EXHIBIT 10.6
EXTENSION AGREEMENT
THIS EXTENSION AGREEMENT is entered into as of the 6th day of August,
2003, by and between ProLogis North Carolina Limited Partnership (the
"Landlord") and Glas-Craft, Inc. (the "Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant have entered into a Lease, dated as of the
6th day of October, 1998, and further modified in that certain First Amendment
to Lease dated as of the 28th day of January, 2000, pursuant to which Landlord
leased to Tenant certain premises located at 0000 X. 00xx Xxxxxx, Xxxxx 000,
Xxxxxxxxxxxx, XX 00000 (such lease, as heretofore and hereafter modified, being
herein referred to as the "Lease").
WHEREAS, Landlord and Tenant desire to extend the term of the Lease on
the terms and conditions set forth below.
NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Landlord and Tenant agree as follows:
1. Effective February 1, 2004 (the "Effective Date") the term of the
Lease shall be extended for sixty (60) months, such that the Lease
shall terminate on the 31st day of January, 2009. All of the terms
and conditions of the Lease shall remain in full force and effect
during such extension period except that the Monthly Base Rent shall
be $17,066.67 during such extension.
2. As of the Effective Date, the Base Year shall be revised to reflect
2004 actual levels.
3. The Turnkey Construction language attached hereto shall be
incorporated into the Lease as Addendum C.
4. The Renewal Option language attached hereto shall be incorporated
into the Lease as Addendum D.
5. The Cap on Controllable Operating Expenses language attached hereto
shall be incorporated into the Lease as Addendum E.
6. Except as modified herein, the Lease, and all of the terms and
conditions thereof, shall remain in full force and effect.
7. Any obligation or liability whatsoever of ProLogis North Carolina
Limited Partnership, a Maryland Real Estate Investment Trust, which
may arise at any time under the Lease or this Agreement or any
obligation or liability which may be incurred by it pursuant to any
other instrument, transaction or undertaking contemplated hereby,
shall not be personally binding upon, nor shall resort for the
enforcement thereof be had to the property of, its trustees,
directors, shareholders, officers, employees, or agents regardless
of whether such obligation or liability is in the nature of the
contract, tort or otherwise.
IN WITNESS WHEREOF, the parties hereto have signed this Extension Agreement as
of the day and year first above written.
LANDLORD:
ProLogis North Carolina Limited Partnership
By:ProLogis-North Carolina (1) Incorporated,
its general partner
By: /s/ Xxxxx X. Xxxxxx
----------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
TENANT:
Glas-Craft, Inc.
By: /s/ Xxxxxx Xxxxxx
--------------------
Name: Xxxxxx Xxxxxx
Title: CFO
ADDENDUM C
CONSTRUCTION
(TURNKEY)
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED 8/6/03 BETWEEN
ProLogis-North Carolina Limited Partnership
and
Glas-Craft, Inc.
(a) Landlord agrees to furnish or perform at Landlord's sole cost and
expense those items of construction and those improvements (the "Initial
Improvements") specified below:
1. Install new 26 oz. direct glue down carpeting or VCT tile
in the areas shown on the attached Exhibits D1 and D2.
Landlord shall move and put back in place all office
furniture. Tenant must remove all office equipment prior to
furniture move.
2. Replace up to five (5) gas fired hanging unit heaters in
the warehouse area.
(b) If Tenant shall desire any changes, Tenant shall so advise Landlord
in writing and Landlord shall determine whether such changes can be made in a
reasonable and feasible manner. Any and all costs of reviewing any requested
changes, and any and all costs of making changes to the Initial Improvements
which Tenant may request and which Landlord may agree to shall be at Tenant's
sole cost and expense and shall be paid to Landlord upon demand and before
execution of the change order.
(c) Landlord shall proceed with and complete the construction of the
Initial Improvements. As soon as such improvements have been Substantially
Completed, Landlord shall notify Tenant in writing of the date that the Initial
Improvements were Substantially Completed. The Initial Improvements shall be
deemed substantially completed ("Substantially Completed") when, in the opinion
of the construction manager (whether an employee or agent of Landlord or a third
party construction manager)("Construction Manager"), the Premises are
substantially completed except for punch list items which do not prevent in any
material way the use of the Premises for the purposes for which they were
intended. In the event Tenant, its employees, agents, or contractors cause
construction of such improvements to be delayed, the date of Substantial
Completion shall be deemed to be the date that, in the opinion of the
Construction Manager, Substantial Completion would have occurred if such delays
had not taken place. Without limiting the foregoing, Tenant shall be solely
responsible for delays caused by Tenant's request for any changes in the plans,
Tenant's request for long lead items or Tenant's interference with the
construction of the Initial Improvements, and such delays shall not cause a
deferral of the Commencement Date beyond what it otherwise would have been.
After the Commencement Date Tenant shall, upon demand, execute and deliver to
the Landlord a letter of acceptance of delivery of the Premises. In the event of
any dispute as to the Initial Improvements, including the Commencement Date, the
certificate of the Construction manager shall be conclusive absent manifest
error.
(d) The failure of Tenant to take possession of or to occupy the
Premises shall not serve to relieve Tenant of obligations arising on the
Commencement Date or delay the payment of rent by Tenant. Subject to applicable
ordinances and building codes governing Tenant's right to occupy or perform in
the Premises, Tenant shall be allowed to install its tenant improvements,
machinery, equipment, fixtures, or other property on the Premises during the
final stages of completion of construction provided that Tenant does not thereby
interfere with the completion of construction or cause any labor dispute as a
result of such installations, and provided further that Tenant does hereby agree
to indemnify, defend and hold Landlord harmless from any loss or damage to such
property, and all liability, loss, or damage arising from any injury to the
Project or the property of Landlord, its contractors, subcontractors, or
materialmen, and any death or personal injury to any person or persons arising
out of such installations, unless any such loss, damage, liability, death, or
personal injury was cause by Landlord's negligence. Any such occupancy or
performance in the Premises shall be in accordance with the provisions governing
Tenant-Made Alterations and Trade Fixtures in the Lease, and shall be subject to
Tenant providing to Landlord satisfactory evidence of insurance for personal
injury and property damage related to such installations and satisfactory
payment arrangements with respect to installations permitted hereunder. Delay in
putting Tenant in possession of the Premises shall not serve to extend the term
of this Lease or to make Landlord liable for any damages arising therefrom.
(e) Except for incomplete punch list items, Tenant upon the
Commencement Date shall have and hold the Premises as the same shall then be
without any liability or obligation on the part of Landlord for making any
further alterations or improvements of any kind in or about the Premises.
ADDENDUM D
ONE RENEWAL OPTION AT MARKET
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED 8/6/03 BETWEEN
ProLogis-North Carolina Limited Partnership
and
Glas-Craft, Inc.
(a) Provided that as of the time of the giving of the Extension Notice
and the Commencement Date of the Extension Term, (x) Tenant is the Tenant
originally named herein, (y) Tenant actually occupies all of the Premises
initially demised under this Lease and any space added to the Premises, and (z)
no Event of Default exists or would exist but for the passage of time or the
giving of notice, or both; then Tenant shall have the right to extend the Lease
Term for an additional term of 2 years (such additional term is hereinafter
called the "Extension Term") commencing on the day following the expiration of
the Lease Term (hereinafter referred to as the "Commencement Date of the
Extension Term"). Tenant shall give Landlord notice (hereinafter called
"Extension Notice") of its election to extend the term of the Lease Term at
least 9 months, but not more than 12 months, prior to the scheduled expiration
date of the Lease Term.
(b) The Base Rent payable by Tenant to Landlord during the Extension
Term shall be the greater of (i) the Base Rent applicable to the last year of
the initial Lease term and (ii) the then prevailing market rate for comparable
space in the Project and comparable buildings in the vicinity of the Project,
taking into account the size of the Lease, the length of the renewal term,
market escalations and the credit of Tenant. The Base Rent shall not be reduced
by reason of any costs or expenses saved by Landlord by reason of Landlord's not
having to find a new tenant for such premises (including, without limitation,
brokerage commissions, costs of improvements, rent concessions or lost rental
income during any vacancy period). In the event Landlord and Tenant fail to
reach an agreement on such rental rate and execute the Amendment (defined below)
at least 6 moths prior to the expiration of the Lease, then Tenant's exercise of
the renewal option shall be deemed withdrawn and the Lease shall terminate on
its original expiration date.
(c) The determination of Base Rent does not reduce the Tenant's
obligation to pay or reimburse Landlord for Operating Expenses and other
reimbursable items as set forth in the Lease, and Tenant shall reimburse and pay
Landlord as set forth in the Lease with respect to such Operating Expenses and
other items with respect to the Premises during the Extension Term without
regard to any cap on such expenses set forth in the Lease.
(d) Except for the Base Rent as determined above, Tenant's occupancy of
the Premises during the Extension Term shall be on the same terms and conditions
as are in effect immediately prior to the expiration of the initial Lease Term;
provided, however Tenant shall have no further right to any allowances, credits
or abatements or any options to expand, contract, renew or extend the Lease.
(e) If Tenant does not give the Extension Notice within the period set
forth in paragraph (a) above, Tenant's right to extend the Lease Term shall
automatically terminate. Time is of the essence as to the giving of the
Extension Notice.
(f) Landlord shall have no obligation to refurbish or otherwise improve
the Premises for the Extension Term. The Premises shall be tendered on the
Commencement Date of the Extension Term in "as-is" condition.
(g) If the Lease is extended for the Extension Term, then Landlord
shall prepare and Tenant shall execute an amendment to the Lease confirming the
extension of the Lease Term and the other provisions applicable thereto (the
"Amendment").
(h) If Tenant exercises its right to extend the term of the Lease for
the Extension Term pursuant to this Addendum, the term "Lease Term" as used in
the Lease, shall be construed to include, when practicable, the Extension Term
except as provided in (d) above.
ADDENDUM E
CAP ON CONTROLLABLE OPERATING EXPENSES
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED 8/6/03 BETWEEN
ProLogis-North Carolina Limited Partnership
and
Glas-Craft, Inc.
Tenant shall not be obligated to pay for Controllable Operating
Expenses in any year to the extent they have increased by more the eight percent
(8%) per annum, compounded annually on a cumulative basis from the 2004 Base
Year level. For purposes of this Addendum, Controllable Operating Expenses shall
mean all Operating Expenses as set forth in Paragraph 6 of the Lease, except for
taxes, insurance premiums, utility costs and snow removal. Controllable
Operating Expenses shall be determined on an aggregate basis and not on an
individual basis, and the cap on Controllable Operating Expenses shall be
determined on Operating Expenses as they have been adjusted for vacancy or usage
pursuant to the terms of the Lease.
