LEASE
AND OPERATING AGREEMENT
LEASE
AND OPERATING AGREEMENT
This
Lease and Operating Agreement is made and entered effective the 1 st of May 2015 by and between Arc LifeStyle Group,
Inc. ("Lessee) either directly or through any subsidiary or affiliate company and La Filotea Productions, Inc. ("Lessor").
Whereas,
the Lessor is in the business of life-style and specializes in fashion, food & beverages and leisure.
Whereas,
the Lessor desires to turn over the operation of La Filotea Productions, Inc. operations and shall become an operating unit ofArc
LifeStyle Group, Inc. (the 'Business');
Whereas,
the Lessee desires to operate the Business on the Property and further to utilize staff of the Lessor and has agreed to reimburse
the Lessor as set forth herein below.
The
parties agree as follows:
l.
Property Lease. The Lessee shall lease the Property and the Business on a quarter-to-quarter basis for the consideration set forth
below and shall have the exclusive right to operate the Business on the Property throughout the term of this Lease and Operating
Agreement. In addition, a monthly and Quarterly submission of financial statements on a timely manner and no later than 15 days
after end of a month or quarter or both is required.
| a. | As
Is Condition. The Lessee has inspected the Property and takes it in "As Is"
condition except with respect to legal matters as follows: Lessor represents that it
has all authorizations required to operate the Business as presently conducted; and that
there is no litigation pending or resolved that has a material impact on the Business
or its potential profitability; that Lessor has exclusive title to and owns the Business
and the Property; that Lessee has not and shall not investigate any environmental issues
and has relied on the absolute representation of the Lessor that no environmental condition
exists and further that the Lessor has all necessary rights to the Property required
to enter into this Lease and Operating Agreement. |
| g. | Hold
Harmless. The Lessee hereby agrees to defend, pay, indemnify and save free and harmless
the Lessor, from and against any and all claims, demands, fines, suits, actions, proceedings,
orders, decrees and judgments of any kind or nature by or in favor of anyone whomsoever
and from and against any and all costs and expenses, including reasonable out of pocket
attorneys' fees, resulting from or in connection with loss of life, bodily or personal
injury or property damage arising out of or from or on account of any occurrence in,
upon, at, or from the Property or occasioned wholly or in part through the use and occupancy
of the Property or any improvements therein or appurtenances thereto, or by any act or
omission of the Lessee or any subcontractor, agent or licensee of the Lessee, or their
respective employees, agents, contractors or invitees in, upon, at, or from the Property
or its appurtenances except claims arising out of the negligence or willful act of the
person or persons sought herein to be indemnified against loss. |
| i. | Indemnification.
The Lessor hereby agrees to defend, pay, indemnify and save free and harmless the Lessee,
from and against any and all claims, demands, fines, suits, actions, proceedings, orders,
decrees and judgments of any kind or nature by or in favor of anyone whomsoever and from
and against any and all costs and expenses, including reasonable out of pocket attorneys'
fees, resulting from or in connection with loss of life, bodily or personal injury or
property damage arising out of or from or on account of any occurrence in, upon, at,
or from the Property incurred prior to the Effective Date hereof or occasioned wholly
or in part through the use and occupancy of the Property or any improvements therein
or appurtenances thereto, or by any act or omission of the Lessor or any subcontractor,
agent or licensee of
the Lessor, or their respective employees, agents, contractors or invitees in, upon,
at, or from the Property or its appurtenances except claims arising out of the negligence
or willful act of the person or persons sought herein to be indemnified against loss. |
| n. | Repair
and Maintenance. The Lessee agrees at all times, from and after delivery of full possession
of the Property to the Lessee, and at its sole cost and expense, to repair and maintain
in good and tenantable condition the Property and every part thereof, excluding the roof,
exterior walls, structural parts of the Property, and including without limitation, the
utility meters, utility lines serving only the Property even though such lines may be
located outside the Property, pipes and conduits, all fixtures, air conditioning and
heating equipment serving the Property. |
| o. | Make
Good Provisions. Lessor shall keep and maintain in good and tenantable condition and
repair, the roof, exterior walls, structural parts of the Property, pipes and conduits
ooutside the Property for the furnishing to the Property of various utilities (except
to the extent that the same are the obligation of the appropriate public utility company)
provided, however, that the Lessor shall not be required to make repairs necessitated
by reason of the negligence of the Lessee or anyone claiming under the Lessee, or by
reason of the failure of the Lessee to perform or observe any conditions or agreements
in this Lease and Operating Agreement contained, or caused by alterations, additions,
or improvements made by the Lessee or anyone claiming under the Lessee. Anything to the
contrary notwithstanding contained in this Lease and Operating Agreement, the Lessor
shall not in any way be liable to the Lessee for failure to make repairs as herein specifically
required unless the Lessee has previously notified the Lessor, in writing, of the need
for such repairs and the Lessor has failed to commence and complete said repairs within
a reasonable period of time following receipt of the Lessee's written notification. All
such repairs made, whether done by the Lessor or the Lessee, shall be made and completed
in accordance with the laws, rules, regulations and orders of all governmental authorities
having jurisdiction thereof and with least interference to the business and activities
of the other party thereto, and the party making such repairs shall not cause any conflict
with any union contract to which the Lessor may then be a party. Notwithstanding anything
herein contained to the contrary, all reasonable out-of-pocket costs of making repairs
hereunder shall be deemed an offset against the obligations due to Lessor under paragraph
numbered 6 hereof. |
| c. | Principal:
The principal amount of the credit line shall be equivalent to $3,000.00. |
| e. | Accountability:
Although this agreement may be signed below by more than one person, each of the undersigned
understands that they are each as individuals responsible and jointly and severally liable
for paying back the full amount. |
| k. | Co-borrowers:
Any Co-borrowers signing this agreement agree to be likewise accountable with the borrower
for this loan. |
The
Lessee shall further compensate the Lessor in the amount of 50,000 shares of Common Stock of the Lessee upon the execution of
this agreement.
Upon
the occurrence of an Event of Default, the Lessor shall provide notice to Lessee and any disputes shall be resolved as set forth
herein. The Lessor shall have no right to terminate this Lease and Operating Agreement except as herein otherwise specifically
provided.
| a) | Cooperation
in transition and otherwise including that due diligence documentation to be completed
by Lessor. |
| b) | Senior
management personnel of Lessor shall agree to terms of management and supervision acceptable
to Lessee and such personnel. |
Upon
the occurrence of an Event of Default, the Lessor shall provide notice to Lessee and any disputes shall be resolved as set forth
herein. Lessee, in addition to any other remedy available to the Lessee at law or in equity may by notice to the Lessor terminate
this Lease and Operating Agreement. Furthermore, in the event the Lessor shall neglect or fail to perform or observe any of the
covenants, provisions or conditions contained in this Lease and Operating Agreement on its part to be performed or observed within
thirty (30) days after written notice of default (or if more than thirty (30) days shall be required because of the nature of
the default, if the Lessor shall fail to proceed diligently to cure such default after notice), then in that event the Lessor
shall be responsible to the Lessee for any and all damages sustained by the Lessee as a result of the Lessor's breach; and further,
after such notice the Lessee shall have the right to cure any such default at the Lessor's expense including in such expenditure
all costs and reasonable attorney's fees incurred to cure such default or breach of the Lease and Operating Agreement.
If
a dispute arises from this Agreement or the performance of or breach of this Agreement, the parties agree to use the following
procedures described in this Section. A meeting shall be held promptly between the parties, attended by individuals with decision-making
authority regarding the dispute, to attempt in good faith to negotiate a resolution of the dispute. If the parties do not meet
within ten (10) days following a party's delivery of notice of a dispute or if following a timely meeting, the dispute is not
resolved, the parties agree to submit the dispute to mediation in accordance with the Commercial Mediation Rules of the American
Arbitration Association. The parties shall jointly appoint a mutually acceptable mediator and if the parties are unable to agree
upon an appointment within ten (10) days from the conclusion of negotiations to seek the assistance of the American Arbitration
Association for appomtment of a mediator. The parties agree to
confer with the mediator within twenty (20) days following the mediator's appointment. If the parties are not successful in resolving
the dispute through mediation, the dispute shall be settled by arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association. The arbitrations shall be administered by and conducted by a single arbitrator. The arbitrator
shall be an independent attorney licensed to practice law in Arizona and who is experienced in commercial real estate and manufacturing
industry practices. No person having a prior or existing attorney-client, business or family relationship with any party or their
representative shall be qualified to act as arbitrator in accordance with this Agreement absent express prior written consent
of all parties. The parties shall negotiate the selection of a single arbitrator, however, if the parties are unable to select
an arbitrator willing to arbitrate the disputed issues within thirty (30) days after delivery by any party of notice of demand
for arbitration, the arbitrator shall be selected in accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration shall be held in Each party shall pay one-half (1/2) of the arbitrator's costs and expenses.
The
parties agree that Lessee shall continue to operate the Business and utilize the Property during this dispute resolution process.
IN WITNESS WHEREOF,
the undersigned have caused this Lease and Operating Agreement to be signed, sealed and delivered on the date first noted above.
| /s/
Xxxxxxxx Xxxx Xxx, CEO |
|
/s/Xxxxxx
Xxxxx Xxxxxxxx |
| Xxxxxxxx Xxxx Xxx, CEO |
|
Xxxxxx Xxxxx Xxxxxxxx,
CEO |
| LESSOR: La Filotea Productions, Inc. |
|
LESSEE: Arc LifeStyle Group, Inc. |
Exhibit
A: Property Subject to Lease and Operating Agreement
| 1. | Buildings
and Land: The buildings and land identified at the address in paragraph one of this agreement |
| 2. | Operating
Assets located on the Property |
| e. | Machinery
and equipment |
| a. | All
operating personnel |
| b. | List
of Advisors and contractors |
| 4. | List
of Customer including all contact details |
| 5. | List
of Vendors and Suppliers |
| 6. | Intellectual
Property including brand names and logos |
