LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is made as of March 5, 1999 by and
between Xxxxxx County Development Corporation, an economic development
corporation formed pursuant to I.C.A. chapter 496B, ("Landlord") and Xxxxxx
Acquisition Sub, Inc., an Iowa corporation ("Tenant").
WITNESSETH:
Landlord for and in consideration of the rents, covenants and
agreements hereinafter reserved, mentioned and contained on the part of Tenant
to be paid, kept, observed and performed, has leased, rented, let and demised
and by these presents does lease, rent, let and demise unto Tenant, and Tenant
does hereby take and hire, upon and subject to the conditions or limitations
hereinafter expressed, that parcel of improved land owned in fee by Landlord and
situated in the City of Jefferson, County of Xxxxxx, Iowa situated at 000 Xxxx
Xxxxxxx 00, Xxxxxxxxx, Xxxx 00000 and more particularly described on Exhibit A
attached hereto and made a part hereof ("Demised Premises").
1. Term of Lease. The term of this lease shall commence on the date
hereof ("Commencement Date") and shall end ten (10) years after the Commencement
Date ("Termination Date") unless terminated sooner pursuant to the provisions of
this Lease.
2. Improvements. Tenant, at its sole cost and expense, is authorized to
maintain and/or construct manufacturing and/or administrative facilities on the
Demised Premises ("Facilities"). The Demised Premises shall be graded and the
Facilities shall be maintained and/or constructed in accordance with sound
engineering standards.
3. Rent. Tenant agrees to pay Landlord rent on an annual basis, in
advance due on the anniversary of the Commencement Date in each year (or the
next business day if such day is a weekend or holiday observed by the state
government of Iowa), in an amount as follows:
Year Amount Due
---- ----------
1 (Commencement Date) $0
2 $0
3 $67,405
4 $67,405
5 $67,405
6 $67,405
7 $67,405
8 $175,000
9 $175,000
10 $175,000
4. Use of the Demised Premises. The Demised Premises and the Facilities
currently existing and/or hereafter to be erected thereon by Tenant shall be
used primarily as a manufacturing facility for the manufacture and the
warehousing of finished products prior to shipment. Tenant shall not use or
occupy the Demised Premises or knowingly permit them to be used or occupied
contrary to any statute, rule, order, ordinance, requirement or regulation
applicable thereto, or in any manner which would violate any certificate of
occupancy affecting the same, or which would cause the value or usefulness of
the Demised Premises or any portion thereof substantially to diminish or which
would constitute a public or private nuisance or waste; and Tenant agrees that
it will promptly upon discovery of any such use, take all necessary steps to
discontinue such use.
5. Real Estate Taxes. All real estate taxes on the Demised Premises and
the Facilities shall be paid by Tenant.
6. Insurance. At all times during the term of this Lease the Tenant
shall maintain and keep in force liability insurance coverage which names
Landlord as an additional insured. Tenant shall from time to time deliver to
Landlord certificates of insurance evidencing such coverage. Policies providing
such insurance coverage shall prevent termination by the insurers without at
least ten days prior written notice to Landlord.
7. Utilities. Landlord shall have no obligation to provide utilities to
the Demised Premises. However, if Tenant extends any utility service to the
Demised Premises, it shall not remove them on or before the Termination Date
without the prior written consent of Landlord. Tenant shall pay the cost of any
and all utilities.
8. Compliance with Law. Throughout the term of this Lease, at Tenant's
sole cost and expense, Tenant shall promptly correct upon discovery any
violations and shall promptly comply with any and all present and future laws,
ordinances, orders, rules, regulations and requirements of all federal, state
and municipal governments and appropriate departments, commissions, boards and
officers thereof applicable to the Demised Premises or any part thereof or to
the operations of Tenant thereon.
9. Mechanic's Liens and Other Liens. Tenant shall not suffer or permit
any mechanics' liens to be filed against the Demised Premises or any part
thereof by reason of work, labor, services and materials supplied or claimed to
have been supplied to Tenant. If any such mechanics' liens shall at any time be
filed against the Demised Premises or any part thereof, Tenant shall cause the
same to be discharged of record within sixty days after the date of filing the
same, or shall deliver to Landlord a bond satisfactory to Landlord protecting
Landlord against such lien if Tenant decides to contest any such lien.
10. Defaults. If default shall be made by Tenant or Landlord by
operation of law or otherwise under the provisions hereof in keeping, observing
or performing any of the terms contained in this Lease, and such default shall
continue for a period of thirty days after written notice thereof given by the
non-defaulting party, such non-defaulting party may give notice to the
defaulting party specifying such default and stating that this Lease and the
term hereby demised shall expire and terminate on a date to be specified on such
notice. Upon any expiration or termination of this Lease, Tenant shall quit and
peaceably surrender the Demised Premises to Landlord and shall remove all
improvements placed thereon by Tenant.
11. Purchase Option. (a) From the Commencement Date until the
Termination Date, Tenant (or at the sole discretion of Tenant, any affiliate of
Tenant) shall have the right to purchase the Premises, together with the
Facilities thereon, all of Landlord's interest in, to and under this Lease, and
all of Landlord's interest in, to and under that certain Option to purchase
Parcel B of Lot 6 of the SE1/4 of Section 32, Township 84 North, Range 30 West
of the 5th P.M., Xxxxxx County, Iowa, all for a purchase price as set forth in
paragraph 11(b) below, and on the terms and conditions set forth in paragraph
11(c) below. Tenant shall exercise such right by delivery of written notice to
Landlord.
(b) The purchase price (the "Purchase Price") payable by Tenant for the
interests of Landlord, as aforesaid, shall be as follows:
During Year Purchase Price
----------- --------------
1 $750,000
2 $750,000
3 $682,595
4 $649,320
5 $614,381
6 $577,695
7 $539,175
8 Appraised Value
9 Appraised Value
10 Appraised Value;
where the term "Appraised Value" shall mean the fair market value as determined
by an independent real estate appraiser selected to the mutual satisfaction of
Landlord and Tenant.
(c) If Tenant elects to exercise the purchase option set forth in this
Section 11, the closing of the transaction shall take place at a time and date
not less than thirty (30) days and not more than 120 days after receipt by
Landlord of Tenant's notice of such exercise, at the business office of Tenant.
At the closing, Landlord shall deliver to Tenant a general warranty deed,
together with appropriate resolutions confirming the authority of Landlord to
make the contemplated conveyance to Tenant. At the closing, the Tenant shall
deliver to Landlord by cashier's check or bank certified check, or by wire
transfer of funds, the Purchase Price. Upon conveyance of title and payment of
the Purchase Price, Tenant's obligations to Landlord and Landlord's obligations
to Tenant under this Lease shall terminate. Any assignment or transfer of
Landlord's interest in this Lease and/or the Premises shall be conditioned upon
and subject to this purchase option. Any assignment or transfer of Tenant's
rights under this Lease shall include, without any specific language, action or
deed, the assignment or transfer of this purchase option.
12. Assignment. Tenant shall not assign this Lease either in whole or
in part or sublet the Demised Premises without first obtaining, in each and
every instance, Landlord's consent thereto in writing, which consent shall not
be unreasonably withheld. Notwithstanding the foregoing, Tenant may assign this
Lease in whole or in part to any affiliate of Tenant upon notice to Landlord
within thirty (30) days of such assignment.
13. Entry by Landlord. Tenant agrees to permit Landlord and the
authorized representatives of Landlord to enter upon the Demised Premises upon
prior notice at all reasonable times during ordinary business hours for the
purpose of inspecting the same.
14. Indemnification. Tenant agrees to indemnify and save Landlord
harmless against and from any and all claims by or on behalf of any persons,
entity or governmental agency arising from the conduct, management or from any
work or thing whatsoever done in or about the Demised Premises, including
without limitation any work or thing resulting in environmental contamination of
the Demised Premises unless caused by Landlord's negligence.
15. Net Lease. Except as specifically stated in this Lease, Landlord
shall have no obligation to pay any costs or expenses with respect to the
Demised Premises during the term of this Lease.
16. Notices. All notices which are required or permitted under the
terms of this Lease shall be given by either party to the other in writing. All
such notices shall be sent by United States mail, postage prepaid, or personal
delivery to the addresses set forth below the signatures of the parties to this
Lease.
17. Binding Effect. Covenants and agreements herein contained shall
bind and inure to the benefit of Landlord and its successors and assigns, and
Tenant and its permitted successors and assigns.
18. Captions. The captions of this Lease are for convenience in
reference only and in no way define, limit or describe the scope or intent of
this Lease, nor in any way affect this Lease.
19. Relation. This Lease does not create the relationship of principal
and agent or of partnership or joint venture or of any association between
Landlord and Tenant, the sole relationship between Landlord and Tenant being
that of Landlord and Tenant.
20. Entire Agreement; Modification. All preliminary and contemporaneous
negotiations are merged into and incorporated in this Lease. This Lease contains
the entire agreement between the parties and shall not be modified or amended in
any manner except by an instrument in writing executed by the parties hereto.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Lease to
be executed as of the day and year first above written.
Landlord:
XXXXXX COUNTY DEVELOPMENT
CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Tenant:
XXXXXX ACQUISITION SUB, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name: Xxxxxx X. Xxxx
Title: President
Exhibit A
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Demised Premises
----------------
Lots 1 and 2 in the SE1/4 of Section 32, Township 84 North, Range 30 West of the
5th P.M., Xxxxxx County, Iowa and Parcel A (except Xxx 0 xx Xxxxxx X) xx Xxx 0
xx xxx X0/0 of the SE1/4 of Section 32, Township 84 North, Range 00 Xxxx xx xxx
0xx X.X., Xxxxxx Xxxxxx, Xxxx.
