EXHIBIT 10.11
COMMERCIAL PROPERTY LEASE
THIS LEASE AGREEMENT is made and entered into this 27th day of August,
1998, by and between ▇▇▇▇▇▇ ▇. AND ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, whose address is ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Lessor"),SEVILLE PLASTICS,INC., a
Michigan corporation, whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ("Lessee") and INMOLD,INC., whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Guarantor").
Statement of Purpose
Lessor is the owner of two commercial buildings and surrounding real
estate located at 3925 and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Lessor has agreed to lease such building and real estate to Lessee, and Lessee
has agreed to lease such building and real estate, under the terms and
conditions of this Agreement. By Agreement of even date, Guarantor has acquired
all of the outstanding stock of Lessee. As part of that transaction Guarantor
agreed, among other things, to guarantee Lessees' obligations under this Lease.
1. Premises. Lessor hereby leases to Lessee the two adjacent commercial
buildings (collectively, the "Building") and related real estate (the
"Land") located at the 3925 and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇▇ (the Building and Land are hereinafter individually and
collectively referred to as the "Premises"), for the term of this
Lease, subject to the terms and conditions of this Lease Agreement. A
legal description of the Land is attached hereto as Exhibit A and by
this reference incorporated herein.
2. Superceding Nature of this Lease. This Lease supecedes an earlier lease
between the Lessor and the Lessee for the Premises. The parties
acknowledge that Lessee is currently in possession of the Premises
under the earlier lease which is presently in full force and effect
neither party being in default thereunder, and that the rent and all
other obligations of Lessee under the earlier lease are paid through
July 1, 1998.
3. Term. This Lease shall become effective on August 1, 1998 (the "Lease
Commencement Date"), and shall end on July 31, 2005 (the "Term").
4. Rent
a. Base rent. Lessee shall pay Lessor the following sums as the
Base Rent for the Term of this Lease, payable at the following
rates, beginning March 1, 1998:
August 1, 1998 - July 31, 2001 $9,200 per month
August 1, 2001 - July 31, 2003 $9,700 per month
August 1, 2003 - May 31, 2005 $10,200 per month
Rent shall be payable in equal monthly installments as noted above,
which shall be due and payable to Lessor without notice and demand and
without deduction or offset, in advance, on the first day of each
calendar month. Rent shall be paid to Lessor at the address shown
above or any other place designated in writing by Lessor. All amounts
payable by Lessee to Lessor hereunder, if not paid when due, shall bear
interest from the due date until paid at
the rate equal to one (1%) percent in excess of the then current
"prime rate" of NBD Bank, but not in excess of the legal rate. Such
prime rate shall be the rate announced by NBD Bank as its "prime
rate". If no such prime rate is announced by NBD Bank, then the
prime rate shall be a generally accepted substitute for the rate
announced by a commercial bank as its charge on a loan to a prime
customer.
b. Additional rent. This Lease is intended by both parties to be an
absolute net\net\net lease to Lessor. As such, Lessee shall be
responsible for the payment of (i) all real estate and personal
property taxes and insurance on the Premises for the entire Term,
(ii) all costs of maintenance, repair and replacement, including
without limitation all equipment, the roof and outer walls, and
(iii) all costs of utilities, water, sewer, electricity, gas and all
other services to the Premises, including without limitation snow
removal, landscaping and the like. Lessee shall at its sole cost and
expense arrange for the periodical removal of trash and refuse in a
manner acceptable to Lessor. Lessee shall pay for all other services
contracted for by Lessee as soon as an invoice is presented so that
no past due accounts arise. Lessee shall indemnify and hold Lessor
harmless from and against any and all such costs, expenses, taxes,
personal property, utility bills, insurance premiums, costs of
maintenance, replacement and repair and other charges. In addition,
any fees, costs, or expenses incurred by Lessor for enforcing
Lessee's obligations under this lease, including reasonable attorney
fees, shall be additional rent owing under the Lease and shall be
immediately due and payable by Lessee.
5. Signs. All signs placed on the Premises shall be in keeping with the
character and decor of the Premises, and shall be subject to
Lessor's written approval, to be given or withheld in Lessor's sole
discretion.
6. Acceptance of Occupancy. Lessee is presently and has for some time
been in possession of the Premises, and acknowledges that the
Premises are in a state of repair that is acceptable for Lessee's
intended use of the Premises as of the date hereof, and Lessee
accepts the Premises in "as is" condition as of the Lease
Commencement Date.
7. Evironmental Matters. Tenant shall not cause or permit the use,
generation, storage or disposal in, on or about the Premises of any
substances, materials or wastes subject to regulation under federal,
state or local laws from time to time in effect concerning
hazardous, toxic or radioactive materials in quantities or
conditions prohibited by such laws. Lessee indemnifies and holds
Lessor, and Lessor's successors and assigns, harmless from and
against any loss, damage, claims, costs, liability or clean up costs
arising out of Lessor's use, handling, storage or disposal of any
such hazardous, toxic or radioactive material on the Premises.
Three weeks prior to expiration of the Lease, Lessee shall, at
Lessee's expense, conduct a baseline environmental assessment
("BEA") with respect to the Premises, which BEA shall comply with
the rules promulgated for such assessments by the Michigan
Department of Natural Resources. Lessee shall then, at Lessee's own
expense, take any actions necessary to remediate any environmental
contamination found on the Premises.
8. Vacation of the Premises. Lessee shall not vacate or abandon the
Premises during the term of this Lease. If Lessee does abandon or
vacate the Premises or is dispossessed by process of law or
otherwise, any of Lessee's personal property that is left on the
Premises shall be
deemed abandoned by Lessee, at the option of Lessor.
9. Use. The Premises are to be used and occupied by Lessee for plastic
injection molding, warehouse and office uses. No activity shall be
conducted on the Premises that does not comply with all state and
local laws, including all laws relating to environmental protection.
10. Repairs, Maintenance and Replacement. (a) Lessee shall keep the
Premises and every part thereof, including without limitation all
building systems and improvements, walls, roof, interior, exterior,
electrical system, plumbing system, HVAC system, water and sewer
systems, parking area, roads, sidewalks, landscaping, drainage,
lighting facilities and any other facilities serving the Premises in
good condition and repair, and in a first class condition, ordinary
wear and tear excepted. Lessee hereby waives all rights to make
repairs to and/or replacements of the Building and/or any equipment
or system thereof or therein, at the expense of Lessor or in lieu
thereof to vacate the Premises as provided by any law, statute or
otherwise now or hereafter in effect. During the Term of this Lease,
Lessee shall make all repairs, additional modifications or
alterations to the Premises, regardless of the nature thereof, which
may subsequently be required by any applicable laws. All repairs made
by or on behalf of Lessee shall be made and performed by contractors
or mechanics reasonably approved by Lessor and in accordance with all
applicable laws and regulations of governmental authorities having
jurisdiction.
(b) Notwithstanding the foregoing, the Lessee shall have no
obligation to replace the walls and roof, such replacement obligaton
being the sole obligation of Landlord.
11. Surrender of the Premises. Lessee shall surrender the Premises to
Lessor when this Lease expires, broom clean and in the same condition
as on the Lease Commencement Date, normal wear and tear excepted.
12. Entry and inspection. Lessee shall permit Lessor or Lessor's agents
to enter the Premises at reasonable times and with reasonable notice,
to inspect the Premises. During the one hundred and eighty (180) days
before the Lease expires, Lessee shall permit Lessor to place
standard "For Lease" signs on the Promises and permit persons
desiring to lease the Premises to inspect the Premises.
13. Taxes and assessments. Lessee shall pay all real and personal
property taxes and assessments levied against the Premises during the
term of this Lease. All taxes levied on personal property owned or
leased by Lessee are the sole responsibility of Lessee.
14. Alterations. Lessee may remodel and improve the Premises. However,
any remodeling or improvements that significantly alter the
Premises or require an investment by Lessee in excess of $5,000 shall
require written approval from Lessor, which approval shall not be
unreasonably withheld. Such work shall be done without injury to any
structural portion of the building. Any improvements constructed on
the Premises shall become the property of Lessor when this Lease
terminates.
15. Assignment and Subletting. Lessee may not assign, sublet or
otherwise transfer or convey
its interest or any portion of its interest in the Premises without
written consent from Lessor. Lessor shall have total discretion on its
approval of proposed assignments or subleases. Lessor may assign its
rights under this Agreement.
16. Trade Fixtures. All trade fixtures and movable equipment installed by
Lessee in connection with the business it conducts on the Premises
shall remain the property of Lessee and shall be removed when this
Lease expires. Lessee shall repair any damage caused by the removal of
such fixtures, and the Premises shall be restored to the original
condition.
17. Insurance. Lessee hereby waives all claims against Lessor for damage
to any property or injury or death of any person in, on or about the
Premises arising at any time and from any cause and Lessee shall hold
Lessor harmless from any damage to any property or injury to or death
of any person arising from the use of the Premises by Lessee. The
foregoing indemnity obligations of Lessee shall include reasonable
attorney's fees, investigation costs and all other reasonable costs
and expenses incurred by Lessor from the first notice that any claim
or demand is to be made or may be made. This provision shall survive
the termination of this Lease with respect to any damage, injury or
death occurring prior to such termination. Without limiting the
foregoing, Lessee shall also insure the Premises, including all
buildings and improvements, for the replacement cost of the buildings
and improvements, against loss or damage under a policy or policies of
fire and extended coverage insurance, including additional perils.
Lessee shall obtain and maintain in full force general liability and
property damage insurance with coverage of $2,000,000 combined single
limit for injury or death and $300,000 for property damage, covering
all claims for injuries to persons occurring in, on or around the
Premises. The insurer providing insurance coverage specified in the
preceding sentence shall be reasonably acceptable to Lessor. Each
insurance policy shall also contain a provision exempting Lessor from
any loss of coverage as an insured due to the acts of Lessee. Lessee
shall give Lessor the customary insurance certificates evidencing that
the foregoing insurance is in effect during the term of the Lease. All
policies must also provide for notice by the insurance company to
Lessor of any termination or cancellation of a policy at least thirty
(30) days in advance. All policies shall name both Lessee and Lessor
as insured parties.
18. Lessee's Personal Property. All Lessee's personal property, including
trade fixtures, on the Premises shall be kept at Lessee's sole risk.
19. Destruction of the Premises. It is understood and agreed that if the
Building hereby leased is damaged or destroyed, in whole or in part,
by fire or other casualty during the term hereof, the Lessor will
repair and restore the same to good tenantable condition with
reasonable dispatch, and the rent herein provided for shall ▇▇▇▇▇
entirely, in case the entire premises are untenantable, and pro rata
for the portion untenantable, in case only a part is untenantable,
until the same shall be restored to a tenantable condition; provided,
however, if Lessee shall fail to adjust Lessee's insurance or to
remove Lessee's damaged goods, wares, equipment or property within a
reasonable time and, as a result thereof, the repairing and/or
restorimg is delayed, there shall be no abatement of rental for such
period of delay. Alternatively, Lessor may elect to terminate this
Lease upon giving notice of such election in writing to Lessee within
sixty (60) days after the happening of the event causing the damage.
Lessee
may also elect to teminate this Lease if (a) 50% or more of the leased
premises are unusable by Lessee for conducting its business; and (b)
the Premises are not restored to a tenantable and usable condition
within ninety (90) days following the happening of the event causing
the damage. Lessee shall provide written notice to Lessor of its
intent to terminate within ten (10) days following the expiration of
such ninety (90) day period. Upon termination of this Lease by Lessee
as aforesaid, Lessor shall receive all insurance proceeds from the
policies carried by Lessee insuring the Premises and if such proceeds
are less than the full replacement cost of the Premises so damaged or
destroyed Lessee shall pay an amount equal to such deficiency to
Lessor upon demand.
20. Condemnation. If any part of the Premises is taken for any public or
quasi-public purpose pursuant to any power of eminent domain, or by
private sale in lieu of eminent domain, and such taking adversely
affects the Lessee's use of the Premises, then either Lessor or
Lessee may terminate this Lease, effective the date the public
authority takes possession. All damages for the condemnation of the
Premises, or damages awarded because of the taking, shall be payable
to and the sole property of Lessor.
21. Default and reentry. (a) Upon the occurrence of an Event of Default
hereunder, Lessor may terminate this Lease, reenter the Premises, and
seek to relet the Premises on whatever terms Lessor thinks advisable.
Notwithstanding reentry by Lessor, Lessee shall continue to be liable
to Lessor for rent owed under this Lease and for any rent deficiency
that results from reletting the Premises during the term of this
Lease. Notwithstanding any reletting without termination, Lessor may
at any time elect to terminate this Lease for any default by Lessee by
giving Lessee written notice of the termination. In addition to
Lessor's other rights and remedies as stated in this Lease, and
without waiving any of those rights, if Lessor deems necessary any
repairs that Lessee is required to make or if Lessee defaults in the
performance of any of its other obligations under this Lease, Lessor
may make such repairs or cure such defaults and Lessor shall not be
responsible to Lessee for any loss or damage that is caused by that
action. Lessee shall immediately pay to Lessor, on demand, Lessor's
costs for curing any defaults as Additional Rent under this Lease.
(b) For purposes of this Lease, an "Event of Default" means:
(i) Lessee's failure to pay rent when due;
(ii) Lessee fails to perform any other obligations under this
Lease within ten (10) days afta receiving written notice of
such failure from Lessor;
(iii) Lessee or Guarantor makes any assignment for the benefit of
creditors or a receiver is appointed for Lessee or Guarantor or
their respective property; or if any proceedings are instituted
by or against Lessee or Guarantor for bankruptcy (including
reorganization) or under any insolvency laws;
(iv) Guarantor fails to pay or perform any obligation to Lessor
under a certain Stock Purchase Agreement of even date and a
Promissory Note executed in connection therewith in the original
principal amount of $400,000; or
(v) Lessee fails to pay or perform any obligation to Lessor under
a certain employment letter of even date, or fails to pay or
perform any obligation to the Rochester Entity, as defined
therein, under a certain Stock Purchase Agreement of even date.
22. Subordination. This Lease and Lessee's rights under it shall at all
times be subordinate to the lien of any mortgage Lessor places on the
Premises or to any collateral assignment Lessor makes of this Lease
or of rent under this Lease. However, as long as Lessee is not in
default under this Lease, the foreclosure of a mortgage given by
Lessor shall not affect Lessee's rights under this Lease. At the
request of any lienholder, Lessee shall provide Lessor with a
customary tenant's estoppel letter regarding the status of this
Lease.
23. Notices. Any notices required under this lease shall be in writing
and served in person or sent by registered or certified mail, return
receipt requested, to the addresses of the parties stated in this
lease or to such other addresses as the parties substitute by written
notice. Notices shall be effective on the date of the first attempted
delivery.
24. Lessee's Possession and Enjoyment. As long as Lessee pays the rent as
specified in this Lease and performs all its obligations under this
Lease, Lessee may peacefully and quietly hold and enjoy the Premises
for the term of this Lease.
25. Holding Over. If Lessee does not vacate the Premises at the end of
the Term, the holding over shall constitute a month-to-month tenancy
and the Base Rent for such hold over period shall be on hundred fifty
(150%) percent of the Base Rent for the immediately preceding
year (computed on a monthly basis).
26. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to its subject matter. This Agreement may not be
modified except by a written document signed by the parties.
27. Waiver. The failure of Lessor to enforce any condition of this Lease
shall not be a waiver of Lessor's right to enforce every condition of
this Lease. No provision of this Lease shall be deemed to have been
waived unless the waiver is in writing.
28. Binding effect. This Agreement shall bind and benefit the parties and
their successors and permitted assigns.
29. Time is the essence. Time is the essence in the performance of this
Lease.
30. Guarantee by Guarantor. The Guarantor hereby guarantees the full and
prompt payment and fulfillment of all obligations of Lessee under
this Lease for the entire Term. This guaranty is a guaranty of
payment and not of collection, and Lessor is not required to first
attempt to collect or to obtain performance from Lessee before
requesting Guarantor to satisfy and/or to perform Lessee's's
obligations hereunder. Guarantor waives notice of any breach or
default by Lessee under this Lease. The liability of Guarantor under
this guarantee will not be released or affected by:
a. Lessor granting any indulgences or extensions of time to
Lessee;
b. Any modification of this Lease by Lessor and Lessee, and
in the event of any such modification the liability of
Guarantor will be deemed modified in accordance with the
terms of such modification;
c. Release, discharging or modification of Lessee's
obligation under this Lease in any creditors,
receivership, bankruptcy or other proceedings; or
d. Assignment or transfer of this Lease by Lessee.
31. Attorneys Fees. Upon default by Lessor hereunder, Lessee (or
Guarantor, as the case may be) shall reimburse Lessor for all costs
of enforcing the provisions of this Lease, including reasonable
attorneys fees incurred in any trial or appellate court.
32. Unenforceable Provisions. If any provisions of this Lease shall be
determined to be illegal or unenforceable, such determination shall
not affect any other provisions of this Lease and all such
provisions shall remain in full force and effect.
33. Governing Law. This Lease shall be governed and construed pursuant to
the laws of the State of Michigan.
IN WITNESS WHEREOF the parties have each signed this Agreement as of
the _______ day of August, 1998.
GUARANTOR: LESSEE:
INMOLD, INC. SEVILLE PLASTICS, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its Treasurer Its Treasurer
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LESSOR:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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EXHBIT A
LEGAL DESCRIPTION OF LAND
