EXHIBIT 10.10
FORM OF LEASE
This LEASE entered into this 3rd day of September, 1999 by and between Xxxx
X. Xxxxx and Xxxxxx X. Xxxxxxx III, Trustees of Airedale Realty Trust u/d/t
dated August 23, 1989 and recorded with the Middlesex South District Registry of
Deeds in Book 20028, Page 126, with a mailing address of 00 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter "Landlord"), and X.X. Xxxx,
Incorporated, a Massachusetts corporation, c/o SMTC Corporation, a Delaware
corporation with a principal place of business at 000 Xxxx Xxxx, Xxxxxxx,
Xxxxxxx, Xxxxxx X0X 0X0 (hereinafter "Tenant").
W I T N E S S E T H:
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ARTICLE 1 - Grant and Description of Premises
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Landlord, for and in consideration of the covenants and agreements
hereinafter set forth to be kept and performed by both parties hereto, demises
and leases to Tenant, the premises known and numbered as 00 Xxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx, as more particularly described on Schedule A attached
hereto (the "Land"), together with the building thereon consisting of
approximately 47,570 square feet (the "Building") (the Land and the Building are
hereinafter referred to as the "Premises"). The Premises are described on
Schedule A attached hereto.
ARTICLE 2 - Preparation for Occupancy
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Tenant hereby acknowledges and agrees that Landlord shall have no
obligation to repair or improve the Premises except as specifically set forth
herein. Tenant may, at its sole cost and expense, construct improvements upon
the Premises, subject to the provisions of Article 9 of this Lease.
ARTICLE 3 - Commencement and Length of Term
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The Lease term shall commence, if at all, on the date hereof (the
"Commencement Date"). The term of this Lease shall be for one (1) year following
the Commencement Date (hereinafter referred to as the "Term") unless sooner
terminated or extended as hereinafter expressly provided. Tenant may extend the
term of this Lease for an additional four (4) years, provided it has given
Landlord written notice to extend the Term at least four (4) months prior to the
end of the first year of this Lease, in which event this Lease shall be so
extended on the terms and conditions contained herein.
ARTICLE 4 - Rent, Payment of First Month's Rent
-----------------------------------------------
Tenant shall pay an annual base rent of $300,000.00 during the first year
of the Lease. Said annual base rent shall be paid in advance in equal monthly
installments on or before the first day of
each month. All other sums which Tenant is obligated to pay to Landlord
hereunder shall be deemed "Additional Rent" and shall be payable as provided in
this Lease. If the Tenant extends the Term of this Lease as provided in Article
3, the annual Base Rent during the extended Term shall be as set forth on
Schedule B attached hereto payable in advance in equal monthly installments.
Tenant shall be obligated to pay to Landlord interest at the rate of
eighteen percent (18%) per annum or the maximum legal rate which Tenant may
contract for in Massachusetts, whichever is less, on all sums and charges Tenant
is obligated to pay under the terms of this Lease from the fifth (5th) day after
the date Landlord provides Tenant with notice that said sums and charges are due
and remain unpaid until the date said sums and charges are paid in full.
ARTICLE 5 - Use of Premises
---------------------------
Subject to the restrictions herein, Tenant may use the Premises for any use
of the Premises existing on the Commencement Date, for any manufacturing uses,
including without limitation, manufacturing uses consistent with Tenant's
business as in effect on the Commencement Date (including, without limitation,
metal fabrication and wet paint powder coat finishing), and office, storage and
other uses ancillary or incidental to any of the foregoing, and for any other
lawful business operation (hereinafter, the "Permitted Use"). Any alteration of
the Building by Tenant shall be subject to the Landlord's prior written consent
if required under Article 9, the restrictions hereinbelow and to all applicable
laws and regulations, including, without limitation, zoning, permitting,
environmental and conservation requirements, and compliance therewith shall be
at Tenant's sole cost and expense.
Tenant shall adhere to all of the following in its Permitted Use of the
Premises:
(a) Tenant agrees to conduct Tenant's business at all times in a lawful
manner consistent with reputable business standards and practices.
(b) Except as hereinafter provided, Tenant agrees promptly to comply with
all laws, ordinances, orders, licenses, permits and regulations applicable
exclusively to Tenant's particular use (collectively, "Applicable Laws").
Tenant may, instead of complying with Applicable Laws, contest the same in good
faith and by appropriate proceedings. Tenant also agrees to comply with the
future requirements and reasonable recommendations of any insurance company,
inspection bureau or similar agency providing services to Landlord with respect
to the Premises that apply specifically to Tenant's particular use of the
Premises. Tenant agrees not to install any electrical equipment, or permit any
use, that overloads the applicable utility lines servicing the Premises. Tenant
may, without Landlord's consent or approval, at Tenant's sole cost and expense,
install additional utility lines as may be necessary to prevent any such
potential overload of utility lines servicing the Premises.
(c) Tenant agrees not to: (i) make any use of or allow the Premises to be
used in any manner or for any purpose that will invalidate or increase the rate
of insurance thereof; (ii) use the
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Premises for any purpose whatsoever which might create a nuisance or injure the
reputation of the Premises; (iii) overload the floors; (iv) commit or suffer any
waste; (v) permit offensive odors other than ordinary odors related to operating
Tenant's business to be emitted from the Premises; or (vi) use the Premises in
violation of any applicable law, ordinance, rule, by-law, code, license, permit
or regulation of any governmental authority (provided that Tenant may contest
such laws, in good faith, and by appropriate proceedings).
(d) From and after the Commencement Date, Tenant shall not use, handle,
store or dispose of any oil, hazardous or toxic materials or hazardous or toxic
wastes on or about the Premises unless such use, handling, storage or disposal
is in compliance with the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et. seq.; the Federal
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Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et. seq.; the
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Hazardous Materials Transportation Act, 49 U.S.C. Section 1801; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et. seq.; and the Massachusetts
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Oil and Hazardous Material Release Prevention Act, M.G.L. c. 21E (the "Acts")
and any regulations and rulings promulgated pursuant to any of the Acts, as the
same may be amended from time to time. If a breach by Tenant, its employees,
agents, contractors, guests or invitees of the foregoing covenant results in (i)
a release or contamination of the soil or surface or ground water and (ii) loss
or damage to person(s) or property; Tenant shall: (1) notify Landlord
immediately after obtaining actual knowledge of such release, contamination,
claim of contamination, loss or damage; (2) after consultation and approval by
Landlord, clean up the contamination to the extent required by all applicable
statutes and other governmental regulations and standards; and (3) indemnify,
defend and hold Landlord harmless from and against any claims, suits, causes of
action, costs and fees, and diminution in the value of the Premises (as
reasonably agreed to by the parties through the use of one or more neutral third
party appraisers, or if the parties are unable to so agree, by a court of
competent jurisdiction), resulting solely from such breach by Tenant, including
attorneys' fees arising from, or connection with, any such contamination, claim
of contamination, loss or damage, including, without limitation, any claims,
suits, causes of action, costs and fees arising under the Acts as the result of
such breach by Tenant, provided nothing contained herein shall prevent Tenant
from contesting any such liability in good faith, provided it has the financial
capability to do so. This provision shall survive the termination of this Lease.
No consent or approval of Landlord shall in any way be construed as imposing
upon Landlord any liability for the means, methods, or manner of removal,
containment or other compliance with applicable law for and with respect to the
foregoing.
(e) The foregoing notwithstanding, Tenant shall not be responsible for any
repairs, alterations or improvements necessary to bring the Premises into
compliance with any requirements or recommendations of any insurance company,
inspection bureau or similar agency providing services with respect to the
Premises, or any law, bylaw, ordinance, code, rule, regulation, order, license,
permit, or other legal requirement, that is in effect on the date hereof due to
the conditions or use of the Premises (at levels of intensity substantially
equal to the level of intensity as of the Commencement Date), as of the date
hereof.
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(f) Tenant agrees that, within the Premises, it shall be responsible for
compliance with the Americans with Disabilities Act (42 U.S.C. (S) 12101 et.
seq.) and the regulations and Accessibility Guidelines for Buildings and
Facilities issued pursuant thereto resulting from any alteration to the Building
or Premises during the Term by Tenant.
(g) Landlord shall comply with all requirements and recommendations of any
insurance company, inspection bureau or similar agency providing services with
respect to the Premises, and all applicable laws, bylaws, ordinances, codes,
rules, regulations, orders, licenses, permits, and other lawful requirements of
governmental bodies having jurisdiction (the "Requirements"), that affect the
Premises as of the date hereof to bring the Premises into compliance with the
Requirements due to the condition of the Premises as of the date hereof.
(h) Notwithstanding the foregoing, if Tenant elects to defer its
obligations under this Article 5 to comply with Applicable Laws and/or the Acts
while contesting the same as permitted under this Article 5, and if in
Landlord's reasonable determination, such deferred compliance shall result in a
material adverse effect to any then-existing good-faith marketing efforts of
Landlord to sell or lease the Premises, Landlord shall notify the Tenant of the
same, whereupon Tenant shall have thirty (30) days in which to elect to either
(i) comply with such Applicable Laws and/or Acts as and to the extent required
under this Article 5, or (ii) terminate this Lease without any further
obligation or liability hereunder.
ARTICLE 6 - Taxes, Special Assessments and Water Charges
--------------------------------------------------------
Tenant shall pay as Additional Rent hereunder all real estate taxes and
assessments, special or otherwise, and all other kinds of governmental
impositions and charges, which are, during the Term hereof, levied, assessed or
imposed and which are due and payable by Landlord on the Premises, but only to
the extent properly allocable to the Term (hereinafter collectively referred to
as "Taxes") and all water and sewer charges consumed at the Premises during the
Term. Landlord shall provide Tenant with copies of all invoices for Taxes and
water and sewer charges upon Landlord's receipt of the same. Tenant shall remit
payment to Landlord for such Taxes and water and sewer charges prior to the
later often (10) days after Tenant's receipt of said invoices, or ten (10) days
before interest or penalty would accrue on such Taxes or water and sewer
charges. In the event Tenant does not remit payment to Landlord as provided
above, Landlord may pay such invoices for Taxes and water and sewer charges, and
all amounts so paid by Landlord shall be immediately reimbursed by Tenant and
shall constitute Additional Rent hereunder. Tenant shall have the right, at its
sole cost and expense, to apply for an abatement of real estate taxes upon the
Premises, provided that Tenant pays all Taxes to Landlord, or directly to the
relevant taxing authority, as provided for in this Article 6. Landlord agrees to
reasonably cooperate with Tenant in such abatement process and shall execute
such forms and other documentation reasonably required by Tenant. Landlord's
reasonable expenditures for attorneys' fees, and other costs incurred in
connection with such cooperation by Landlord shall be reimbursed by Tenant
within thirty (30) days of written notification of such costs by Landlord.
Tenant shall be entitled to receive and retain any refund or abatement that may
be made of Taxes that were paid by, or on behalf of, Tenant.
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Tenant shall pay directly to the taxing authority involved all taxes based
on any personal property of Tenant which shall at any time be on the Premises,
including Tenant's installations, additions, improvements, fixtures and other
personal property (whether or not title to the same shall have vested in
Landlord by reason of any other provision hereof). Landlord and Tenant agree
that any betterments and assessments shall be paid over the maximum period
allowed by law.
ARTICLE 7 - Utility Charges
---------------------------
Tenant shall be responsible for the connection of any additional utilities
not serving the Premises as of the Commencement Date that are necessary because
of a change in, or increase in the intensity of, the use of the Premises by
Tenant, and promptly paying all charges for utility services to the Premises
during the Term, including, but not limited to, gas, oil, electricity, telephone
or any other utility used or consumed by it in the Premises (collectively,
"Utilities"). In the event Tenant fails to pay any utility xxxx within sixty
(60) days after the due date, Landlord may, but shall not be obligated to, pay
such xxxx (without any duty to investigate the validity thereof) in which event
such payment shall be deemed Additional Rent hereunder and Tenant shall
immediately reimburse Landlord for the amount paid by Landlord. Unless caused by
the negligence or willful neglect of Landlord or its employees, agents,
contractors or others for whom Landlord is legally responsible, no interruption
or discontinuance of any utility, or inability to obtain same, regardless of the
nature of the cause, shall be deemed an eviction or disturbance of Tenant,
relieve Tenant from any obligation under this Lease, or create any liability on
the part of Landlord.
ARTICLE 8 - Repairs and Maintenance
-----------------------------------
From and after the Commencement Date and during the Term, Tenant shall, at
its own cost and expense but subject to Landlord's obligation to reimburse
Tenant as hereinafter provided, perform such repairs as are necessary to keep
the Premises in as good condition, order and repair as it is on the Commencement
Date, except for (i) reasonable wear and use, and (ii) damage by fire or other
casualty.
If in order to comply with its obligations under this Article 8, Tenant
must make any capital expenditure or acquires any capital item with respect to
the Premises (each, a "Capital Expenditure"), Landlord shall, within thirty (30)
days of receipt of an invoice from Tenant, reimburse Tenant for the Capital
Excess (as hereinafter defined). As used herein, the term "Capital Excess" shall
mean the amount equal to (x) the amount by which the aggregate of all Capital
Expenditures in any given lease year of the Term exceed the following respective
amount for such lease year: $50,000.00 in each of years I through 3 of the Term,
$40,000.00 in year 4 of the Term, and $30,000.00 in year 5 of the Term, less (y)
the Annual Charge-Off (as hereinafter defined) for the lease year in which such
Capital Expenditures were incurred. Commencing on the anniversary of the
Commencement Date next following the lease year in which such Capital Excess
occurs and continuing for the duration of the Term, Tenant shall pay Landlord an
Annual Charge-Off for each lease year then-remaining in the Term. Each such
Annual Charge-Off shall be payable by Tenant to Landlord in equal monthly
installments, which shall be due with each installment of base rent.
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As used herein, the "Annual Charge-Off 'shall be defined as the Capital
Excess divided by the Weighted Useful Life (as hereinafter defined). As used
herein, the "Weighted Useful Life" shall mean (a) the sum of all Capital
Expenditures in the relevant lease year after each Capital Expenditure is
multiplied by its respective Useful Life (as hereinafter defined), divided by
(b) the total of all Capital Expenditures in the relevant lease year.
As used herein, the "Useful Life" shall be expressed in years and shall be
reasonably determined in accordance with generally accepted accounting
principles consistently applied and in effect at the time of the acquisition of
the capital item, provided however, that the Useful Life shall in no event
exceed seven (7) years.
If Landlord shall fail to reimburse Tenant for the Capital Excess within
thirty (30) days after receipt of an invoice therefor from Tenant, Tenant shall
be entitled to deduct an amount equal to the Capital Excess from the next
installment(s) of rent due hereunder until Tenant is fully reimbursed for the
Capital Excess. Tenant shall supply Landlord with reasonably sufficient
supporting documentation in respect of each Capital Expenditure to enable
Landlord to determine the nature of such Capital Expenditure.
ARTICLE 9 - Tenants Alterations and Improvements
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Tenant may, at its sole expense, make interior, non-structural alterations
to the Premises without Landlord's consent or approval. If Tenant is not in
default of this Lease, Tenant may remove such interior nonstructural
alterations, and shall promptly repair any damage to the Premises occasioned by
such removal at the expiration of the Lease. Tenant shall obtain the prior
written consent of Landlord, which consent shall not be unreasonably withheld or
delayed, to make exterior, structural alterations, additions or leasehold
improvements to the Premises, provided that such alterations, additions or
leasehold improvements shall (a) be of the same quality, design and class as the
existing improvements to the Premises, (b) become the property of the Landlord
at the expiration of the Lease, and (c) be at Tenant's sole cost and expense.
Tenant shall promptly pay all contractors and materialmen hired by Tenant
to furnish any labor or materials for any alterations, leasehold improvements or
additions provided for in this Article 9. Should any lien of any nature or type
be made or filed due to any act or omission of Tenant, Tenant shall bond against
or discharge same within ten (10) days after the Tenant obtains actual notice
that the lien is made or filed. If the Tenant shall fail to cause such lien
forthwith to be so discharged or bonded after being notified of the filing
thereof, then, in addition to any other right or remedy of Landlord, Landlord
may discharge the same by paying the amount claimed to be due, and the amount so
paid by Landlord and all reasonable out-of-pocket costs and expenses, including
reasonable attorneys' fees, incurred by Landlord in procuring the discharge of
such lien, shall be due and payable by Tenant to Landlord as additional rent on
the first day of the next month following Tenant's receipt of a xxxx from
Landlord itemizing said costs. The foregoing notwithstanding, Tenant may contest
such claims in good faith and by appropriate proceedings and subject to the
terms and conditions hereof.
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ARTICLE 10 - Signs
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Tenant shall have the right, at its sole expense, to erect signs on the
Premises, provided that they are in conformity with existing municipal
regulations. Landlord, however, reserves the right to require Tenant to modify
the size and location of its sign anytime during the Term of this Lease in
accordance with any change in the municipal regulations requiring such
modification.
ARTICLE 11 - Quiet Enjoyment
----------------------------
Provided Tenant is not in default, Tenant shall have the peaceable and
quiet enjoyment and possession of the Premises during the Term hereof without
any hindrance or molestation.
ARTICLE 12 - Access to Premises
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Landlord or Landlord's agents or representatives shall have the right to
enter the Premises at reasonable times and upon at least twenty-four (24) hours
prior written notice to examine same, and to show it to prospective purchasers
or prospective Tenants of the Premises, provided such entry shall not
unreasonably interfere with Tenant's occupancy of or business in the Premises.
Entry shall be permitted at any time when Landlord deems an emergency exists
which warrants such entry for emergency repairs or otherwise. Any such entries
provided herein shall not constitute eviction of Tenant in whole or in part, and
the rent reserved hereunder shall not xxxxx while such work is being done on or
to the Premises by reason of loss or interruption of Tenant's business or
otherwise.
ARTICLE 13 - Security
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Landlord does not assume responsibility to provide any security measures at
the Premises and shall not be liable for failure to provide same or for
inadequacy thereof to Tenant, its agents, employees, invitees, subtenants or any
third party. Tenant shall indemnify and hold Landlord harmless from any loss,
cost, damage or expense, including reasonable attorney's fees, for any injuries
or other damages arising from claims for failure to provide adequate security at
the Premises.
ARTICLE 14 - Destruction of Premises by Fire or other Casualty
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Except as otherwise provided below, in the event of partial or total
destruction of the Building by fire or other casualty, Landlord shall, as
promptly as practicable, repair, reconstruct or replace the portions of the
Building destroyed to as nearly as possible their condition prior to such
destruction. During the period of repairs or restoration, this Lease shall
continue in full force and effect and there shall be an abatement of base rent
and additional rent hereunder in proportion to the percentage of space within
the Building rendered untenantable by such fire or other casualty.
If twenty-five (25%) percent or more of the Building is so extensively
destroyed by fire or other casualty (i) that is not susceptible of repair,
reconstruction or replacement (x) within six (6) months from the date of such
destruction, or (y) with the insurance proceeds reasonably anticipated
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to be available to Landlord as the result of such fire or other casualty, (ii)
that occurs during the initial one-year Term and Tenant does not provide notice
to Landlord within thirty (30) days after such fire or other casualty of
Tenant's election to extend the Term of the Lease pursuant to Article 3, which
notice Tenan t may provide to Landlord, notwithstanding the terms and provisions
of Article 3, at any time during such 30-day period, or (iii) that occurs during
the last year of the extension period of the Term, Landlord or Tenant may
terminate this Lease by giving written notice to the other within thirty (30)
days after the date of such destruction. In the event of termination as
aforesaid, this Lease shall terminate as of, and base rent and additional rent
shall be appropriately apportioned through and abated from and after, the first
rental payment date occurring after the delivery of the notice of termination.
In addition to Tenant's foregoing rights, if after a fire or other casualty,
Landlord is unable to repair or restore the Premises to a condition reasonably
sufficient for the operation of Tenant's business within six (6) months from the
date of such damage or destruction, Tenant may terminate this Lease by giving
written notice to Landlord no later than thirty (30) days after the expiration
of such six-month period.
ARTICLE 15 - Condemnation
-------------------------
If the whole of the Premises shall be acquired or condemned under eminent
domain proceedings, then the Term of this Lease shall cease and terminate when
the Premises are taken. All payment obligations of Tenant hereunder shall cease
on said termination date.
In the event of a taking of a portion of the Premises and as a result of
said taking the total floor area remaining in the Premises and the total area
available for parking shall be reduced to less than seventy-five percent (75%)
of the total floor area in the Premises and the total area available for parking
at the commencement of the Term hereof, then at the election of the Tenant, this
Lease may be terminated as of the date when the Tenant is required to vacate the
portion of the Premises so taken. In the event Tenant determines to remain in
operation, all base rent shall be reduced pro rata and Landlord shall, within
six (6) months after said condemnation, rebuild the Premises on the space
available, unless, delayed through causes beyond its control, including the
attainment of taking, or insurance proceeds for the same; in which case the
Landlord shall rebuild the Premises in as diligent a manner as possible. If the
Premises are rebuilt by Landlord, the base rent shall be appropriately adjusted.
In any event, Tenant shall have no claim against Landlord by reason of such
taking or termination and shall not have any claim or right to any portion of
the amount that may be awarded or paid to Landlord as a result of any such
taking; provided, however, nothing contained herein shall prevent Tenant from
applying for reimbursement from the condemning authority (if permitted by law
for moving expenses, or removal of trade fixtures, or loss of business goodwill
only if such action shall not reduce the amount of compensation otherwise
recoverable by Landlord from the condemning authority. Except as aforesaid, the
entire compensation awarded in or by reason of said eminent domain proceedings
shall belong to Landlord without any deduction therefrom for any present or
future estate or interest of Tenant and Tenant hereby assigns to Landlord all of
Tenant's
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right, title and interest in and to any and all such compensation together with
any and all rights, estate and interest of Tenant now existing or hereafter
arising in and to the same or any part thereof.
ARTICLE 16 - Insurance and Indemnity
------------------------------------
Landlord agrees to purchase and keep in full force and effect insurance on
Landlord's buildings, fixtures and leasehold improvements located on the
Premises against fire and such other risks as may be included in its extended
coverage insurance covering up to one hundred percent (100%) of the replacement
costs of the buildings, fixtures and leasehold improvements located on the
Premises with vandalism and malicious mischief coverage. Tenant shall pay as
Additional Rent hereunder the cost of said insurance.
Tenant, at its expense, shall maintain and keep in effect at all times
while it is occupying the Premises, the following insurance coverage:
(a) comprehensive general liability insurance and property insurance in
which the limits of public liability shall not be less than $3,000,000.00 per
person and per accident, and in which the limit of property damage shall not be
less than $1,000,000.00. The policy shall also include contractual liability
covering the indemnity provisions of this Lease, premises operations liability,
independent contractors liability, personal injury liability, civil assault and
battery coverage and such other coverage as the Landlord may reasonably require
from time to time that are customarily carried by responsible comparable tenants
in comparable buildings in Holliston, Massachusetts;
(b) workers' compensation insurance as required by statute, and employers'
liability insurance in which the liability limits shall not be less than
$1,000,000.00 for bodily injury by accident, each accident; $1,000,000.00 bodily
injury by disease, each disease; and $2,000,000.00 bodily injury by disease,
policy aggregate;
(c) automobile liability insurance with a combined single limit of not
less than $1,000,000.00 for each accident applying to all owned, hired and non-
owned vehicles;
Such policies (except the workers' compensation and employers' liability) shall
name the Landlord, any other parties in interest designated by Landlord as
additional insureds, and the Tenant as the insured party, and shall contain a
clause that the insurer shall not cancel such policies without at least thirty
(30) days prior written notice to Landlord and shall be issued by insurers of
recognized responsibility licensed to do business in the Commonwealth of
Massachusetts.
Tenant shall deliver to Landlord certificates of such insurance coverage
prior to the date Tenant takes possession of the Premises under this Lease, and,
at least thirty (30) days before any such policy shall expire, Tenant shall
deliver a certificate of replacement policy to Landlord. Tenant shall not be
required to carry plate glass insurance covering breakage of plate glass on the
exterior and interior of the Premises, but shall be required to repair and/or
replace any plate glass breakage as expeditiously as possible, unless caused by
the negligence or willful misconduct of Landlord or
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its agents, employees, contractors or others for whom Landlord is legally
responsible (collectively "Landlord's Affiliates"), in which case such repair
and/or replacement shall be Landlord's responsibility. Repairs and/or
replacement of any plate glass shall be of like kind and quality.
Tenant waives all claims against Landlord and Landlord's Affiliates except
those arising out of Landlord's failure to fulfill its obligations under this
Lease, or the negligence or willful misconduct of Landlord or Landlord's
Affiliates, for injury to persons, damage to property, or to any other interest
of Tenant sustained by Tenant, its employees, agents, invitees, subtenants or
any person claiming through Tenant resulting from any occurrence in or upon the
Premises, including, but not limited to, such claims for damages resulting from:
(a) any equipment or appurtenances becoming out of repair; (b) the Premises
being out of repair; (c) injury or damage done or occasioned by wind, water,
flooding, freezing, fire, explosion, excessive heat or cold, vandalism, riot or
disorder or other casualty; (d) any defect in or failure in the utility
connections, plumbing equipment, heating equipment, air conditioning equipment,
electric wiring, utilities, steam pipes, stairs, railings or walls; (e) broken
glass; (f) the bursting, leaking, backup, or running of any water closet, sewer
pipe, waste pipe, drain, cooling, coil or any other pipe or tank; (g) the escape
of steam or hot water; (h) water, snow or ice being upon or coming through the
roof, stairs or walks of the Premises; (i) the falling of any fixture, plaster
or stucco; and (j) any act, omission, or negligence of other persons in the
Premises, provided however, that such waiver shall not apply to conditions
existing on the Commencement Date.
Tenant agrees to indemnify, defend and hold harmless Landlord and their
agents and employees, from and against all claims, liabilities, losses, damages
and expenses for injury to or death to any person or loss of or damage to
property in or upon the Premises, except for such claims, liabilities, losses,
damages and expenses which result from the gross negligence or willful
misconduct of Landlord or Landlord's Affiliates, or with respect to claims,
liabilities, losses, damages and expenses resulting from Landlord's failure to
fulfill its obligations under this Lease, all as finally determined by a court
of competent jurisdiction. It is further understood and agreed that all
property kept, stored or maintained in or upon the Premises (excluding property
of Landlord or Landlord's Affiliates) shall be at the risk of Tenant. The
foregoing indemnity shall be in addition to Tenant's obligation to supply the
insurance as required in this Article and not in discharge of or substitution
for same.
Landlord agrees to indemnify, defend and hold harmless Tenant from and
against all claims, liabilities, losses, damages and expenses for injury to or
death to any person or loss of or damage to property in or upon the Premises,
which result from the acts or omissions of Landlord or Landlord's Affiliates, or
with respect to claims, liabilities, losses, damages and expenses resulting from
Landlord's failure to fulfill its obligations under this Lease, all as finally
determined by a court of competent jurisdiction.
Landlord agrees to indemnify and hold Tenant harmless from and against any
and all liability due to its compliance or failure to comply with Acts, or the
compliance or failure to comply with the Acts by owners or occupants of the
Premises prior to the date hereof. Included in the foregoing
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indemnity are losses and damages arising out of any claims, suits, causes of
action, costs and fees related to such liabilities, provided that nothing
contained herein shall prevent Landlord from contesting any such liability in
good faith, provided it has the financial capability to do so, and provided
further that any such contest would not result in a material adverse effect to
Tenant's business operations at the Premises.
Notwithstanding any other provision hereof, Landlord and Tenant waive all
rights to recover against each other for any loss or damage arising from any
cause covered by any insurance required to be carried by each of them pursuant
to this Article 16 or any other insurance actually carried by each of them.
Landlord and Tenant will cause their respective insurers to issue appropriate
waiver of subrogation rights endorsements to all policies of insurance carried
in connection with the Building or the Premises or the contents of either of
them.
ARTICLE 17 - Assignment-Subletting
----------------------------------
Tenant shall not assign, mortgage, pledge or encumber this Lease nor sublet
all or any part of the Premises without obtaining on each such occasion
Landlord's prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed, and provided that the term of any such
sublease does not extend beyond the Term of the Lease. If with such consent,
there is any sublease of all or any part of the Premise, Tenant shall pay
Landlord (i) the amount by which any rent or other consideration paid to Tenant
by any subtenant exceeds the amounts (including base rent and Additional Rent)
which Tenant is paying Landlord under the provisions of this Lease, and (ii) any
other profit or gain realized by Tenant from such subletting. All sums payable
hereunder by Tenant shall be paid to Landlord as Additional Rent immediately
upon the receipt thereof by Tenant.
The foregoing notwithstanding, the consent of Landlord shall not be
required if Tenant assigns or transfers the Tenant's interest:
(a) in connection with any merger, consolidation, reorganization or other
corporate restructuring of the Tenant; or
(b) in connection with any sale of all or substantially all of the stock
or assets of the Tenant (and, Tenant shall be released from its liability under
the Lease upon an assumption of the Lease by any successor to the Tenant who
acquires all or substantially all of the Tenant's stock or assets); or
(c) to any affiliate of the Tenant (i.e., any entity controlling,
controlled by, or under common control with, directly or indirectly);
provided that in any such case, the successor shall have net worth equal to or
greater than Tenant as of August 31, 1999, subject to reasonable accounting
adjustments.
-11-
ARTICLE 18 - Additional Covenants
---------------------------------
Tenant covenants and agrees as follows:
(a) Tenant shall keep the Premises at a temperature sufficiently high to
prevent freezing of water in pipes and fixtures;
(b) Tenant shall provide, at its sole cost, such pest examination as
Landlord may reasonably request from time to time during the Term of this Lease.
ARTICLE 19 - Subordination, Estoppel and Landlord's Consents
------------------------------------------------------------
This Lease shall be subject and subordinate at all times to the lien of
existing and future mortgages on the Premises, but only if, with respect to any
such future mortgages, the mortgagee agrees in writing, to the reasonable
satisfaction of Tenant, that for so long as there exists no event of default
hereunder by Tenant, such mortgagee will not, before or after foreclosing,
taking possession of the Premises, or otherwise exercising any of its rights
under such mortgage, disturb Tenant's possession of the Premises or any of
Tenant's rights under this Lease. Tenant covenants and agrees to execute and
deliver, upon reasonable notice, such further instruments subordinating, this
Lease to the lien of any such instruments as shall be desired by Landlord, or
any mortgagee or trustees under trust deeds.
The provisions of the above paragraph shall be self-operative with respect
to existing mortgages on the Premises and no further instrument shall be
required; provided, however, in confirmation thereof, Tenant shall execute such
further assurance as may be requested. Tenant further, to the extent not
prohibited by law, waives the provisions of any statute or rule of law, now or
hereafter in effect, which may give or purport to give Tenant any right or
election to terminate or otherwise adversely affect this Lease and the
obligations of Tenant hereunder in the event any such foreclosure proceeding is
brought, prosecuted or completed.
Within ten (10) days after request by either party, the other party agrees
to deliver an estoppel certificate to any proposed mortgagee or purchaser,
Tenant, or to Landlord, certifying (if such be the case) that this Lease is in
full force and effect and that there are not defenses or offsets thereto, or
stating those claimed by the other party.
Landlord shall exercise reasonable best efforts to arrange with the holder
of any existing underlying mortgage or trust deed for an agreement that if, by
foreclosure or otherwise such holder, or any successor in interest, comes into
possession of the Premises, becomes the owner of the Premises, or takes over the
rights of Landlord in the Premises, it will not disturb the possession, use or
enjoyment of the Premises by Tenant - in accordance with the terms and
provisions of this Lease, so long as Tenant is not in default under any of the
covenants, conditions and agreements contained in this Lease beyond all
applicable grace or cure periods. Failure by Landlord to obtain such
-12-
arrangements shall not relieve Tenant from any obligation under this Lease, or
create any liability on the part of Landlord.
Landlord hereby consents to the grant by Tenant to one or more of Tenant's
lenders of a lien on and security interest in all assets and personal property
of Tenant from time to time located at the Premises, including, but not limited
to, all accounts receivable, inventory, goods, machinery and equipment installed
by Tenant (the "Personal Property"). At the request of any such lender, Landlord
shall execute and deliver such lender's form of consent and waiver agreement,
which may include, without limitation, a waiver by Landlord of any and all
security interests, liens, claims or other similar rights, including, without
limitation, rights of levy or distraint for rent, that Landlord may have in or
on the Personal Property, and an agreement by Landlord that such lender shall
have the right of reasonable access to the Premises for the purpose of removing
the Personal Property within thirty (30) days after Tenant's default under this
Lease or upon Tenant's default under any lending arrangements between such
lender and Tenant, subject to the Tenant's obligations under Article 30 hereof,
and further provided that such lender shall comply with the terms and provisions
of this Lease in respect of such period of occupancy.
ARTICLE 20 - Default
--------------------
The occurrence of any one or more of the following events shall constitute
an "event of default" hereunder:
(a) Tenant's failure to pay rent, utilities, taxes, insurance premiums or
any other obligations payable by Tenant hereunder within five (5) days after
notice from Landlord that the same was not paid when due;
(b) Tenant's default in any of the other terms, conditions or covenants
herein contained, which default is not cured within thirty (30) days after the
date of written notice of such default, or such longer period of time as is
reasonably necessary to cure such default if the same cannot be cured within
thirty (30) days, provided that Tenant has commenced curing such default within
said thirty (30) day period and is diligently pursuing said cure;
(c) Tenant's insolvency or making of an assignment for the benefit of
creditors;
(d) Tenant's filing, or having filed against it, any petition under any
bankruptcy or similar laws which is not discharged within sixty (60) days of
said filing;
(e) Tenant's assets being levied upon in anticipation of a sheriffs or
constable's sale thereof;
(f) appointment of a receiver to administer Tenant's assets or operate
Tenant's business.
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Upon the occurrence of an event of default hereunder, Landlord may declare
the Term of this Lease terminated, and pursue all legal and equitable remedies
available to it under the laws of the Commonwealth of Massachusetts resulting
from Tenant's breach, including, but not limited to, re-entering the Premises by
summary proceedings or otherwise, expelling Tenant and removing all of Tenant's
property therefrom or bringing an action to recover all rents, and all other
charges due hereunder from Tenant for the remaining Term of the Lease. In
addition, Landlord shall be entitled to all costs incurred as a result of
Tenant's breach, including, but not limited to, all reasonable attorneys' fees
incurred to correct such default and/or to pursue all remedies available to
Landlord.
Upon and after any such termination of this Lease, Landlord shall make
commercially reasonable efforts to, relet all or any part of the Premises for
the account of Tenant for such rent and upon such terms and to such person, firm
or corporation and for such period or periods as Landlord in Landlord's sole
discretion shall determine. Landlord shall not be required to accept any
prospective lessee offered by Tenant, or to observe any instruction given by
Tenant about such reletting. For the purpose of such reletting, Landlord may
decorate or make repairs, changes, alterations or additions in or to the
Premises to the extent reasonably deemed by Landlord necessary for re-letting
the Premises. All consideration received by the Landlord for reletting the
Premises shall be the sole property of Landlord. If the consideration collected
by Landlord upon any such reletting for Tenant's account is not sufficient to
pay the rental and Tenant's other obligations reserved in this Lease and all of
Landlord's other costs and expenses related to the reletting of the Premises,
Tenant agrees to pay to Landlord the deficiency upon demand.
The failure of either party to insist in any one or more instances upon the
performance of any of the covenants or conditions of this Lease or to exercise
any right or privilege herein conferred shall not be construed as thereafter
waiving or relinquishing either party's right to the performance of any such
covenants, conditions, rights or privileges, and the same shall continue and
remain in full force and effect, and the waiver of any default or right shall
not constitute waiver of any other default, and the receipt of any rent by
Landlord from Tenant or any assignee of Tenant, or of any portion thereof, shall
not operate as a waiver therein contained, of any of Landlord's rights hereunder
unless evidenced by the Landlord's written waiver thereof.
Landlord shall in no event be in default in the performance of any of its
obligations hereunder unless and until Landlord shall have failed to perform
such obligations within thirty (30) days, or such additional time as is
reasonably required to correct any such default in the exercise of diligence so
long as Landlord has commenced curing such default within said thirty (30) day
period, after written notice by Tenant to Landlord properly specifying wherein
Landlord has failed to perform any such obligation.
ARTICLE 21 - Unperformed Covenants of Tenant
--------------------------------------------
In the event Tenant shall fail to comply with and perform any of the
covenants, conditions or agreements herein contained on Tenant's part to be
performed and such failure shall continue beyond all applicable grace or cure
periods, Landlord shall have the right, but shall not be obligated,
-14-
to perform any such covenants, conditions or agreements, and Tenant agrees to
pay to Landlord on demand, as additional rent, a sum equal to the amount
expended by Landlord in the performance of such covenants, conditions or
agreements. In the event Landlord shall perform any such covenants, conditions
or agreements, Tenant agrees that Landlord, its agents or employees, may enter
the Premises in accordance with the terms of Article 12, and that such entry and
such performance shall not constitute an eviction of Tenant, in whole or in
part, nor relieve Tenant from the continued performance of all covenants,
conditions and agreements of this Lease. Notwithstanding anything in this Lease
to the contrary, Tenant shall have no right to xxxxx its rent or to cancel the
Lease for failure of Landlord to perform any obligation which it is required to
perform hereunder.
ARTICLE 22 - Force Majeure
--------------------------
If either party shall be delayed or hindered in or prevented from the
performance of any act required hereunder by reason of strikes, lock-outs, labor
trouble, inability to procure materials, failure of power, restrictive
governmental laws or regulations, riots, insurrection, war or other reason of
like nature not the fault of the party delayed, then performance of such act
shall be excused for the period of the delay and the period of the performance
of any such act shall be extended for a period equivalent to the period of such
delay. The provisions of this Article shall not operate or excuse the Tenant
from the prompt payment of Base Rent or Additional Rent or any other payments
required by the terms of this Lease.
ARTICLE 23 - Notices
--------------------
All notices, demands and other communications made hereunder shall be in
writing and shall be given either by personal delivery, by nationally recognized
overnight courier (with charges prepaid) or by facsimile (with telephone
confirmation), and shall be deemed to have been given or made when personally
delivered, the second day following the date deposited with such overnight
courier service or when transmitted to facsimile machine and confirmed by
telephone, addressed to the respective parties at the following addresses (or
such other address for a party as shall be specified by like notice):
If to Landlord:
Xxxx X. Xxxxx
000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
and
Xxxxxx X. Xxxxxxx III
00 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
-15-
With a copy to:
Xxxxxxx, Xxxxxx & Weiner, P.C.
000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Tenant:
X. X. Xxxx, Incorporated
c/o SMTC Corporation
000 Xxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxx, Esq.
Barristers & Solicitors
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Either party may, at any time, in the manner set forth for giving notices
to the other, set forth a different address to which notice to it may be sent.
ARTICLE 24 - Recording
----------------------
This Lease shall not be recorded, but a short form notice of this Lease may
be recorded upon the request of either party.
ARTICLE 25 - Successors and Assigns
-----------------------------------
This Lease shall be binding upon and shall inure unto the benefit of the
parties hereto and their respective legal representatives, heirs, successors and
assigns.
-16-
ARTICLE 26 - Governing Law and Interpretation
---------------------------------------------
The laws of the Commonwealth of Massachusetts shall govern the validity,
performance and enforcement of this Lease. Any legal action brought concerning
this Lease or any dispute hereunder shall be brought only in the courts of the
Commonwealth of Massachusetts or in the federal courts located in such state.
The parties hereto submit to the venue and jurisdiction in these courts.
If any provision of this Lease is held to be invalid, such invalid
provision shall be deemed to be severable from and shall not affect the validity
of the remainder of this Lease.
ARTICLE 27 - Entire Agreement
-----------------------------
This Lease and the Schedules and Exhibits attached hereto and forming a
part hereof, set forth all of the covenants, promises, agreements, conditions,
and understandings between Landlord and Tenant concerning the leasing of the
Premises and there are no covenants, promises, agreements, conditions or
understandings, either oral or written, between them concerning the leasing of
the Premises other than as set forth herein. The Trustees executing this Lease
on behalf of Landlord do so solely in their capacity as Trustees and shall have
no personal liability hereunder whatsoever.
ARTICLE 28 - Amendments
-----------------------
No amendments, modifications of or supplements to this Lease shall be
effective unless in writing, executed and delivered by Landlord and Tenant.
ARTICLE 29 - Brokerage
----------------------
Tenant warrants and represents that Tenant has not dealt with any broker in
connection with the consummation of this Lease, and in the event any claim is
made against the Landlord relative to dealings with brokers, Tenant shall defend
the claim against Landlord with counsel of Landlord's selection and save
harmless and indemnify Landlord on account of loss, cost or damage which may
arise by reason of any such claim.
ARTICLE 30 - Expiration of Term - Abandoned Property
----------------------------------------------------
Upon the expiration or other termination of the Term, Tenant shall
peaceably quit and surrender to Landlord the Premises and all alterations and
additions thereto that are the property of Landlord pursuant to Article 9 or
otherwise, broom clean and in as good order, repair and condition as is required
of Tenant under Article 8. Tenant may remove all of its property, and shall
repair any damages to the Premises caused by their installation or by such
removal. Tenant's obligation to observe or perform this covenant shall survive
the expiration or other termination of the Term.
Tenant may remove any personal property from the Premises (including trade
fixtures owned by Tenant if Tenant repairs all damage in connection with such
removal) upon or prior to the
-17-
expiration or termination of this Lease and any such property which shall remain
in the Premises thereafter shall be conclusively deemed to have been abandoned,
and may either be retained by Landlord as its property or sold or otherwise
disposed of in such manner as Landlord may see fit; provided, however, that if
Landlord terminates this Lease prior to the expiration of the Term, Tenant shall
have up to 30 days after notice of termination to remove its Personal Property
if during such period it observes the terms and provisions of this Lease,
including the obligation to pay rent. If any part thereof shall be sold, then
Landlord may receive and retain the proceeds of such sale and apply the same, at
its option, against the expenses of the sale, the cost of moving and storage,
any arrears of rent, additional or other charges payable hereunder by Tenant to
Landlord and any damages to which Landlord may be entitled under this Lease or
pursuant to law.
In the event Tenant holds over after the expiration of the Term, Tenant
shall thereafter be deemed a tenant at sufferance and shall be liable for use
and occupancy payments at a rate of one hundred fifty (15 0%) percent of the
base rent due hereunder plus additional rent calculated on the basis of the
preceding twelve (12) months and prorated on a daily basis, and such occupancy
shall otherwise be on the terms and conditions set forth in this Lease.
ARTICLE 31 - When Lease Becomes Binding
---------------------------------------
The submission of this document for examination and negotiation does not
constitute an offer to lease, or reservation, or option for, the Premises. This
Lease shall become effective and binding only upon the execution and the
delivery hereof by Landlord and Tenant.
ARTICLE 32 - Additional Provisions
----------------------------------
Landlord has no knowledge of any hazardous materials or toxic wastes, at,
in, under or emanating from on the Premises except as disclosed under a Stock
Purchase Agreement entered into by and among X.X. Xxxx, Incorporated,
Shareholders of X.X. Xxxx, Incorporated and HTM Holdings, Inc. of even date (the
"Stock Purchase Agreement"). If any hazardous materials or toxic wastes not
disclosed under the Stock Purchase Agreement exist on, at, in, under or are
emanating from the Premises as of the date of this Lease, or come into existence
during the Term through the acts or negligence of Landlord or Landlord's
Affiliates (collectively, a "Release") Landlord shall be responsible at its own
cost and expense, for the removal and remediation of such hazardous materials or
toxic wastes; provided however, that Landlord shall have no liability to Tenant
under this sentence unless Tenant's business operations at the Premises are
materially adversely affected due to such Release. Landlord has no knowledge of
any pending or threatened actions with respect to environmental matters at the
Premises as of the date hereof. The respective rights and obligations of
Landlord and Tenant hereunder shall in no way modify or alter the respective
rights and obligations of the parties under the Stock Purchase Agreement.
Landlord acknowledges and agrees that the Sellers under the Stock Purchase
Agreement are obligated to perform certain remedial actions in connection with
bringing the Premises into compliance with certain Environmental Laws (as
defined in the Stock Purchase Agreement) as described in Section 5.7 of the
Stock Purchase Agreement (the "Agreed Actions") or reimburse Tenant for its cost
of such remediation. If Tenant
-18-
elects to perform the Agreed Actions, Tenant shall not be required to obtain
Landlord's consent to perform the Agreed Actions.
IN WITNESS WHEREOF, the parties have executed this Lease on the date first
above written.
Landlord:
AIREDALE REALTY TRUST
By: _________________________________
Xxxx X. Xxxxx, as Trustee
By: _________________________________
Xxxxxx X. Xxxxxxx III, as Trustee
Tenant:
X.X. XXXX, INCORPORATED
By: ___________________________________
COMMONWEALTH OF MASSACHUSETTS
Middlesex, ss.
--------- ------
Then personally appeared the above-named Xxxx X. Xxxxx and Xxxxxx X.
Xxxxxxx III, Trustees of Airedale Realty Trust, and acknowledged the foregoing
instrument to be their free act and deed, before me,
__________________________________
Notary Public
My commission expires:
COMMONWEALTH OF MASSACHUSETTS
Middlesex, ss.
--------- -------
Then personally appeared the above named ____________________ of X.X. Xxxx,
Incorporated, and acknowledged the foregoing instrument to be his free act and
deed, before me,
__________________________________
Notary Public
My commission expires:
-19-
SCHEDULE A
Property Description
--------------------
A certain parcel of land situated on Xxxxxxx Xxxxxx in the Town of Holliston,
Middlesex County, Massachusetts and shown as "Lot 2" on a plan entitled
"Definitive Subdivision Plan of Xxxxxxx Industrial Park in Holliston, Mass.;
Owner: X.X. Xxxx Corp., 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx; Survey
by: Xxxxxxx Engineering, Inc.," dated June 24, 1982, revised October 21, 1982,
and November 15, 1982, which plan is recorded with Middlesex South District
Registry of Deeds as Plan No. 1211 of 1982, Book 14802, Page End, being more
particularly bounded and described according to said plan as follows:
NORTHWESTERLY by Xxxxxxx Street, as shown on said plan, by curving line on
three courses, 100.16 feet, 100.29 feet and 152-86 feet;
EASTERLY by land now or formerly of Xxxxxxx, 493.18 feet;
SOUTHERLY by land now or formerly of Holliston Sand and Gravel Co.,
Inc. on three courses, 217.79 feet, 120.52 feet and 91.90
feet;
WESTERLY by land now or formerly of Lowland Realty Trust, 414.51
feet;
NORTHWESTERLY by Lot 3, as shown on said plan, 67.15 feet.
Said Lot 2 contains 4.05 acres, according to said plan.
-20-
SCHEDULE B
Annual Base Rent During Extended Term
-------------------------------------
Year of Extended Term Annual Rent
--------------------- -----------
Year 1 $6.70 x 47,570 sq. ft. = $318,719.00
Year 2 $7.10 x 47,570 sq. ft. = $337,747.00
Year 3 $7.40 x 47,570 sq. fl. = $352,018.00
Year 4 $7.60 x 47,570 sq. ft. = $361,532.00
-21-
