INDUSTRIAL LEASE AND OPTION
This Lease, is executed this 17th day of April, 1995, by and between
the City of Cedar Falls, Iowa, LESSOR, and Clay `Equipment Corporation, an Iowa
corporation, with its principal office at 000 Xxxxxxx Xxxxxx, Xxxxx Xxxxx 00000,
LESSEE,
W I T N E S S E T H:
WHEREAS, Lessor is the owner of the real property hereinafter described
and has the lawful authority to lease the same for the purposes hereinafter
described; and
WHEREAS, Lessor is a corporation organized and existing under the laws
of the State of Iowa, and as such is empowered to promote and solicit,
industrial and economic development projects as authorized and to make and
execute leases, contracts and other instruments necessary or convenient for the
exercise of its powers and purposes to acquire, whether by purchase, lease or
otherwise, and to improve, maintain, equip and furnish one or more projects,
including real and personal property deemed necessary in connection therewith,
and to lease to others any of its projects and to charge and collect rent
therefore; and
WHEREAS, to finance a portion of this project hereinafter described,
consisting of the hereinafter described real estate and a facility for the
conduct of manufacturing operations, including the acquisition and construction
of the facility, to be located on Xxxx 0 xxx 0, Xxxxx Xxxxx Xxxxxxxxxx Xxxx,
Xxxxx VI, (the "Project"), the United States Department of Commerce Economic
Development Administration (the "EDA") has authorized a Grant for Flood Relief
Project Award No. 00-00-00000 (the "XXX Xxxxx") to Lessor; and
WHEREAS, pursuant to said Grant and the above powers, Lessor is
authorized to enter into this Lease with Lessee, subject to the approval of the
terms thereof by the EDA; and
WHEREAS, pursuant to the foregoing recitals, Lessor and Lessee now enter
into this Industrial Lease and Option;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, covenants and agreements herein contained, LESSOR AND LESSEE
HEREBY REPRESENT, COVENANT AND AGREE AS FOLLOWS:
1. Lease of Premises. Lessor does hereby lease and demise to Lessee and
Lessee does hereby hire and take as Lessee upon and subject to the terms and
conditions herein set forth the tract of real property hereinafter described,
together with all improvements and appurtenances thereto, located in Cedar
Falls, Black Hawk County, Iowa, (hereinafter the "premises" or the "project"),
to-wit:
Xxxx 0 xxx 0, Xxxxx Xxxxx Xxxxxxxxxx Xxxx, Xxxxx VI in the
City of Cedar Falls, Black Hawk County, Iowa.
2. Term of Lease. (a) The initial term of the Lease (the "Lease Term")
shall be a period of ten (10) years, commencing on the first day of the first
month following completion of the improvements by the contractor, acceptance
thereof by Lessor, and delivery of the premises to Lessee, and terminating on
the last day of the one hundred twentieth (120th) month thereafter, both dates
inclusive; subject to (1) the limited right of termination by Lessor and other
remedies for default as provided in Paragraph 7 hereof, and (2) the option for
Lessee to renew this Lease for an additional period as provided in Paragraph
2(b) below.
(b) The Lease Term may be renewed and extended by Lessor, at its
option and subject to the review and approval by the United States Department of
Commerce, Economic Development Administration (the "EDA"), as provided in the
Special Terms and Conditions of the XXX Xxxxx, for an additional period of five
years. Lessor will not unreasonably withhold the lease extension option to
Lessee. The rental amount for months one hundred twenty-one (121) through one
hundred eighty (180) shall be no less than the current lease amount provided in
Paragraph 3(a)(A) hereof nor shall it increase more than three percent (3%).
Lessor shall exercise such option to renew the Lease Term unless Lessee is in
default and has failed to cure such default as provided in Paragraph 7 hereof by
the time of expiration of the Lease Term. If Lessor intends not to renew the
Lease, Lessor shall give not less than 180 days' prior written notice to Lessee
of its intention not to so renew.
(c) Lessee will have the option to purchase said property upon
expiration of the lease extension referenced in Paragraph 2(b) subject to those
conditions provided in Paragraph 6 hereof.
3. Rental Amounts. (a) Lessee shall pay Lessor, as a rental fee the
aggregate of the following amounts commencing on the first day of the first
month following the issuance of an Occupancy Permit by City:
(A) Monthly Lease Payments at the rate of sixteen thousand
seven hundred twenty-two dollars and no cents ($16,722.00) during the
initial one hundred twenty (120) months of the term of the Lease.
(B) If the Lease Term is, renewed by Lessor as provided in
Paragraph 2(b) hereof, lease payments for months one hundred twenty-one
(121) through one hundred eighty (180) shall be no less than the
current lease amount provided in Paragraph 3(a)(A) hereof nor shall it
increase more than three percent (3%).
(2) A late payment penalty of three percent (3% of the
applicable Monthly Lease Payment as stated above in the event such
Payment is not made by Lessee within five days after the due date
thereof.
(3) All other payments of whatever nature which Lessee
has agreed to pay or assume hereunder.
(b) The obligations of Lessee to make the foregoing Lease Payments
on or before the date the same become due and to perform all of its other
obligations, covenants and agreements hereunder shall be absolute and
unconditional, without notice or demand, and without abatement, deduction,
set-off, counterclaim, recoupment or defense or any right of termination or
cancellation arising, and, except as may be otherwise expressly provided herein,
notwithstanding any damage to or loss, theft or destruction of the Project or
any part thereof, any failure of consideration or frustration of commercial
purpose, or any chancre in Lessor's legal organization or status.
(c) Nothing in this Lease shall be construed to release Lessor from
the performance of any agreement on its part herein contained or as a waiver by
Lessee of any lights or claims which Lessee may have against Lessor under this
Lease or otherwise, but any recovery upon such lights and claims shall be had
from Lessor separately, it being the intent of this Lease that Lessee shall be
unconditionally and absolutely obligated to perform fully all of its
obligations, agreements and covenants under this Lease (including the obligation
to make Lease Payments). Lessee may, however, at its own cost and expense and in
its own name or in the name of Lessor, prosecute or defend any action or
proceeding or take any other action involving third persons which Lessee deems
reasonably necessary in order to secure or protect its light of possession,
occupancy and use of the Project, and in such event Lessor hereby agrees to
cooperate fully with Lessee and to take all action necessary to effect the
substitution of Lessee for Lessor in any such action or proceeding if Lessee
shall so request.
4. Lessor's Covenants. Lessor covenants and agrees:
(a) That Lessor owns the premises and has good and legal right to
lease said premises to Lessee and that Lessor will put Lessee in possession
thereof, and, so long as Lessee pays the Lease Payments and Additional Payments
hereby reserved and observes and performs the several covenants, stipulations
and agreements provided on Lessee's part, Lessee shall peaceably hold and enjoy
the demised premises during the term hereof without any interruption by Lessor
or by any person rightfully claiming under Lessor;
(b) That Lessee may, at its sole cost and expense, make other such
additions, changes and alterations in and to any part of the premises as Lessee
from time to time may deem necessary or advisable, subject to the express
conditions set forth in Paragraph 5 hereof,
(c) That Lessee, notwithstanding the provisions of Paragraph 5(e)
hereof, shall have the right to contest any mechanic's or other similar lien
filed against or upon the described premises if within the 30-day period
referred to in said Paragraph 5(e) hereof it notifies Lessor in writing of its
intention to do so and, if requested by Lessor, deposits with Lessor a bond (or
other reasonably acceptable security) in favor of Lessor, with a surety company
reasonably acceptable to Lessor as surety, in the penal sum of at least the
amount of the lien claim so contested plus an additional amount equal to
interest thereon for six months at the current statutory rate of interest,
indemnifying and protecting Lessor from and against any liability, loss, damage,
cost and expense of whatever kind or nature growing out of or in any way
connected with said asserted lien in the contesting thereof, but all on the
condition that Lessee diligently prosecute such contest, at all times
effectively stay or prevent any official or judicial sale of the premises, or
any part thereof or interest therein, under execution or otherwise, and pay or
otherwise satisfy any final judgment adjudging or enforcing such contested lien
claim and thereafter promptly procure record release or satisfaction thereof;
(d) That any part of the structure and any fixtures paid from funds
of Lessor shall remain the property of Lessor. Lessee shall have the right to
remove from the premises any and all machinery, equipment and fixtures owned by
or paid for by Lessee, provided, however, that Lessee shall repair any physical
damage to Lessor's property caused by the removal of any such machinery,
equipment or fixtures;
(e) That Lessee shall have the right, in its or Lessor's name, to
contest the validity or amount of any imposition, as defined in Paragraph 5(o)
hereof, which Lessee is required to bear, pay and discharge pursuant to the
terms of this Lease, by appropriate legal proceedings instituted, at least ten
(10) days before the imposition complained of becomes delinquent, but only if
and provided that Lessee, before instituting any such contest, gives Lessor
written notice of its intention so to do and, if requested in writing by Lessor,
deposits with Lessor a bond (or other reasonably acceptable security) in favor
of Lessor, with a surety company reasonably acceptable to Lessor as surety, in a
penal sum of at least the amount of the imposition so contested plus an
additional amount equal to interest thereon for six months at the current
statutory rate of interest, conditioned upon the payment, if so adjudged, of the
contested imposition, together with all interest and penalties accruing thereon
and costs of suit, if any, and provided further that Lessee diligently
prosecutes any such contest, at all times effectively stays or prevents any
official or judicial sale therefore under execution or otherwise, and promptly
pays any final judgment enforcing the imposition so contested, and thereafter
promptly secures record release or satisfaction thereof, and provided further,
that Lessee hold Lessor whole and harmless from any costs and expenses Lessor
may incur related to any such contest;
(f) That Lessor is authorized to (i) enter into this Lease and
perform its obligations hereunder, and (ii) grant Lessee the option to purchase
the premises as set forth herein;
(g) That Lessor will not transfer or encumber the premises or
impose any new restrictions on the premises without Lessee's prior written
consent; and
(h) That Lessor will construct the building and improvements on the
premises in accordance with the plans, specifications and standards necessary
for Lessee to continue its operations, and approved by Lessee and the EDA.
(i) To bear, pay and discharge, before the delinquency thereof, all
taxes and assessments, general and special, if any, which may be lawfully taxed,
charged, levied, assessed or imposed upon or against or be payable for or in
respect of the demised premises, or any part thereof, or any improvements at any
time thereon or Lessee's interest therein or under this Lease, including any new
lawful taxes and assessments not of the kind enumerated above to the extent that
the same are lawfully made, levied or assessed in lieu of or in addition to
taxes or assessments now or heretofore customarily levied against said premises
or against comparable real property in general, and further including all water
and sewer charges, assessments, and other governmental charges and impositions
whatsoever, foreseen or unforeseen.
5. Lessee's Covenants. Lessee covenants and agrees:
(a) To pay the Lease Payments at the time and in the manner herein
provided to Lessor or Lessor's order at such place as may from time to time be
reasonably designated by Lessor;
(b) To assume full responsibility for all maintenance, upkeep,
repair, replacement and improvement of any and all buildings, improvements,
machinery, equipment, fixtures and appurtenances of any type now or hereafter
located upon said property, and for the care and maintenance of all exterior and
unimproved portions thereof. and to hold Lessor harmless from any responsibility
or liability therefore of any type whatsoever;
(c) To make no additions, changes or alterations in and to any part
of the premises, and improvements thereon, which will adversely affect the
structural strength of any part of the same or which would change the character
of said premises and improvements so that the premises would not constitute a
"facility" as defined in Iowa law. All additions, changes and alterations made
by Lessee, upon said conditions, shall W be made in a workmanlike manner and in
strict compliance with all laws and ordinances applicable thereto, (ii) when
commenced, be prosecuted to completion with due diligence, and (iii) when
completed, be deemed a part of the premises; provided, however, that additions
of machinery, equipment and fixtures to the premises by Lessee, the cost of
which is financed totally by funds of Lessee independent of any non-financing
therefore now or hereafter provided by Lessor, and not constituting repairs,
renewals or replacements of items owned by Lessor at the time of execution of
this lease;
(d) Not do or permit others under its control to do any work in or
about the premises or related to the repair, rebuilding, restoration,
replacement, alteration of or addition to the premises, or any part thereof,
unless Lessee shall have first procured and paid for all requisite municipal and
other governmental permits and authorizations. All such work shall be done in
good and workmanlike manner and in compliance with all applicable building,
zoning and other laws, ordinances, governmental regulations and requirements,
and in accordance with the requirements, rules and regulations of all insurers
under the policies required to be carried hereby;
(e) Not do or suffer anything to be done whereby the premises, or
any part thereof, may be encumbered by any mechanic's or other similar lien, and
if, whenever and as often as any mechanic's or other similar lien is filed
against the premises, or any part thereof, purporting to be for or on account of
any labor done or materials or services furnished in connection with any work
in, on or about the premises done by, for, or under the authority of Lessee,
Lessee shall discharge the same of record within thirty (30) days after the date
of films or provide security therefore which is reasonably acceptable to Lessor.
Lessee hereby acknowledges and gives notice to all other parties that Lessor
does not authorize or consent to and shall not be liable for any labor or
materials furnished Lessee or anyone claiming by, through, or under Lessee upon
credit, and that no mechanic's or other similar lien for any such labor,
services or materials shall attach to or affect the reversionary or other estate
of Lessor in and to the premises or any part thereof,
(f) If at any time during the term of this Lease the demised
premises or any part thereof is damaged or destroyed by fire or other casualty,
to proceed with due diligence to repair, restore, rebuild or replace said
damaged or destroyed portion thereof to as good condition as it was in
immediately prior to such damage and destruction, subject to such alterations as
Lessee may elect to make as otherwise permitted herein. Before commencing the
work of repairing, restoring, rebuilding or replacing the improvements as above
provided, there shall be delivered to Lessor performance and labor and material
payment bonds with respect to such work and in the full amount of the contract
covering such work made by the person which contracts to do such work as
principal and a surety company or companies reasonably satisfactory to Lessor as
surety and in form satisfactory to Lessor. Said bonds shall name Lessor and
Lessee as joint obligees. In the event that any such damage or destruction
occurs, all of the insurance monies collected or payable on account of such
damage or destruction on or under the policy or policies of insurance maintained
by Lessee pursuant to the requirements hereof shall be payable jointly to Lessor
and Lessee as their interests appear, and thereafter endorsed by such other
parties to Lessee and to the person or persons performing such work or providing
materials therefore upon receipt by Lessor, from time to time, of certificates
signed by both Lessee and an architect or engineer selected by Lessee and
reasonably approved in writing by Lessor (i) requesting payment of a specified
amount of such funds and directing to whom such amount shall be paid; (ii)
stating that the amount requested either has been paid by Lessee or is justly
due to contractors or other persons who have performed the work or provided
necessary materials in the repair and rebuilding of the premises and
improvements, and briefly describing such work and materials, and stating that
the requested amount does not exceed the fair value of such work or materials;
(iii) stating that, except for the amounts if any stated in said certificate,
there are no outstanding indebtedness which are then due and payable for labor,
wages, materials, supplies or services in connection with the repair or
rebuilding of the damaged improvements which, if unpaid, might become the basis
of a mechanic's or other similar lien upon the premises or any part thereof, and
(iv) stating that no part of the several amounts paid or due, as stated in said
certificate, has been or is being made the basis for the withdrawal of any
monies in any previous or then pending application pursuant to this Paragraph.
All insurance monies not required to be used for such purposes shall, upon
receipt by Lessor of a certificate by said architect or engineer that the work
has been completed and that no liens exist, become the property of Lessee. If
the insurance monies so collected by the Lessee are insufficient in amount to
pay in full the cost of all repairs, restorations, rebuilding and replacements
of said damaged or destroyed improvements, Lessee shall provide and furnish all
other monies necessary to complete fully all such repairs, restorations,
rebuilding and replacements;
(g) Anything in this Lease to the contrary notwithstanding, that
Lessor shall have the right at any time and from time to time to withhold
payment of endorsement of all or any part of the insurance monies to Lessee, as
generally provided in Paragraph 5(f) hereof, in the event (i) Lessee is then in
default in the payment of rent or other charges as provided herein, (ii) Lessor
has given notice to Lessee of any other default on Lessee's part under this
Lease, or (iii) an act of default as described in Paragraph 7 hereof has
occurred. In the event Lessee shall cure the defaults specified above or such
defaults cease to exist, Lessor shall make such payments from the insurance
monies to Lessee in accordance with the provisions of this Lease; provided,
however, that if this Lease is terminated or Lessor otherwise re-enters and
takes possession of the premises without terminating this Lease under the
provisions of Paragraph 7 hereof, Lessor may itself use such insurance monies
for the payment of the reasonable and necessary charges of such persons
providing work and materials for the repairs, restoration, rebuilding and
replacements of the damaged improvements;
(h) That the real property and all buildings, improvements and
fixtures located thereon at the time of execution of this Lease, and all work
and materials on the buildings and improvements, and anything under this Lease
which becomes, is deemed to be, or constitutes a part of said premises and the
manufacturing facility thereon, and said manufacturing facility thereon, and
said manufacturing facility as repaired, rebuilt, rearranged, restored or
replaced by Lessee under the provisions of this Lease, except as otherwise
specifically provided herein, shall be and remain or become immediately when
erected or installed, as the case may be, the absolute property of Lessor to the
same extent as if the same had been erected or installed prior to the execution
of this Lease, subject only to the express provisions of this Lease and as
otherwise noted in Paragraph 4(b), provided that no machinery or equipment or
other non-fixture personal effects of the Lessee purchased and installed on the
premises by Lessee and no part of which is paid for from funds of Lessor or from
the XXX Xxxxx shall be deemed part of the premises;
(i) To keep and preserve the demised premises free from nuisance
and not permit the use of the same or any part thereof for other than industrial
or manufacturing purposes as described herein for the Project; and not permit
the same to be used for any purpose forbidden by law, ordinance or regulation,
or for any purpose which would be in violation of the Special Terms and
Conditions or the General Terms and Conditions of the said XXX Xxxxx, including
the governmental regulations referred to therein, all of which terms and
conditions are hereby incorporated by reference;
(j) To pay all utility charges incurred in respect of the premises
and Lessee's occupation thereof, and if not paid in due time and if paid by
Lessor at Lessor's sole option, to reimburse Lessor for such amounts paid,
including late charges, plus interest thereon at the highest lawful rate in the
State of Iowa.
(k) Not to sublet or assign Lessee's interest or any part thereof
in this Lease or the demised premises without the prior written consent of
Lessor, which said consent shall not be unreasonably withheld; and not to
alienate or permit to be alienated its interest in the demised premises (which
shall be deemed to include but not limited to the sale, lease, rent, option or
mortgage thereof) provided, however, that Lessee shall have the absolute right
to assign Lessee's interest in the lease to any corporation or other entity in
connection with any acquisition of substantially all of the assets of Lessee,
acquisition of 80% or more of the stock of Lessee or in connection with any
merger involving Lessee; subject to approval by the United States Department of
Commerce Economic Development Administration; which consent shall not be
unreasonably withheld;
(l) Not to allow trash, refuse, waste material or garbage to
accumulate or remain on the premises and to deposit the same in appropriate
containers and arrange for the removal thereof periodically as required by law
or ordinance;
(m) Not to initiate any proceedings of any kind whatsoever to
dissolve or liquidate Lessee or its corporate status without securing the prior
written consent thereto of Lessor;
(n) To permit Lessor or Lessor's agents to enter the premises at
any reasonable time after giving reasonable notice during normal business hours
for the purpose of inspection for conformity to the express requirements of this
Lease or making repairs to the premises or to show to prospective purchasers or
tenants, subject to the express conditions hereof, and at other times upon
reasonable notice to lessee;
(o) To maintain at all times during the term of this Lease public
liability insurance (including coverage for all losses whatsoever arising from
the ownership, maintenance, operation or use of any automobile, truck or other
motor vehicle), under which Lessor shall be named as an additional insured,
properly protecting and indemnifying Lessor in an amount not less that $500,000
for injury, including death, to any one person, not less than $1,000,000 for
personal injuries, including death, in any one accident or occurrence, and not
less than $500,000 for property damage in any one accident or occurrence. Said
policy or policies of insurance shall contain a provision that such insurance
may not be cancelled by the issuer thereof with not less than thirty (30) days'
advance written notice to Lessor and Lessee. Such policy or policies or copies
or certificates thereof shall be furnished to Lessor on a current basis at all
times during the term of this Lease;
(p) To keep the demised premises, and all buildings and
improvements thereon, insured against loss or damage by fire, lightning and all
other risks covered by the extended coverage insurance endorsement then in use
in the State of Iowa in an amount equal to the full insurable value thereof,
with such insurance company or companies authorized to do business in the State
of Iowa as may be selected by Lessee and reasonably approved in writing by
Lessor, and against loss or damage by water risks as and when and in such
amounts as such insurance is obtainable and generally carried by owners of
industrial and manufacturing plants in Iowa. The term "full insurable value"
shall mean, to the maximum extent possible, the full actual replacement cost of
all improvements on the premises. At all times during the term of this Lease,
originals or copies of certificates of the policies provided for in this
Paragraph, each bearing notations evidencing payment of the premiums or other
evidence of such payment satisfactory to Lessor, shall be delivered by Lessee to
Lessor. All policies of such insurance, and all renewals thereof, shall name
Lessor and Lessee as insureds as their respective interests may appear and shall
contain a provision that such insurance may not be cancelled by the insurer
thereof without at least thirty (30) days' written notice to Lessor and Lessee.
The proceeds of any such policies shall be used an applied in the manner and to
satisfy the various obligations set forth in this Lease;
(q) That this Lease is intended to be a net lease and that the
payment of Lease Payments as provided herein is in addition to all other
obligations imposed herein upon Lessee;
(r) If default be made in the payment of Lease Payments or any part
thereof or of any other payment required to be made to Lessor by the terms
hereof, on the date due, and after the expiration of all applicable cure
periods, or' if this Lease is terminated by any method herein provided, to quit
and surrender to Lessor or Lessor's agents peaceful possession of the premises
upon demand for possession for nonpayment of Lease Payments as aforesaid or upon
the effective date of termination after notice thereof, whichever is applicable;
and in the event of Lessee's failure to surrender possession as aforesaid, or if
the premises become vacant during the term of this Lease, then Lessor may at any
time thereafter resume possession thereof by any lawful means, and remove Lessee
and Lessee's effects by self-help or proceedings for possession or unlawful
detainer, or otherwise, and in any such event Lessee shall pay all costs and
attorneys' fees incurred by Lessor in regaining possession and/or asserting
(s) At the termination of this Lease, by whatever method herein
provided, to surrender peaceful possession of said premises in as good condition
as the same were received, usual wear and tear and providential destruction
excepted.
6. Option to Purchase. Lessor hereby grants to Lessee the limited right
to purchase the Project and the above described property and appurtenances at
any time prior to the expiration of one month after the expiration of the
original Lease Term plus the five (5) year renewal of said lease, upon the terms
and conditions hereinafter set forth:
(a) The purchase price for said Project shall be ONE MILLION TWO
HUNDRED EIGHTY-FIVE THOUSAND NINE HUNDRED FIFTY-FIVE DOLLARS AND NO CENTS
($1,285,955.00); plus (1) any other sums or expenses of any type in connection
with said property which have or had accrued to the account of Lessee or were
otherwise properly payable by Lessee according to the terms of this Lease but
were for any reason paid by Lessor; plus (2) the total of all reasonable costs
and expenses incurred or to be incurred by Lessor in the closing of such sale to
Lessee, excluding Lessor's legal fees, but including but not limited to the cost
of all title examinations and title insurance and other reasonable and necessary
closing expenses. Said total sum, determined as provided in this Paragraph,
shall be paid in full and in cash or by cashier's check on the date of closing
of said purchase.
(b) This option shall be in effect for the term of this Lease,
including any renewal or extension thereof, and for one month thereafter. Notice
of election by Lessee to exercise this option shall be in writing delivered or
mailed as provided in Paragraph 8 hereof so to reach Lessor prior to the time of
expiration of this option. As long as notice of exercise is given prior to
expiration of the option, closing may occur after said expiration.
(c) In the event this option is so exercised by Lessee, Lessor
shall, within thirty (30) days thereafter, provide to Lessee a commitment for
the issuance of title insurance, certified to the date of Lessee's said notice,
showing marketable title to the premises to be vested in Lessor, according to
the Title Examination Standards of the Iowa Bar, free and clear of all liens and
encumbrances of record, except any encumbrances which may be satisfied in full
by Lessor on or before the date of closing, and except for the special
exceptions, if any, noted in Paragraph 1 of this Lease, and except for any lien
or encumbrance placed or suffered to be placed upon the premises by Lessee after
the date of this Lease, and except for any other lien or encumbrance otherwise
permitted or required according to the terms of this Lease, and except for the
lien for any taxes thereon which may attach or may have attached after the date
of this Lease. Lessee shall thereafter have a period of fifteen (15) days to
examine said commitment and to determine if defects are noted therein in the
title of Lessor. If defects are found to exist in the title of Lessor which
prevent absolute compliance with the requirements of this Paragraph, then Lessor
shall at Lessor's expense obtain the removal or correction of any such noted
defect, if the same can be done within six months after being so noted. If
defects of title are noted which are not capable of correction or removal within
such six month period, then Lessee shall have the option of avoiding the
obligation to purchase, or of completing the purchase of said premises, with
reduction in the price therefore by an amount sufficient to remedy such defect
in title or to compensate Lessee for the reduction in value of the premises
attributable to such defect, as Lessee may determine.
(d) The property shall be conveyed by special corporate warranty
deed, properly executed and acknowledged by officials of Lessor and delivered to
Lessee, free and clear of all liens and encumbrances except as provided herein.
(e) In the event of exercise of this option by Lessee, the sale and
conveyance of said property shall be closed at the office of Lessor in Cedar
Falls, Iowa, on the tenth business day immediately following expiration of the
time granted to Lessee for examination of said commitment, or on the tenth
business day immediately following the correction of noted defects of title by
Lessor, or upon the tenth business day immediately following Lessee's
notification to Lessor or Lessee's intention to waive any noted defects in
title, as the case may be. At the time of closing, all papers, documents and
final payments provided herein shall be exchanged between the parties. Lessee
shall at said time be given full and absolute possession of said premises,
without further interference or claim of Lessor or any person claiming through
Lessor.
(f) If this Option is not exercised by notice in writing as
provided above prior to midnight on the appropriate day of expiration of the
same, said Option shall be of no further force or effect, and the consideration
paid therefore shall be retained by Lessor. Proof of expiration of this Option
without exercise by Lessee may be made by recording of Lessor's affidavit,
reciting the failure of Lessee to exercise said Option and to complete the
purchase of said property in the manner provided herein and further reciting the
expiration of said Option, and by recording of the receipt issued by the United
States Postal Service as proof of mailing by certified mail of a copy of such
affidavit at least ten days prior to the date of recording the same. Proof of
actual receipt of such affidavit by Lessee shall not be required.
7. Events of Default. (a) If any one or more of the following events
shall occur and be continuing, it is hereby defined as and declared to be and to
constitute an Event of Default of "default" hereunder:
(1) Default in the due and punctual payment of any Lease
Payment by Lessee pursuant to Paragraph 3 hereof, including applicable late
payment penalty or penalties, which default shall continue for five (5) days
after Lessor has given Lessee written notice specifying such nonpayment; or
(2) Default in the due observance or performance of any other
covenant, agreement, obligation or provision of this Lease, or for the
applicable provisions of the Special Terms and Conditions or General Terms and
Conditions of said XXX Xxxxx, on Lessee's part to be observed or performed, and
such default shall continue for 60 days after Lessor has given Lessee written
notice specifying such default or such longer period as shall be reasonably
required to cure such default; provided that (1) Lessee has commenced such cure
within said 60-day period, and (2) Lessee diligently prosecutes such cure to
completion; or
(3) Lessee shall W admit in writing its inability to pay its
debts as they become due; or (ii) file a petition in bankruptcy or for
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under the Bankruptcy Code as now or in the future amended or
any other similar present or future Federal or State statute or regulation, or
file a pleading asking for such relief; or (iii) make an assignment for the
benefit of its creditors; or (iv) consent to the appointment of a trustee,
receiver or liquidator for all or a major portion of its property or shall fail
to have vacated or set aside the appointment of any trustee, receiver or
liquidator which was made without Lessee's consent or acquiescence; or (v) be
finally adjudicated as bankrupt or insolvent under any Federal or State law; or
(vi) be subject to any proceedings, or suffer the entry of a final and
nonappealable court order, under any Federal or State law, appointing a trustee,
receiver or liquidator for all or a major part of its property or ordering the
winding-up or liquidation of its affairs, or approving a petition filed against
it under the United States Bankruptcy Code, as now or in the future amended,
which order or proceeding, if not the subject of Lessee's consent, shall not be
dismissed, vacated, denied, set aside or stayed within 60 days after the day of
entry or commencement; or (vii) suffer a writ or warrant of attachment or any
similar process to be issued by any court against all or any substantial portion
of its property, and such writ or warrant of attachment or any similar process
is not contested, stayed or released within 60 days after the final entry, or
levy after any contest if finally adjudicated or any stay is vacated or set
aside; or
(4) Lessee shall vacate or abandon the Project; or
(5) Violation of any provision, or commission or omission of
any act which causes or constitutes a violation of any provision, of the Special
Terms and Conditions or General Terms and Conditions of said XXX Xxxxx, if not
timely cured to the satisfaction of the EDA.
(b) If any Event of Default specified in Paragraph 7(a) hereof
shall have occurred and be continuing, then Lessor may, at Lessor's election,
then or at any time thereafter, and while such default shall continue, take any
one or more of the following actions:
(1) Cause all Lease Payments for the remainder of the Lease
Term to become due and payable; or
(2) Give Lessee written notice of intention to terminate this
Lease on a date specified in such notice, which date shall not be earlier than
30 days after such notice is given, and if all defaults have not then been
cured, on the date so specified, Lessee's rights to possession of the Project
shall cease and this Lease shall thereupon be terminated, and Lessor may reenter
and take possession of the Project; or
(3) Without terminating this Lease, reenter the Project or
take possession thereof pursuant to legal proceedings or pursuant to any right
of self-help or notice provided for by law, and having elected to reenter or
take possession of the Project without terminating this Lease, Lessor shall use
reasonable diligence to relet the Project, or parts thereof, for such term or
terms and at such rental and upon such other provisions and conditions as Lessor
may deem advisable, with the right to make alterations and repairs to the
Project, and no such reentry or taking of possessing of the Project by Lessor
shall be construed as an election on Lessor's part to terminate this Lease, and
no such reentry or taking of possession by Lessor shall relieve Lessee of its
obligation to pay Lease Payments or Additional Payments (at the time or times
provided herein), or of any of its other obligations hereunder, all of which
shall survive such reentry or taking of possession, and Lessee shall continue to
pay the Lease Payments specified herein until the end of the Lease Term, whether
or not the Project shall have been relet, less the net proceeds, if any, of any
reletting of the Project after deducting of all of Lessor's reasonable expenses
of or in connection with such reletting, including without limitation all
repossession costs, brokerage commissions, legal expenses, expenses of
employees, alteration costs and expenses of preparation for reletting.
Having elected to reenter or take possession of the Project without terminating
this Lease, Lessor may, by notice to Lessee given at any time thereafter while
Lessee is in default in the payment of Lease Payments or in the performance of
any other obligation hereunder, elect to terminate this Lease on a date to be
specified in such notice, which date shall be not earlier than 30 days after
reentry under Subparagraph (b)(3) above, and if all defaults shall not have then
been cured, on the date so specified this Lease shall thereupon be terminated.
If in accordance with any of the foregoing provisions of this Paragraph 7 Lessor
shall have the right to elect to reenter and take possession of the Project,
Lessor may enter and expel Lessee and those claiming through or under Lessee and
remove the property and effects of both either (forcibly if necessary) without
being guilty of any manner of trespass and without prejudice to any remedies for
arrears of rent or for preceding breach of covenant. Lessor may take whatever
action at law or in equity which may appear necessary or desirable to collect
rent then due and thereafter to become due, or to enforce performance and
observance of any obligation, agreement or covenant of Lessee hereunder.
Notwithstanding any of the foregoing, if Lessor elects to reenter
or take possession of the Project and relet the same, in such reletting Lessor
shall not adversely affect any grant or loan made to Lessor, the City of Cedar
Falls, Iowa, by the United States Department of Commerce Economic Development
Administration, by Flood Relief Project Award No. 00-00-00000.
(c) Lessee covenants and agrees with Lessor that Lessee's
obligations hereunder shall survive the cancellation and termination of this
Lease, for any cause, and that Lessee shall continue to make the Lease Payments
required hereunder and perform all other obligations specified herein, all at
the time or times provided herein; provided, however, that upon the payment of
all Lease Payments required hereunder, Lessee's obligations under this Lease
shall thereupon cease and terminate in full.
(d) The rights and remedies reserved by Lessor and Lessee hereunder
and those provided by law shall be construed as cumulative and continuing
rights. No one of them shall be exhausted by the exercise thereof on one or more
occasions. Lessor and Lessee shall each be entitled to specific performance and
injunctive or other equitable relief for any breach or threatened breach of any
of the provisions hereof, notwithstanding availability of an adequate remedy at
law, and each party hereby waives the right to raise such defense in any
proceeding in equity.
(e) No waiver of any breach of any covenant or agreement herein
contained shall operate as a waiver of any subsequent breach of the same
covenant or agreement or as a waiver of any breach of any other covenant or
agreement, and in case of a breach by Lessee of any covenant, agreement or
undertaking by Lessee, Lessor may nevertheless accept from Lessee any payment or
payments hereunder without in any way waiving Lessor's right to exercise any of
its rights and remedies as provided herein with respect to any such default or
defaults of Lessee which were in existence at the time when such payment or
payments were accepted by Lessor.
(f) In the event either party should default under any of the
provisions hereof and the other party should employ attorneys or incur other
expenses for the collection of the Lease Payments or the enforcement of
performance of any obligation or agreement on the part of the defaulting party,
the defaulting party will on demand pay to the non-defaulting party the
reasonable fee of such attorneys and such other expenses so incurred.
(g) If Lessee shall fail to make any payment or to keep or perform
any of its obligations as provided herein, then Lessor may (but shall not be
obligated so to do) upon the continuance of such failure on Lessee's part for 60
days after notice of such failure is given Lessee by Lessor, and without waiving
or releasing Lessee from any obligation hereunder, as an additional but not
exclusive remedy, make any such payment or perform any such obligation, and all
sums so paid by Lessor and all necessary incidental costs and expenses incurred
by Lessor in performing such obligations shall be deemed Additional Payments and
shall be paid be Lessee to Lessor on demand, and if not so paid by Lessee,
Lessor shall have the same rights and remedies provided for in Paragraph 7(b)
hereof in the case of default by Lessee in the payment of Lease Payments.
8. Administrative and Compliance Requirements.
(a) The Lessee shall maintain books, records, documents and other
evidence pertaining to all costs and expenses incurred and revenues acquired
under this Agreement.
(b) Audit and Inspection. At any time during normal business hours
and as frequently as is deemed necessary, the Lessee shall make available to the
Lessor and the Economic Development Administration or their agents for their
examination, all of its records pertaining to all matters covered by this
Agreement and permit these agencies to audit, examine, make excerpts, or
transcripts from such records, contract, invoices, payrolls, personnel records,
conditions of employment, and all other matters covered by this Agreement.
(c) Retention of Records. All records in the possession of the
Lessee pertaining to this Agreement shall be retained by the Borrower for a
period of three (3) years beginning with the date upon which this Agreement is
issued. All records shall be retained beyond the three-year period if audit
findings have not been resolved within that period or if other disputes have not
been resolved.
(d) Civil Rights Provision. Lessee will comply with all applicable
Civil Rights provisions.
9. Mutual Covenants. It is mutually agreed:
(a) That any notice provided for herein may be given to the party
entitled thereto by personal service or by certified mail addressed as follows:
To Lessor: To Lessee:
Mayor Chief Executive Officer
City of Cedar Falls Clay Equipment Corporation
000 Xxxx Xxxxxx 000 Xxxxxxxx Xxxx Xxxx
Xxxxx Xxxxx, Xxxx 00000 Xxxxx Xxxxx, Xxxx 00000
and
(b) That this Lease shall be binding upon the parties hereto and
their successors and assigns, subject to the restrictions herein contained as to
subletting or assignment by Lessee;
(c) That the terms and conditions of this Lease, including but not
limited to the Lease Term, the Monthly Lease Payments, and the option to
purchase the premises, are subject to the review and approval by the EDA, as
provided in the Special Terms and Conditions of the XXX Xxxxx; and that, as of
the initiation of the Lease, there are in effect in the locality where the
project is situated leases for 10 years at the initial rental rate stated in
Paragraph 3(a)(A) hereof; and
(d) That the parties shall execute and acknowledge a Memorandum of
Lease, stating the existence of this Lease, the purchase option, and the
description of the leased premises, and shall record the same in the office of
the Recorder of Deeds for Black Hawk County, Iowa.
IN WITNESS WHEREOF, the parties have caused this Lease to be executed
in duplicate by their respective officers as of the day and year first above
written.
LESSOR: LESSEE:
By: By:
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Mayor Chief Executive Officer
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City Clerk Secretary
APPROVAL BY EDA
The foregoing Industrial Lease and Option, and the terms and conditions thereof,
is hereby approved by the United States Department of Commerce Economic
Development Administration, as of this ______ day of ________________, 199____.
UNITED STATES DEPARTMENT OF
COMMERCE, ECONONUC DEVELOPMENT
ADMINISTRATION
By:
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Regional Director
