------ 27 30 1 16 MONITOR 14" 1995 MIKRO ELECTRONICS #20 - ------------------------------------------------------------------------------------------------------------------------------------ 29 12 1 16 MONITOR 14" EVERVIEW #20 - ------------------------------------------------------------------------------------------------------------------------------------ 31 13 1 16 MONITOR 14" LOADING TECHNOLOGY #24 - ------------------------------------------------------------------------------------------------------------------------------------ 25 26 1 16 MONITOR 14" ORCHESTRA 1994 TRUMPET #KL44347 #13 - ------------------------------------------------------------------------------------------------------------------------------------ 30 11 1 16 MONITOR 14" PACKARD BELL #92465466 #22 - ------------------------------------------------------------------------------------------------------------------------------------ 23 14 1 16 MONITOR 14" SPECTRE 1995 #8 - ------------------------------------------------------------------------------------------------------------------------------------ 26 18 1 16 MONITOR 14" SPECTRE 1996 #18 - ------------------------------------------------------------------------------------------------------------------------------------ 31 14 1 16 MONITOR 14" TRUMPET 14 #24 - ------------------------------------------------------------------------------------------------------------------------------------ 31 4 1 16 MONITOR 15" 1995 GM #CX-2158D6 #23 - ------------------------------------------------------------------------------------------------------------------------------------ 26 32 1 16 MONITOR 15" GOLDSTAR 1505 #257B5B01847A #18 - ------------------------------------------------------------------------------------------------------------------------------------ 25 20 1 16 MONITOR 15" GOLDSTAR 1995 1505 #257B8B01898A #13 - ------------------------------------------------------------------------------------------------------------------------------------ 24 15 1 16 MONITOR GOLDSTAR 1995 1505 #257353011712A #11 - ------------------------------------------------------------------------------------------------------------------------------------ 28 7 1 16 MONITOR MAGNAVOX CM2015D1 #54791402 #20 - ------------------------------------------------------------------------------------------------------------------------------------ 22 30 1 16 MONITOR NEC MULTISYNC 4D #6 - ------------------------------------------------------------------------------------------------------------------------------------ 19 28 1 16 MONITOR ORCHESTRA TRUMP 14" ROOM 19 - ------------------------------------------------------------------------------------------------------------------------------------ 20 3 1 16 MONITOR SCEPTRE 14" ROOM 21 - ------------------------------------------------------------------------------------------------------------------------------------ 18 17 1 16 MONITOR VIEW SCENIC 17GS ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 17 7 1 16 MOUSE ROOM 7 - ------------------------------------------------------------------------------------------------------------------------------------ 18 5 1 16 MOUSE ROOM 10 - ------------------------------------------------------------------------------------------------------------------------------------ 18 16 1 16 MOUSE ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 18 23 1 16 MOUSE ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 18 30 1 16 MOUSE ROOM 12 - ------------------------------------------------------------------------------------------------------------------------------------ 19 11 1 16 MOUSE ROOM 19 - ------------------------------------------------------------------------------------------------------------------------------------ 19 30 1 16 MOUSE ROOM 19 ====================================================================================================================================
12 37 EXHIBIT A
=================================================================================================================================== Grp Pg # Qty. Item No. Code Description Location Comments - --- ---- ----- -------- ---- ------------------------------------------------------- -------- --------- 20 5 1 16 MOUSE ROOM 21 - ----------------------------------------------------------------------------------------------------------------------------------- 20 14 1 16 MOUSE ROOM 21 - ----------------------------------------------------------------------------------------------------------------------------------- 25 18 1 16 MOUSE #13 - ----------------------------------------------------------------------------------------------------------------------------------- 16 31 1 16 MOUSE DEXXA ROOM 7 - ----------------------------------------------------------------------------------------------------------------------------------- 26 20 1 16 MOUSE DEXXA #LC2942006943 #18 - ----------------------------------------------------------------------------------------------------------------------------------- 29 4 1 16 MOUSE DEXXA #LC4543012511 #20 - ----------------------------------------------------------------------------------------------------------------------------------- 27 25 1 16 MOUSE DEXXA 1995 #20 - ----------------------------------------------------------------------------------------------------------------------------------- 29 9 1 16 MOUSE DEXXA LC2541010112 #20 - ----------------------------------------------------------------------------------------------------------------------------------- 26 31 1 16 MOUSE LOGITECH #LU269004814 #18 - ----------------------------------------------------------------------------------------------------------------------------------- 28 20 1 16 MOUSE MICROSOFT 2.0A #20 - ----------------------------------------------------------------------------------------------------------------------------------- 25 27 2 16 MOUSE MICROSOFT 2.0A #06314477 #13 - ----------------------------------------------------------------------------------------------------------------------------------- 16 3 1 16 NETWORK HOOKUP FOR LAPTOP ROOM 2 - ----------------------------------------------------------------------------------------------------------------------------------- 21 30 1 16 OVERHEAD PROJECTOR 3M IMAGE SYSTEMS 2000 AG CONF. ROOM - ----------------------------------------------------------------------------------------------------------------------------------- 19 9 1 16 PENTIUM COMPUTER ROOM 19 - ----------------------------------------------------------------------------------------------------------------------------------- 23 36 1 16 POWER PROTECTOR #17 - ----------------------------------------------------------------------------------------------------------------------------------- 20 17 1 16 PRINTER - HP LASER JET SERIES II ROOM 21 - ----------------------------------------------------------------------------------------------------------------------------------- 20 8 1 16 PRINTER - PANASONIC KXP2135 COLOR ROOM 21 - ----------------------------------------------------------------------------------------------------------------------------------- 39 1 1 16 PRINTER HP 1200C/PS #USA3B12015 BULLPEN - ----------------------------------------------------------------------------------------------------------------------------------- 39 2 1 16 PRINTER HP 1200C/PS #USA3C05700 STORAGE - ----------------------------------------------------------------------------------------------------------------------------------- 27 7 1 16 PRINTER HP LASERJET 4 PLUS #JPGX263825 #18 - ----------------------------------------------------------------------------------------------------------------------------------- 23 13 1 16 PRINTER HP LASERJET 4 PLUS C2037A #JPGX227829 #8 - ----------------------------------------------------------------------------------------------------------------------------------- 29 24 1 16 PRINTER HP LASERJET 4SI #20 - ----------------------------------------------------------------------------------------------------------------------------------- 39 6 1 16 PRINTER HP4PLUS #JPGH024370 MARKETING - ----------------------------------------------------------------------------------------------------------------------------------- 39 3 1 16 PRINTER HP4PLUS #JPGJ011235 BULLPEN - ----------------------------------------------------------------------------------------------------------------------------------- 39 4 1 16 PRINTER HP4PLUS #JPGK077740 BULLPEN - ----------------------------------------------------------------------------------------------------------------------------------- 39 5 1 16 PRINTER HP4PLUS #JPGK092652 BULLPEN - ----------------------------------------------------------------------------------------------------------------------------------- 39 9 1 16 PRINTER HP4PLUS #JPGK227829 WORD PROCESSING - ----------------------------------------------------------------------------------------------------------------------------------- 39 7 1 16 PRINTER HP4PLUS #JPGK263825 ESTIMATOR - ----------------------------------------------------------------------------------------------------------------------------------- 39 8 1 16 PRINTER HP4PLUS #TBD STORAGE - ----------------------------------------------------------------------------------------------------------------------------------- 39 10 1 16 PRINTER HP4PSi #USDB346096 BULLPEN - ----------------------------------------------------------------------------------------------------------------------------------- 39 11 1 16 PRINTER HP560C #US4C61C08T STORAGE - ----------------------------------------------------------------------------------------------------------------------------------- 39 14 1 16 PRINTER HP650C #TBD STORAGE - ----------------------------------------------------------------------------------------------------------------------------------- 39 13 1 16 PRINTER HP650C #USA4201952 CADD/GIS - ----------------------------------------------------------------------------------------------------------------------------------- 39 12 1 16 PRINTER HPLASERJET 6P #TBD STORAGE - ----------------------------------------------------------------------------------------------------------------------------------- 39 15 1 16 PRINTER HPLASERJET II #TBD WAREHOUSE - ----------------------------------------------------------------------------------------------------------------------------------- 39 16 1 16 PRINTER HPLASERJET II #TBD STORAGE - ----------------------------------------------------------------------------------------------------------------------------------- 39 17 1 16 PRINTER HPLASERJET II #TBD STORAGE - ----------------------------------------------------------------------------------------------------------------------------------- 39 18 1 16 PRINTER HPLASERJET II #TBD STORAGE - ----------------------------------------------------------------------------------------------------------------------------------- 39 19 1 16 PRINTER HPLASERJET II #TBD ZIA - ----------------------------------------------------------------------------------------------------------------------------------- 39 20 1 16 PRINTER PANASONIC KX P2135 PO STATION - ----------------------------------------------------------------------------------------------------------------------------------- 27 4 1 16 PRINTING CALCULATOR CASIO FR - 12155 #4235516 #18 - ----------------------------------------------------------------------------------------------------------------------------------- 36 16 1 16 PRINTING CALCULATORS CANON P20-DX - ----------------------------------------------------------------------------------------------------------------------------------- 15 18 1 16 PRO SYSTEMS COMPUTER ROOM 1 - ----------------------------------------------------------------------------------------------------------------------------------- 16 11 1 16 PRO SYSTEMS COMPUTER ROOM 5 - ----------------------------------------------------------------------------------------------------------------------------------- 20 11 1 16 PRO SYSTEMS COMPUTER ROOM 21 - ----------------------------------------------------------------------------------------------------------------------------------- 20 2 1 16 PRO SYSTEMS PC ROOM 21 - ----------------------------------------------------------------------------------------------------------------------------------- 31 27 1 16 RADIO PLAYER LABORATORY STANDARD #24 - ----------------------------------------------------------------------------------------------------------------------------------- 20 12 1 16 SAMSUNG MONITOR ROOM 21 - ----------------------------------------------------------------------------------------------------------------------------------- 16 24 1 16 SCANNER (FLAT TOP) HP SCANJET IICX ROOM 7 - ----------------------------------------------------------------------------------------------------------------------------------- 40 3 1 16 SCANNER HP SCANJET II CX #3414A78321 MARKETING - ----------------------------------------------------------------------------------------------------------------------------------- 40 1 1 16 SCANNER SCANMAKER II #S59760110A GIS/CADD - ----------------------------------------------------------------------------------------------------------------------------------- 15 15 1 16 SMALL COPY MACHINE - XEROX 7042 #E139751T ROOM 1 - ----------------------------------------------------------------------------------------------------------------------------------- 23 12 1 16 SMITH CORONA ELECTRIC TYPEWRITER #713541 #8 - ----------------------------------------------------------------------------------------------------------------------------------- 21 15 1 16 SPECTRE MONITOR RECEPTION - ----------------------------------------------------------------------------------------------------------------------------------- 28 16 1 16 SPECTRE MONITOR 15" #20 - ----------------------------------------------------------------------------------------------------------------------------------- 30 26 1 16 SURGE PROTECTOR #23 - ----------------------------------------------------------------------------------------------------------------------------------- 40 10 1 16 TAPE BACKUP HP SURESTORE TAPE 5000 #TBD FILE SERVER - ----------------------------------------------------------------------------------------------------------------------------------- 22 17 1 16 TEXAS INSTRUMENTS CALCULATOR TI-5032 #4 - ----------------------------------------------------------------------------------------------------------------------------------- 27 26 1 16 TOSHIBA PHONE EXT 6520-H #20 - ----------------------------------------------------------------------------------------------------------------------------------- 21 29 1 16 TV W/VCR BUILT IN 15" PANANSONIC W/REMOTE CONF. ROOM - ----------------------------------------------------------------------------------------------------------------------------------- 30 27 1 16 TYPEWRITER IBM CORRECTING SELECTRIC III #23 - ----------------------------------------------------------------------------------------------------------------------------------- 31 17 1 16 UNION SURGE PROTECTOR #24 - ----------------------------------------------------------------------------------------------------------------------------------- UNIT YOU PLUG LAPTOP INTO SO YOU CAN SEE MONITORE - ASE 24 17 1 16 TECHNOLOGIES D2 #C5525 #11 - ----------------------------------------------------------------------------------------------------------------------------------- 17 5 1 16 VIEWSONIC MONITOR W/EXT SPEAKER ROOM 7 - ----------------------------------------------------------------------------------------------------------------------------------- 18 8 1 T 800 16 XEROX 5150 COPY MACHINE ROOM 12 52K312912 - ----------------------------------------------------------------------------------------------------------------------------------- 17 21 1 16 XEROX FAX MACHINE 7042 ROOM 7 - ----------------------------------------------------------------------------------------------------------------------------------- 16 26 1 16 ZIP DRIVE - IOMEGA ZIP 100 ROOM 7 - ----------------------------------------------------------------------------------------------------------------------------------- 17 8 1 17 9 BUTTON PHONE TOSHIBA ROOM 7 - ----------------------------------------------------------------------------------------------------------------------------------- 16 14 1 17 9 BUTTON PHONE W/DISPLAY TOSHIBA ROOM 5 - ----------------------------------------------------------------------------------------------------------------------------------- 20 6 1 17 9 BUTTON PHONE W/DISP ROOM 21 - ----------------------------------------------------------------------------------------------------------------------------------- 19 8 1 17 9 BUTTON PHONE W/DISP ROOM 19 - ----------------------------------------------------------------------------------------------------------------------------------- 19 23 1 17 9 BUTTON PHONE W/DISPLAY ROOM 19 - ----------------------------------------------------------------------------------------------------------------------------------- 15 20 1 17 9 BUTTON PHONE W/DISPLAY TOSHIBA ROOM 1 - ----------------------------------------------------------------------------------------------------------------------------------- 16 27 1 17 9 BUTTON PHONE W/DISPLAY TOSHIBA ROOM 7 - ----------------------------------------------------------------------------------------------------------------------------------- 14 15 2 17 9 BUTTON PHONES TOSHIBA UPSTAIRS ===================================================================================================================================
13 38 15 Pages EXHIBIT A
GRP PG # QTY ITEM NO. CODE DESCRIPTION LOCATION COMMENTS -- -- --- -------- ---- --------------------------------- -------- -------- 19 17 1 17 9 BUTTON TOSHIBA PHONE ROOM 19 19 33 1 17 9 BUTTON TOSHIBA PHONE ROOM 19 20 19 1 17 9 BUTTON TOSHIBA PHONE ROOM 21 18 27 1 17 9 BUTTON TOSHIBA PHONE (WHITE) ROOM 12 20 23 1 17 9 BUTTON TOSHIBA PHONE W/DISP ROOM 21 20 31 1 17 9 BUTTON TOSHIBA PHONE W/DISP ROOM 21 17 20 1 17 9 BUTTON TOSHIBA PHONE W/DISP. ROOM 7 19 5 1 17 9 BUTTON TOSHIBA PHONE W/DISP. ROOM 19 15 35 1 17 9 BUTTON TOSHIBA PHONE W/DISPLAY ROOM 2 18 20 1 17 9 BUTTON TOSHIBA PHONE W/DISPLAY ROOM 12 28 15 1 17 CELL PHONE MOTOROLA #20 19 21 1 17 NEXTEL BATTERY ROOM 19 18 7 1 17 NEXTEL CHARGER ROOM 10 19 20 1 17 NEXTEL CHARGER ROOM 19 15 26 4 17 NEXTEL CHARGERS ROOM 1 15 27 1 17 NEXTEL MOTOROLA CELL PHONE ROOM 1 15 28 1 17 NEXTEL PHONE BATERY ROOM 1 17 22 1 17 PHONE 9 BUTTON TOSHIBA W/DISP. ROOM 7 18 1 1 17 TOSHIBA 9 BUTTON PHONE ROOM 10 34 28 1 17 TOSHIBA PHONE 36 15 1 17 TOSHIBA PHONE 21 3 1 17 TOSHIBA PHONE EKT6020-H RECEPTION 26 24 1 17 TOSHIBA PHONE EKT6020-H #18 23 28 1 17 TOSHIBA PHONE EKT6025-H #17 29 14 1 17 TOSHIBA PHONE EKT6025-H #20 29 23 1 17 TOSHIBA PHONE EKT6025-H #20 29 29 1 17 TOSHIBA PHONE EKT6025-H #20 30 19 1 17 TOSHIBA PHONE EKT6025-H #23 30 25 1 17 TOSHIBA PHONE EKT6025-H #23 30 30 1 17 TOSHIBA PHONE EKT6025-H #23 27 2 1 17 TOSHIBA PHONE EKT6025-SD #18 28 6 1 17 TOSHIBA PHONE EKT6025-SD #20 27 32 1 17 TOSHIBA PHONE EKT6020-H #20 30 29 1 17 TOSHIBA PHONE EKT6020-H #23 30 32 1 17 TOSHIBA PHONE EKT6020-H #23 21 7 1 17 TOSHIBA PHONE EKT6520-SD RECEPTION 21 24 1 17 TOSHIBA PHONE EKT6520-SD CONF. ROOM 22 10 1 17 TOSHIBA PHONE EKT6520-SD #3 22 16 1 17 TOSHIBA PHONE EKT6520-SD #4 22 32 1 17 TOSHIBA PHONE EKT6520-SD #6 23 16 1 17 TOSHIBA PHONE EKT6520-SD #8 24 27 1 17 TOSHIBA PHONE EKT6520-SD #11 25 3 1 17 TOSHIBA PHONE EKT6520-SD #11 25 16 1 17 TOSHIBA PHONE EKT6520-SD #13 26 17 1 17 TOSHIBA PHONE EKT6520-SD #18 26 30 1 17 TOSHIBA PHONE EKT6520-SD #18 28 34 1 17 TOSHIBA PHONE EKT6520-SD #20 29 18 1 17 TOSHIBA PHONE EKT6520-SD #20 30 8 1 17 TOSHIBA PHONE EKT6520-SD #22 21 8 1 17 TOSHIBA TRANSFER SET HDSS6560 RECEPTION 2 7 1 T103 99 CARGO VAN - 1995 FORD E350; VIN 1FTHE24H4SHC16664 2 9 1 T105 99 CARGO VAN - 1996 FORD AEROSTAR; VIN 1FTDA14UXTZA48252 2 12 1 T108 99 CLARK FORKLIFT (WAREHOUSE USE); SERIAL #5978 2 99 FLATBED TRAILERS 2 13 1 T109 99 MIGHTY MOVER FLAT TRAILER W/1100 GALLON TANK 2 5 1 T100 99 SERVICE TRUCK - 1987 NISSAN FLATBED WITH LIFTGATE; VIN JN6HD15H3HW000852 1 T113 99 SERVICE TRUCK - 1995 CHEVY C25 HD; VIN 1GCGC29F3SE236592 1 T112 99 SERVICE TRUCK - 1995 CHEVY C25 HD; VIN 1GCGC29K3SE235102 2 11 1 T107 99 SERVICE TRUCK -1995 F350 STAKEBED; VIN 1FDLF47FXSEA72211 2 10 1 T106 99 SERVICE TRUCK - 1996 CHEVY PICK-UP; VIN 2GCEC19W5T1117639 1 P104 99 SERVICE TRUCK - 1996 FORD STAKEBED; VIN 1FDLF47F5TEB58821 1 P101 99 SERVICE TRUCK - 1997 FORD F250 HD; VIN 1FTHX25F6VEA39080 1 T111 99 SERVICE TRUCK - F250; VIN 1FTHF26H1PLA75728 2 8 1 T104 99 WELL DEVELOPMENT RIG - 1995 FORD F350 W/TOOLS; VIN 1FDJF37FXSEA00992 4 1 115 VAC GRUNDFOS POWER CONVERTER DENVER DENVER OFFICE 2 1 150 FT GRUNDFOS REDIFLOW SAMPLING PUMP W/PORTABLE REEL & ACCESSORIES DENVER DENVER OFFICE 3 1 200 FT GRUNDFOS REDIFLOW SAMPLING PUMP W/PORTABLE REEL & ASSECCORIES DENVER DENVER OFFICE 5 1 200 FT WATER-LEVEL TAPE HOE CREEK HOE CREEK SITE 5 1 230 VAC GRUNDFOS POWER CONVERTER DENVER DENVER OFFICE 4 1 3 METER CONNECTION CABLE FOR REDOX PROBE DENVER DENVER - SITE 67 (FUDS) 4 1 81" X 12" UTILITY TRAILER HOE CREEK HOE CREEK SITE 1 T734 AIREX VAPOR EXTRACTION SYSTEM RETOX #8 1M9FM1932M1261099
14 39 15 Pages EXHIBIT A
==================================================================================================================================== GRP Pg # QTY ITEM NO. CODE DESCRIPTION LOCATION COMMENTS - ------------------------------------------------------------------------------------------------------------------------------------ 3 1 ANSWERING MACHINE HOE CREEK HOE CREEK SITE - ------------------------------------------------------------------------------------------------------------------------------------ CATALYTIC COMBUSTION 3000 SCFM CATALYTIC OXIDIZER W/ 1 T719 SCRUBBER SYSTEM - ------------------------------------------------------------------------------------------------------------------------------------ 5 1 CONDUCTIVITY METER W/KIT DENVER DENVER - SITE 67 (FUDS) - ------------------------------------------------------------------------------------------------------------------------------------ 1 T500 COYNE 60" 300 CU AIR BOTTLE A-1786301Y - ------------------------------------------------------------------------------------------------------------------------------------ 6 1 DISSOLVED OXYGEN METER W/KIT DENVER DENVER - SITE 67 (FUDS) - ------------------------------------------------------------------------------------------------------------------------------------ 8 1 EZLOAD II-L/S PUMPHEAD DENVER DENVER - SITE 67 (FUDS) - ------------------------------------------------------------------------------------------------------------------------------------ 1 1 FAX HOE CREEK HOE CREEK SITE - ------------------------------------------------------------------------------------------------------------------------------------ 1 T700 FOXBORO OIL IN WATER ANALYZER IFF-A-B - ------------------------------------------------------------------------------------------------------------------------------------ 1 T701 FOXBORO ORGANIC VAPOR ANALYZER A22259 - ------------------------------------------------------------------------------------------------------------------------------------ 1 1 HATCH TURBIDITY 2100P METER DENVER DENVER OFFICE - ------------------------------------------------------------------------------------------------------------------------------------ 1 P707 INDUST SCI 9107064014 - ------------------------------------------------------------------------------------------------------------------------------------ 1 1 IN-LINE FLOW CELL W/CASE & ACCESSORIES DENVER DENVER SITE -67 (FUDS) - ------------------------------------------------------------------------------------------------------------------------------------ 1 P401 KATOLITE ACME 9111 - ------------------------------------------------------------------------------------------------------------------------------------ 6 2 MICROWAVE OVENS HOE CREEK HOE CREEK SITE - ------------------------------------------------------------------------------------------------------------------------------------ 9 1 MODULAR BATTERY & CHARGER DENVER DENVER - SITE 67 (FUDS) - ------------------------------------------------------------------------------------------------------------------------------------ 1 T706 MSA LEL METER 360 288011 - ------------------------------------------------------------------------------------------------------------------------------------ 1 T708 MSA LEL METER 360 - ------------------------------------------------------------------------------------------------------------------------------------ 1 T704 ORION CONDUCTIVITY METER 31304070 - ------------------------------------------------------------------------------------------------------------------------------------ 1 T707 ORS OIL/WATER INTERFACE PROBE 9515141 - ------------------------------------------------------------------------------------------------------------------------------------ 2 2 PH/REDOX METERS W/KIT DENVER DENVER - SITE 67 (FUDS) - ------------------------------------------------------------------------------------------------------------------------------------ 2 1 PHONE HOE CREEK HOE CREEK SITE - ------------------------------------------------------------------------------------------------------------------------------------ 1 T802 QUEBEC COLONY COUNTER 12847 - ------------------------------------------------------------------------------------------------------------------------------------ 3 1 REDOX PROBE W/PLUG HEAD DENVER DENVER - SITE 67 (FUDS) - ------------------------------------------------------------------------------------------------------------------------------------ 1 T110 RSI IC ENGINE VAPOR EXTRACTION 2966 - ------------------------------------------------------------------------------------------------------------------------------------ 7 1 SERIES II AC-DC GEOPUMP W/KIT DENVER DENVER - SITE 67 (FUDS) - ------------------------------------------------------------------------------------------------------------------------------------ 1 T703 SOLINST INTERFACE PROBE 17124 - ------------------------------------------------------------------------------------------------------------------------------------ 1 T711 SRI GAS CHROMATOGRAPH AUTO SAMPLER - ------------------------------------------------------------------------------------------------------------------------------------ 1 T718 STEALTH FIRECAT 250 SCFM THERMAL/CATALYTIC OXIDIZER 00394 - ------------------------------------------------------------------------------------------------------------------------------------ 1 T724 STEALTH FIRECAT 500 ELECTRIC THERMAL OXIDIZER 00275 - ------------------------------------------------------------------------------------------------------------------------------------ 1 T717 STEALTH FIRECAT 500 SCFM THERMAL OXIDIZER 00364 - ------------------------------------------------------------------------------------------------------------------------------------ 1 T720 STEALTH INDUSTRIES 70 GPM WATER TREATMENT TRAILER 00291/1T9FM183S1441 - ------------------------------------------------------------------------------------------------------------------------------------ 1 T702 THERMO ENVIRONMENTAL ORGANIC VAPOR MONITOR 580B-33156-245 - ------------------------------------------------------------------------------------------------------------------------------------ 1 T710 TSI VELOCITY METER 410015 - ------------------------------------------------------------------------------------------------------------------------------------ 1 T727 WHITE HORSE TECHNOLOGIES 5000 SCFM CATALYTIC OXIDIZER ====================================================================================================================================
15 40 EXHIBIT B (ASSUMED CONTRACTS) Pre-Placed Remedial Action Contract (PRAC) DACA45-97-D-0022 Worldwide Full Service Environmental Remedial Actions F41624-97-D-8010 Seattle MARC Contract DACW67-99-D-1008 METRIC Contract F04699-97-D-0024 Stone and Webster TERC Subcontract Foster Wheeler South West Division RACII Subcontract Montgomery Watson AFCEE Subcontract Lasmo Oil & Gas Contract KDC-OC, LLC (Koll) Contract GATX Contract Paramount Petroleum Contract Coastal Corp./Pacific Refinery Co./Gaffey Street Venture, LLC Georgia Pacific City of Coachella Solutia Inc. Landbank Overton, Moore & Assoc. Mar General BNSF Railway Ameripride Services, Inc. Fletcher Golden West Refining Co. Cole CH2M Hill Mar General Contracting Golden West Refining Co. Other Government Contracts and clients, if any--as mutually agreed prior to closing
-21- 41 EXHIBIT C (ACCRUED VACATION) See Attached -22- 42 EXHIBIT C ACCRUED VACATION* VACATION BALANCE AS OF PAYROLL DATE 3/3/2000 (W/E 2/27/2000)
HOURLY VAC BALANCE LIABILITY VACATION ACCRL NAME RATE (HOUR) AMOUNT PER PAYROLL - ---- ------ ----------- --------- ---------------- BEDOY, DARRYL 23.39 49.56 $1,159.21 3.08 COOPER, MONICA 34.14 178.04 6,078.29 4.62 COTTON, MAUREEN 42.50 136.42 5,797.85 4.62 DADPOUR, BEHROUZ 32.21 29.76 958.57 3.08 EDMUND, WILLIAM 29.77 15.90 473.34 4.62 FINK, ED 18.36 3.40 62.42 TERMINATED GILBERT, KEITH 28.12 124.13 3,490.54 4.62 GLAZER, GEORGE 47.04 148.60 6,990.14 4.62 IKEMOTO, WILLIAM 21.59 1.84 39.73 3.08 ISLAS, MICHELLE 19.81 90.46 1,792.01 3.08 MANNING, BRIAN 35.63 65.68 2,340.18 3.08 MASSOUD, GHOLAMREZA 23.88 280.99 6,710.04 6.15 MAYEKAWA, GLEN 38.42 245.96 9,449.78 4.62 MCMULLEN, PAT 40.87 41.32 1,688.75 3.08 MEYER, ROBERT 27.00 21.72 586.44 3.08 MITCHELL, STEVEN 20.00 67.72 1,354.40 4.62 NUSENOW, MATTHEW 35.00 99.52 3,483.20 3.08 OGG, RANDY 30.70 25.52 783.48 3.08 SALCEDO, VICTOR 24.04 343.21 8,250.77 6.15 SCHMIDT, MICHAEL 28.85 30.24 872.42 3.08 SMITH, KEVIN 15.20 9.16 139.23 3.08 SMITH, MARY PAT 24.81 103.06 2,556.92 4.62 SONES, PAUL 37.50 42.10 1,578.75 4.62 STRADER, TOM 24.44 25.66 627.13 3.08 TODD, LINDA 13.00 83.28 1,082.64 3.08 --------- ---------- TOTAL 2,263.25 $68,346.22
* Data will be upated as of the day of closing. 43 EXHIBIT D (EMPLOYEES WITH CONTINUED EMPLOYMENT) Bedoy, Darryl R. Proposal Coordinator Bishop, Everett Casual, O&M Operator Bishop, Judy Casual, O&M Operator Bohn, Ed, R.G. Casual Cawood, Felix Casual - Laborer Cooper, Monica A. Manager of Marketing Cotton, Maureen K. Director, Marketing Dadpour, Behrouz Engineer Edmund, William C. Staff Geologist Fink, Ed Site Superintendent/Operator Franklin, Waleed T. Casual - Laborer Fula, Luis Casual Laborer Gilbert, Keith Staff Geologist Glazer, George D. Regional Manager Green, Andre A. Casual - Environmental Technician Ikemoto, William R. Cadd Operator/Draftsman Islas, Michelle L. Office Manager Johnson, James E. Casual - Technician Manning, Brian A. Estimator Mason, Robert A. Casual - Laborer Massoud, Gholamreza Staff Engineer Mayekawa, Glen S. Manager of Safety McMullen, Pat Marketing, Manager Meyer, Robert Superintendent Mitchell, Steven Construction Foreman Munoz, Laura Contract - Word Processing Nusenow, Matthew J. Engineering Manager Ogg, Randy T. Project Manager Porter, Jeffrey S. Casual - Environmental Technician Roberts, Eli Casual, Equipment Operator Salcedo, Victor Senior Geologist Schmidt, Michael Project Manager
-23- 44 Smith, Kevin N. Facilities Manager Smith, Mary Pat Technical Editor Sones, Paul R. Senior Project Manager Strader, Tom Superintendent Todd, Linda Field Secretary Wilson, Lawrence T. Casual - Laborer Wing, Chris J. Casual - Equipment Operator
In addition to the above named employees, CAPE requests access to Tim Cooper, Site Superintendent and Charles Cullina, Site Superintendent and possibly other CET staff needed to complete short term projects on a subcontract basis. CAPE will also attempt to provide subcontract employee support to CET on an as needed--as available basis. -24- 45 EXHIBIT E (NON-COMPETITION AGREEMENT) See attached -25- 46 NON-COMPETITION AGREEMENT BETWEEN CET ENVIRONMENTAL SERVICES, INC. AND CAPE ENVIRONMENTAL MANAGEMENT, INC. DATED AS OF _________ ____, 2000 47 NON-COMPETITION AGREEMENT This Non-Competition Agreement (this "Agreement") is effective as of this ____ day of _________, 2000, by and between Cape Environmental Management, Inc., a Georgia corporation ("Buyer"), and CET Environmental Services, Inc., a California corporation ("Seller"). RECITALS WHEREAS, Seller is engaged in the business of environmental remediation (the "Business"); WHEREAS, Seller has agreed to transfer to Buyer and Buyer has agreed to acquire from Seller, as permitted by and in accordance with applicable law, certain public and private Environmental remediation contracts entered into by Seller in the ordinary course of Seller's Business; and WHEREAS, pursuant to the Asset Purchase Agreement between Buyer and Seller dated March _____, 2000 (the "Asset Purchase Agreement"), Seller has agreed to sell and Buyer has agreed to purchase all those assets of Seller involved in the performance of such contracts, and to hire those employees of Seller who are involved in the performance of such contracts, on the terms and subject to the conditions of the Asset Purchase Agreement; and WHEREAS, Buyer requires assurances that Seller will not re-enter the market and compete with Buyer for the Business Seller sold to Buyer; NOW, THEREFORE, in consideration of the mutual agreements and covenants in this Agreement, the sufficiency of which the Seller and Buyer hereby acknowledge, Buyer and Seller agree as follows: TERMS AND CONDITIONS 1. Definition of Terms. Each capitalized term used in this Agreement shall, unless otherwise defined, have the meaning provided in the Asset Purchase Agreement. In addition, the capitalized terms set forth below shall have the meanings assigned such terms as follows: (a) "Department of Defense" shall mean the United States Department of Defense, its successors and assigns. (b) "Scheduled Customers" shall mean the customers listed on Schedule 1 attached hereto and made a part hereof. (c) "Southern California" shall mean that portion of the State of California that is situated south of the latitude that passes through the northernmost point on the north boundary of the city of San Luis Obispo. -2- 48 (d) "Subordinate Unit" shall mean any subdivision, department, district, agency or other component organization within or under the regulatory authority of the Department of Defense, their successors and assigns. (e) "Unscheduled Customers" shall mean all customers that are not Scheduled Customers, the Department of Defense or any Subordinate Unit. 2. Term. Unless otherwise specified in this Agreement, this Agreement shall commence at the Closing (as defined in the Asset Purchase Agreement) and continue through a term of four (4) years (the "Term"); 3. Agreement Not to Compete. Seller will not, directly or indirectly, engage or invest in, own, manage, operate, finance, control, or participate in the ownership, management, operation, financing, or control of, be associated with, or in any manner connected with, lend Seller's name or any similar name to, lend Seller's credit to, or render services or advice to, any business whose environmental remediation services, products or activities are similar to those provided by Buyer on the date of Closing: (a) anywhere in the United States in the case of any such business that competes for contracts or work from the Department of Defense or any Subordinate Unit, except pursuant to an unsolicited contract with a third party that is under contract with the Department of Defense or any Subordinate Unit, provided that before entering into any such contract Seller shall first advise Buyer of the proposed contract and shall obtain Buyer's prior written consent to enter into such contract. Buyer agrees not to unreasonably withhold such consent unless Buyer has decided to pursue the work covered by such contract or to pursue other work with the Department of Defense or Subordinate Unit that is party to such contract; (b) anywhere in the State of California in the case of any business that competes for contracts or work from the Scheduled Customers; and (c) anywhere in Southern California (but only for a period of twelve months after the Closing) in the case of any business that competes for contracts or work from Unscheduled Customers; provided, however, that Seller may purchase or otherwise acquire up to (but not more than) one percent of any class of securities of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934. For purposes of the foregoing, Seller and Buyer agree that any business will be deemed competitive with Buyer's business if its services, products or activities are the same as, or similar to, those services, products or activities as were furnished by Seller pursuant to the Assumed Contracts (as defined in the Asset Purchase Agreement). Notwithstanding the foregoing, Seller may continue to perform its obligations under the following Contracts: -3- 49 (i) Contracts with the U.S. Environmental Protection Agency; (ii) Contracts with Remediation Financial, Inc.; (iii) Contracts with Signal Hill Petroleum; and (iv) Other Contracts in existence as of the Closing Date which are not Assumed Contracts In addition, Seller may enter into renewals or extensions of the Contracts listed in subsections (i), (ii), and (iii) above, or enter into new agreements to provide any services to the persons listed in subsections (i), (ii), and (iii) above, without being in violation of this covenant. Seller agrees that this covenant is reasonable with respect to its duration, geographical area, and scope. 4. Mutual Nonsolicitation. For one (1) year following the Closing, without the other party's prior written approval, each party shall not: (i) employ or attempt to employ any person who is currently employed by the other party or any of its affiliates or otherwise, directly or indirectly, interfere with or disrupt any employment relationship (contractual or other) of the other party or any of its affiliates, (ii) request, advise, or induce any present or potential customer, supplier, or other person having a business relationship with the other party or any of its affiliates to cancel, curtail, or otherwise change such business relationship, or (iii) criticize or disparage in any manner or by any means (whether written or oral, express or implied) the business of the other party, or any of its affiliates, or any aspect of the management, policies, operations, practices, decisions, personnel, products, or business of any of them. 5. Remedies. The parties acknowledge that the provisions in Sections 3 and 4 are a substantial inducement to the parties in entering into the Asset Purchase Agreement and consummating the transactions contemplated in this Agreement. The parties also acknowledge and agree that this Section 5 is reasonable and necessary to ensure that the parties receive the expected benefits of acquiring the Business, and that violation of Sections 3 and 4 will irreparably and immediately harm the parties to such an extent that monetary damages alone would be an inadequate remedy. Accordingly, the parties agree that each party shall, in addition to and not in lieu of its other rights and remedies, be entitled to: (a) injunctive relief to prevent a breach and compel specific performance of this Agreement, and (b) an extension of the Term of this Agreement for the period of time equal to the length of the breach. If any provision or application of this Section 5 is held unlawful or unenforceable in any respect, this Section 5 shall be construed in a manner that renders it lawful and enforceable to the fullest extent possible. 6. Representations and Additional Agreements. The parties hereby represent and agree as follows: (a) Each party is an entity in good standing in its jurisdiction of formation and has full power and authority to enter into this Agreement and is able to perform its obligations under this Agreement; -4- 50 (b) Each party has fully executed and delivered this Agreement, and the provisions of this Agreement are valid and binding obligations and agreements, enforceable against them in accordance with their terms; (c) Each party has sought and received independent advice from counsel of its own selection in connection with this Agreement and have not relied to any extent on any member, manager, officer, director, or shareholder of, or counsel to the other party in deciding to enter into this Agreement; and (d) Each party is relying on the other party's execution and delivery of this Agreement as a basis for entering into the Asset Purchase Agreement. 7. Indemnification. Each party ("Indemnifying Party") agrees to indemnify the other party ("Indemnified Party") and hold the Indemnified Party's members, managers, officers, directors, shareholders, and assignees harmless from and against any and all liabilities, damages, losses, costs, and expenses (including, but not limited to, reasonable fees of attorneys and other professionals actually incurred) arising out of or resulting from any breach or non-performance by the Indemnifying Party of any representation, agreement, or covenant made in this Agreement. 8. Entire Agreement. This Agreement and the Asset Purchase Agreement contain the entire understanding and agreement between the parties and supersede all prior negotiations, understandings, and agreements between the parties. 9. Assignments. No party to the Agreement shall assign the Agreement without the written consent of the other party; provided, however, that Buyer may, without obtaining Seller's consent, assign this Agreement and all Buyer's rights hereunder to any purchaser of all or substantially all of Buyer's assets or to any successor of Buyer by merger, consolidation or other acquisitive reorganization. 10. Severance. If any term of this Agreement shall be invalid or unenforceable, the remainder of this Agreement and any other application of such terms shall not be affected. 11. Successors. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties. 12. Headings. The headings of this Agreement are for purposes of reference only and shall not limit or define the meaning. 13. Counterparts. This Agreement may be executed in any number of counterparts, each of which is an original, but all of which shall constitute one instrument. 14. Amendments and Waivers. This Agreement may be amended, waived, or terminated only by an instrument in writing signed by all the parties. 15. Governing Law. This Agreement shall be interpreted and enforced pursuant to the laws of the State of Georgia. -5- 51 16. Notices. All notices and other communications provided for in this Agreement shall be in writing and delivered personally, by overnight delivery, by facsimile, or sent by registered or certified mail, postage prepaid, as follows: (a) To the Seller: President CET Environmental Services, Inc. 7032 South Revere Parkway Englewood, Colorado 80112 with a copy to: William J. Campbell, Esq. Faegre & Benson LLP 2500 Republic Plaza 370 17th Street Denver, Colorado 80202 (b) To the Buyer: President Cape Environmental Management, Inc. 2302 Parklake Drive NE, Suite 200 Atlanta, Georgia 30345-2907 With a copy to: Charles E. Roberts, Esq. McGuire Woods Battle & Boothe LLP Suite 2200, Marquis Two Tower 285 Peachtree Center Avenue, NE Atlanta, Georgia 30303-1234 17. Jurisdiction: Service of Process. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against any of the parties in the courts of the State of Georgia, County of DeKalb, or, if it has or can acquire jurisdiction, in the United States District Court for the Northern District of Georgia, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world. IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date first above written. BUYER: CAPE ENVIRONMENTAL MANAGEMENT, INC. By: ------------------------------- Print Name: ----------------------- Title: ---------------------------- -6- 52 SELLER: CET ENVIRONMENTAL SERVICES, INC. By: ------------------------------- Print Name: ----------------------- Title: ---------------------------- -7- 53 SCHEDULE 1 SCHEDULED CUSTOMERS 1. Coastal Corp./Pacific Refinery Co./Gaffey Street Venture, LLC 2. Georgia Pacific 3. City of Coachella 4. Solutia Inc. 5. Landbank 6. Overton, Moore & Assoc. 7. Mar General 8. BNSF Railway 9. Ameripride Services, Inc. 10. Fletcher 11. Golden West Refining Co. 12. Cole 13. CH2M Hill 14. Mar General Contracting 15. Golden West Refining Co. 16. Lasmo Oil & Gas 17. KDI-OC, LLC (Koll) 18. GATX 19. Paramount Petroleum
-8- 54 EXHIBIT F (BILL OF SALE) See attached -26- 55 BILL OF SALE This BILL OF SALE is entered into as of March __, 2000, by and between Cape Environmental Management, Inc., a Georgia corporation (the "Buyer") and CET Environmental Services, Inc., a California Corporation ("Seller"). 1. DEFINED TERMS. All capitalized terms used in this Bill of Sale shall have the same meanings given to the terms in the Asset Purchase Agreement, dated March ____, 2000 (the "Agreement"), by and between Buyer and Seller unless otherwise expressly defined in this Bill of Sale. 2. ASSET PURCHASE AGREEMENT. This Bill of Sale is made pursuant to the Agreement and is subject to every agreement, representation, warranty, indemnification, covenant, and provision contained in the Agreement. 3. TRANSFER OF ASSETS AND WARRANTY OF TITLE. For good and valuable consideration in hand paid to Seller as set forth in the Agreement, the receipt and sufficiency of which are hereby acknowledged, Seller hereby sells, conveys, transfers, and assigns to Buyer all of Seller's right, title, and interest in the Assets. Seller hereby warrants and confirms to Buyer that: (a) the Equipment is physically located at [LOCATION OF EQUIPMENT] on the date hereof; (b) Seller has the right, power and authority to convey all of the Assets; and (c) that the Assets conveyed herein are free and clear of all liens, claims, security interests and Encumbrances. Seller covenants and binds its successors and assigns to warrant and defend the title to the Assets to Buyer, its successors and assigns, forever, against the lawful claims of all persons. 4. SELLER'S DISCLAIMER. Seller sells, conveys, transfers and assigns the Equipment to Buyer "AS IS, WHERE IS, AND WITH ALL FAULTS." Seller specifically disclaims and excludes any promises or warranties, express or implied, regarding the condition, quality, or operating characteristics of the Equipment, or as to any prior use of the Equipment, including any implied warranty of merchantability or fitness for a particular purpose. Notwithstanding Seller's disclaimer of warranties, Seller does hereby sell, convey, transfer and assign to Buyer any and all manufacturer's warranties and other express warranties relating to the Equipment. Buyer acknowledges that Seller is not a dealer in goods such as the Equipment, that Seller does not have, or hold itself out as having, any knowledge or skill peculiar to the Equipment involved in this transaction, and that the Buyer has determined to purchase the Equipment upon the basis of the Buyer's own judgment, relying upon such inspection of the Equipment as the Buyer may have seen fit fo make prior to the issuance of this Bill of Sale. Buyer assumes all risks as to the condition, quality and operating characteristics of the Equipment and hereby waives, to the fullest extent permitted under applicable law, any and all rights, claims, and causes of action that Buyer may have against the Seller relating to condition, quality or operating characteristics of the Equipment under or based upon any federal, state, local, or foreign law, ordinance, rule, or regulation or any principle of equity. 56 5. FURTHER ASSURANCES. The parties agree to cooperate by performing any further action the other party may reasonably request to complete the sale, conveyance, transfer, and assignment of the Assets to Buyer. 6. NO AMENDMENT; CONFLICT WITH PURCHASE AGREEMENT. This Bill of Sale is intended to implement the provisions of the Agreement and shall not be construed to enhance, extend or limit the rights or obligations of the parties thereunder. To the extent any provision of this Bill of Sale is inconsistent with the Agreement, the provisions of the Agreement shall control. 7. SUCCESSORS AND ASSIGNS. This Bill of Sale shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. 8. GOVERNING LAW. This Bill of Sale shall be governed by and construed in accordance with the laws of the State of Georgia applicable to agreements made and to be performed entirely within such state, without regard to the conflicts of law principles of the state. 9. AUTHORIZATION TO EXECUTE BILL OF SALE. The person executing this Bill of Sale on behalf of Seller warrants and represents that he is duly authorized to do so on behalf of Seller. The person executing this Bill of Sale on behalf of Buyer warrants and represents that he is duly authorized to do so on behalf of Buyer. 10. COUNTERPARTS. This Bill of Sale may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed and delivered this Bill of Sale effective as of the above date.
SELLER: BUYER: CET ENVIRONMENTAL SERVICES, INC. CAPE ENVIRONMENTAL MANAGEMENT, INC. By: By: ---------------------------- ------------------------------ Print Name: Print Name: -------------------- ---------------------- Title: Title: ------------------------ ---------------------------
EX-10.17 5 LEASE AGREEMENT 1 COVER SHEET FOR LEASE AGREEMENT OWNER: SKY HARBOR ASSOCIATES LIMITED PARTNERSHIP TENANT: CET ENVIRONMENTAL SERVICES, INC. 2 TABLE OF CONTENTS BASIC LEASE PROVISIONS GENERAL LEASE PROVISIONS: 1. Incorporation of Attachments; Definitions 2. Lease Grant 3. Term 4. Payment of Rent 5. Base Rent and Percentage Rent 6. Additional Rent; Escalation 7. Late Charge and Interest on Overdue Rent 8. Security Deposit 9. Use of Premises; Merchant's Association; Covenant's 10. Use of Common Areas; Parking 11. Rules and Regulations 12. Building Services and Utilities 13. Owner's Construction of Premises 14. Tenant's Alterations 15. Repairs and Maintenance 16. Signs and Advertising 17. Mechanics' Liens 18. Indemnification and Exculpation 19. Tenant's Liability insurance; Subrogation Rights 20. Subordination 21. Estoppel Certificates 22. Assignment and Subletting by Tenant 23. Holding Over 24. Acceptance of Surrender of Premises 25. Condemnation 26. Fire and Other Casualty 27. Events of Default 28. Owner's Remedies 29. Owner's Lien 30. Certain Rights Reserved by Owner 31. Intentionally Omitted 32. Brokers 33. Quiet Enjoyment 34. Notices 35. Force Majeure 36. Entire Agreement; Amendments; Waivers; Binding Effect 37. Severability 38. Joint and Several Liability of Tenant 39. Owner's Liability Limitation 40. Arbitration 41. Waiver of Trial by Jury 42. Applicable Law 43. Miscellaneous 44. Special Provisions 45. Acts to be Performed by Tenant Prior to Tenant's Construction 46. Personal Property Taxes 47. Transfer of Interest 48. Special Provisions RIDERS I Additional Rent; Escalation II Building Services and Utilities ADDENDUM NO. 1 TO LEASE AGREEMENT 1 3 TABLE OF CONTENTS EXHIBITS A-1 Description of Land A-2 Description of Building A-3 Proposed Floor Plan B Rules and Regulations C Work Letter D Lease Commencement Date Memorandum 2 4 BASIC LEASE PROVISIONS LEASE DATE: March 1, 1999 TENANT: Name: CET Environmental Services, Inc. Legal Form: Corporation Legal Situs: (State of Residence, Incorporation or Formation): California Address: 7032 S. Revere Pkwy., Ste. 300 Authorized Representative: Stephen H. Davis Telephone: 303-708-1360 x215 OWNER: Name: Sky Harbor Associates Limited Partnership Legal Form: Limited Partnership Legal Situs: Michigan Address: 74 E. Long Lake Road, Bloomfield Hills, MI 48304-2379 Authorized Representative: Cytryn/Tischler Properties, Inc. Telephone: (303) 777-2500 LAND: The tract of land located in Arapahoe County and described in Exhibit A-1. BUILDING: The building commonly know as 7032 S. Revere Parkway Englewood, Colorado situated on the Land and described in or depicted on Exhibit A-1. PREMISES: Suite 300, being the Building shown on the Floor Plan, Exhibit A-3 STATE: Colorado TERM: 5 years 0 months (subject to adjustment pursuant to Paragraph 3). ENDING DATE OF TERM (pursuant to paragraph 3): April 30, 2004 Initials: Owner --------- Tenant --------- ESTIMATED COMMENCEMENT DATE: May 1, 1999 ACTUAL COMMENCEMENT DATE: (pursuant to paragraph 3): --------------- Initials: Owner --------- Tenant --------- BASE RENT: $ See Addendum No. 1 per year, payable in monthly installments of $ See Addendum No. 1 per month OVERDUE INTEREST RATE: Ten (10)% per annum (but never to exceed the maximum rate of interest permitted by applicable law to be charged Tenant for the use, forbearance or detention of money). LATE CHARGE: Five Percent (5%) SECURITY DEPOSIT: $8,268.56 FIRST OPERATING COST YEAR: Means the twelve (12) month period commencing on the first day of January, 1999. INITIAL MONTHLY ESTIMATED ADDITIONAL RENT: $3.75 per square foot per year = $3,758.44 per month for the Premises. TENANT'S PROJECT PROPORTIONATE SHARE: The percentage which expresses the ratio between the number of square feet leased and the rentable square feet within the project (initially approximately 108,021) which for the purpose of the Lease shall initially be conclusively deemed to be 11.13%. This percentage shall be the initial Tenant's Project Proportionate Share. If and at such times as 1 5 the Project is expanded or diminished, Owner shall equitably adjust Tenant's Project Proportionate Share to reflect the increased or decreased rentable square feet within the Project using the formula set forth above. RENTABLE AREA: Project 108,021 square feet Premises 12,027 square feet The rentable area and the usable area of the Premises may be different, but have been stipulated and agreed to by the parties, and the Rent and Tenant's Allocated Share shall not be changed even if it is determined that the Premises contains either a larger or a smaller area than indicated. PERMITTED USE: General office & storage of files and materials/equipment BROKER: Frederick Ross Company & Re/max Commercial Services, Inc. 2 6 GENERAL LEASE PROVISIONS This LEASE AGREEMENT ("Lease") is entered into as of the Lease Date between Owner and Tenant. In consideration of the mutual covenants herein set forth, and intending to be legally bound hereby, Owner and Tenant agree as follows: 1. Incorporation of Attachments: Definitions. This Lease consists of the Cover Sheet, Table of Contents, Basic Lease Provisions, General Lease Provisions, Riders, Addendums and Exhibits all of which are attached and incorporated by reference for all purposes. The terms defined in the Basic Lease Provisions, General Lease Provisions, Riders, Addendum and Exhibits shall be deemed to have the meanings ascribed, wherever used herein. The Cover Sheet, Table of Contents and headings of paragraphs, Riders, Addendum and Exhibits are for convenience only and shall not be deemed to enlarge or diminish the meanings of the provisions of this Lease. 2. Lease Grant. Owner leases to Tenant and Tenant leases from Owner the Premises for the Term and upon the provisions and subject to the conditions set forth herein. 3. Term. (a) The Commencement Date of the Term shall be the earlier of (i) the date on which Tenant, with Owner's approval, takes possession of the Premises for the Permitted Use, or (ii) on the thirtieth (30th) day following the date on which Owner notifies Tenant that the Premises will be available for occupancy, provided that Owner's work on the Premises is substantially completed as specified in paragraph 13 by such date, and if not then substantially completed, (iii) five (5) days following the date of substantial completion of such work. Upon notification as provided in (ii) above, Owner and Tenant shall schedule a preoccupancy inspection of the Premises at which time all mechanical systems will be demonstrated to Tenant, a punchlist of outstanding items, if any, shall be completed by Owner for conformance to construction plans, and a letter of acceptance of the Premises shall be executed by Tenant, on Owner's usual form. If the Commencement Date is other than the first day of a calendar month, the Term shall be deemed extended by the period from (including) the Commencement Date to the end of such month. (b) Notwithstanding said commencement date, if for any reason Owner cannot deliver possession of the Premises to Tenant on said date, Owner shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or the obligations of Tenant hereunder. However, in such case Tenant shall not be obligated to pay rent until possession of the Premises is tendered to Tenant. Upon Owner's request, the parties agree to execute in writing an Addendum to certify the Commencement Date and expiration date hereof, but this Lease shall not be affected in any manner if either party fails or refuses to execute such Addendum. 4. Payment of Rent. The term "Rent" means Base Rent, Additional Rent and any charges, fees and other amounts due from Tenant to Owner hereunder, Tenant agrees to pay all Rent to Owner, in lawful currency of the United States of America, at Owner's Address or at such other location as Owner may specify by notice to Tenant, without notice or demand (except as may be expressly provided for herein with regard to a particular portion of Rent) and without setoff or deduction. Tenant's obligation to pay any and all Rent owing by Tenant to Owner under this Lease shall survive any expiration or termination of this Lease. 5. Base Rent. Base Rent is payable in monthly installments in advance on the first day of each calendar month during the Term, except that the monthly installment of Base Rent due for the first full calendar month of the Term shall be paid on the Lease Date. If the Commencement Date is other than the first day of a calendar month, Tenant shall pay on the Commencement Date a pro rata portion of the monthly installment of Base Rent for the month during which the Commencement Date falls, such pro rata portion being equal to one-thirtieth of the monthly installment times the number of days from (including) the commencement Date to the end of such month. 6. Additional Rent; Escalation. Additional Rent shall be calculated and is payable as provided in Rider I. 7. Late Charge and Interest on Overdue Rent. If any installment of Base Rent or Additional Rent is not received within ten (10) days after the due date thereof (without in any way implying Owner's consent to such late payment), Tenant agrees to pay Owner the Late Charge, to the extent permitted by law, in addition to said installment of Base Rent or Additional Rent, it being understood that the Late Charge shall constitute liquidated damages and such liquidated damages shall be solely for the purpose of reimbursing Owner for the additional costs and expenses which Owner presently expects to incur in connection with the handling and processing of late payments of Base Rent and/or Additional Rent. Owner and Tenant agree that in the event of any such late payment by Tenant, the damages resulting to Owner will be difficult to ascertain 1 7 precisely, and that the Late Charges constitutes a reasonable and good faith estimate by the parties of the extent of such damages. In addition to the Late Charge, Tenant agrees to pay Owner interest, at the Overdue Interest Rate, on any installment of Base Rent or Additional Rent not paid within thirty (30) days after the due date thereof, which interest shall accrue from the due date to the date of payment. Notwithstanding the foregoing, the Late Charge shall not apply to any sum which may have been advanced by Owner to or for the benefit of Tenant pursuant to any provision of this Lease, it being understood that such sum shall bear interest, which Tenant agrees to pay Owner, at the Interest Rate specified in such provision. 8. Security Deposit. The Security Deposit and the first month's rent shall be delivered by Tenant to Owner on the Lease Execution Date, and shall be held by Owner, without liability for interest, as security for the performance by Tenant of Tenant's covenants and obligations under this Lease, it being expressly understood that the Security Deposit shall not be considered an advance payment of Rent or a measure of Owner's damages in case of default by Tenant. Upon the occurrence of any Event of Default, Owner, from time to time and without prejudice to any other remedy, may use the Security Deposit to the extent necessary to make good any arrearages of Rent and any other damage, injury, expense or liability caused to Owner by such Event of Default. Following any such application of the Security Deposit, Tenant shall pay Owner on demand the amount so applied in order to restore the Security Deposit to its original amount. If Tenant is not then in default hereunder, any remaining balance of the Security Deposit shall be returned by Owner to Tenant within a reasonable period of time after the termination of this Lease, and in any event within the time period prescribed by State law, if any. If Owner transfers its interest in the Premises during the Term, Owner may assign the Security Deposit (or so much thereof as has not been used and not restored by Tenant) to the transferee and thereafter Owner shall have no further liability to Tenant for the return of the Security Deposit. 9. Use of Premises. Tenant shall use the Premises only for the Permitted Use. Tenant will not occupy or use the Premises, or permit any portion of the Premises to be occupied or used, for any business or purpose other than the Permitted Use or for any use or purpose which is unlawful in part or in whole or deemed to be disreputable in any manner or extra hazardous on account of fire or other casualty, nor permit anything to be done which will in any way increase the rate of insurance on the Building or contents; and in the event that, by reason of acts of Tenant or Tenant's servants, employees, agents, contractors, licensees or invitees ("Tenant Parties"), there shall be any increase in rate of insurance on the Building or contents, then such acts shall be deemed to be an Event of Default hereunder and Tenant hereby agrees to pay to Owner the amount of such increase on demand. Tenant will conduct its business and control Tenant Parties in such a manner as not to create any nuisance, nor interfere with, annoy or disturb other tenants or Owner in the ownership or management of the Land or Building. Tenant will maintain the Premises in a clean, healthful and safe condition and will comply with all laws, ordinances, orders, rules and regulations (of federal, state, municipal and other agencies or bodies having any jurisdiction thereof), and any restrictive covenants and condominium association by-laws, rules and regulations of which Tenant has been advised, with reference to the use, condition or occupancy of the Premises. 10. Use of Common Areas: Parking. (a) Tenant shall have the right, nonexclusive and in common with others, to use (i) any common hallways, entrances, lobbies, elevators, stairways, common restroom facilities and similar common areas of the Building for the purposes for which the same were designed and (ii) to use the exterior paved driveways and walkways of the Land for vehicular and pedestrian access to the Building. Tenant shall also have the right, non-exclusive and in common with other tenants of the Building and Owner, to use the designated free parking areas of the Land, if any, for the parking of automobiles and other vehicles of Tenant and its employees and business visitors; incident to Tenant's Permitted Use of the Premises; provided that Owner shall have the right to restrict or limit Tenant's utilization of such parking areas in the event the same become overburdened and in such case to allocate on a proportionate basis or assign parking spaces among Tenant and the other tenants of the Building. Owner shall have the right to establish other reasonable regulations, applicable to all tenants, governing the use of or access to any interior or exterior common areas, and such regulations; when communicated by written notification from Owner to Tenant, shall be deemed incorporated by reference into Exhibit B hereof. (b) Tenant covenants and agrees that all loading and unloading of freight, merchandise, supplies, construction materials, trade fixtures and other goods delivered to or from the Premises shall be done only in the loading dock area of the Premises or the Building, as applicable. Under no circumstances shall Tenant allow freight, merchandise, supplies, construction materials, trade fixtures or other goods delivered to or from the Premises to be stored on, accumulate on, or obstruct the entrances of the Building or the loading dock area, roads, trash bay, sidewalks, driveways or parking areas within the Project. A violation or violations of this sub-paragraph shall constitute a material breach of this lease. (c) Tenant shall not perform or permit work to be done on the loading dock, roads, sidewalks, driveways, parking areas, landscaped areas or any other exterior areas within the Project. This 2 8 includes, but is not limited to, assembly, construction, mechanical work, painting, drying, layout, cleaning or repair of goods or materials. 11. Rules and Regulations. Tenant will comply fully with all requirements of the Rules and Regulations set forth in Exhibit B. Owner shall at all times have the right to change the Rules and Regulations or to promulgate other Rules and Regulations in such manner as Owner may deem advisable for safety, care, or cleanliness of the Building, Land and Premises, and for preservation of good order therein, all of which additional Rules and Regulations, changes and amendments will be forwarded to Tenant in writing and shall be carried out and observed by Tenant. Tenant shall further be responsible for compliance with such Rules and Regulations by Tenant Parties. Nothing in this Lease shall be construed to impose upon Owner any duty or obligation to enforce the rules and Regulations or terms, covenants or conditions in any other lease, against any other tenant, and Owner shall not be liable to Tenant for violation of the same by any other tenant, its tenant parties, or other visitors. 12. Building Services and Utilities. Building services and utilities shall be provided by Owner as provided in Rider II. 13. Owner's Construction of Premises. (a) Before the Commencement Date, Owner will substantially complete the construction of the Building (if not substantially completed as of the Lease Date) to the stage that the Building is operable for Tenant's purposes, which shall be defined as occurring when the public entrances of the Building, including ground floor lobbies and the public hallways of the floor(s) containing the Premises (or portions of said lobbies and hallways necessary to provide reasonable and safe access to the Premises) are substantially completed and elevators necessary (if any) to provide service to the Premises, the heating and air conditioning system (as required for the season and then prevailing climate) and all other mechanical systems required for service to the Premises are in regular operation. (b) The Premises shall be deemed to be substantially completed when all work specified to be done in Exhibit C ("Tenant Finish") has been substantially completed, except for (i) minor items of finishing and construction of a nature which are not necessary to make the Premises reasonably tenantable for the Permitted Use, and (ii) items not then completed because of delay by Tenant in furnishing any drawings, plans or approvals (collectively, "Plans") required by Exhibit C or because of approved requests made by Tenant subsequent to delivery of Plans, for changes or additions therein. (c) Intentionally Omitted (d) Owner shall have the Premises substantially completed by the Estimated Commencement Date, except for delays due to Force Majeure or Tenant's failure to timely furnish the Plans, any of which shall extend the Estimated Commencement Date for a period equal to the total of the duration of each such delay. If the Premises is not substantially completed within three (3) months following the Estimated Commencement Date, as the same may be extended in accordance herewith, Tenant, as Tenant's sole right thereby arising, may terminate this Lease by notice to Owner given thereafter, provided that the Term shall not have commenced within thirty (30) days after the giving of such notice by Tenant. This Lease shall terminate in such case upon expiration of thirty (30) days after Owner's receipt of such notice without substantial completion having occurred, whereupon Owner shall return all rent and the Security Deposit paid by Tenant to Owner in advance, and all further obligations of the parties hereunder shall end. It is understood that in the event of such termination by Tenant, Owner shall have no responsibility to reimburse Tenant for any cost or expense which Tenant may have directly or indirectly incurred with respect to this Lease or the projected occupancy of the Premises, whether arranging for, or termination of arrangements for, other space, or any Alterations to the Premises or otherwise. 14. Tenant's Alterations. (a) Tenant will not make or allow to be made any alterations, additions or improvements ("Alterations") in or to the Premises without the prior written consent of Owner. Alterations to the Premises shall be done by Owner or by contractors approved in writing by Owner), at Tenant's sole cost and expense. If Owner approves Tenant's proposed Alterations and agrees to permit Tenant's contractor to do the work, Tenant's contractor must first furnish to Owner insurance coverage against such risks and in such amounts as Owner may require, including but not limited to Workman's Compensation Insurance (as required under the Workman's Compensation Act of Colorado), issued by such companies as Owner may approve. All Alterations permitted by Owner must conform to all rules and regulations established from time to time by the Underwriters' Association (or comparable organization) of the local area in which the Land and Building are located, and conform to all requirements of all governmental entities having jurisdiction. Tenant's contractor shall also furnish all applicable building and occupancy permits required by law. Owner shall have the right to have Tenant's contractor's work inspected by architects and engineers, the cost of which shall be paid by 3 9 Tenant to Owner on demand, with interest thereon at the Reimbursement Interest Rate from the due date until paid. At any time Tenant either desires to, or is required to make repairs or Alterations in accordance with this Lease, Owner may, in addition to its other options, require Tenant at Tenant's sole cost and expense, to obtain and provide to Owner a lien and completion bond (or such other applicable bond as reasonably determined by Owner) in an amount equal to one and one-half (1.5) times the estimated cost of such improvements to insure Owner against risk and liability, including but not limited to liability for mechanics and materialman's lien, and to insure the completion of the work. (b) All Alterations (whether temporary or permanent in character and whether made with or without Owner's consent) made in or upon the Premises, either by Owner or Tenant, shall be Owner's property upon installation and shall remain on the Premises without compensation to Tenant unless Owner shall, by written notice, elect to have the alterations so made be removed upon expiration of the Term or termination of this Lease. Owner may give this notice of election to Tenant at any time during the Term of the Lease, and for a period of three (3) days after the expiration of the Term or the termination of this Lease. If Owner shall make such election that Alterations so made shall be removed, then Tenant agrees to cause same to be removed and to restore the Premises to their former condition at Tenant's sole cost and expense, and should Tenant fail to remove the same and restore the Premises, then Owner may cause same to be removed and the Premises restored at Tenant's expense, and Tenant agrees to reimburse Owner on demand for the cost of such removal and restoration, together with any and all damages which Owner may suffer and sustain by reason of the failure of Tenant to remove the same with interest thereon at the Reimbursement Interest Rate from the due date until paid. (c) At the Ending Date of Term or other termination of this Lease, all furniture, movable trade fixtures and personal property of Tenant may be removed by Tenant if Tenant so elects and no Event of Default then exists, and shall be so removed if required by Owner, or if not so removed shall, at the option of Owner, become the property of Owner. (d) All Alterations, installations, removals and restoration shall be accomplished in a good and workmanlike manner so as not to damage the Premises or the Building, and in such manner as not to disturb other tenants in their use and occupancy of the Building. 15. Repairs and Maintenance. (a) Owner shall be responsible for repair and maintenance of the foundation, floors (beneath the carpet or other floor covering), roof, the exterior walls (excluding all glass windows, window frames and doors), and the electrical service to the wall box (before any Tenant finish), the plumbing to the wall stubs and common areas. Owner shall also be responsible for the preventative maintenance contract for the roof mounted air conditioning and heating apparatus. Tenant shall pay for these items as provided for in Rider I. (b) Tenant shall use, operate and maintain the Premises and its systems, including all fixtures and equipment installed by Tenant, in such manner as to keep the same in good order and condition, making all repairs and replacements necessary to maintain such good order and condition all at Tenant's expense, including but not limited to, plumbing from the wall stubs, electrical service from the wall box, sewer, water and heating pipes from the exterior wall, and all glass. Tenant shall be responsible for the maintenance (other than preventative maintenance) and repair and/or replacement of any heating, ventilating, air conditioning, plumbing, electrical or other systems and fixtures installed solely to service the Premises, whether installed or paid for by Owner or Tenant. The performance by Tenant of its obligations to maintain the Premises shall be conducted only by contractors approved in writing by Owner, it being understood that Tenant shall procure and maintain and shall cause contractors engaged by or on behalf of Tenant to procure and maintain insurance coverage against such risks and in such amounts as Owner may require, including but not limited to Workmen's Compensation Insurance (as required under the Workmen's Compensation Act of Colorado), issued by such companies as Owner may approve, in connection with such maintenance. If Tenant fails to make any repair within fifteen (15) days after the occurrence of the damage necessitating same, or fails to cause other maintenance to be performed within fifteen (15) days after notice from Owner of the need therefor, Owner at its option may make such repair, or cause such other maintenance to be performed, and Tenant, shall on demand therefor, pay Owner for the cost thereof, with interest thereon at the Reimbursement Interest Rate from the due date until paid. At the Ending Date of Term or other termination of this Lease, Tenant shall deliver up the Premises including all Alterations (except as otherwise herein provided), in good repair and condition, reasonable wear and tear excepted, and shall deliver to Owner all keys to the Premises. (c) Tenant shall give Owner prompt written notice of any damage to or defects in, the Premises and in the plumbing, electrical, heating, air conditioning and other systems and apparatus located in the Premises. The obligation to repair such damages or defects shall be as stated in this paragraph 15. In no event shall Owner be obligated to repair any damage to the Premises or the Building caused by any act, 4 10 omission or negligence of Tenant or Tenant Parties. Tenant shall reimburse Owner for all costs and expenses of repairing and replacing all damage to the Premises and Building and to fixtures and equipment caused by Tenant or Tenant Parties or as the result of all or any of them moving in or out of Building or by installation or removal of furniture, fixtures or other property. Such costs and expenses shall be paid by Tenant to Owner on demand, with interest thereon at the Reimbursement Interest Rate from the due date until paid. (d) Owner shall not be liable by reason of any injury to or interference with Tenant's business arising from the making of any repairs or alterations in or to the Premises or the Building or to any appurtenances or equipment therein. There shall be no abatement of Rent because of such repairs or alterations, or because of any delay by Owner in making the same. 16. Signs and Advertising. No sign, advertisement or notice shall be inscribed, painted, affixed or otherwise displayed on any part of the outside or the inside of the Building except on the directories and doors of offices, and then only in such place, number, size, color and style as is approved by Owner and provided by Owner at Tenant's cost and expense, if any such sign, advertisement or notice is nevertheless exhibited by Tenant, Owner shall have the right to remove same and Tenant shall be liable for any and all expenses incurred by Owner in said removal, which shall be payable by Tenant to Owner on demand, with interest thereon at the Reimbursement Interest Rate from the due date until paid. Owner shall have the right to prohibit (by injunction or otherwise) any advertisement of Tenant which in Owner's opinion tends to impair the reputation of the Building or its desirability. Upon written notice from Owner, Tenant shall immediately refrain from and discontinue any such advertisement. 17. Mechanic's Liens. (a) Tenant will not suffer or permit any mechanic's, laborer's or materialman's lien to be filed against the Land, Building, or Premises, or any part thereof, by reason of work, labor services or materials supplied or claimed to have been supplied to Tenant; and if any such lien shall at any time be filed, Tenant, within ten (10) days after notice of the filing thereof, shall cause it to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or as otherwise provided by law. If Tenant shall fail to cause such lien to be discharged within the period aforesaid, then in addition to any other right or remedy, Owner may, but shall not be obligated to, discharge it either by paying the amount claimed to be due or by procuring the discharge of such lien by deposit or by bonding or other proceedings. Owner may at its option and without waiving any of its rights set forth in the immediately preceding sentence, permit Tenant to contest validity of any such lien or claim, provided that in such circumstances the Tenant shall at its expense defend itself and Owner against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against the Owner, the Premises or the building, provided further that Owner may at any time require the Tenant to post a bond with an entity satisfactory to Owner in an amount on and one-half (1.5) times the amount of the lien or to deposit with the Court exercising jurisdiction over such claim such amount as either the Court or statute may determine to be sufficient as a release and discharge of the lien. If Tenant shall not immediately make such payment upon the request of Owner, Owner may make said payment in the amount so paid together with interest thereon from the date of payment and all legal costs and charges, including attorney fees incurred by Owner in connection with said payment shall be deemed Additional Rent and shall be payable on the next date on which a base rental installment is due. Any amount so paid by Owner, plus all of Owner's costs and expenses associated therewith, shall be paid by Tenant to Owner on demand, with interest thereon at the Reimbursement Interest Rate from the due date until paid. (b) Nothing in this Lease, nor any approval by Owner of any of Tenant's Alterations or contractors, shall be deemed or construed in any way as constituting consent by Owner for the making of any alterations or additions by Tenant within the meaning of any State law, or constituting a request by Owner, expressed or implied, to any contractor, subcontractor, laborer or materialman for the performance of any labor or the furnishing of any materials for the use or benefit of Owner. 18. Indemnification and Exculpation. (a) Tenant indemnifies and agrees to hold harmless Owner against and from any and all claims arising from Tenant's use of the Premises, or from the conduct of Tenant's business or from any activity, work or things done, permitted or suffered by Tenant in or about the Premises, Land, Building or elsewhere, and Tenant further indemnifies and agrees to hold harmless Owner against and from any and all claims arising from any breach or default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease, or arising from any negligence of Tenant or Tenant Parties, and from and against all costs, attorney's fees, expenses and liabilities incurred in the defense of any such claims or any action or proceeding brought thereon, and if any action or proceeding is brought against Owner by reason of any such claim, Tenant upon notice from Owner shall defend the same at Tenant's expense by counsel satisfactory to Owner. (b) Owner shall not be liable or responsible for any loss or damage to any property or death or injury to any person occasioned by theft, fire, act of God or public enemy, criminal conduct of third 5 11 parties, injunction, riot, strike, insurrection, war, court order, requisition or other act of governmental body or authority, acts of other tenants of the Building, or any other matter beyond the control of Owner, or for any injury or damage or inconvenience which may arise through repair or alteration of any part of the Building, failure to make repairs, or from any cause whatever except Owner's gross negligence or willful wrong. 19. Tenant's Liability Insurance; Subrogation Rights. (a) Tenant shall obtain and keep in effect throughout the Term, an insurance policy or policies, issued by insurance carriers reasonably satisfactory to Owner, providing general public liability insurance against claims for personal injury (including death), property damage, or otherwise, arising out of or in any way connected with the Premises or this Lease, in amounts of not less than a combined single limit of $1,000,000.00 or such higher amounts as Owner shall reasonably require from time to time. Such insurance shall not be subject to cancellation, reduction of coverage or other modification without at least thirty (30) days prior notice to all insureds, and such insurance shall name Owner, first mortgagee and Tenant as insured and if requested by Owner shall also name as additional insureds any lessor and any other mortgagee. (b) Prior to the commencement of the Term, Tenant shall provide Owner with original certificates or duplicate originals of the policy or policies of insurance referred to in subparagraph (a) with evidence that premiums have been paid in full for the respective policy periods. Tenant also shall furnish to Owner throughout the Term, replacement certificates or renewal policies, together with evidence of like premium payment at least ten (10) days prior to the respective expiration dates of the then current policy or policies. (c) Each party hereto hereby waives any cause of action it might have against the other party on account of any loss or damage that is insured against under any insurance policy (to the extent that such loss or damage is recoverable under such insurance policy and only to the extent of and with respect to any loss or damage occurring during such time as the policy or policies of insurance covering said loss shall contain a clause or endorsement to the effect that this waiver shall not adversely affect or impair said insurance or prejudice the right of the insured to recover thereunder) that covers the Building, the Land, the Premises, Owner's or Tenant's fixtures, personal property, leasehold improvements or business and which names Owner or Tenant, as the case may be, as a party insured. Each party hereto agrees that it will request its insurance carrier to endorse all applicable policies waiving the carrier's rights of recovery under subrogation or otherwise against the other party. (d) Tenant shall obtain and keep in effect throughout the Term of the Lease an insurance policy or policies with coverage known as business interruption or business continuation insurance. This policy shall name Owner as an additional insured. Such insurance shall not be subject to cancellation, reduction of coverage or other modification without at least thirty (30) days prior written notice to Owner. (e) Any insurance required by Tenant hereunder shall be in companies rated A+, AAA or better in "Best's Insurance Guide". If in the reasonable opinion of Owner, the amount of liability insurance required hereunder or the coverage under such policy is not adequate, then not more frequently than twice during this Lease and any extension or renewal term of this Lease, if any, Tenant shall reasonably increase said insurance coverage, either in an amount or breadth of insurance as required by Owner provided however that in no event shall the amount of the liability insurance increase by more than fifty per cent (50%) of the amount of the insurance during the preceding term of this Lease. 20. Subordination. (a) This Lease and all rights of Tenant hereunder are subject and subordinate to any first deed of trust, first mortgage or other first instrument of security (a "Mortgage"), and at Owner's option, this Lease and all rights of Tenant hereunder are subject and subordinate to any junior deed of trust, junior mortgage or other junior instrument of security, as well as to any ground Lease or primary Lease (an "Underlying Lease") that now or hereafter covers all or any part of the Building, the Land, or any interest of Owner therein, and to any and all advances made on the security thereof, and to any and all increases, renewals, modifications, consolidations, replacements and extensions of any Mortgage or Underlying Lease. This provision is self-operative and no further instrument shall be required to effect such subordination of this Lease. Tenant shall, however, upon demand at any time or times execute, acknowledge and deliver to Owner or to the holder ("Holder") of any Mortgage, or lessor ("Lessor") in any Underlying Lease, any and all instruments and certificates that in the judgment of Owner, Holder or Lessor may be necessary or desirable to confirm or evidence such subordination. Not in limitation of the generality of the foregoing, Tenant agrees that any Holder shall have the right at any time to subordinate any Mortgage to this Lease on such terms and subject to such conditions as such Holder may deem appropriate in its discretion. Tenant further covenants and agrees upon demand by Holder or Lessor at any time, before or after the institution of any proceedings for foreclosure or sale pursuant to any Mortgage, or termination of any Underlying Lease, to attorn to the purchaser upon such foreclosure or sale or to Lessor upon such termination, and to recognize such purchaser 6 12 or Lessor as Owner under this Lease. The agreement of Tenant to attorn contained in the immediately preceding sentence shall survive any such foreclosure, sale or termination. Tenant, upon demand at any time or times, before or after any such foreclosure, sale or termination, shall execute, acknowledge and deliver to Holder or Lessor any and all instruments that in the judgment of Holder or Lessor may be necessary or desirable to confirm or evidence such attornment and Tenant hereby irrevocably authorizes Holder or Lessor to execute, acknowledge and deliver any such instruments on Tenant's behalf. (b) If Owner shall be or is alleged to be in default of any of its obligations owing to Tenant under this Lease, Tenant agrees to give to Holder and Lessor a copy of any written notice (by registered or certified mail or by delivery service) of any such default which Tenant shall have served upon Owner, provided that prior thereto Tenant has been notified in writing (by way of notice of assignment of rents and/or leases, or otherwise) of the name and addresses of any such Holder and Lessor. Tenant shall not be entitled to exercise any right or remedy as may exist because of any default by Owner without having given such notice to Holder and Lessor; and Tenant further agrees that if Owner shall fail to cure such default; (i) Holder or Lessor shall have an additional thirty (30) days (measured from the later of the date on which the default should have been cured by Owner, or the date of Holder's or Lessor's receipt of such notice from Tenant), provided that if such default could not be cured within such thirty (30) day period and Holder or Lessor is diligently pursuing the remedies necessary to effectuate the cure (including but not limited to foreclosure or termination proceedings, if appropriate) such longer period as may be necessary, within which to cure such default; and (ii) Tenant shall not exercise any right or remedy as may exist or arise because of Owner's default, as may be expressly provided for herein or available to Tenant as a matter of law, if the Holder or Lessor either has cured the default within such thirty (30) day period, or as the case may be, has initiated the cure of same within such thirty (30) day period and is diligently pursuing the cure of same as aforesaid. (c) If any Holder or Lessor, or a successor of either, succeeds to the interest of Owner in the Land or Building, or acquires the right to possession of the Land or Building, such person shall not be (i) liable for any act or omission of Owner under this Lease; (ii) liable for the performance of Owner's covenants hereunder which arise and accrue prior to such person's succeeding to the interest of Owner hereunder or acquiring such right to possession; (iii) subject to any offsets or defenses which Tenant may have at any time against Owner; (iv) bound by any rent which Tenant may have prepaid for more than one month; (v) in the event the unexpired term of this Lease exceeds three years at the time of such succession or acquisition of the right to possession, bound by any amendment or modification hereof relating to the reduction of rent, shortening of term, or effecting a cancellation or surrender hereof and made without the consent of such person; or (vi) liable for the performance of any covenant of Owner under this Lease which is capable of performance only by the original Owner. 21. Estoppel Certificates. Tenant agrees, from time to time as may be requested by Owner, Holder or Lessor, within five (5) days after such request, to execute, acknowledge and deliver to such person(s) as may be specified in the request, a certificate confirming and containing such factual certifications and representations with respect to Tenant and this Lease, as may be deemed appropriate by Owner, Holder or Lessor. Not in limitation of the foregoing, such certificate shall confirm that this Lease is in full force end effect and has not been amended, modified or superseded, that Owner has satisfactorily completed all construction work required by this Lease (subject to completion of punchlist items), that Tenant has accepted the Premises and is then in possession thereof, that Tenant has no defense, offsets or counterclaims hereunder or otherwise against Owner with respect to this Lease or the Premises, that Owner is not in default hereunder, that Tenant has no knowledge of any pledge or assignment of this Lease or rentals hereunder (other than to Holder), and that Rent is accruing under this Lease but has not been paid more than one month in advance (and specifying the date to which Rent has been paid). If any of the foregoing shall not be the case, Tenant shall specify in reasonable detail the extent and nature of the deviation therefrom. 22. Assignment and Subletting by Tenant. (a) Without the prior written consent of Owner, Tenant shall not (i) assign or in any manner transfer this Lease or any estate or interest therein, or (ii) permit any assignment of this Lease or any estate or interest therein by operation of law, or (iii) sublet the Premises or any part thereof, or (iv) grant any license, concession or other right of occupancy of any portion of the Premises, or (v) permit the use of the Premises by any parties other than Tenant, its agents and employees, and any such acts without Owner's prior written consent shall be void and of no effect. Consent by Owner to one or more assignments or sublettings shall not operate as a consent to, or a waiver of Owner's rights with respect to, any subsequent assignments and sublettings. Notwithstanding any assignment or subletting, Tenant and any guarantor of Tenant's obligations under this Lease shall at all times remain fully responsible and liable for the payment of the Rent and for compliance with all of Tenant's other obligations under this Lease. If an Event of Default should occur while the Premises or any part thereof is then assigned or sublet, Owner, in addition to any other remedies herein provided or provided by law, may at its option collect directly from such assignee or sublessee all payments becoming due to Tenant under such assignment or sublease and apply such payments against any sums due to Owner by Tenant hereunder, and Tenant hereby authorizes and directs any such assignee or 7 13 sublessee to make such payments directly to Owner upon receipt of notice from Owner. No direct collection by Owner from any such assignee or sublessee (regardless of whether or not such assignee or sublessee shall be deemed to be void and of no effect as stated in the first sentence of this (a)) shall be construed to constitute a novation or a release of Tenant or any guarantor of Tenant from the further performance of its obligations hereunder. Receipt by Owner of payments from any assignee, sublessee or occupant of the Premises shall not be deemed a waiver of the covenants in this Lease against assignment and subletting, or a release of Tenant under this Lease. The receipt by Owner from any such assignee or sublessee obligated to make payments shall be a full and complete release, discharge, and acquittance to such assignee or sublessee to the extent of any such amount so paid to Owner. Owner is authorized and empowered on behalf of Tenant to endorse the name of Tenant upon any check, draft, or other instrument payable to Tenant evidencing payment under an assignment or sublease to Tenant, and to receive and apply the proceeds thereof in accordance with the terms hereof. (b) Tenant shall not mortgage, pledge or otherwise encumber this Lease or any estate or interest therein or in the Premises. (c) If Tenant requests Owner's consent to an assignment of the Lease or subletting of all or a part of the Premises, it shall submit to Owner, in writing, the name of the proposed assignee or subtenant and the nature and character of the business of the proposed assignee or subtenant, the term, use, rental rate and other particulars of the proposed subletting or assignment, including without limitation, evidence satisfactory to Owner that the proposed subtenant or assignee is financially responsible and will immediately occupy and thereafter use the Premises (or any sublet portion thereof) for the remainder of the Term (or for the entire term of the sublease, if shorter). In addition, Tenant shall submit to Owner $300.00 which shall be deemed to be Owner's expense in reviewing the materials referred to in the immediately preceding sentence. Owner shall be under no obligation to review any of the materials until such time as Owner receives said $300.00. This review is made solely for the purpose of determining suitability from Owner's point of view of the proposed subtenant and subtenancy or proposed assignee and assignment. Owner shall have the option (to be exercised within thirty (30) days from receipt of Tenant's written request) to cancel this Lease (or to cancel this Lease with respect to the applicable portion of the Premises, as to a partial subletting) as of the commencement date provided for in the subletting or assignment. If Owner elects to cancel this Lease as dated, then the Term, and the tenancy and occupancy of the Premises by Tenant under this Lease, shall terminate with respect to that portion of the Premises proposed to be so assigned or sublet, as if the cancellation date were the Ending Date of Term, and Tenant shall pay to Owner all costs or charges which are the responsibility of Tenant hereunder with respect to that portion of the Premises, and Tenant shall, at its own cost and expense, discharge in full any outstanding commission obligation of Owner with respect to this Lease, or any part hereof so cancelled, and/or reimburse Owner for the portion of any such commission paid by Owner relating to the portion of the Term which is cancelled. Thereafter Owner may lease the Premises to any person, including the prospective subtenant or assignee, without liability to Tenant. If Owner does not thus cancel this Lease, the terms and provisions of subparagraph (a) hereof will apply. (d) If Owner consents to any subletting or assignment by Tenant as above provided, and subsequently any payments received by Tenant under any such sublease are in excess of the Rent payable by Tenant under this Lease, or any additional consideration is paid to Tenant by the assignee under any such assignment, then Owner may, at its option, either (i) declare such excess payments under such sublease or such additional consideration for such assignment to be due and payable by Tenant to Owner as Additional Rent hereunder, or (ii) elect to cancel this Lease as provided in subparagraph (c) hereof. (e) All of the foregoing notwithstanding, Tenant shall not enter into any lease, sublease, license, concession or other agreement for the use, occupancy or utilization of the Premises or any portion thereof, which provides for a rental or other payment for such use, occupancy or utilization based in whole or in part on the income or profits derived by any persons from the property leased, occupied or utilized (other than an amount based on a fixed percentage or percentages of receipts or sales). Any such purported lease, sublease, license, concession or other agreement shall be absolutely void and ineffective as a conveyance of any right or interest in the possession, use or occupancy of any part of the Premises. 23. Holding Over. Tenant shall, at the expiration or earlier termination of the Term, promptly quit and surrender the Premises in good order and condition and in conformity with the applicable provisions of this Lease, excepting only reasonable wear and tear and damage by fire or other insured casualty. Tenant shall have no right to hold over beyond the expiration or earlier termination of the Term and in the event Tenant shall fail to deliver possession of the Premises as herein provided, such occupancy shall not be construed to effect or constitute other than a tenancy at sufferance, at a daily rental equal to (a) the greater of (i) twice the Rent (calculated on a per diem basis) in effect for the last day of the Term, or (ii) the then current market rental (calculated on a per diem basis) for the Premises, plus (b) all damages, costs and expenses sustained by Owner by reason of Tenant's holding over. Without limiting any rights and remedies of Owner as a result of the holding over by Tenant, and without creating any right in Tenant to continue in possession of the Premises, all of Tenant's obligations provided for in this Lease with respect to the use, occupancy and 8 14 maintenance of the Premises shall continue during such hold over period. The inclusion of this paragraph shall not be construed as Owner's consent for Tenant to hold over. 24. Acceptance of Surrender of Premises. During the Term, tenant shall continuously occupy the Premises and shall not permit the Premises to become vacant or abandoned. No act or thing done by Owner or its agents during the Term shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept a surrender of the Premises shall be valid unless the same is made in writing and signed by Owner. 25. Condemnation. (a) If any taking by condemnation, or sale in lieu thereof, pursuant to an exercise of a power of eminent domain ("Condemnation") occurs with respect to the Building or Land or any portion of either, which would leave the remainder of the Building or Land unsuitable for use comparable (economically or otherwise) to its use prior to the Condemnation, in Owner's reasonable judgment, then Owner may terminate this Lease. (b) If any Condemnation occurs with respect to the entire Premises, or more than 25% thereof (by floor area), or such portion of the Premises as renders the remainder thereof unsuitable for use comparable (economically or otherwise) to its use prior to the Condemnation, in Owner's reasonable judgment, then Owner or Tenant may terminate this Lease. (c) If Owner determines that the compensation awarded for Condemnation, available for restoration of the Land, Building or Premises will not be sufficient to pay the cost of restoration, or if such award is required to be applied on account of any Mortgage or Underlying Lease, or if Owner determines that the length of the Term remaining after restoration would make restoration impractical (whether for economic or other reasons), Owner may terminate this Lease. (d) Any termination of this Lease pursuant to this paragraph shall be effective upon the earlier of the date title to or possession of the condemned real estate vests in the condemnor. All Rent shall be apportioned equitably and paid in full by Tenant to Owner to that date. In the event of a Condemnation which does not effect a termination of this Lease but does deprive Tenant of the use of a portion of the Premises, there shall be an equitable reduction of the Rent, taking into account the period for which and the extent to which such portion of the Premises is not reasonably usable for the Permitted Use. (e) All compensation awarded for any Condemnation of the Building or Land or any portion of either shall be the property of Owner, and Tenant shall have no claim thereto, the same being expressly waived by Tenant. Tenant assigns to Owner all rights to compensation for damages, if any, sustained by Tenant on any Condemnation, except for loss of business, or for Condemnation of equipment, fixtures and/or improvements which Tenant, on expiration of the Term, is entitled to remove, if and to the extent a separate award is made by the condemner to Tenant for such items. (f) If this Lease is not terminated as provided above, Owner shall make such repairs, if any, as are reasonably necessary to restore the part of the Premises not condemned to tenantable condition. Owner, in so doing, shall not be required to expend more than the net amount Owner reasonably expects to be available for restoration of the Premises, unless Tenant agrees to pay the amount of the excess expenditure and, before commencement of the restoration, provides Owner with reasonable security for such payment by Tenant. Restoration, if any, shall begin promptly after Tenant vacates the part of the Premises condemned and shall be completed with reasonable diligence, subject, however, to delays incident to Force Majeure. 26. Fire and Other Casualty. (a) Except as provided below, in case of damage to the Premises or other portions of the Building by fire or other insured casualty, Owner shall repair the damage. Such repair work shall be commenced promptly following notice of the damage and completed with reasonable diligence, taking into account the time required for Owner to effect a settlement with and procure insurance proceeds from the insurer, except for delays due to Force Majeure. (b) If the damage is of a nature or extent that, in Owner's reasonable judgment, the repair and restoration work would require more than 180 days to complete after commencement of work, assuming normal work crews not engaged in overtime, Owner shall so notify Tenant within a reasonable time after such determination, and either party, for a period of fifteen (15) days after such notice, shall have the right to terminate this Lease by notice to the other, as of the date, not later than thirty (30) days thereafter, specified in such termination notice. Further, if Owner reasonably determines that the Building is damaged to such extent as to make repair thereof unfeasible or that the length of the Term remaining after restoration would make restoration impractical (in either case, whether for economic or other reasons), within a reasonable time after such determination Owner shall have the right to terminate this Lease by notice to Tenant, as of the date, 9 15 not later than thirty (30) days thereafter, specified in such termination notice. (c) If the insurance proceeds received or to be received by Owner (excluding any rental interruption insurance proceeds) would not be sufficient to pay for repairing the damage or are required to be applied on account of any Mortgage or Underlying Lease, or if the nature of loss is not covered by Owner's hazard insurance coverage, Owner may elect either to (i) repair the damage as above provided notwithstanding such fact, or (ii) terminate this Lease, by giving Tenant within thirty (30) days after Owner's knowledge of the damage and determination of availability or sufficiency of insurance proceeds, notice of Owner's election; and if the election is to terminate, specifying the termination date, which termination date shall be not earlier than fifteen (15) days nor later than thirty (30) days thereafter. (d) All injury or damage to the Premises or the Building caused by Tenant or Tenant Parties shall be repaired at Tenant's sole cost and expense. Owner shall have the right to make such repairs, and any cost or expense so incurred by Owner shall be paid by Tenant to Owner on demand, with interest thereon at the Reimbursement Interest Rate from the due date until paid. (e) Owner shall not be obligated to repair any Alterations which Tenant may have installed (whether or not Tenant has the right or the obligation to remove the same or is required to leave the same on the Premises as of the Ending Date of Term or earlier termination of this Lease) unless Tenant, in a manner satisfactory to Owner, assures payment in full of all costs which may be incurred by Owner in connection therewith. Owner shall not be required to insure any Alterations to the Premises in excess of Building standard tenant improvements, or any fixtures, equipment or other property of Tenant. Tenant shall have the right, at its sole expense, to insure the value of its leasehold improvements, fixtures, equipment or other property located in the Premises, for the purpose of providing funds to Owner to repair the Premises. Except as otherwise provided in this Lease, any insurance which may be carried by Owner or Tenant against loss or damage to the Building or to the Premises shall be for the sole benefit of the party carrying such insurance and under its sole control. (f) If this Lease is terminated pursuant to this paragraph, all Rent shall be apportioned equitably and paid in full by Tenant to Owner to the date of termination. This provision shall not relieve Tenant of liability to Owner for damages (including damages arising due to early termination of this Lease) arising out of the negligence or other tortious conduct of Tenant or Tenant Parties. (g) In the event of a fire or other casualty damage not arising out of the negligence or other tortious conduct of Tenant or Tenant Parties, which does not result in termination of this Lease pursuant to this paragraph but does deprive Tenant of the use of a portion of the Premises, there shall be an equitable reduction of the Rent, taking into account the period for which and the extent to which such portion of the Premises is not reasonably usable for the Permitted Use. 27. Events of Default. In addition to any Event of Default specified elsewhere in this Lease, each of the following events shall be deemed to be an "Event of Default" by Tenant under this Lease: (a) Failure by Tenant to pay when due any installment of Rent payable by Tenant hereunder or any rental or other sum under any other lease now or hereafter executed by Tenant in connection with space in the Building). (b) Failure by Tenant to comply with or observe any other provision of this Lease (or any other Lease now or hereafter executed by Tenant in connection with space in the Building) after ten (10) days notice of such failure. (c) Vacation or abandonment by Tenant or any portion of the Premises. (d) (i) Appointment of a receiver to take possession of, or making of an attachment or execution against, Tenant's assets or any substantial portion thereof, or Tenant's interest in this Lease; or (ii) Making by Tenant of a general assignment for the benefit or creditors; or (iii) Admission by Tenant in writing of its inability to meet its obligations as they mature; or (iv) Commission by Tenant of any other act of bankruptcy or filing by Tenant of a petition or institution of a proceeding on its behalf under any section or chapter of the Bankruptcy Code of the United States, as amended, or under any similar law or statute of the United States or any state thereof ("Bankruptcy Laws"); or (v) Filing by any third party of a petition or institution by any third party of a 10 16 proceeding against Tenant under any Bankruptcy Law, and such petition or proceeding is not dismissed within thirty (30) days; or (vi) Adjudication of Tenants as a bankrupt; or (vii) Occurrence of any of the foregoing actions in this subparagraph (d) with respect to any guarantor of Tenant's obligations under this Lease, or default by such guarantor in performance of any provision under its guaranty. 28. Owner's Remedies. If an Event of Default shall occur, the following provisions shall apply and Owner shall have the rights and remedies, cumulatively if possible, set forth herein, which rights and remedies may be exercised, separately or cumulatively, notwithstanding any election of remedies, upon or at any time following the occurrence of an Event of Default unless, prior to such exercise, Owner shall agree in writing with Tenant that the Event of Default has been cured by Tenant in all respects: (a) Acceleration of Rent. (i) By notice to Tenant, Owner shall have the right to accelerate all Base Rent and all Additional Rent due hereunder and otherwise payable in installments over the remainder of the Term, and, at Owner's option, any other Additional Rent and other Rent to the extent that such Additional Rent and other Rent can be determined and calculated (which may be reasonably estimated by Owner) to a fixed sum; and the amount of all of such accelerated Rent, without further notice or demand for payment, shall be due and payable by Tenant within five (5) days after Owner has so notified Tenant. Additional Rent and other Rent which has not been included in accelerated Rent, shall be due and payable by Tenant during the remainder of the Term, in the amounts and at the times otherwise provided for in this Lease. (ii) Notwithstanding the foregoing or the application of any rule of law based on election of remedies or otherwise, if Tenant fails to pay the accelerated Rent in full when due, Owner thereafter shall have the right by notice to Tenant. (A) to terminate Tenant's further right to possession of the Premises and (B) to terminate this Lease under subparagraph (c) below; and if Tenant shall have paid part but not all of the accelerated Rent, the portion thereof attributable to the period equivalent to the part of the Term remaining after Owner's termination of possession or termination of this Lease shall be applied by Owner against Tenant's obligations owing to Owner as determined by the applicable provisions of subparagraphs (d) and (f) below. (b) Taking of Possession - Curing Tenant's Defaults. (i) With or without notice, Owner shall have the right to enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part thereof, by force if necessary, without being liable for prosecution or any claim for damages therefor. No re-entry or taking possession of the Premises by Owner shall be construed as an election on its part to terminate this Lease, unless a written notice of termination is given to Tenant. (ii) With or without re-entering and taking possession of the Premises, and with or without notice to Tenant, Owner may make any payment which Tenant was obligated but failed to make under this Lease, and perform or attempt to perform any other obligation of Tenant under this Lease which Tenant has failed to perform. (c) Termination of Lease. (i) By notice to Tenant, Owner shall have the right to terminate this Lease as of a date specified in the notice. Tenant's rights to the possession and use of the Premises shall end absolutely as of the specified termination date, and this Lease shall terminate in all respects except for the provisions hereof regarding Owner's damages and Tenant's liabilities arising prior to, out of and following the Event of Default and the ensuing termination, and the provisions hereof which by their terms survive termination. Therefore after termination of the Lease, Tenant shall remain liable to Owner for damages as calculated pursuant to 28.(f) (ii) Following such termination (as well as upon any other termination of this Lease by expiration of the Term or otherwise) Owner immediately shall have the right to recover possession of the Premises; and to that end, Owner may enter the Premises and take possession, without the necessity of giving Tenant any notice to quit or any other notice, with or without legal process or proceedings, and in so doing Owner may remove Tenant's property (including any improvements or additions to the Premises which Tenant made, unless made with Owner's consent which expressly permitted Tenant to not remove the same upon expiration of the Term), as well as the property of others as may be in the Premises, and make disposition thereof in such manner as Owner may deem to be commercially reasonable under the circumstances. 11 17 (d) Tenant's Continuing Obligations - Owner's Re-letting Rights. (i) Unless and until Owner shall have in writing terminated this Lease under subparagraph (c) above, Tenant shall remain fully liable and responsible to perform all of the covenants and to observe all the conditions of this Lease throughout the remainder of the Term; and, in addition, whether or not Owner shall have terminated this Lease, Tenant shall pay to Owner, on demand and with interest thereon at the Reimbursement Interest Rate from the due date until paid, the total sum of all costs, losses and expenses, including reasonable counsel fees, as Owner incurs, directly or indirectly, because of any Event of Default having occurred. (ii) If Owner either terminates Tenant's right to possession without terminating this Lease or terminates this Lease and Tenant's leasehold estate as above provided, Owner shall have the unrestricted right to re-let the Premises or any part thereof to such tenants, on such provisions, and for such periods as Owner may deem appropriate. It is understood that Owner shall have no obligation to have the Premises available for re-letting or otherwise endeavor to re-let so long as Owner (or any affiliated entity) has other comparable or competing vacant space or property available for leasing to others in the Building or in other buildings in the general market area of which the Building is a Part; and that notwithstanding nonavailability of other space or property, Owner's obligation to mitigate damages shall be limited to such efforts as Owner, in its reasonable judgement, deems appropriate. (e) Bankruptcy Assurances. Owner and Tenant understand that, notwithstanding certain provisions to the contrary contained herein, a trustee or debtor in possession under the Bankruptcy Code of the United States (or other Bankruptcy Laws) may have certain rights to assume or assign this Lease. Owner and Tenant further understand that in any event Owner is entitled under the Bankruptcy Code (or other Bankruptcy Laws) to adequate assurances of future performance of the terms and provisions of this Lease. For purposes of any such assumption or assignment, the parties hereto agree that the term "adequate assurance" shall include at least the following: (i) In order to assure Owner that the proposed assignee will have the resources with which to pay the Rent, any proposed assignee must have demonstrated to Owner's satisfaction a net worth (as defined in accordance with generally accepted accounting principles consistently applied) at least as great as the net worth of Tenant on the commencement Date, increased by ten percent (10%) for each year from the Commencement Date through the date of the proposed assignment. The financial condition and resources of Tenant were a material inducement to Owner in entering into this Lease. (ii) Any proposed assignee must have been engaged in the business conducted by Tenant in the Premises, allowable pursuant to the Permitted Use, for at least five (5) years prior to any such proposed assignment. (iii) Any proposed assignee must agree to use the Premises only for the Permitted Use. In entering into this Lease, Owner considered extensively the Permitted Use and determined that such Permitted Use would add substantially to Owner's tenant balance and that were it not for Tenant's agreement to use the Premises only for the Permitted Use, Owner would not have entered into this Lease. Owner's overall operation will be substantially impaired if the trustee in bankruptcy or any assignee of this Lease makes any use of the Premises other than the Permitted Use. (f) Owner's Damages. (i) Whether the Lease is terminated or not the damages which Owner shall be entitled to recover from Tenant shall be the sum of: (a) All Rent accrued and unpaid as of the termination date or the date Owner retakes possession of the premises (whichever occurs later); and (b) (1) all costs and expenses incurred by Owner in recovering possession of the Premises, including removal and storage of Tenant's property, improvements and Alterations therefrom, (2) the costs and expenses of curing or attempting to cure any default by Tenant, (3) the costs and expenses of restoring the Premises to the condition in which the same were to have been surrendered by Tenant as of the Ending Date of Term, or, in lieu thereof, the costs and expenses of remodeling or altering the Premises or any part for re-letting the same, (4) the costs of re-letting (exclusive of those covered by the foregoing) including brokerage fees and reasonable counsel fees, and (5) any special overhead expenses related to the vacancy of the Premises not in excess of ten percent (10%) of the monthly Base Rent otherwise to be paid by Tenant over the remainder of the Term, for each month or part between the date of termination and the re- 12 18 letting of the entire Premises; and (c) All Base Rent and Additional Rent and other Rent (to the extent that the amount of Additional Rent and other Rent has been then determined or estimated as provided above) otherwise payable by Tenant over the remainder of the Term; and (d) All reasonable attorney fees, court costs, arbitration costs, witness fees and similar costs of enforcing this Lease; (e) Less [deducting from the total determined under subparagraphs (a), (b), (c) and (d)] all Rent and Additional Rent which Owner receives from other tenants by reason of the leasing of the Premises or part thereof during or attributable to any period falling within what would otherwise have been the remainder of the Term. If the premises covered by a new lease by other tenants include other premises not part of the Premises of this Lease, a fair apportionment of the rent received from such new lease and expenses incurred in connection therewith as provided aforesaid will be made in determining the net proceeds from such new lease. If the existing term of a new lease by other tenants is different from the Term of this Lease any rent concessions will be equally apportioned over the term of the new lease. (ii) The damages payable by Tenant under the preceding provisions of this subparagraph (f) shall be payable on demand from time to time as the amounts are determined; and if from Owner's subsequent receipt of rent as aforesaid from re-letting, there shall be any excess payment(s) by Tenant by reason of the crediting of such rent thereafter received, the excess payment(s) shall be refunded by Owner to Tenant, without interest. (iii) If this Lease is terminated, then Owner shall have the additional options to determine the damages as follows: (a) Tenant shall be liable for amounts determined pursuant to 28, Owner's Remedies, (a)(i). Owner may have damages determined under this section A. even if Owner did not previously accelerate the rent pursuant to 28 (a)(i). (b) Owner shall be entitled to recover forthwith against Tenant as damages for loss of the bargain, and not as a penalty, an aggregate sum which, at the time of such termination of this lease, represents the aggregate of the rent and all other sums payable by Tenant hereunder that would have accrued for the balance of the term discounted present worth at the rate of 4% per annum. (g) Interest on Damages Amounts. Any sums payable by Tenant hereunder which are not paid after the same shall be due shall bear interest, from the due date until paid, at the Overdue Interest Rate. (h) Owner's Statutory Rights. Owner shall have all rights and remedies now or hereafter existing at law or in equity with respect to the enforcement of Tenant's obligations hereunder and the recovery of the Premises. No right or remedy herein conferred upon or reserved to Owner shall be exclusive of any other right or remedy, but shall be cumulative and in addition to all other rights and remedies given hereunder or now or hereafter existing at law or in equity. Owner shall be entitled to injunctive relief in case of the violation, or attempted or threatened violation, by Tenant of any covenant, agreement, condition or provision of this Lease, or to a decree compelling performance of any covenant, agreement, condition or provision of this Lease. If Tenant is in default, Tenant may not remove property subject to the security interest referred to in paragraph 29. Owner's Lien. Owner shall be entitled to injunctive relief in case Tenant attempts to remove property subject to the security interest referred to in paragraph 29. Owner's Lien. This injunctive relief includes, but is not limited to a temporary or permanent restraining order. Tenant hereby agrees to the issuance of such restraining order ex parte. Tenant acknowledges that Owner's remedy at law in such a case would be inadequate and that the equitable relief may be brought without the necessity of proof of actual damage or inadequacy or any legal remedy. Notwithstanding any statute to the contrary, Owner shall have the right to such restraining order without the necessity of a bond. (i) Remedies Not Limited. Nothing herein contained shall limit or prejudice the right of Owner to exercise any or all rights and remedies available to Owner by reason of default or to prove and obtain in proceedings under any Bankruptcy Laws, an amount equal to the maximum allowance permitted by any law in effect at the time when, and governing the proceedings in which, the damages are to be proved, whether or not the amount is greater, equal to, or less than the amount of the loss or damages referred to above. (j) No termination Except by Owner in writing. No action by Owner, including without limitation legal proceedings for eviction, unlawful detainer or similar actions that may be available under the laws of the State, shall be deemed a termination of this Lease or of Tenant's obligations hereunder unless Owner specifies in writing that the Lease is terminated and that Tenant has no further liability hereunder. 13 19 (k) No Waiver by Owner. No delay or forbearance by Owner in exercising any right or remedy hereunder, or Owner's undertaking or performing any act or matter which is not expressly required to be undertaken by Owner shall be construed, respectively, to be a waiver of Owner's rights or to represent any agreement by Owner to undertake or perform such act or matter thereafter. Waiver by Owner of any breach by Tenant of any covenant or condition herein contained (which waiver shall be effective only if so expressed in writing by Owner) or failure by Owner to exercise any right or remedy in respect of any such breach shall not constitute a waiver or relinquishment for the future of Owner's right to have any such covenant or condition duly performed or observed by Tenant, or of Owner's rights arising because of any subsequent breach of any such covenant or condition, nor bar any right or remedy of Owner in respect of such breach or any subsequent breach. Owner's receipt and acceptance of any payment from Tenant which is tendered not in conformity with the provisions of this Lease or following an Event of Default (regardless of any endorsement or notation on any check or any statement in any correspondence accompanying any payment) shall not operate as an accord and satisfaction or a waiver of the right of Owner to recover any payments then owing by Tenant which are not paid in full, or act as a bar to the termination of this Lease and the recovery of the Premises because of Tenant's previous default. 29. Owner's Lien. In addition to any applicable statutory Owner's lien, which is not waived but is supplemented hereby, Owner shall have, at all times, and Tenant hereby grants to Owner, a valid security interest to secure payment of all Rent and other sums of money becoming due hereunder from Tenant, and to secure payment of any damages or loss which Owner may suffer by reason of any Event of Default, upon all goods, wares, equipment, fixtures, furniture, improvements and other personal property of Tenant presently or which may hereafter be situated in the Premises or the Building or on the Land ("Property"), and all proceeds thereof, and the Property shall not be removed therefrom without the consent of Owner until all arrearages in Rent as well as any and all other sums of money then due to Owner hereunder shall first have been paid and discharged and all the covenants, agreements and conditions hereof have been fully complied with and performed by Tenant. Upon the occurrence of an Event of Default in addition to any other remedies provided herein, Owner may enter upon the Premises and take possession of any and all Property, without liability for trespass or conversion, and sell the same at public or private sale, with or without having the Property at the sale, after giving Tenant reasonable notice of the time and place of any public sale or of the time after which any private sale is to be made, at which sale Owner or its assigns may purchase unless prohibited by law. Unless otherwise provided by law, and without intending to exclude any other manner of giving Tenant reasonable notice, the requirement of reasonable notice shall be met if such notice is given, in the manner prescribed in this Lease, at least five (5) days before the time of sale. The proceeds from any such disposition, less any and all expenses connected with the taking of possession, holding and selling of the Property (including reasonable attorneys' fees and other expenses), shall be applied as a credit against the payments secured by the security interest granted in this paragraph. Any surplus shall be paid to Tenant or as otherwise required by law, and Tenant shall pay any deficiencies forthwith. Upon request by Owner, from time to time, Tenant agrees to execute and deliver to Owner a financing statement or statements in form sufficient to perfect the security interest of Owner in the Property and proceeds thereof under the provisions of the Uniform Commercial Code in force in the State. In addition, Tenant hereby agrees to grant Owner a power of attorney to act as Tenant's agent to execute any financing agreement or financing statement in order to perfect the security interest referred to in this paragraph 29. 30. Certain Rights Reserved by Owner. Owner (acting itself or through persons authorized by it) shall have the following rights, exercisable from time to time without notice and without liability to Tenant for damage or injury to property, persons or business and without effecting an eviction, constructive or actual, or disturbance of Tenant's use or possession of the Premises or giving rise to any claim for set off or abatement of Rent or otherwise affecting Tenant's obligations hereunder: (a) To decorate and to make repairs, alterations, additions, changes or improvements whether structural or otherwise, in and about the Building, or any part thereof, and for such purposes to enter upon the Premises, and during the continuance of any such work, to temporarily close doors, entryways, common areas, public space and corridors in the Building, to interrupt or temporarily suspend Building Services and facilities and to change the arrangement and location of entrances or passageways, doors and doorways, corridors, elevators, stairs, toilets, or other public parts of the Building, so long as the Premises are reasonably accessible and Tenant is not unreasonably disturbed in use or possession thereof. (b) To have and retain paramount title to the Premises free and clear of any act of Tenant purporting to burden or encumber the Premises. (c) To grant to anyone the exclusive right to conduct any business in or render any service to the Building, provided such exclusive right shall not operate to exclude Tenant from the Permitted Use. (d) To prohibit the placing of vending or dispensing machines of any kind in or about the Premises without the prior written permission of Owner. 14 20 (e) To have access for Owner and other tenants of the Building to any mail chutes located on the Premises according to the rules of the United States Postal Service. (f) To take all such reasonable measures as Owner may deem advisable for the security of the Building and its occupants, including without limitation, the search of persons entering or leaving the Building, the evacuation of the Building for cause, suspected cause, or for drill purposes, the temporary denial of access to the Building, and the closing of the Building after normal business hours and on Saturdays, Sundays and holidays, subject, however to Tenant's right to admittance when the Building is closed after normal business hours under such reasonable regulations as Owner may prescribe from time to time which may include by way of example but not of limitation, that persons entering or leaving the Building, whether or not during normal business hours, identify themselves to a security officer by registration or otherwise and that such persons establish their right to enter or leave the Building. (g) To enter the Premises to perform Owner's covenants under this Lease, to exercise Owner's remedies under this Lease, to ascertain if Tenant is in compliance with its covenants under this Lease, to inspect the Premises, and to exhibit the Premises to Mortgagees and Lessors and to prospective lenders, purchasers and tenants. (h) To change the name by which the Building is designated. (i) To transfer, assign and convey, in whole or in part, the Building and any and all of its rights under this Lease, and in the event Owner assigns its rights under this Lease, Owner shall thereby be released from any further obligations hereunder, and Tenant agrees to attorn to and look solely to such successor in interest of the Owner for performance of such obligations. 31. Intentionally Omitted 32. Brokers. Each party warrants to the other that it has had no dealings with any broker or agent in connection with the negotiation or execution of this Lease except as may be named in the Basic Lease Provisions, and each party agrees to indemnify the other against all costs, expenses, attorney's fees or other liability for commissions or other compensation or charges claimed by any broker or agent claiming the same by through or under said indemnifying party. 33. Quiet Enjoyment. Provided Tenant has performed all of the terms and conditions of this Lease, including the payment of Rent, to be performed by Tenant, Tenant shall peaceably and quietly hold and enjoy the Premises for the Term, without hindrance from Owner, subject to the terms and conditions of this Lease. 34. Notices. Each provision of this Lease, or of any applicable governmental law, ordinance or regulation, or other requirement, with reference to the sending, mailing or delivery of any notice or document, or with reference to the making of any payment by Tenant to Owner, shall be deemed to be complied with when and if the following steps are taken: (a) All Rent and other payments required to be made by Tenant to Owner hereunder shall be payable to Owner at Owner's Address set forth in the Basic Lease Provisions or at such other address as Owner may specify from time to time by notice to Tenant, and shall be deemed delivered only upon actual receipt (and if other than in cash, subject to collection). (b) Any notice or document required to be delivered hereunder shall be deemed to be delivered if actually received and whether or not received when deposited in the United States mail, postage prepaid, certified or registered mail (with return receipt requested), addressed to the party to receive same at its address set forth in the basic Lease Provisions or at such other address as said party has theretofore specified to the other by notice. 35. Force Majeure. Whenever a period of time is herein prescribed for action to be taken by Owner, Owner shall not be liable or responsible for, and there shall be excluded from the computation of any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, governmental laws, regulations or restrictions or any other causes of any kind whatsoever which are beyond the control of Owner ("Force Majeure"). 36. Entire Agreement; Addendums; Waivers; Binding Effect. This Lease contains and embodies the entire agreement of the parties hereto with respect to the subject matter hereof, and no representations, inducements or agreements, oral or otherwise, between the parties not contained in this Lease shall be of any force or effect. This Lease may not be supplemented or amended, except by instrument in writing signed by both parties hereto. No provision of this Lease shall be deemed to have been waived by Owner unless such 15 21 waiver is in writing signed by Owner and addressed to Tenant, nor shall any custom or practice which may evolve between the parties in the administration of the terms thereof be construed to waive or lessen the right of Owner to insist upon performance by Tenant in strict accordance with the terms hereof. The terms and conditions contained in this Lease shall apply to, inure to the benefit of, and be binding upon the parties hereto, and upon their respective successors in interest and legal representatives, except as otherwise herein expressly provided. 37. Severability. If any clause or provision of this Lease is illegal, invalid, or unenforceable under present or future laws effective during the Term, the remainder of this Lease shall not be affected thereby and in lieu of such clause or provision, there shall be deemed added as a part of this Lease a clause or provision as similar in terms thereto as may be possible and be legal valid and enforceable. 38. Joint and Several Liability of Tenant. If there is more than one person comprising Tenant, the obligations imposed upon Tenant hereunder shall be joint and several. If there is a guarantor or there are guarantors of Tenant's obligations hereunder, the obligations imposed upon Tenant shall be the joint and several obligations of Tenant and each such guarantor and Owner need not first proceed against Tenant before proceeding against any such guarantor, nor shall any such guarantor be released from its guaranty for any reasons whatsoever, including without limitation, any amendment hereto, waiver of any provision hereof or failure to give such guarantor any notice hereunder. 39. Owner's Liability Limitation. The liability of Owner to Tenant for fulfillment of any obligation of Owner or for any default by Owner under the terms of this Lease shall be limited to the interest of Owner in the Building and the Land; Tenant shall look solely to such interest for satisfaction thereof; and Owner shall not be personally liable for any deficiency. 40. Arbitration. (a) At Owner's option, all claims, disputes and other matters in question or calling for mutual agreement, between Owner and Tenant arising out of, or relating to this Lease or the breach hereof, shall be decided by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association then obtaining. At Owner's option, any arbitration arising out of or relating to this Lease or any breach hereof shall include, by consolidation, joinder or joint filing any other person not a party to this Lease to the extent necessary for the final resolution of the matter in controversy. This agreement by Tenant to arbitrate shall be specifically enforceable by Owner under the prevailing arbitration law. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. (b) Notice of the demand for arbitration shall be filed by Owner in writing with Tenant and with the American Arbitration Association. The demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter has arisen, and in no event shall it be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter would be barred by the applicable statute of limitations. (c) Unless otherwise agreed in writing by Owner, Owner and Tenant shall continue to perform their obligations under this Lease in accordance with Owner's interpretation of the claim, dispute or other matter during any arbitration proceedings, until final resolution thereof. (d) At Owner's option, the venue for arbitration or litigation with respect to all claims, controversies and disputes arising out of or relating to this Lease or any breach hereof, shall be the county in which the Land and Building are located. 41. Waiver of Trial by Jury. To the extent such waiver is permitted by applicable law, Owner and Tenant waive trial by jury in any action or proceeding brought in connection with this Lease or the Premises. 42. Applicable Law. This Lease and the rights and obligations of Owner and Tenant hereunder shall be construed in accordance with and governed by the laws of the State of Colorado. 43. Miscellaneous. (a) Any approval by Owner or Owner's architects and/or engineers of any of Tenant's Plans shall not in any way be construed or operate to bind Owner or to constitute a representation or warranty of Owner as to the adequacy or sufficiency of such Plans or the Alterations to which they relate, for any use, purpose, or condition, but such approval shall merely be the consent of Owner as may be required hereunder. (b) Nothing contained in this Lease shall be deemed or construed to create a partnership or joint venture of or between Owner and Tenant, or to create any other relationship between the parties hereto other than that of Owner and Tenant. 16 22 (c) Words of any gender used in this Lease shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the context otherwise requires. The word "person" as used in this Lease means any natural person, legal entity, or body politic. (d) The submission of this Lease to Tenant shall not be construed as an offer, nor shall Tenant have any rights with respect thereto unless and until Owner shall have executed a copy of this Lease and delivered the same to Tenant. (e) If Tenant is a corporation, each of the persons executing this Lease on behalf of Tenant hereby warrants that Tenant is a duly formed and existing corporation, qualified to do business in the State, that the Tenant has the full right and authority to enter into the Lease, and that each of the persons signing on behalf of Tenant are authorized to do so. (f) The covenants and obligations of Owner and Tenant hereunder are independent, such that the obligations of Tenant to pay rent hereunder are not contingent upon any act or failure to act by Owner. (g) If Owner consults with an attorney to enforce any provision of this Lease then all costs, including reasonable attorney fees from the date any such matter is turned over to an attorney shall be recoverable by Owner from Tenant. 44. Recording. Tenant hereby covenants and agrees not to place the Lease of record. If so requested by Owner, Tenant shall execute a short form memorandum of lease which memorandum may, at Owner's option, be placed of record. Any recording of the Lease or of any notice or memorandum thereof by Tenant without Owner's prior written consent shall be a default under the Lease and Owner shall have all of the rights and remedies set forth therein for a default. In addition, if requested by Owner, Tenant shall execute a memorandum of lease to be filed with the Colorado Department of Revenue on such form as may be prescribed by said department within ten (10) days after execution of the Lease, or any other such memorandum so that Owner may avail itself of such statutes as Section 39-22-604 (7)(c) of the Colorado Revised Statutes(1973). 45. Acts to be performed by Tenant Prior to Tenant's Construction. (a) In the event that Tenant receives Owner's prior written approval to commence any alterations, additions, improvements or construction of whatever kind or nature to be done by Tenant in or about the Premises (the "Alterations"), which approval or disapproval shall be in Owner's sole and subjective discretion, then, as a condition precedent to Tenant's commencing such Alterations, Tenant shall submit to Owner the following items: (i) All architectural, engineering, construction and/or design drawings, plans, specifications, studies, reports, bids and other material of every kind relating to the Alterations (the "Plans and Specifications"); (ii) An originally signed copy of the contract between Tenant and any and all contractors, subcontractors, materialmen or suppliers together with copies of any and all subcontracts and supply contracts relating to the Alterations; (iii) A standard indemnification in a form approved by Owner. (iv) Originally signed lien waivers from all subcontractors and materialmen or suppliers for all work done and/or material supplied in connection with the Alterations in a form approved by Owner; and (v) An originally signed general release of liens from Tenant's general contractor in a form approved by Owner; and (vi) A standard form of notice to be posted at the Property in a form approved by Owner. (b) Upon completion of the Alterations, Tenant shall submit to Owner: (i) A certification from Tenant's general contractor and, if requested by Owner, from Tenant's architect, certifying that each has inspected the Premises not more than five (5) days prior to the date of the certification and that the Alterations have been constructed in good and workmanlike manner and in substantial accordance with the Plans and Specifications and with the requirements of the governmental 17 23 authorities having jurisdiction or control over same, and that all materials for which payment has been made by Tenant have been delivered to and have been incorporated into the Premises; and (ii) Final unconditional certificate(s) of occupancy, or the equivalent issued by the applicable governmental authority. 46. Personal Property Taxes. Tenant shall pay, prior to delinquency, all taxes, assessments, license fees and public charges levied, assessed or imposed upon or measured by the value of its personal property and business operations, including but not limited to, the furniture, fixtures, leasehold improvements, equipment and other property of Tenant at any time situated upon or installed in the Premises by Tenant. Tenant shall cause all such personal property to be assessed and billed separately from the real property of Owner. 47. Transfer of Interest. If Tenant is a partnership or corporation, the transfer, sale, conveyance and disposition of a controlling interest in Tenant to any third party, including without limitation, to an affiliate of Tenant shall be deemed as assignment or transfer of Tenant's interest under the Lease for purposes of Section 22 of the Lease. As used herein, the term "affiliate" shall mean any subsidiary or parent company of Tenant and any subsidiary of a parent company of Tenant, or any entity related to Tenant or held in common control with Tenant. 48. Special Provisions. Special Provisions, if any, are provided in Addendum I. IN WITNESS WHEREOF, Owner and Tenant have executed this Lease as of the Lease date. OWNER: TENANT: SKY HARBOR ASSOCIATES LIMITED CET ENVIRONMENTAL SERVICES, INC. PARTNERSHIP By: Pomeroy Investment Corporation By: /s/ STEPHEN H. DAVIS Corporation, General Partner ----------------------------- Stephan H. Davis Its: President By: /s/ HOWARD LESHMAN --------------------------------- Howard Leshman Its: Vice President 18 24 RIDER I This Rider to Lease is attached to and forms a part of that certain lease between Sky Harbor Associates Limited Partnership ("Owner") and CET Environmental Services, Inc. ("Tenant") dated as of the 1st day of March 1999 (the "Lease"), and sets forth additional terms and provisions to be incorporated into the Lease. ADDITIONAL RENT. It is expressly agreed that Tenant will pay in addition to the Base Rent, Additional Rent, herein defined as those items enumerated in this Rider. A. Tenant shall pay to Owner as Additional Rental commencing with the First Operating Cost Year (as said term is hereinafter defined), and for each Subsequent Operating Cost Year thereafter an amount equal to Tenant's Project Proportionate Share (as said term in hereinbefore defined) of the total aggregate of Operating Costs (as said term is hereinafter defined) of said Operating Cost Year. B. The term "Operating Costs" means the total amounts paid or payable, whether by Owner or otherwise on behalf of Owner, in connection with the ownership, management, maintenance, repair and operation of the Building, including by way of illustration and not a limitation, and without limiting the generality of the foregoing, the aggregate of the amounts paid or payable for; (i) all electricity furnished to the Building except those amounts paid directly by Tenant or tenants; (ii) the amount paid or payable for all water furnished to the Building other than those amounts paid directly by Tenant or tenants; (iii) labor and or wages and other payments made by Owner in the operation, maintenance and repair of the Building, including, without limitation, the cost to Owner of workman's compensation and disability insurance, payroll taxes, and contributions to any social security, unemployment insurance, welfare, pension or similar fund and payments for other fringe benefits made to or on behalf of all employees of Owner performing services rendered in connection with the operation and maintenance of the Building, including, without limitation, porters, janitors, handymen, watchmen, persons engaged in patrolling and protection the Building, carpenters, engineers, mechanics, electricians, plumbers, building manager, clerical and administrative personnel, contractors, subcontractors (It is understood that Owner is under no obligation to have employed any or all of such above-referred to employees.); (iv) the total charges of any independent contractors employed in the repair, care, operation, maintenance and cleaning of the Building; (v) the cost of replacements for tools and equipment used in the operation and maintenance of the Building, including without limitation electric light bulbs, tubes and ballasts used in connection with Building Common Areas and parking lots; (vi) the cost of telephone service, postage, office supplies, maintenance and repair of office equipment and similar costs related to operation of the Building and manager's office (whether in the Building or not); (vii) the cost of licenses, permits and similar fees and charges related to the operation, repair, maintenance of the Building (viii) the cost of maintenance of parking areas and driveways, including, but not limited to cleaning, snow removal, repaving, relining and repainting; (ix) cleaning cost for the Building, including the windows, sidewalks, all snow removal (including separate contracts therefore) and the cost of all labor, supplies, equipment and materials incidental thereto; (x) the cost of premiums and other charges incurred by Owner with respect to all insurance relating to the Building and the operation and maintenance thereof, including without limitation, fire and extended coverage insurance, including windstorm, hail, explosion, riot, rioting attending a strike, civil commotion, aircraft, vehicle and smoke insurance, public liability, elevator, workman's compensation, boiler and machinery, rent, use and occupancy, and health, accident and group life insurance of all employees; (xi) the cost of sales and excise taxes and the like upon any of the expenses enumerated herein; (xii) the cost of decorating, repainting or otherwise maintaining the exterior of the Building; (xiii) the cost of auditing fees necessarily incurred in connection with the maintenance and operation of the Building and accounting fees incurred in connection with the preparation and certification of the real estate tax escalation and the operating expense escalation statements pursuant to this Rider; (xiv) fees for legal, inspection, accounting and consulting services; (xv) all costs incurred by Owner to retrofit any portion or all of the Building to comply with change in existing legislation or introduction of new legislation, whether federal, state or municipal, state, county or municipal (including any agency or arm of said governmental unit; (xvi) the cost of repairs, replacements and improvements which are appropriate for the continued operation of the Building; (xvii) all expenses associated with the installation of any energy, cost or labor saving devices; (xviii) costs of all landscaping; (xix) costs of any security guards or security; (xx) any and all other expenditures of Owner in connection with the operation, repair or maintenance of a Building which are properly expensed in accordance with generally accepted accounting principles consistently applied with respect to the operation and repair and maintenance of comparable buildings in the southern Metro Denver Area. The above enumeration of any Operating Cost shall not create any obligation (express or implied) on the part of Owner to furnish such service. If Owner shall purchase any item of capital equipment or make any capital expenditure as described in (xv), (xvi), or (xvii) above, then the cost for the same shall be included in operating expenses in the year of installation and in subsequent years amortized in accordance with generally accepted accounting principles. If Owner shall lease such item of capital equipment, then the rentals or other operating costs paid 1 25 pursuant to such leasing shall be included in operating expenses for each year in which they are incurred. In addition, Operating Cost shall also include all Real Estate Taxes. The term Real Estate Taxes includes, without limitation, general and special taxes, assessments, duties and levies, charged and levied upon or assessed against the Building, the land upon which it is located, and improvements situated on the real property, any leasehold improvements, fixtures, installations, additions and equipment used in the maintenance or operation of the Building, whether owned by Owner or Tenant and not paid directly by Tenant, including, without limitation, real estate taxes, personal property taxes, general or special assessments, any duties or levies charged or levied upon or assessed against the building and the property and personal property transfer taxes, all costs and expenses (including legal fees and court costs) charged for the protest or reduction of property taxes or assessments in connection with the property and the Building, or any tax or excise on rent or any other tax (however described) on account of rental received for use and occupancy of any or all of the Building and the property, whether any such taxes are imposed by the United States, the State of Colorado, the County in which the Building is located, or any local governmental municipality, authority or agency or any political subdivision of any thereof. Real Estate Taxes shall not include franchise, gift, estate or inheritance taxes. Further, if at any time during the Term the method of taxation of real estate prevailing at the time of execution hereof shall be, or has been, altered so as to cause the whole or any part of the taxes now or hereafter levied, assessed or imposed on real estate to be levied assessed or imposed upon Owner, wholly or partially as a capital levy or otherwise, or on or measured by the rents received, then such new or altered taxes attributable to the Demised Premises shall be deemed to be included within the term Real Estate Taxes for purposes of this paragraph, save and except that such shall not be deemed to include any increase in said tax not attributable to the Building. Furthermore, if at any time during the term hereof a tax or excise on rents or income or other tax however described (herein called Rent Tax) is levied or assessed by the State of Colorado, or any political subdivision thereof, on account of the rents hereunder of the interest of Owner under this Lease, such Rent Tax shall constitute Real Estate Taxes, provided, further, in no event shall Tenant be obligated to (i) pay for any year any greater amount by any of such Rent Tax than would have been payable by Tenant had the rentals paid to the Owner under all Building leases (being the rentals upon which such Rent Tax is imposed) been the sole taxable income of Owner for the year in question or (ii) to pay or to reimburse Owner for any tax of any kind assessed against Owner on account of any such Rent Tax having been reimbursed. Operating costs shall not include (1) leasing commissions, advertising expenses and other costs incurred in leasing or procuring new Tenant; (2) the cost of any capital addition made to the Building, including the cost to prepare space for occupancy by a new Tenant; (3) depreciation and amortization of the Building, other than (a) capital expenditures which under generally applied real estate practices are expensed or regarded as deferred expenses; (b) capital expenditures appropriate to a building comparable to this in the southern Metro Denver Area or required by law as described in (xv) and (xvi) above; and (c) capital expenditures designed to result in savings or reductions in operating expenses as described in (xvii) above; (4) interest and principal payments on mortgages and other debt costs; (5) Any cost or expenditure (or portion thereof) for which Owner is reimbursed, whether by insurance proceeds or otherwise (Base Rent adjustments under any provision of this Rider and under similar provisions and other Tenant leases are not reimbursements); and (6) cost of any service furnished to any other occupant of the Building which Owner does not provide to Tenant hereunder. In the event during all or any portion of any calendar year the Building is not fully rented and occupied, Owner may elect to make an appropriate adjustment of Operating Costs for such year, employing sound accounting and management principles, to determine the Operating Cost that would have been paid or incurred by Owner had the Building been fully rented and occupied and the amount so determined shall be deemed to have been the Operating Costs for such year. If Owner selects an accrual accounting basis rather than a cash accounting basis for operating expenses purposes, operating expenses shall be deemed to have been paid when such expenses have accrued. All references to "Building" in this Rider shall include all other Buildings in the Project (as defined in Basic Lease Provisions) and all related facilities, including without limitation, corridors, lobbies, sidewalks, grounds, parking spaces, driveway areas, elevators and other common or public areas contained in or around the real estate as well as landscaping, exterior walkways, and improvements or facility utilized in common by the Building (and other Buildings of the projects upon or adjacent to the real property). It is the express intent of the parties that all Operating Costs be determined on the Project level, rather than at an individual Building level. (i) First Operating Cost Year is as defined in Basic Lease Provisions. (ii) Subsequent Operating Cost Year means each twelve month calendar period following the First Operating Cost Year, the whole or any part of which full period is included within the Term. 2 26 (iii) The Amount of Operating Costs for any period shall be the amount as determined by the Owner in accordance with generally accepted accounting principles. C. If only part of the Term is included within any Operating Cost Year, then such amount payable by Tenant for such Operating Cost Year shall be estimated by Owner acting reasonably and reduced proportionately on a per diem basis and shall be payable according to the terms and conditions in subparagraph D. below. D. Any additional Rent payable by Tenant under this Rider shall be payable as follows, unless otherwise provided: During the Term, Tenant shall pay to owner monthly in advance and every month during the Term, one-twelfth (1/12th) of the amount of such Additional Rent as estimated by Owner, from time to time, in advance, acting reasonably, to be due from Tenant. Within a reasonable time after the close of each calendar year, Owner shall give Tenant a statement of the year's Operating Costs and the total amount of the Additional Rent, if any. If such year's Operating Cost is different than the estimated amount paid by Tenant, Tenant shall pay Owner or Owner shall credit Tenant, as applicable, within 30 days of the date of the Statement, Tenant's proportionate share which has either (i) not be paid by Tenant or (ii) overpaid by Tenant pursuant to an estimate. One-twelfth of the amount of Additional Rent, as reasonably estimated by Owner, for the First Operating Cost Year, to be paid by Tenant with each month's Base Rent as Additional Rent shall be as stated in Basic Lease Provisions as "Initial Monthly Estimated Additional Rent". This amount shall be paid monthly until such time as Owner, in writing, reasonably adjusts the estimated Additional Rent pursuant to the first sentence of this paragraph. For purposes of calculating Additional Rent, Tenant's proportionate share of the total shall be deemed to be as set forth in paragraph F. below. E. For the protection of Tenant, Owner shall maintain books of account which shall be open to Tenant and its representatives for thirty days after billing for Additional Rent, at all reasonable times so that Tenant can determine that such Additional Rent costs have, in fact, been paid or incurred. Tenant shall have the right to contest or question the amount and the appropriateness of the Operating Cost and Additional Rent for a period of thirty (30) days after the billing for Additional Rent. If Tenant does not so contest or question within said thirty (30) day period, then all the determinations by Owner shall be conclusive. F. Tenant's Project Proportionate Share is as defined in Basic Lease Provisions. G. Except as otherwise expressly provided in the Lease, the parties agree that Owner shall have no obligation of any kind to make any expenditures upon or with respect to the Premises. It is intended that Tenant shall throughout the term, at its sole expense, maintain in good condition, repair and order all of the Premises and all parts thereof and shall pay to Owner Additional Rent as stated in this Rider 3 27 RIDER II This Rider to Lease is attached to and forms a part of that certain lease between Sky Harbor Associates Limited Partnership ("Owner") and CET Environmental Services, Inc. ("Tenant") dated as of the 1st day March, 1999, (the "Lease"), and sets forth additional Terms and provisions to be Incorporated into the Lease. Building Services and Utilities (a) Subject to the limitation herein set forth, Owner will furnish Tenant while occupying the Premises and while Tenant is not in default under this Lease: (i) water to the wall stub of the Premises; (ii) snow removal and snow plowing of all common areas of the Building and Project; (iii) cleaning and maintenance of driveways and parking areas of the Project; (iv) trash and refuse removal; (v) maintenance and repair of all building standard air-conditioning and heating apparatus. In addition, Owner will maintain the public and common areas of the Building and Project, such as walkways, stairs, and landscaping, if any, in reasonable good order and condition, except for damage occasioned by Tenant or Tenant's parties. (b) Utilities, Owner shall have the option to have: (i) Tenant pay promptly all charges for heating, natural gas and electrical service used on the Premises directly to the appropriate public utility company. If Tenant shall fail to pay any utilities as required above, Owner shall have the right, at his option, but without any obligation to do so, to pay such utilities (without affecting any other remedy available to Owner) on account of Tenant and the same shall constitute Additional Rent hereunder and shall be repaid by Tenant to Owner forthwith; or (ii) Tenant pay all charges for heating, natural gas and electrical service used on the Premises as Additional Rent pursuant to Rider I. Owner shall make an election pursuant to this paragraph from time to time, by 30 day notice to Tenant. Owner may elect to have certain utilities paid pursuant to (i) above and to have other utilities paid pursuant to (ii) above. If Owner makes no written election, then all utilities that are separately metered shall be paid pursuant to (i) above and all items that are not separately metered shall be paid pursuant to (ii) above. Notwithstanding the above, Tenant covenants and agrees that at all times its use of electric current shall never exceed the capacity of the existing feeders to the Building or the risers or wiring installations. Any risers or wiring to meet Tenant's excess electrical requirements will be installed by Owner at the sole cost and expense of Tenant (if, in Owner's sole judgment, the same are necessary and will not cause permanent damage or injury to the Building or the Premises or cause or create a dangerous or hazardous condition or entail excessive or unreasonable alterations, repairs or expense or interfere with or disturb other tenants or occupants). If initially Tenant is paying all or any public utilities pursuant to (ii) above, Owner may at its option, upon not less than 30 days prior written notice to Tenant discontinue the availability of such utility service. If Owner gives any such notice of discontinuance, Owner shall make all necessary arrangements with the public utility supplying the utilities to the area in which the Building is located with respect to obtaining such utility service to the Premises, but Tenant will contract directly with such public utility for the supplying of such utility service to the Premises. In the event Owner deems it appropriate to make available separately metered service to the Premises, Owner may require that separate submeters be installed in or for the Premises, at Owner's expense, and Tenant will be billed monthly from such sub-meter in a manner provided hereinbefore, provided that no such sub-metering shall relieve Tenant from its obligation to pay Tenant's share of other utility charges under this paragraph. Owner shall not in any way be liable or responsible to Tenant for any loss or damage or expense which Tenant may sustain or incur if either the quantity or character of any utility service is changed or no longer available or is no longer suitable for Tenant's requirements. (c) Failure to any extent to make available, or any slow-down, stoppage or interruption of, these defined services resulting from any cause (including, but not limited to, Owner's compliance with (i) any voluntary or similar governmental or business guideline now or hereafter published or (ii) any requirements now or hereafter established by any governmental agency, board or bureau having jurisdiction over the 1 28 operation and maintenance of the Building) shall not render Owner liable in any respect for damages to either person, property or business, nor be construed as an eviction of Tenant or work an abatement of rent, nor relieve Tenant from fulfillment of any covenant or agreement hereof. Should any equipment or machinery which Owner is obligated to maintain and repair pursuant to this Lease break down or for any reason cease to function properly, Owner shall use reasonable diligence to repair same promptly, but Tenant shall have no claim for abatement of rent or damages on account of any interruptions in service occasioned thereby or resulting therefrom. (d) Notwithstanding any termination of this Lease prior to the Ending Date of Term, Tenant's obligations to pay any and all Rent pursuant to this Rider shall continue and shall cover all periods up to the actual expiration date of the Term; provided, however, if Owner terminates this Lease without waiving Owner's right to seek damages against Tenant, Tenant's obligation to pay any and all Rent pursuant to this Rider shall not terminate as a result thereof. (e) Trash and Refuse Removal. If Owner determines, in its sole discretion, that Owner provides Tenant with more than normal and ordinary Trash and Refuse Removal ("Excess Removal"), then Owner shall have the option to i) charge Tenant, as Additional Rent, an amount for such Excess Removal (Owner's determination of such amount shall be binding on the parties), or ii) cease providing Tenant with Trash and Refuse Removal. 2 29 ADDENDUM NO. 1 TO LEASE AGREEMENT BY AND BETWEEN SKY HARBOR ASSOCIATES LIMITED PARTNERSHIP AS OWNER AND CET ENVIRONMENTAL SERVICES, INC. AS TENANT This Addendum No. 1 to one certain Lease Agreement dated March 1, 1999 by and between Sky Harbor Associates Limited Partnership as Owner and CET Environmental Services, Inc., as Tenant, is entered into this 1st day of March, 1999 by and between Sky Harbor Associates Limited Partnership as Owner and CET Environmental Services, Inc., as Tenant. For and in consideration of the mutual covenants herein contained and contained in the Lease Agreement, the parties do hereby agree as follows: 1. Base Rent: Monthly Base Rental for years one through five is as follows:
YEAR BASE RENT INSTALLMENT ANNUAL PSF COST ---- ----------- ----------- --------------- 1 $ 87,195.75 $ 7,266.31 $ 7.25/SF NNN 2 $ 90,202.50 $ 7,516.87 $ 7.50/SF NNN 3 $ 93,209.25 $ 7,767.44 $ 7.75/SF NNN 4 $ 96,216.00 $ 8,018.00 $ 8.00/SF NNN 5 $ 99,222.75 $ 8,268.56 $ 8.25/SF NNN
2. Commencement Date: Notwithstanding anything in the Lease to the contrary, the Commencement Date of the Lease shall be the date upon which Tenant takes occupancy of the Premises, which is estimated to be May 1, 1999. 3. Owner's Tenant Finish: Owner shall construct the tenant improvements in accordance with Exhibit A-3 and Exhibit C0. 4. Environmental Compliance: (a) All operations and activities to be conducted by Tenant at the Premises are described in Basic Lease Provision of the Lease. Tenant agrees that Tenant will not conduct any operations or activities not specifically described in Basic Lease Provisions at the Premises without the prior specific written consent of Owner. (b) All operations and activities of Tenant on the Premises will comply with all applicable federal, state and local environmental laws and regulations and shall be conducted in a manner which will not give rise to any environmental hazard or claim. Operations and activities of Tenant involving the handling, storage, disposal or transportation to and from the Premises of hazardous materials, substances and/or waste (hereinafter "hazardous materials") shall be conducted in accordance with all applicable laws and regulations and in a manner so as to prevent any releases of hazardous materials. (c) As used herein, "Environmental Cleanup Liability" shall mean any liability, loss, cost, expense, fine or penalty of any nature incurred or imposed by any authority as a result of the necessity to contain, dispose, remove, treat, remedy or abate any air, soil, groundwater or other contamination on or off the Premises and on or off the property of which the Premises are a part, only to the extent arising from Tenant's acts or omissions in the storage, disposal or transportation of chemicals or other products of Tenant on or to the Premises including but not limited to; (a) costs or expenses for investigation, study, assessment, legal representation, cost recovery by government agency, or monitoring of such contamination; and (b) cost, expense, loss or damage incurred as a result of actions or measures necessary to implement or effectuate any containment, removal, disposal, treatment, remediation, cleanup or abatement of such contamination. (d) Tenant agrees to protect, defend, indemnify and hold Owner harmless from any Environmental Cleanup Liability to the extent that such liability arises from the operations, acts or omissions of Tenant on the Premises including but not limited to Tenant's disposal from the Premises or transportation of hazardous materials to or from the Premises. This agreement of Tenant to protect, defend, indemnify and hold Owner harmless shall extend to all acts or omissions of Tenant and shall not be limited to negligent or wrongful acts or omissions of Tenant. (e) The obligations of this Section 5 shall survive the termination of this lease. 1 30 5 Change in Regulations: Tenant and Owner acknowledge and agree that if at any time during the term of the Lease the rules and regulations of the Uniform Building Code or the Uniform Fire Code pertaining to hazardous materials change so as to require an additional investment in fire protection equipment in the Premises then such additional investment shall be the obligation of Tenant, provided however that such additional investment shall not be required as a result of any action of Owner with respect to the Premises, the Building or the Project. 6. Tenant shall have the obligation to conduct an inspection of the Premises with Owner and its representatives within fourteen (14) days after substantial completion of the Tenant Finish and to give Owner, within said fourteen day period, a punch list of all items to be completed and/or corrected. Any items not on such punch list shall be deemed accepted by Tenant, except for latent defects which exception shall be effective for one (1) year following the Commencement Date (unless such defect or subsequent damage was caused by Tenant or its agents, employees, invitees, contractors or suppliers). Owner shall correct any punch list items after receipt of said punch list. 7. Owner's Default: Notwithstanding any other provisions of this Lease, if default shall be made by Owner in the performance of the agreements, conditions or covenants of this Lease to be performed by Owner, and said default shall have continued for thirty (30) days after written notice thereof to Owner or if such default cannot be cured within such thirty (30) day period if Owner shall have failed to commence and diligently pursue such cure, then Tenant in addition to all other remedies now or hereafter provided by law, may at its election, perform such covenant or agreement for or on behalf of Owner, or make good any such default, and any amount or amounts which Tenant shall advance pursuant thereto shall be repaid by Owner to Tenant on demand. 8. Utilities Interruption: Owner agrees to use reasonable efforts to remedy any situation (other than caused by default by Tenant) which gives rise to interruption or failure to furnish any utility services. Additionally, if the Premises are rendered untenantable or Inaccessible due to interruption of service attributable solely to Owner's fault, rent shall be abated for the period of such untenantability. 9. Save and except the foregoing provisions, all other paragraphs and covenants of the Lease Agreement, Riders and Exhibits shall remain in full force and effect as therein stated. In the event of a conflict between the provisions of this Addendum No. 1 and the Lease Agreement or its Riders and/or Exhibits, then the provisions of this Addendum No. 1 shall prevail. 10. The Lease Agreement, Riders, Exhibits and this Addendum No. 1 may only be modified in a writing executed by both parties. 11. Additional Provisions: Early Termination: Tenant will be given the right to terminate the lease after the initial three (3) years of the terms provided the following: a) Tenant agrees to give Landlord six (6) months prior notice of its intent to terminate; b) Tenant agrees to pay Landlord a penalty at termination equal to the remaining unamortized Tenant improvements, commissions and three (3) months base rent equal to the current base rent in year three of the lease. In the event that Tenant is in the process of negotiating a new government contract, Landlord will grant Tenant a thirty (30) to forty-five (45) day reduction of the six (6) month provision, however, Tenant must keep Landlord informed of the contract negotiation pursuant to provision (a). Dated as of the 1st day of March, 1999. OWNER: TENANT: SKY HARBOR ASSOCIATES, CET ENVIRONMENTAL SERVICES, INC. a Michigan limited partnership a California corporation By: Pomeroy Investment Corporation By: /s/ STEPHEN H. DAVIS --------------------------- General Partner Stephen H. Davis Its: President By: /s/ HOWARD LESHMAN ----------------------------- Howard Leshman Its: Vice President 2 31 EXHIBIT A-1 DESCRIPTION OF LAND Building B, Block 1, Linpro Arapahoe Land Limited, County of Arapahoe, Colorado 1 32 EXHIBIT A-3 [FLOOR PLAN] 2/16/98 Proposal 1 for CET Environmental Services, 7032 South Revere Parkway 33 EXHIBIT A-2 [FLOOR PLAN] SKY HARBOR At Centennial Airport Center 7002-7042 South Revere Parkway Englewood, Colorado 34 EXHIBIT B RULES AND REGULATIONS 1. SIGNS A. No Sign, advertisement, notice, placard, picture, name or other lettering shall be exhibited, inscribed, printed displayed or affixed on or to any part of the inside or outside of the Demised Premises of the Building without the prior written consent of Owner. Owner shall have the right to remove any such sign, advertisement, notice, placard, picture, logo, name or other lettering without notice and at the expense of Tenant. B. All approved signs or lettering on doors shall be printed, painted, affixed or inscribed at the expense of Tenant by a person selected by Owner. 2. SIDEWALKS, OBSTRUCTIONS. The sidewalks, halls, entrances, exits, passages, stairways and elevators of the Building shall not be obstructed by Tenant, its agents or employees, nor shall they be used for any purpose other than ingress and egress to and from the Premises. The halls, passages, entrances, exits, stairways, elevators, balconies and roof are not for the use of the general public, and Owner shall in all cases retain the right to control and prevent access thereto by all persons whose presence in the judgment of Owner might be prejudicial to the safety, reputation and interests of the Building and its tenants, provided that nothing herein contained shall be construed to prevent such access to persons with whom Tenant normally deals in the ordinary course of Tenant's business, unless such persons are engaged in illegal activities. No tenant and no employees or invitees of any tenant shall go upon the roof of the Building. 3. LOCKS. Tenant shall not alter any lock or install any new or place additional locks or any bolts or mail slots on any door, wall or window of the Premises without the prior written consent of Owner. 4. KEYS. All keys to the Building, Premises, rooms and toilet rooms shall be and remain the property of Owner and shall be obtained from Owner's Building Management Office, and Tenant shall not from any other source duplicate, obtain keys or have keys made. Tenant, upon termination of the tenancy, shall deliver to Owner all keys to the Building, Premises, rooms and toilet rooms that have been furnished or shall pay the Owner the cost of replacing same or of changing the lock or locks opened by such lost key(s) if Owner deems it necessary to make such change. 5. WATER FIXTURES. The toilet rooms, urinals, wash bowls, drinking fountains and other apparatus shall not be used for any purposes other than that for which they were constructed, and no foreign substance of any kind whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the Tenant who, or whose employees or invitees, shall have caused it. No person shall waste water by leaving faucets open or in any other manner. 6. FLOOR LOADING. Tenant shall not overload the floor of the Premises. Owner shall prescribe, after consultation with the appropriate architects and engineers, the floor loading permissible. 7. ALTERATIONS. In addition to the provisions of the Lease, Tenant shall not mark, paint, drill into, drive nails or screw into or in any way deface or change any part of the Premises or the Building. Owner will direct electricians as to where electric and telephone wires are to be introduced. No boring, cutting or stringing of wires will be allowed except as approved and directed by Owner. The locations of telephones, call boxes and other office equipment affixed to the Premises shall be subject to the approval of Owner. Owner shall permit reasonable numbers of picture hangers and other reasonable attachments to be made to walls, floors and ceilings. 8. FLOOR COVERINGS. The only floor coverings shall be the building standard carpet, or such other covering(s) as Owner may approve in writing. The expense of repairing any damage resulting from Tenant's violation of this rule or from removal of any floor covering shall be borne by the Tenant by whom, or by whose contractors, employees or invitees, the damage shall have been caused. 9. DISTURBANCES AND USE. A. Tenant shall not use, keep or permit to be used or kept any food (other than that to be kept in reasonable amounts for the consumption by its own employees and all of that to be kept in tightly sealed containers and/or in a refrigerator) or noxious gas or substance in the Premises, or permit or suffer the Premises to be occupied or used in a manner offensive or objectionable to Owner or to other occupants of the Building by reason of noise, odors and/or vibrations, or interfere in any way with other tenants or those having business therein. 1 35 B. Only incidental cooking for the use of Tenant may be done on the Premises, and that only using equipment and in a place within the Premises specifically authorized in writing by Owner, and in a way so that no odors of food are observed by other occupants of the Building. C. No vending or machines of any description may be installed, maintained or operated in the Premises without the written consent of Owner. D. No animals or birds may be brought in or kept in or about the Premises or the Building. E. No tenant, employee or invitee of any tenant shall make or permit to be made any unseemly or disturbing noises or disturb or interfere with occupants of this or neighboring buildings or Premises or those having business with them whether by use of any musical instrument, radio, phonograph, unusual noise, or in any other way. F. No tenant, employee or invitee of any tenant shall throw anything out of doors or down any passageway, any stairway, elevator shaft or ventilating duct or shaft of the Building. G. Tenant shall not disturb, solicit, peddle or canvass any occupancy of the Building and shall cooperate to prevent same. H. Tenant shall be responsible for keeping any children visiting or accompanying anyone visiting the Premises under control and quiet so that they do not disturb other occupants of the Building. I. Tenant shall not use the Premises for any purpose other than that described in the Lease, for manufacturing, for the storage of merchandise, except as such storage may be incidental to the use of the Premises for the purpose(s) described in the Lease, for washing clothes, for lodging or for illegal, improper, immoral or objectionable purpose. J. Tenant shall not advertise for laborers giving an address at the Building or Premises. 10. FIRE AND OTHER GOVERNMENTAL REGULATIONS. Tenant shall not do or permit anything to be done in the Premises, or bring or keep anything therein, which will in any way increase the fire insurance rates on the building or on the property kept therein; or obstruct or interfere with the rights of other tenants, or in any way injure or annoy them or conflict with the laws relating to fire, or with any regulations of the fire department, or with any insurance policy upon the Building or any part thereof or conflict with any of the rules or ordinances of the governmental jurisdictions in which the Building lies. A. Tenant agrees that it will comply with all fire and security regulations that may be issued from time to time by Owner, and Tenant also shall provide Owner with the name of a designated employee responsible to represent Tenant in all matters pertaining to such fire or security regulations. B. Tenant shall not use or keep in the Premises any gasoline, kerosene or inflammable, combustible, or explosive fluid or material, other than nominal amounts of ordinary office fluids to be used for duplicating or photocopying machines or other, similar office equipment. C. Tenant shall not use any method of heating or air conditioning other than that supplied by Owner. D. Tenant shall install and properly maintain, at Tenant's sole cost and expense, an adequate, visibly marked and at all times properly operational fire extinguisher next to any duplicating or photocopying machine or any cooking device or any similar heat-producing equipment which may or may not contain combustible material in the Premises. 11. LEAVING THE PREMISES. Tenant shall see that the doors of the Premises are closed and securely locked before leaving the Building and must observe strict care and caution that all water faucets or other water apparatus in the Premises are entirely shut off before Tenant leaves the Building, and that all unnecessary electricity shall likewise be carefully shut off so as to prevent waste or damage. For any default or carelessness, Tenant shall make good all injuries sustained by Tenant, by other tenants or occupants of the Building. All doors opening to public corridors shall be kept closed except for normal ingress and egress from the Premises. 2 36 12. OBJECTIONABLE BUILDING OCCUPANTS. Owner reserves the right to exclude or expel from the Building any person who, in the judgement of Owner, appears intoxicated or under the influence of alcohol or drugs, or who shall in any manner do any act in violation of any of the rules and regulations of the Building. 13. PAINTING AND DECORATING. All painting and decorating in the Premises must be agreed to in writing and in advance by Owner. Any such work as may be agreed to be done by and at the expense of Owner shall be done during regular working hours. Should Tenant desire such work to be done outside of regular working hours, Tenant shall pay the extra cost thereof. 14. WINDOW COVERINGS. No curtains, blinds, shades, draperies, screens or other materials shall be attached to, hung in or used in connection with any window or sidelight of the Premises other than those supplied by or otherwise agreed to by Owner. A. The sashes, sash doors, skylights, windows and sidelights that reflect or admit light or air into the halls, passageways or other public places in the Building shall not be covered or obstructed by Tenant. B. Tenant shall not place anything or allow anything to be placed near the glass of any window, skylights, door, partition or wall which may, in the sole opinion of Owner, appear unsightly from outside the Premises. 15. LIGHT FIXTURES. No electrical fixtures shall be hung or otherwise installed in the Premises other than those supplied by or otherwise agreed to by Owner. 16. SHOW CASES. No show case or other articles shall be put in front of or affixed to any part of the exterior of the Building, nor placed in public portions thereof. 17. INFESTATION. If the Premises is or becomes infested with vermin as a result of the use or any misuse or neglect of Premises by Tenant, Owner shall forthwith at Tenant's sole cost and expense cause the same to be exterminated from time to time to the satisfaction of Owner. 18. TENANT'S CONTRACTORS. Tenant's contractor(s) (any of which shall be subject to the prior written approval of Owner) shall, while in the Building or elsewhere on the Property, be subject to and under the control and direction of Owner or Owner's agent(s) but said contractor(s) shall not be the agent or servant of Owner or Owner's agent(s). 19. TENANT'S NEEDS. The requirements of Tenant will be attended to only upon application at the office of the Building. Owner's employees shall not perform any work or do anything outside of their regular duties unless under special instructions from Owner. 20. ADVERTISING. Without the prior written consent of Owner, Tenant shall not use the name of the Building nor any picture of the Building in connection with or in promoting or advertising the business of Tenant, or on its stationery or in any other manner except as Tenant's address. 21. BUILDING NAME. Owner shall have the right, exercisable without notice and without liability to Tenant, to change the name and the street address of the Building. 22. GOVERNMENT REGULATIONS. If, as a result of any governmental rule or regulation, Owner imposes a curtailment of services or equipment in Premises or the Building, Tenant shall comply therewith and shall be liable to Owner for any surcharge imposed for any violation by Tenant. 23. OUTSIDE SERVICES. No tenant shall obtain for use in the Premises towel or other similar service or accept barbering, boot-blacking or other similar services on the Premises, except from persons authorized by the Owner and at the hours and under regulations fixed by the Owner. 24. BUILDING OPERATION. Owner shall have the right to control and operate the public portions and the public facilities of the Building and the heating and air conditioning, as well as facilities furnished for the common use of the tenants, in such manner as it deems best for the benefit of the tenants generally. 25. PARKING. A. Tenant shall not park any vehicles in any driveways, service entrances or areas posted either as "No Parking" or as "Visitor Parking". 3 37 B. Tenant shall not park any vehicles in any parking space designated for handicapped parking unless such vehicle bears a current handicapped license plate or windshield placard. C. Tenant shall not park in such a manner as to occupy more than one parking space per vehicle, except in such case where a delivery vehicle too large for one space is parked for the purpose of making a specific delivery to or pickup from the Premises. 26. DEFINITIONS. For the purposes of the Rules and Regulations, in every case where the word "Tenant" is used, it shall be deemed to mean the Tenant, its employees, agents, servants, contractors, licensees, visitors, delivery people and invitees. 27. RULE WAIVER. Owner reserves the right by written notice to Tenant to rescind, alter, waiver or add any rule or regulations prescribed for the Building at any time when, in Owner's sole judgment, it is necessary, desirable or proper for the best interest of the Building and its tenants. 4 38 EXHIBIT C WORK LETTER March 1, 1999 Re: Tenant: CET Environmental Services, Inc. Building: 7022 S. Revere Parkway, Englewood, CO ------------------------------------- Suite: 100 --- Address: 7022 S. Revere Parkway, Englewood, CO ------------------------------------- Gentlemen: Concurrently herewith, you, as Tenant, and the undersigned, as Owner, have executed a Lease covering the above captioned suite (the Premises, as defined in the Lease). The provisions of said Lease are hereby incorporated by reference as if fully set forth herein. In consideration of the execution of said Lease, Owner and Tenant mutually agree as follows: Landlord agrees to complete standard improvements to the premises per mutually agreeable space plan and shall contribute up to $5.00 PSF to the cost of completion thereof which cost includes engineering, construction coordination and all other associated costs of construction. Any additional improvements exceeding this allowance shall be paid for by Tenant prior to occupancy. Any unused Tenant finish shall be given to Tenant to be designated a "moving allowance". Tenant agrees that the final space plan will include new carpet, paint and other improvements substantially similar to those on the attached space plan dated February 16, 1999. ACCEPTED AND APPROVED THIS 1ST DAY OF MARCH, 1999. OWNER: TENANT: SKY HARBOR ASSOCIATES CET ENVIRONMENTAL SERVICES, INC. a Michigan Limited Partnership a California corporation By: Pomeroy Investment By: /s/ STEPHEN H. DAVIS Corporation, General Partner -------------------- Stephen H. Davis Its: President By: /s/ HOWARD LESHMAN ------------------ Howard Leshman Its: Vice President 1 39 EXHIBIT D LEASE COMMENCEMENT DATE MEMORANDUM LANDLORD: Sky Harbor Associates Limited Partnership TENANT: CET Environmental Services, Inc. LEASE DATE: March 1, 1999 PREMISES: 7032 South Revere Parkway Englewood, Colorado 80112 Square Feet of Premises 12,027 Square Feet of Project 108,021 Pursuant to the above referenced Lease, Landlord and Tenant agree and certify the Lease commencement date is May 27, 1999, and the expiration date is May 31, 2004. Rent shall commence under the following rates: Base Rent: $ (per Addendum No. 1 of the Lease Agreement) Operating Expenses: $ (per Addendum No. 1 of the Lease Agreement) Commencement Date for Base Rent: May 27, 1999 ------------ Commencement Date for Additional Rent: May 27, 1999 ------------ LANDLORD: TENANT: Sky Harbor Associates CET Environmental Services, Inc., a California corporation By: Pomeroy Investment Corporation By: /s/ STEPHEN H. DAVIS ---------------------- Stephen H. Davis By: /s/ HOWARD LESHMAN Date: May 28, 1999 -------------------- ------------- Howard Leshman Vice President Date: 6/15/99 ------------------ EX-21 6 SUBSIDIARIES OF THE REGISTRANT 1 EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT
Name State of Incorporation Other Names Used in Business - ---------------------------- ---------------------- ---------------------------- Cleanwater Contracting, Inc. California None.
EX-23 7 CONSENT OF GRANT THORNTON 1 EXHIBIT 23 [GRANT THORNTON LETTERHEAD] CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS We have issued our reports dated March 1, 2000, accompanying the consolidated financial statements incorporated by reference or included in the Annual Report of CET Environmental Services, Inc. (the Company) on Form 10-K for the year ended December 31, 1999. We consent to the incorporation by reference in the Company's Registration Statement on Form S-8 of the aforementioned reports. /s/ GRANT THORNTON LLP GRANT THORNTON LLP Denver, Colorado March 28, 2000 EX-27 8 FINANCIAL DATA SCHEDULE
5 1,000 YEAR DEC-31-1999 JAN-01-1999 DEC-31-1999 505 0 10,371 479 74 11,132 4,899 2,263 13,805 7,617 179 0 0 8,671 (2,664) 13,805 43,189 43,189 40,130 45,920 446 51 483 (3,177) 0 (3,177) 0 0 0 (3,177) (.51) (.51)
-----END PRIVACY-ENHANCED MESSAGE-----